HOUSING: THE FAILURE OF THE NEOLIBERAL PATH

by Dec 1, 2023Amandla 90/91, Feature

HOW SEVERE ARE SOUTH Africa’s housing and consumer debt crises, and what can be done to address them, at the root, finally; not just with existing tokenistic subsidy measures? By considering the class character of housing, fused with race, gender and environmental analysis, we can distinguish between the neoliberal agenda of the state, banks and property developers on the one hand, and the needs of society on the other.

Census failure

First, regarding the scale of the crisis, it’s even worse than in 1994, given the country’s population increase from 35 to 62 million. We can’t truly say, with confidence, how bad things are, due to Statistics South Africa’s 2016-21 defunding, self-described “brain drain” and professional collapse. (Recall Stats SA’s zany declaration in mid-2020 that the “narrow” unemployment rate had fallen during Covid’s lockdown period from 30% to 23%. In reality, from April-June 2020 there was actually a decline of five million employed and informally-employed workers.)

Official homelessness figures, drawing on the 2022 Census, are unbelievably rosy: for example, only 55,719 people without shelter in 2022, led by Gauteng with 25,384, the Western Cape with 9,743 and KwaZulu-Natal with 7,768. More realistically, the Johannesburg Homelessness Network reckons there are “about 20,000 people sleeping rough in Johannesburg alone, with fewer than 1,000 beds available in shelters,” and the Western Cape Government recently estimated 14,000 people experiencing homelessness in Cape Town alone, a figure endorsed by urban public-interest NGO Ndifuna Ukwazi.

Such extreme undercounts reflect an exceptionally sloppy Census, with an official surveying deficit above 30% more than 30% of people were not actually counted. Stats SA’s board chair conceded that may rate as “a new international record.” Blamed on residual Covid-19 hesitancies, xenophobia and very low trust in the government,” it implies that a redo is probably in order.

The bias in who was counted and who was not is glaringly obvious in surreal General Household Survey figures released in August 2023, such as the share of “households living in informal dwellings” in the three poorest provinces: only 3.1% in Limpopo, and just over 5% in KwaZulu-Natal and the Eastern Cape.

No progress with backlog

What we do know, though, is that several million houses have been built with state subsidies since 1994. But that rate has fallen dramatically as construction prices rose and subsidies stayed flat. As then Human Settlements Minister Lindiwe Sisulu claimed in a 2019 strategic plan, “the government has delivered almost 4.9 million houses and housing opportunities since the dawn of democracy” which if true, would have meant nearly 200,000 RDP houses were built annually (two-thirds of the 1994 RDP annual mandate).

Not true. In an August 2021 cabinet reshuffle, Tourism Minister Mmamoloko Kubayi switched jobs with Sisulu, and two years later in a MoneyWeb interview, admitted the scope of the problems she inherited: “You would have projects that have been done, and no one could tell where they were in the process, and incomplete projects. So we’ve now quantified them to almost 1.9 million units that were unfinished.” (Those were Sisulu’s “housing opportunities”, perhaps.)

Why such sloth? Under Sisulu, she remarked, “We had a tendency of non-accountability, where you would find contractors will come, do the work, not finish, and they will not be held accountable.” But actually, this PPP (Public-Private Plundering) model dates to 1994 – when national policy encouraged municipalities to end what, under white rule, had been extensive public (municipally-owned) housing construction and management. Instead, they outsourced these contracts to for-profit developers and banks.

The result, Kubayi confirmed, is no progress in reducing the absolute number of houses in the national backlog: “We have built more than three million houses. For the ones that are falling under Breaking New Ground, which is your normal RDP [house], the current backlog we are told is at three million.”

That’s a shocking admission, for as the RDP document had reported, “The urban housing backlog in 1990 was conservatively estimated at 1.3 million units. Including hostels and rural areas, the backlog rises to approximately three million units.”

Hence it’s terribly important to contest the ruling party’s back-slapping service-delivery claims, especially in an election year. After all, when combined with municipal services typically including electricity, water, sanitation, stormwater drainage, lighting and refuse removal the dissatisfaction expressed about housing (in a poll by the Human Sciences Research Council) in 2019 rose to 38% of the population, up from 25% in 2003.

