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Housing subsidies and support services

What is in this guide?

This guide provides government policy on housing subsidies and support services. It has the following sections:

  1. Government’s strategy to address the housing backlog and the slum living conditions
  2. Government’s achievements since 1994
  3. Laws passed to ensure people have access to quality houses
  4. How to get your name on the housing waiting list
  5. Way to check if your name is listed on the housing waiting list
  6. The Housing subsidy and what you need have to qualify for it
  7. Types of housing subsidies available

a) Individual subsidies
b) Consolidation Subsidy
c) Institutional Subsidy
d) People’s housing process establishment grants
e) Rural Subsidy
f) Project linked Subsidy
g) Discount Benefit Scheme
h) Relocation Assistance

  1. Creative ways of making your subsidy go further
  2. How Development Workers can help with problems in housing projects

  1. Government’s objectives to address the housing backlog and poor living conditions

In 1994 millions of people in our country stayed in informal houses, overcrowded backyard shacks or far from where they worked.  The housing backlog and the slum living conditions it created was a central concern of the new government.  To address this situation, government committed itself to do the following:

These four objectives guide government’s work with regard to housing in general and influence the land the government chooses for community development and the priority government gives to relocating existing communities to new places closer to facilities and economic activities. 

In September 2004, the government released a comprehensive housing plan for the following five years.  This plan, called “Breaking New Ground”, has the following targets:

  1. The removal or improvement of all slums in South Africa as rapidly as possible, but not later than 2014;
  2. The fast-tracking of the provision of formal housing within human settlements for the poorest of the poor and those who are able to afford rent and or mortgages;
  3. The creation of rental stock for a rapidly growing, mobile (migrant) and urban population within inner city and other locations close to employment opportunities;
  4. To remove administrative blockages that prevent speedy developments and to strive to reduce the time to grant various permissions relating to the built environment to 50% of the current time;
  5. To ensure consumer education/understanding in all housing development projects.

The “Breaking New Ground” Plan includes the development of low-cost housing, a stronger emphasis on medium-density housing, affordable rental accommodation, the strengthening of partnerships with private housing developers; social infrastructure and amenities. The Plan also aims to change existing spatial settlement patterns, motivated by the need to build multicultural communities in a non-racial South Africa.  The gradual replacement of informal settlements with adequate and secure housing in well-serviced communities is a critical aspect of the plan.

  1. Government’s achievements since 1994

Since 1994 the government has:

There are, however, many more challenges to be met to ensure that all South Africans are fully afforded their constitutional right to safe, secure housing.

  1. Laws passed to ensure people have access to quality houses

Since 1994 government has passed the following laws to ensure people have access to quality houses:

  1. How to get your name on the housing waiting list?

People often ask how to put their names on the housing waiting list. Many of these people are new arrivals in the urban areas or young people who do not yet have a house and may be newly married.  They may also be people who used to live with their parents and who now want to live on their own with their families.  As we explained earlier there is a big housing backlog in our country. This means that not everyone who wants to get a house can get one immediately.  If you earn enough money to buy a house you can go to the bank and take a loan. But if you earn less than R 3 500 per month and you have a partner or children you can get government assistance to get a house.

Local government is responsible for the delivery of housing and most local governments have housing departments.  It is here that you will be able to put your name on the waiting list. You do this by going to the housing department at your local council offices.  Many councils have set up help desks to assist families with housing problems.

Remember, young people who are not married or do not have children, will not qualify for subsidies. They can still rent council houses.

  1. Way to check if your name is listed on the housing waiting list

Some people complain that they have been on the housing waiting list for a long time but they have not yet received a house.  They see new housing developments and want to know when they will receive an RDP house.  It is possible to check if someone is on the housing waiting list through the internet.  Go to www.ndd.co.za .  You will then be able to enter the ID of the person to see if he/she is on the waiting list.

  1. The Housing subsidy and what you need have to qualify for it

A subsidy is a grant of money which does not have to be paid back.  This money does not go directly to the homeowner.  Instead it goes to the developer that is building the house.  The developer can be a private company, the local authority or a community organisation.

