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10.1177/0739456X02250305 ARTICLEHousing Policy in Postapartheid South AfricaMiraftab
The Perils of Participatory Discourse:
Housing Policy in Postapartheid
South Africa
Faranak Miraftab
T
his article examines communities’ participation in human settlement develop
-
ment processes as partners with the public and private sectors in the South African
context. At the early stages of postapartheid South Africa, two important components
for successful community participation in housing development processes were in
place: a democratic government that recognized the significance of communities’ con-
tributions to housing development processes and a strong grassroots movement moti-
vated to take part in development processes.
In 1994, when the democratic government of National Unity led by the African
National Congress (ANC) came to power, its new constitution recognized housing as a
human right for all. The government made a commitment to address the injustices of
the past through its housing policy and declared the provision of housing for the his-
torically oppressed majority in South Africa to be a priority. The government’s policy
documents stressed a people-centered approach: significant community participation
in housing processes and an active role for low-income groups as partners with govern
-
ment and the private sector in developing housing (Department of Housing 1994a).
The grassroots communities’ mobilization in the black townships of the country had
already achieved significant organization through decades of resistance to the brutality
of the apartheid. These community-based movements, which had fought against the
oppression of the state, among other strategies, by boycotting black authorities as
instruments of the state control and withholding payment for services to them, held
significant social capital that could be enlisted to further the new housing directives
(Mayekiso 1996).
Despite these positive elements, what is evident from the studies coming out of
South Africa since 1995 is how limited community participation in processes of hous
-
ing development has been under the government’s housing policy (Tomlinson 1999;
Jenkins 1999; Ruiters and Bond 1996; Bolnick 1999; Bond 2000a). This finding, consis
-
tent among studies whatever their divergent analyses, is confirmed by my own observa
-
tions and information gathered during 1998 in meetings with key informants among
community-based organizations (CBOs), nongovernmental organizations (NGOs),
226
Journal of Planning Education and Research 22:226-239
DOI: 10.1177/0739456X02250305
© 2003 Association of Collegiate Schools of Planning
Abstract
This article concerns the discursive use of
community participation in processes of
human settlement development. It fo-
cuses on South African housing policy,
which expected to implement a people-
centered policy through developer-driven
strategies. Stressing two important condi-
tions with respect to the conception and
institutionalization of participatory pro-
cesses, the paper examines the policy’s
failure in its participatory agenda,
whereby contrary to its participatory rhet
-
oric, communities and other actors have
not established a positive or synergistic re
-
lationship, but rather one best defined by
a zero-sum perspective: the private sector
interests have hijacked the participatory
discourse, and communities’ interests
have been marginalized.
Keywords: housing policy; South Africa
Faranak Miraftab is an assistant professor
in the Department of Urban and Regional
Planning at the University of Illinois,
Urbana Champaign. Her area of research
has focused on the access to housing and
urban services by low-income groups in
developing countries. In particular, she is
interested in the state-society relations in
processes of human settlement
development.
and private-sector developers of housing for low-income
groups in Cape Town.
The central quest of this article, then, is to understand why,
given the favorable conditions noted above, South Africa’s
housing policy has fallen short of its agenda for community
participation in the processes of housing development. What
were the underlying misconceptions in the formulation of the
policy? What links and supportive conditions were missing for
reaching the objective of communities’ partnerships with the
public and private sectors?
The analysis that follows concurs with the analyses of other
investigators who have pointed out the contradictory nature of
South Africa’s housing policy, trying to implement a people-
centered policy through developer-driven strategies (see
Jenkins 1999; Tomlinson 1998; Bond 2000a, 2000b; Lalloo
1999). My analysis, however, goes on to point out certain mis
-
conceptions about the notion of power sharing in participa
-
tory processes that lie at the heart of this contradiction. To
achieve the synergistic and generative relationship between
communities and other actors, which characterizes a success-
ful partnership, the ways in which partnership processes are
conceived and institutionalized prove critical. How the origin
of participatory processes is conceived and how community
participation is institutionalized and assisted to scale up deter-
mine whether community participation moves beyond mere
tokenism. These two elements are the focus of the analysis
developed here.
