Minister Sexwale has recently launched his campaign “Each One Settle One” as an initiative to encourage the top 20 JSE listed companies, and the broader public, to participate in the national housing process (see a useful FM article on the subject from about 2 weeks ago). In promoting the campaign, Minister Sexwale has acknowledged that the state does not have the resources to address South Africa’s growing housing backlog on its own, and that public participation in the national housing process is critical to its success. The campaign is targeted at the wealthy: JSE-listed companies, major employers as well as employers of domestic workers, and so on, to act as small scale housing suppliers on the expectation that if all participate the collective scale achieved will be significant. While this is a novel approach, the actual policy document is still forthcoming so it is difficult to understand the detail.
Interestingly, the Minister’s “Each One Settle One” campaign is already underway in the backyards across South Africa – and has been underway for long before the campaign slogan was even coined! A study undertaken by FinMark Trust and other funders in 2005/2006 found that across South Africa, 1,85 million households were living in housing provided by small scale landlords, including the providers of backyard and other small scale rental accommodation. At the time, these landlords were offering just as many units to low income earners as had been delivered by the National Housing Subsidy Scheme. Between themselves, the landlords were earning an estimated R5bn annually in rental income, providing affordable accommodation to households with an estimated average income of less than R1800 per month. More recent analysis done for the Social Housing Foundation in 2008 found that of the 2.4 million South African households that rent their primary accommodation, 850 000 (35%) occupy small-scale rental units. This equates to approximately 10% of all South African households. Contrary to popular belief, 53% of all small-scale rental units were found to be formally constructed (houses, flats, or rooms), with the balance (47%) being shacks. The small-scale rental sub-sector achieves this with no direct state support, and at times in contravention of a hostile policy framework. Interestingly, the fastest-growing sub-sector within the small-scale rental sector is houses, flats and rooms built on existing properties, with a growth rate of 83% between 2002 and 2006. The average delivery of formal, small-scale rental units between 2002 and 2006 was 33 500 units per annum.
Urban LandMark has done considerable research into small scale landlordism, and in 2010 developed a small-scale rental strategy that is ripe for the picking, especially for policy makers wanting to add some depth to the “Each One Settle One Campaign”.
Small-scale rental is an international phenomenon, and is not unique to South Africa. Although a proportion of this accommodation does not meet recognised housing standards, this sub-sector is one of the most successful, efficient and pervasive accommodation delivery systems in South Africa. The investors, developers and landlords of this stock are not JSE-listed companies, but regular individuals finding a way to realise an income while responding to a very real demand for affordable rental accommodation. The Minister and his team should explicitly include this market segment in their suite of facilitative interventions. Much work has already been done to make this a relatively easy cherry to pick.