In order to qualify for a housing subsidy, you need to have the following:

It is very important to warn people who want to apply for a housing subsidy of the following:

  1. Types of housing subsidies available

a) Individual subsidy

This subsidy is for low-income households wishing to buy residential property for the first time and may be used to purchase an existing house including the land on which the house stands. This subsidy can only be used once by a successful applicant.  In 2006 households with an income of R1 500 per month or less are eligible for a subsidy of R31 929.  Households with an income between R1 501 and R 3500 per month are eligible for a subsidy of  R29 450 and must pay a contribution of R 2 479. 

b) Consolidation Subsidy

This is for people who have previously received a subsidy, live on a serviced site and want to build a better house such as building a top structure.  This money can only be used for building as services have already been provided on the site.  In 2006 households with an income under R1 500 per month are eligible for a subsidy of R18 792.  Households with an income between R1 501 and R 3500 per month are eligible for a subsidy of R16 313 and must pay a contribution of R2 479.

c) Institutional Subsidy

This is for non profit organisations like churches, local authorities or housing associations (also called “social housing institutions”) that want to provide rented accommodate to people from lower income groups.  It is called an institutional subsidy because it goes to the institution who can rent out the housing to different families.  A family who lives in this type of rented accommodation does not jeopardise their chance to apply for their own subsidy at a later date.  This is because the subsidy for rented housing is taken in the name of the organisation and not in the name of the individual. The homes developed through the institutional subsidy must remain in the ownership of the organisation for at least four years after they are built.   In 2006, the subsidy for the institutional subsidy per household is R29 450 which is paid directly to the non-profit organisation. The organisation must add capital.

d) People’s Housing Process establishment grants

These are special subsidies that are available to communities, or organised groups of households to enhance their housing subsidy by building or organising the building of their own homes themselves.  By using their own labour rather than paying someone else, these households can make their housing subsidy and personal contribution go further by building better quality and/or larger houses for less money.  An add-on of up R570 per subsidy is available under this scheme.  In addition, the People’s Housing Process can also include the following support:

e) Rural subsidy

This subsidy is available to people who don’t have formal tenure rights to the land on which they live.  (Such land is owned by the government and tenure granted in terms of traditional  laws and customs). The rural subsidy is available only on a project basis and beneficiaries themselves may decide on how to use their subsidies.  The subsidy may be used for building houses, providing services of a combination of both. In 2006 the value of this subsidy was R29 450.

f) Project linked subsidy

This may be used towards purchasing a house, and the land on which it stands, in an approved Municipal  housing.  This is usually within a municipal housing project.  The subsidy is paid directly to the Municipality that is building the housing. Households with an income of R1 500 per month or less are eligible for a subsidy of R31 929, Households with an income between R1 501 and R 3 500 per month are eligible for a subsidy of  R29 450 and must contribute R2 479.

g) Discount benefit scheme

 This scheme promotes home ownership among tenants of publicly-owned rental housing (municipal and provincial). From April, 2006, purchasers can receive a discount  on the selling price of the property. In many cases, this amount is greater than the purchase price.  When this happens the property is transferred free of any further costs.  Some Municipalities have already transferred much of their housing stock to tenants who have utilised the Discount Benefit Scheme.

h) Relocation assistance

This is for home owners who are locked into paying for home loans they cannot afford.  The loan must have been from an accredited lender and the borrower must have defaulted on at least three payments.  This subsidy will help them purchase a home they can afford  A person who is eligible for relocation assistance must enter into a relocation agreement, so as to relocate to more affordable housing  Households with an income of R1 500 or less are eligible for a subsidy of R31 929, Households with an income between R1 501 and R 3000 per month are eligible for a subsidy of  R29 450 and must contribute R2 479.

An updated table of housing subsidies can be found on the government housing website: www.housing.gov.za

NOTE:  People with are disabilities (or who are health-stricken) may receive the higher housing subsidy for Individual, Project-Linked or Relocation Assistance even if their household income is more than R1 500 but less than R3 500 (and do not have to make a personal contribution). They are also entitled to receive an amount higher than the usual subsidy amount to cover the cost of special structures to meet their needs such as a wheelchair ramp for the mobility impaired.

  1. Creative ways of making your subsidy go further

Some people have complained that the housing subsidy is too little and that the houses that are built are too small.  This is an important area where development workers can help communities to build better quality houses.

Some ways to do this include:

  1. How Organisations and Development Workers can help with problems in housing projects

There have been some instances where communities have reported corruption in housing projects such as:

Here are some things you can do to assist in solving these problems:

Read the land and housing chapter in the paralegal manual for more information.

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