Living Cape: establishing sustainable human settlements

The provision of fully subsidised housing remains the standard form of housing assistance in the Western Cape for low-income households. Recent experience, unfortunately, has been one of fast-growing demand for subsidised housing outstripping resource-limited supply, with ever-larger informal settlements the result. Despite this history, as the Western Cape continues to develop, many of the primary drivers of housing demand are beginning to weaken: birth rates are declining (potentially falling below replacement levels by the 2030s), the population is aging (with the median age rising from 28 to 34), urban population growth is slowing, and personal incomes are rising across the income spectrum. These changes could substantially reduce future demand for subsidised housing.

This policy brief looks at how the number of households qualifying for housing opportunities under the current housing regime has changed over time and may continue to change into the future.

This policy brief, therefore, explores several sets of policy interventions, each designed to reduce future need for subsidised housing opportunities by spurring faster and more inclusive economic growth, with each targeting a specific policy area: governance, education, infrastructure, and health. On their own, the education and governance interventions have the most significant impact – in terms of accelerating economic growth and improving income distribution in the province – increasing average annual economic growth to 4.8% and 4.6%, respectively (compared to 4.4% in the Base Case), and reducing the number of households in need of fully subsidised housing in 2040 by 11% and 8%.