Housing income threshold must rise!

The majority of poor South Africans cannot access housing in the market and further exclusion from state housing on technicalities such as poorly-crafted beneficiary thresholds is a further impediment.

Since the inception of the Reconstruction and Development Housing Programme (RDP) in 1994, the income threshold for those who qualify for state-provided houses (RDP houses) has remained at R0 – R3 500 monthly per household. The Department of Human Settlements has not reviewed the threshold over the years in spite of inflation that erodes people’s earnings. Inflation means the cost of goods increases over time and households’ disposable income shrinks if the income is not on par with the inflation rate.

In order to have the same purchasing power, a household that earned R 3 500 in March 2015 should earn R 4 283 in March 2019. In real wage terms, this means households that earn R4 283 should qualify for an RDP house.

But the Department of Human Settlements has failed to review the threshold, and this has led to the exclusion of individuals and households that should qualify for RDP housing. People who earn above the threshold today but less than R5 000 for example have very little disposable income and limited purchasing power which makes it almost impossible to benefit from social rental housing programmes as they struggle to pay rentals and rates. The result is exclusion from both social housing programmes and RDP housing.

Evidence has shown that most of the people who should benefit from social rental housing programmes struggle to pay their rent and rates. Social rental housing caters for those who earn between R3 500 and R7 500. Through the programme, the government subsidizes the construction of properties, which are let out to low-income earners. Those who do not qualify for RDP houses are intended to benefit from social rental housing. But those who qualify for social housing struggle to pay rent and rates.

The rationale by the Department of Human Settlements to keep the RDP threshold constant could be related to budget concerns. Increasing the threshold for RDP houses might translate to increased demand for RDP houses, which already has a huge backlog. However, budget concerns cannot justify exclusion of the poor from realising their right to shelter, which is stipulated in Section 26 of the Constitution of South Africa. The state has an obligation to progressively meet the basic rights of low-income earners. It is simpy not reasonable to say an individual whose income has been increased from R3 500 to R4 000 in the past year is automatically disqualified from applying for an RDP house.

The Public Service Commission (PSC) undertook an evaluation of the National Housing Subsidy Scheme in 2003. In the report, the PSC noted recommendations by the Urban Sector Network in 2000, which included using criteria other than income and adjusting the housing subsidy for inflation. The Department has done well on the former, by including the most vulnerable community members like the elderly, child headed households and people with disabilities to their mandate.

However, it has failed to factor in inflation on the income of those who qualify for RDP houses, which naturally should result in the increase of the upper threshold from R3 500. After all these years of maintaining the same income threshold for the beneficiary of RDP houses and social rental housing the department must consider reviewing the household income threshold and factor in inflation because it determines the purchasing power of the people.

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