Housing rental stock provincial government – Infographic

Human Settlements and Public Works Provincial government have two stocks of rental accommodation: one managed by Public Works and which accommodates government employees; one managed by Human Settlements for ordinary citizens. Public Works provide rental accommodation at low monthly rentals for occupants who are also mostly government employees earning an income. There are about 6600 of these units across the country. Operational shortfalls in the provincial public works portfolio are covered by provincial governments’ budget allocations and represents a significant subsidy to the occupants estimated to be worth nearly R5,000 per household relative to market rents. Occupants should be able to afford to pay for their accommodation on terms that are not highly subsidised, especially as public servants receive a housing allowance. The arrangement is not sustainable or equitable. However, any attempt to change these arrangements is met with opposition from government employees. Human Settlements departments inherited a stock of provincial government-owned units that has largely been sold off or handed over to occupants. A small portfolio of more problematic units — about 6,000 in total — remains in the books of five provinces. These are rented out at low rates, and collection rates are poor, leading to a gap between costs and revenues of about R100 million in 2016/17. This creates an individual subsidy to the beneficiary far greater than the subsidy provided in any of the other housing programmes. The policy equity argument does not hold for this stock. Overall, it is unsustainable to continue to manage the stock as rental stock and for provincial departments to continue to act as management agents.