This article first appeared in the 29 June 2022 edition of the Cape Argus newspaper.
Cape Town - Infrastructure MEC Tertuis Simmers has issued a beneficiary of the Highbury Park Housing Project in Kuils River with a notice to vacate her free and subsidised Breaking New Ground (BNG) house after the illegal sale of the unit and breach of the sale agreement.
In terms of the Housing Act, the sale of government subsidised housing is subject to a pre-emptive clause: houses that are less than eight years old cannot be sold on the open market.
The clause says that if an owner wishes to sell his or her home, they must first offer this to their provincial or municipal authority.
Simmers said he had acted after investigations into an alleged BNG resale syndicate operating in the community and found that the beneficiary issued with a notice only moved into her unit in early 2020.
The investigation found that the beneficiary had advertised the property on various social media platforms.
Simmers said that despite numerous efforts by the department to discourage the sale, the house was sold for a nominal fee of R450 000 with a R110 000 deposit paid up front.
He said further investigations were under way to determine if the conduct forms part of a larger syndicated network that seems to be involved in the selling of government subsidised housing.
“It is worth noting that the incumbent occupiers who illegally purchased the house will need to institute a civil lawsuit against the beneficiaries.”
In March this year, after a visit to the development, Simmers warned beneficiaries of BNG houses, formerly known as RDP housing, against selling their state-subsidised homes without following due process.
Simmers said there were 568 000 people registered on the Western Cape Housing Demand Database and therefore such actions could not go unpunished given the limited stock of free government housing. He said he hoped the action would discourage other beneficiaries from selling their homes.
The question of the buying and selling of BNG houses has long been a bone of contention among housing experts and activists alike.
Stellenbosch University South African property law research chair Sameera Mahomedy said the housing crisis in South Africa was extremely dire.
Before the pandemic it was already bad and Covid-19 just exacerbated the situation with the job losses and unemployment that ensued. The bottom line is that people are desperate and it is getting worse.
As to whether there is a better way to deal with people selling their BNG houses, Mahomedy said the issue was complex and multifaceted as the reasoning behind people selling the houses differed, making it impossible to make a blanket statement.
She said there were also issues with hierarchy of rights because people who own houses in the private market are allowed to sell their houses whenever they want to.
“Of course, I understand the caveat by the government saying you have to wait eight years, but I do think we need to shift our narrative and try to level the playing field in terms of viewing all our citizens more equally, and not having these different standards or rights for different people.”
In a statement Ndifuna Ukwazi said the buying and selling of BNG houses had to be understood in a broader context.
“There is an estimated title deed backlog of 900 000 nationally and over 63 000 in the Western Cape. Transactions of a subsidised house is endemic to the vast unemployment and desperation of households.”
They said research into transactions on the government subsidised houses had demonstrated that a large percentage of people sell their homes in desperation for as low as half the subsidy price.
“Given the costs of maintaining a home in urban areas, without sufficient investment in the local economy, this practice of buying and selling would continue.”
In a paper she wrote on the issue, Centre for Affordable Housing Finance in Africa (CAHF) director Kecia Rust argued that by not enabling the resale market, the government had further exacerbated inequality.
Rust said by promoting the resale market for BNG houses the government would realise a number of benefits, such as beneficiaries being able to realise the asset value of their housing and use that to climb the housing ladder, improving their asset wealth and, in the long run, using property to close the inequality gap.
Chief executive of Communicare Anthea Houston said the housing crisis deepened daily as household growth outstripped housing delivery in South Africa and Cape Town.
She said to be viable social housing must be built at medium or higher densities so that the operating costs are kept low.
“Unfortunately, given the limited government contributions to social housing, this type of housing constitutes less than 1% of all housing delivered under the government’s Housing Subsidy Scheme.”