Gauteng cities and townships are among the most expensive places in the world to live in, in terms of housing and transport costs.
This is according to a study of the province published on Wednesday by the Organisation for Economic Co-operation and Development (OECD).
Part of the OECD’s territorial review series, the report was produced in collaboration with the Gauteng government and the Gauteng City-Region Observatory, a partnership between the Gauteng government and the universities of Johannesburg and the Witwatersrand.
Compared to other large cities in the developed countries, Gauteng residents pay “an extremely high cost” for formal housing relative to their income, making housing unaffordable to most.
Households spend more than 23 percent of median income on housing, more than double the level for Vancouver, the Canadian city which is ranked number two in terms of housing costs.
The housing cost for Gauteng is also eight times higher than the 3 percent or less of annual income that the OECD deems as the benchmark for affordable housing.
Though way below the Gauteng average, formal housing costs in the townships are, at about 5 percent of annual income, above the benchmark for “seriously unaffordable” housing.
The calculations for housing affordability are based on data for a two-bedroomed, one-bathroomed house for the third quarter of 2009 compiled by Absa.
Township housing data from the Affordable Land and Housing Data Centre is drawn from 2008 median house prices for Diepkloof, Protea North, Katlehong Phooko, Dube neighbourhoods and Tsakane (RDP housing).
The OECD calculated median house prices as a percentage of median income to make comparisons possible.
However, it cautioned that this was not the only indicator of affordability because it did not, for instance, take into account differences in house and stand sizes as well as interest rates on mortgages and transport costs.
The picture is worse for the poorest as they also live very far from where jobs are available, which raises their transport costs as a percentage of monthly income to the highest on the African continent. Gauteng residents spend 21 percent of their monthly income on transport.
“No subsidies are given to low-income residents to rent in moderate-income neighbourhoods, as is common throughout the OECD member countries,” the OECD said. It recommended that the government consider a rent subsidy voucher programme to enable recipients to choose residential areas that would best meet their needs.
The US’s experience with housing vouchers showed that, when given the choice, the recipients of vouchers moved to neighbourhoods with lower poverty and that were less segregated.
“The low affordability and fractured nature of the public transport network harms Gauteng’s competitiveness,” the OECD said. It recommended that Gauteng develop a unified fare system to reduce the cost of transport and the costs in transferring from one system to another.
“A unified fare system could reduce commuting times and increase the efficiency of the network, given the frequency of trip chaining in Gauteng, i e the combination of multiple stops and modes of transport.”
The different modes of the transport system – trains, buses and minibus taxis – could be managed more effectively by treating them as interrelated parts of a single system. All these modes would also benefit from combined planning, purchasing, marketing and joint use of facilities.