The article takes the following structure. First a brief over
-
view of the rationale for community participation is sketched
along with its critique. These follow a discussion of the above-
mentioned elements in the relationship between communities
and other actors: the conception of participatory processes
and the institutionalization of community participation. My
arguments are grounded in the concrete example presented
by two programs of current South African housing policy: the
Subsidy Scheme and the People’s Housing Process (PHP). The
article’s analysis of these programs identifies the conceptual
and operational shortcomings of the current policy that
impede active participation of communities in housing pro
-
cesses and preclude any synergistic relationship between com
-
munity and other actors. The article’s conclusion stresses the
context specificity of the relationship between communities
and other actors in the public and private sectors and thus the
inevitability of failure for South Africa’s participatory agenda
in the context analyzed here. Yet considering the resurgence
of the grassroots movement and the necessity for the govern
-
ment to consider alternative approaches, optimism about the
possibility of change is not abandoned.
䉴
The Roads to Community Participation
In the past three decades, support for community participa
-
tion in processes of housing and neighborhood services devel
-
opment (referred to in this article as human settlement devel
-
opment) has risen among academics and development
professionals. This support drives from three rationales:
•
increased efficiency, to lower the cost of projects;
•
increased effectiveness, to achieve a greater reach for hous
-
ing among the poor; and
•
empowerment of communities, to increase their influence
in decisions that affect their living conditions.
These objectives of community participation can each be
broadly located within one of two interpretations, which view
participation of local communities in development projects
either as a means (efficiency/effectiveness) or as an end
(empowerment/emancipation) (Moser 1989).
The former view advocates mobilizing communities as a
means to effective and efficient project implementation (see
UNCHS 1984, 1985; Paul 1987). Critics point out that viewed
in this way, community participation may indeed ameliorate
communities’ immediate problems but seldom then contin-
ues beyond the life of the specific projects and does not result
in any greater community influence in decision making. Com-
munities, especially women within them, become pools of
cheap labor and do not challenge their larger political and
economic contexts (Chambers 1998; Burkey 1996; Guijt and
Shah 1998; Rahnema 1992). This interpretation of participa
-
tory processes is further criticized as satisfying the neoliberal
rationale of efficiency and cost-effectiveness, but at the cost of
leaving communities to participate in other projects, without
real influence in decision making or control over their life
situations.
The latter view, of community participation as an end,
stresses the empowerment derived from community participa
-
tion in human settlement development when participation
goes beyond implementing a project and includes, as well,
defining project goals and objectives and formulating policies.
This perspective calls for the role of communities to change
from that of passive recipients of projects’ outcomes to active
initiators of projects. Thus, ideally, the participatory processes
build a sense of empowerment among participants by demon
-
strating that communities can change their lives and address
their immediate needs through mobilization of their
resources and reliance on their own power (Friedmann 1992).
Often, however, these processes fall short of the ideal, and
community mobilization may not achieve the participants’
expected material gain. As empowerment, therefore, these
Housing Policy in Postapartheid South Africa 䉳 227
processes are criticized for often leading to frustration in the
communities insofar as the empowerment is bestowed inequi
-
tably. It is argued that in actuality the participatory arrange
-
ments fall prey to political abuse and replicate unjust develop
-
ment practices by benefiting the more powerful and more
vocal—often men—within the community (Nelson and
Wright 1995; Guijt and Shah 1998).
In fact, whether in the former case, when communities par
-
ticipate in predetermined projects, or in the latter case, when
they participate in open processes, community participation in
development of human settlements can lapse into a cosmetic
and token role. The results are community fatigue and
nonparticipation, often unjustly misinterpreted as apathy
(Lane 1995). Certain conditions determine whether meaning
-
ful participatory processes do emerge, ones capable of both
efficiency/effectiveness and emancipation/empowerment.
