Opportunities for private sector investment in social housing in South Africa

This report was prepared for Nedbank and investigated South Africa’s social housing sector making the case for private sector investment. Social housing is used to describe subsidised rental housing co-operative housing in South Africa for low to medium income households.

The Social Housing Regulatory Authority (‘SHRA’) was established in 2010 to manage and regulate social housing institutions and the private sector. SHRA addresses the risks that previously undermined the delivery of subsidised rental housing in the country. Recognising the need to subsidise the capital costs of projects, the government of South Africa has committed itself to funding a significant portion of social housing project costs (up to 65%), enabling subsidised units in projects to be offered to tenants with monthly household incomes of between R1 500 and R7 500.

Historically, funding for social housing was limited to SHIs. For the first time, in 2012, private sector institutions were also eligible to apply for subsidy funding through the SHRA to support the provision of social housing. This policy encourages integrated settlements in which social housing is only a part of the entire project. This can further support the viability of projects while also realising the broader aim of social housing, that is, to support spatial and social integration.

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