The South African inclusionary housing policy

• Main Author: Prinsloo, B. D.
• Other Authors: Smith, Johan
• Language: en_ZA
• Published: Stellenbosch : Stellenbosch University 2010
• Subjects: Inclusionary housing programs > South Africa; Low-income housing > Government policy > South Africa; Housing policy > South Africa; Dissertations > Business management; Theses > Business management
• Online Access: http://hdl.handle.net/10019.1/5034

Thesis (MBA (Business Management))--Stellenbosch University, 2008. === ENGLISH ABSTRACT: This study focuses on the inclusionary housing policy (IHP), a concept introduced to incorporate the private sector in actively contributing to the delivery of affordable housing as a by-product of higher income housing delivery, in an effort to promote socio-economic integration and to eradicate informal housing by 2014. The IHP stipulates that between 0% to 30% of new residential developments, measured in units, need to be inclusionary in nature. This means that a unit may be sold from R50,000 to R350,000 or rented for R600 to R3,000 per month to beneficiaries earning between R1,500 and R7,500 gross income per month. The policy will be implemented in a phased manner with two complimentary strategies, namely the town planning compliant approach and the Voluntary pro-active deal driven approach. To off set financial burdens, the government has made available six incentives and the concepts of off site compliance and inclusionary stock credits. The national government has set the requirements and parameters of the inclusionary elements and based on this a number of the possible effects that this IHP might have on residential developments, when looking at the interactions of supply, demand and price,were discussed as well as the views of industry experts. Inclusionary housing will result in social benefits but unwanted social costs as well. Benefits and costs were discussed and even though this policy is not Pareto efficient, based on the Kaldor-Hicks criterion, it is efficient in that the members of society that are made worse off can be compensated by the beneficiaries due to the fact that surrounding property prices that may rise and developers get incentives they would otherwise not have had access to. This study also looked internationally at the key success factors that were identified in case studies focussing on the United States of America, United Kingdom, Malaysia and China. From this international study, recommendations were made for South Africa's IHP. Because of various cultures and economies, success factors can not purely be copied but the recommendations should add to sustainable inclusionary developments. Ad hoc recommendations, also inferred from international lessons learnt, were discussed briefly and based on the above findings and recommendations, the accusations made by industry experts were readdressed. Although some areas still remain grey, many were found to be questionable. No concrete inferences can be made from this study pertaining to the supply, demand or price of residential developments but the following predictions can be made. The IHP is not necessarily going to drive property prices down and the requirements may be accepted by higher income households and therefore socio-economic integration may be successful in South Africa. This is only if the policy remains in its current form and not become law. This is in order to adapt to changing external variables and to incorporate success factors as they become known; if the IHP gets implemented transparently; if suggestions are incorporated from all stakeholders i.e. beneficiaries, developers, governmental spheres and third parties such as financial institutions and if this policy is phased into the market timeously. === AFRIKAANSE OPSOMMING: Die studie fokus op die insluitende behuising beleid (IBB), 'n konsep wat bekend gestel is om die privaat sektor aktief betrokke te maak by die voorsiening van lae koste behuising as 'n by-produk van die voorsiening van hoër inkomste behuising in 'n poging om sosio-ekonomiese integrasie te bevorder en informele behuising teen 2014 te verwyder. Die IBB bepaal dat tussen 0% en 30% van nuwe residensiële ontwikkelings, gemeet in eenhede, insluitend van aard moet wees wat beteken dat eenhede vir tussen R50,OOO tot R300,000 verkoop en verhuur vir tussen R600 en R3,000 per maand aan begunstigdes wat tussen R1,000 tot R7,000 bruto inkomste per maand verdien. Die beleid sal trapsgewys toegepas word met twee komplimentêre strategieë naamlik 'n vrywillige pro-aktiewe gedrewe benadering en 'n dorpsbeplanning voldoeningsbenadering. Om finansiële belassings te voorkom het die regering ses aansporingsbonusse beskikbaar gestel en die konsepte van lewering op ander land en insluitende handels krediete. Die nasionale regering het die vereistes en limiete van die insluitende elemente bepaal en gegrond op dit is 'n aantal van die moontlike uitkomste, wat die IBB op residensiële ontikkelings mag hê, gegrond op die interaksie tussen aanbod, vraag en prys, bespreek asook die sieninge van sektor deskundiges. Insluitende behuising sal sosiale voordele en ongewenste sosiale nadele tot gevolg het. Voordele en nadele was bespreek en alhoewel die beleid nie Pareto optimaal is nie is dit effektief gegrond op die Kaldor-Hicks kriterium deurdat die lede van die samelewing wat slegter af gemaak word, gekompenseer kan word deur die begunstigdes deur eiendomspryse wat kan styg en ontwikkelaars wat aansporingbonusse ontvang wat hulle andersins nie toegang tot sou gehad het nie. Die studie het ook internasionaal gekyk na sukses faktore wat geidentifiseer was deur te kyk na gevalle studies wat gedoen is in Verenigde State van Amerika, Verenigde Koningkryk, Maleisië en China. Aanbevelings vir Suid-Afrika se ISS, algelei van die internasionale gevalle studies, is gemaak. As gevolg van verskillende kulture en ekonomiese faktore kan sukses faktore nie bloot gedupliseer word nie maar die aanbevelings behoort by te dra tot volhoubare insluitende ontwikkelings.