Housing construction sector, top job creator - UCT study

The study, conducted by a team under University of Cape Town associate professor Francois Viruly, audited the social and economic impact of affordable housing developments commissioned by International Housing Solutions (IHS), a global private equity investor which has financed projects with a combined total value of more than R7.8bn.

The research had the objective to determine the indirect benefits derived from living in integrated affordable housing developments, and the job creation impact of such developments. "The research breaks new ground, as little research has been undertaken to measure the indirect economic as well as social benefits that the supply of affordable housing creates," says Viruly.

Moving away from RDP housing

The timing of the release of the report is particularly significant, coming as it does after a number of developments in recent weeks, which indicate that the country's approach to the housing backlog is set to move from a singular focus on the provision of free, RDP housing to the development of affordable housing. This will allow South African families an opportunity to start on, and move up, the housing ladder.

"The concept of RDP housing has been a revolutionary programme replicated nowhere in the world," says IHS managing partner Soula Proxenos. "However, after some three million homes have been 'given away', it appears this policy has served its purpose and something more sustainable is likely to take its place. Several developments these past weeks have confirmed that SA is moving towards other forms of subsidy that aid poorer households and allow them to join the formal housing ladder in the affordable housing sector," says Proxenos.

Political leaders gave an indication of future housing

"President Jacob Zuma's State of the Nation Address, the R83.5bn in housing subsidies announced by Finance Minister Pravin Gordhan during his budget speech, and pronouncements by Mayor of Cape Town Patricia de Lille and Planning Minister Trevor Manuel, have collectively given a clear indication of how the country's housing crisis might be addressed by the development of affordable housing in coming years and decades," she says.

The study found that it takes between 1 200 and 1 500 man-hours to build a 40m2 house, with the average being approximately 1 289 hours. This comprises 541 hours of skilled and 748.8 hours of unskilled work. This again translates to 2.45 people employed continuously to complete a typical house in 13 weeks.

Developments have a positive social impact

Taking into account direct and indirect employment opportunities in line with the aforementioned calculations, it is expected that IHS's investments over the life of the first fund will create 100 000 jobs. An estimated 5 000 jobs will be created per annum in perpetuity, through the maintenance and management of housing units, the payment of rates and taxes , and the expenditure on goods and services by households directly related to the housing units. 50 000 jobs will be created once-off for the construction of the invested units. This means that, over the life of the first fund, a total of 100 000 man years of employment will be created.

Regarding the social impact of IHS's developments, which are all designed to ensure healthy, integrated communities rather than just to provide dwellings, Viruly notes that residents surveyed reported an improvement in the quality of life for children, health and housing. "More than 50% of households have also seen an improvement in access to education and employment from the property that they presently occupy." he says.

"Developers and users agree that the units have had a positive impact on the neighbourhood safety and security. The overall conclusion is that the developments surveyed provide benefits that go well beyond the mere provision of housing, but rather are playing an important role in creating sustainable human settlements. The developments provide numerous indirect benefits, which include improvement to accessibility and employment, leisure and social amenities," he says.