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Asset revenue fund to help speed up development of housing projects in Western Cape

The Forest Village housing development in Eerste River. has122 partially subsidised Finance Linked Individual Subsidy Houses (FLISP) houses. File Picture: Henk Kruger/African News Agency (ANA)

The Forest Village housing development in Eerste River. has122 partially subsidised Finance Linked Individual Subsidy Houses (FLISP) houses. File Picture: Henk Kruger/African News Agency (ANA)

Published Aug 20, 2021

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Cape Town - Neither the provincial human settlements department nor municipalities in the province can properly sustain their rental stock catering to the least privileged in communities across the Western Cape, but do it because they are bound by the principle of social responsibility.

The department’s chief financial officer Francois de Wet made this admission during a briefing to the legislature’s human settlements standing committee, where he briefed members on the Western Cape Asset Revenue Fund.

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“The people in rental stock are mostly those that qualify for additional financial assistance or the poorest of the poor and as such is not sustainable for us at all and we are re-looking at what to do with that rental stock.”

“Rental income is about R2 million a year while the cost the department incurs on these houses is R20m. Municipal rental stock for the less privileged also has low rental income because people cannot afford more and so we budget for a shortfall.

“We know that rental stock in municipalities is a challenge and although our affordable housing unit provides support to, it is not being optimally utilised but the issue is the department cannot go and ask tenants such as these to pay market-related rental,” said De Wet.

The asset revenue fund is a tool by the provincial government which aims to support local municipalities in unlocking funding opportunities to accelerate the development of various human settlements projects across the province in non-metro areas.

The initiative seeks to reserve income generated by developers through the sale of stands created during the first phase of a development to finance housing for people earning R7 000 per month and less

Yesterday, committee chairperson Matlhodi Maseko (DA) said: “For every rand spent by municipalities, the revenue fund will also allocate a rand which will thus double the funding of the municipalities for their projects and unlock housing opportunities for the most vulnerable residents of the province.

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“To date, five municipalities have applied to the Asset Revenue Fund for eight projects which stretch from the George CBD to Piketberg on the West Coast. These projects include the development of old age homes, social housing projects and Finance Linked Individual Subsidy (Flisp) units.”

The department also briefed the committee on its work to upskill and train youth and semi-skilled workers through housing developments.

The department said that nearly R4m has been allocated to support an estimated 250 workers through a daily stipend while they are trained in bricklaying, painting, plastering and carpentry this year.

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“These training initiatives empower local communities and provide economic opportunities without compromising on the quality and the standard of housing opportunities,” said the department.

[email protected]

Cape Argus

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