Big shift in South Africa’s rental market – and the government is taking note
The Department of Public Works and Infrastructure has gazetted a comprehensive document updating the norms and standards for all rental housing in South Africa, signifying a big shift in how it approaches social housing in the country.
The norms and standards, while not prescriptive, will be incorporated into the national housing and human settlements code and will define what is expected of the various forms of rental housing in South Africa.
One of the key trends emerging in the country has caught the department’s attention, namely the rise of informal renting or ‘backyard rentals’ in the country.
The department said that over the last five years, there has been increasing recognition of this informal rental market; however, attempts by the government to put policies in place to enable this typology have largely been unsuccessful.
“Despite this, the private sector has thrived by providing a range of rental types by a range of different actors,” the department said.
Looking ahead, the department said that there is a growing realisation that South Africa’s housing programme in its current form cannot be sustained.
“The government cannot financially afford a commitment to the eradication of informal settlements and the provision of fully subsidised, stand-alone houses for low-income households. Meeting this demand alone will require the government to build at least 1.8 million houses at a current cost of R343 billion,” it said.
Because of this, the government is now shifting its policy emphasis towards informal settlement upgrading, site and service schemes, affordable housing for ownership, social housing and affordable rental, including shared one-room/shared ablutions, smaller units etc.
In this new landscape, a greater role by the private sector, individuals and households is envisaged, it said.
Backyard rentals
According to the department, backyard rental is a sub-market of the private sector rental market, and it is of a substantial size.
There were approximately 919,000 households living in backyard rental units in South Africa in 2016, making up an estimated 26% of the total rental market and 5% of the total housing accommodation arrangements in South Africa.
This has only grown since then.
The department flagged backyard rentals as a sector to focus on and grow over the next 25 to 30 years in South Africa to help alleviate growing demand for cheap or affordable housing in South Africa.
The department said that the backyard unit sub-market is important for four reasons:
- It provides rental accommodation across income groups but particularly in the affordable housing market where there are shortages of accommodation;
- It offers entrepreneurial and job creation opportunities for low-income households;
- It plays a key role in the compaction and densification of cities, as well as better utilisation of existing infrastructure investments; and
- It is usually in well-located areas and as such, offers access to urban amenities for low-income households, thereby enhancing their financial sustainability.
Backyard units are also found everywhere – in high, middle and low-income proclaimed urban areas, across old and new subsidised and unsubsidised housing estates, rural areas and in informal settlements.
Units vary greatly in terms of their size, type and quality of construction materials. A high proportion have access to basic services (water, toilet and electricity), but the nature and quality of this access is highly variable.
Access can be internal, on-site (shared) or offsite (communal). Service connections vary from fully reticulated to illegal connections. There is variance in the willingness and ability of landlords to comply with building regulations.
Some landlords go through the formal channels of building application and approvals, and build to legislatively required specifications, while others are either ignorant of, cannot afford to or choose to ignore existing planning frameworks, building regulations and by-laws.
Despite a lack of regulation, research shows that relations between owners and renters are relatively good. Evictions are relatively rare. Renters are often extended family members or are part of broader social networks.
There are negative aspects, however. Due to the unregulated nature of these dwellings they can often put pressure on infrastructure, and it can undermine the quality of living environments as a result of overcrowding and tenants not having access to basic services, the department said.
Because of the nature of backyard rentals, the department conceded that the dwellings were unlikely to meet the norms and standards and detailed in its documentation. Despite this, it encouraged municipalities not to act against such units.
“Municipalities are strongly encouraged not to enforce the norms and standards in a manner that will undermine the Backyard Rental sub-markets that already exist in their areas, but rather to designate areas and encourage the upgrading of the stock over time,” it said.
“It is very important that any norms and standards that are introduced enhance rather than undermine the Backyard Rental sub-market.”
Read: Massive overhaul planned for neighbourhoods in South Africa – including more ‘backyard rentals’
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