Government has built millions of RDP houses since 1994. Most of them are owned by the recipients. But there is a school of thought that home ownership is not always the best model for providing houses. Instead, the view goes: rent is often a more sustainable way. Subsidised rentals are a tiny part of the government’s objective to provide nearly 1.5 million houses by 2019, but it is growing. Home to about 700 families, Social Housing Institutions often are Non Profit Companies. As a Social Housing Institution, its primary objective is that of developing and/or managing housing stock that has been funded through grant programmes.
In Pietermaritzburg we have Capital City Housing NPC which currently owns and manages 1688 rental units.
WHAT IS SOCIAL HOUSING
“Social Housing” means a rental housing option for low to medium income households and which is provided by Social Housing Institutions (SHI’s) or other delivery agents. It is a targeted and focussed programme, not a mass delivery programme like the provision of low-cost housing.
There are currently Social Housing Projects in eThekwini Metro and uMsunduzi Local Municipality but plans are underway to extend this rental housing option to residents in all municipalities.
The project is 100% rental stock aimed at offering rental accommodation for people earning between R1500 and R7500 who (in terms of the Social Housing Policy) are classified as low to middle income earners. The scheme will remain rental units and cannot be converted to saleable units in the future.
WHAT ARE THE ADVANTAGES OF SOCIAL HOUSING?
Rental arrangements are known and discussed upfront. You can leave at any time, with no struggles of having to first sell. You can give notice whenever you want to move out, and do not have to first find someone to take over your rental payment.
You can be as mobile as you want, and do not have to settle in one place. Your monthly rent is cheaper than the bond repayment on a house. You do not have to pay property taxes, only monthly services fees (water and electricity). You share the responsibility for maintenance with the SHI.
CAN A TENANT PURCHASE A SOCIAL HOUSING UNIT?
Social Housing Units will NEVER be for sale or sub-let. All tenants sign a lease, which is a rental agreement, and this is the only way to access social housing in South Africa.
HOW DOES ONE QUALIFY TO BE A SOCIAL HOUSING TENANT?
The subsidy is not given to the tenant, but to the institution that provides rental housing (hence the name Institutional Subsidy). The institution receives it on behalf of the tenant who qualifies for the subsidy.
Tenants have to meet the following requirements, set by the Department of Housing, in order for the SHI to qualify for an Institutional Subsidy:
You must be a South African citizen;
Gross household earning must be between R1 500 and R15 000 per month;
You must not own or have owned property before;
You must not have received government subsidy before;
You must be 21 years of age or older; and
You must be married, cohabiting, or have dependents.
Providing high quality and secure homes at affordable rentals would be impossible without Government financial assistance in the form of the Institutional Subsidy.
WHY IS IT IMPORTANT TO PAY RENT IN SOCIAL HOUSING PROJECTS?
The Social Housing Programme involves 60% government funding. The balance is secured through a mortgage bond that is paid over 20 to 25 years.
The payment of rent is essential as the funds collected are utilized to service the mortgage bond with the National Housing Finance Corporation (NHFC).
The funds collected are also used to maintain the development so as to ensure its sustainability over a long period of time.
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