The 2020-22 Covid-19 shocks caused even more damage to housing and service delivery, especially when the International Monetary Fund, World Bank and BRICS Bank provided nearly $10 billion in expensive loans but with ‘fiscal-consolidation’ austerity conditionalities which have radically reduced funds available to municipalities.

Yet to be fair, on the one hand, the current national housing subsidy budget amazingly escaped Enoch Godongwana’s recent fiscal hatchet. He approved an increase in spending from R26.1 billion this year to R32.6 billion in 2026-27, slightly higher than the anticipated inflation rate.

On the other hand, as a share of the total budget (which rises from R2.262 trillion this year up to R2.588 trillion in 2026-27), the increase from 1.11% to 1.26% is still far below the immediate post-apartheid period, in which Housing Minister Joe Slovo successfully lobbied for a 1.5% housing share of the budget. And it’s extremely low compared to the 5% that both the Reconstruction and Development Programme (RDP) and Slovo’s 1994.

Budgetary trends in the ‘social wage’ (Treasury’s 2023 Medium-Term Budget Framework)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change must come – but how?

There is inevitably a debate on whether the radical change necessary can be achieved through advocating the “right to housing” found in the South African Constitution ( albeit working within a relatively ungenerous welfare state) or through a much more radical approach to urban transformation.

The leading Marxist urban scholar, David Harvey, has insisted on the latter, yet with a nod to the former (in a 2008 New Left Review article), by virtue of using: the right to the city as both working slogan and political ideal, precisely because it focuses on the question of who commands the necessary connection between urbanization and surplus production and use. The democratization of that right, andt he construction of a broad social movement to enforce its will, are imperative if the dispossessed are totake back the control which they have for so long been denied, and if they are to institute new modes of urbanization. 

However, the problem of rights-based sloganeering became clear in South Africa’s Constitution, which in 1996 was launched by its main commission organiser, Cyril Ramaphosa, just as he was transitioning from trade unionist and liberation movement general secretary to business tycoon. To trump the pleasing constitutional clause, “Everyone has the right to have access to adequate housing,” two weasel-word phrases were inserted, along with a devotion to property rights: “The state must take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of this right.”

That phrasing neutered the Constitution. The failure to anticipate austerity and the slow pace of delivery – or to really compel the state to ditch Slovo’s fetish that “housing must be provided within a normalised market” (the main operational objective of his 1994 Housing White Paper) – left the judiciary hamstrung.

The 2000 lawsuit against housing policy led by Irene Grootboom showed, especially when she died homeless in 2008, that a court simply declaring Slovo’s policy unconstitutional because it ignored poor people, was not enough. In that case, the Constitutional Court felt it was not empowered to direct a brand new policy, due to the division of labour between executive and judiciary. The capitalist status quo remained intact.

Ironically, when Mashatile spoke in London at Chatham House in May 2020, he admitted past failure: Our point of departure is that the new economy we are building must be more inclusive, resilient and sustainable. We have taken the view that in building a post Covid-19 economy, we need to go back to the fundamental insights contained in the RDP of the early 1990s…Guided by the RDP, we are of the view that through urban expansion and renewal as well as provision of infrastructure and services, particularly to the historically-excluded communities in rural and urban areas, conditions would be created to repair the broken structure of the South African economy.

There are many unrealised RDP objectives. The promised land redistribution target of 30% within five years was scaled down dramatically (less than 1% of land was redistributed), and substantial funding for land reform was not forthcoming. The promised minimum standards for housing were replaced by an “‘incremental” process and inadequate “basic services”, and a strong state role in housing was negated in favour of the market-driven approach. As a result, the RDP houses were often less than 30 square meters in size, compared with the old apartheid “matchbox” 40 square meters.

Politically connected contractors with dubious ethics did the construction, often installing lower-grade state services, including rare rubbish collection, inhumane sanitation, dirt roads, no street lights, no sidewalks, and inadequate storm-water drainage. And they were generally located even further from jobs and amenities than under apartheid.

Resistance has often emerged, although like most of the “popcorn protests” that appear briefly, the various urban and peri-urban community movements have not advanced a genuine policy solution. The need to break away from the capitalist-based strategy may eventually arise, but only when the movements declare a genuine right to South Africa’s cities and towns far more ambitious than that offered in the Constitution or in state policy.

Patrick Bond teaches sociology at the University of Johannesburg.

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