Sustainable housing financing model to reduce South Africa housing deficit

Abstract

Purpose This study aims to identify and establish effective housing financing concepts to be adopted by government in achieving its mandate of providing sustainable affordable housing for the poor to decrease the building of shacks, as well as proposing solutions to the housing deficit in South Africa. A rise in demand and shortage in supply of housing calls for the need to address issues of affordable housing in South Africa, and developing countries in general, to ensure a stable and promising future for poor families. Design/methodology/approach Literature has revealed that the South African government, at all levels, accorded high priority to the provision of low-cost housing. Thus, government has adopted subsidy payment as a method of financing affordable housing to ensure that houses are allocated free to the beneficiaries. This also addresses the historically race-based inequalities of the past, but unfortunately, this has not been fully realised. This study uses a sequential mixed method approach, where private housing developers and general building contractors were the research participants. The qualitative data were analysed using a case-by-case analysis, and quantitative data were analysed using a descriptive statistical technique on SPSS. Findings The results of the qualitative analysis reveal a gross abuse of the housing subsidies system by the beneficiaries of government-funded housing in South Africa. This is evident from illegal sale of the houses below market value. This has led to a continual building of shacks and an increased number of people on the housing waiting list instead of a decrease in the housing deficit. The results from quantitative analysis affirm the use of “Mortgage Payment Subsidies, Mortgage Payment Deductions, Down-Payment Grant and Mortgage Interest Deductions” as viable alternatives to subsidy payment currently in use to finance affordable housing projects by the South African Government. Practical implications At the moment, the focus of the South African National Government is continual provision of free housing to the historically disadvantage citizens, but the housing financing method being used encourages unapproved transfer of ownership in the affordable housing sector. This study thus recommends the use of an all-inclusive housing financing method that requires a monetary contribution from the beneficiaries to enable them take control of the process. Originality/value The relational interface model proposed in this study will reduce pressure on government budgetary provision for housing and guarantee quick return of private developers’ investment in housing. Government must, as a matter of urgency, launch a continuous awareness programme to educate the low-income population on the value and the long-term benefits of the housing.

Sustainable Affordable Housing Strategies For Solving Low-Income Earners Housing Challenges In Nigeria

“…Through these components, the strategies were discussed. Retrofitting of aged buildings [81] Promotion of high density development/diversity in housing [33] Economic Provision of incentives to developers [82] Development of a robust financial market [83,84] Provision of housing subsidies/incentives to households [85] Environment Conservation of energy in buildings [86,87] Development and utilization of local resources [88,89] Efficient land use and planning [90,91] Control and reduction of wastes and natural disasters [92,93] Institutional Private sector Involvement [83] Formulation of sound housing policies [94] Transparent/robust procurement process [95] Decentralization of authority and responsibility [96,97] Technological Promotion of technological innovation [98] Training and re-training of personnel [79] Promotion of the growth and development of local and rudimentary technologies [79] Promotion of the use of reusable, renewable and recyclable materials [79] Source: Authors compilation from systematic review…”

“…Against this backdrop, [112] sued for the need for the adoption of energy efficiency strategies in buildings. Similarly, the environmental strategy of sustainable affordable housing seeks to achieve energy conservation in buildings through the encouragement and promotion of the use of energy efficient lighting systems, solar heating technologies, energy efficient heating systems, ventilation and air condition systems, installation of water efficient appliances, rain water harvesting technologies as well as the improvements of the housing envelops generally [87,113]. These strategies no doubt can lead to an increase in the housing cost which is already unaffordable to the low-income but however, with an incentive driven housing market, these costs can be , managed [82].…”

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“…Several factors explain the large housing deficits observed in the region. Endogenous population growth and rapid urbanization fueled by rural to urban migration are further raising the demand for housing [3]. However, as Bah et al [1] have pointed out, the supply of housing has been insufficient for several reasons.…”