First, meaningful participation, as Burkey (1996) argues,
“is concerned with achieving power: that is the power to influ
-
ence decisions that affect one’s livelihood” (p. 59). To under
-
stand at what cost and in which context communities gain
decision-making power, one must assess the relationship
between the community and external agents. Does more
power of communities in local decision making equal less
power of governments and the private sector to control those
decisions? Or are the communities and the external agents in a
complementary relationship that creates a synergy benefiting
all? In which case, under what conditions can we forestall
tokenism in participation? How can we ensure that communi
-
ties gain from participating in collaborative processes?
Second, in assessing the possibilities for empowering and
meaningful participation, one should consider who is partici
-
pating in whose process. Is it the community being brought
into processes defined by the government and/or developers
and thus tied to their priorities? Or is it the private sector and
the government being brought into a grassroots-initiated pro
-
cess and complementing resources mobilized by the commu
-
nity? How the participatory process is conceived and origi
-
nated goes far toward defining who sets the rules of the game
and whose premises guide the participation.
Third, whether the effects of community participation
extend beyond the cases isolated within territorial communi
-
ties, to become meaningful and effective strategies for devel
-
opment and empowerment depends on the nature and the
extent of institutional support. Is participation simply the pro
forma response required by a decree from above? Or is it an
ongoing function built through supportive legal, administra
-
tive, and financial frameworks that encourages communities
and their organizations to scale up local experience of
participatory development? Each of these elements is dis
-
cussed below.
䉴
Communities’ Relationships
vis-à-vis Other Actors
If participatory processes are to move beyond rhetoric and
tokenism, the relations between community and external
agents are critical. In an essay on empowerment, Patricia Wil
-
son (1996) engages in a dialogue with two camps in the field of
community development with implications for how I approach
this issue. She articulates on one hand the belief in what she
calls “the myth of scarcity of power” in participatory processes:
power is assumed as a fixed sum, so that the more one party
gets, the less is left for others—that is, a zero-sum game. On the
other hand, she presents, and also makes the case for, the
belief in a positive-sum game, or generative power in participa
-
tory processes: power of one party is not at the cost of, but com
-
plementary to the power of, others. Wilson views a zero-sum
game as disempowering because it places the power outside
oneself, thus promoting an “us and them” relationship that
demonizes others, feeds fear, minimizes trust, and limits the
effectiveness of communities’ energy by mobilizing it ineffi-
ciently in adversarial terms. On the contrary, a positive-sum
concept of power is viewed as empowering because it focuses
on communities’ recognition of their own power and
resources and promotes trust and cooperation, thus avoiding
disharmony and inefficient opposition (Wilson 1996).
In human settlement development processes, the two per
-
spectives described by Wilson can be captured in two types of
scenarios. Zero-sum relationships are evident in situations
where communities are limited to ad hoc participation in pre
-
determined projects; where communities are excluded from
decision making, but help to implement the project by provid
-
ing cheap labor; where a certain fear of communities’ control
is evident and a mutual lack of trust drives the process. In such
situations, the communities’ energy is mobilized mostly in
adversarial roles against the external actors rather than in com
-
plementary roles. In contrast, positive-sum or synergistic rela
-
tionships can be expected in projects where communities have
been involved in initiating the process and participate actively
in decisions guiding the projects and where communities are
able to operate with other actors on a level playing field. In
such situations, communities mobilize their energy positively
and complementarily vis-à-vis others in the process.
Whether the relationship between communities and gov
-
ernment or between communities and the private sector is a
228 Miraftab
zero-sum or a positive-sum relationship depends on the con
-
text. As Peter Evans (1997a, 1997b) puts it in discussing the rela
-
tionship between the society and the state, we cannot assume
either a zero-sum or a positive-sum synergistic relationship for
a given situation. The state, he argues, cannot always be assumed
to be the enemy—at least not monolithically so. Nor is a syner
-
gistic relationship always a given. Evans (1997a) points out that
whether society operates in a zero-sum or a synergistic relation
-
ship with the state has to do with the context in which the rela
-
tionship is constructed. He stresses the likelihood of what he
calls “embedded complementarity” of the two actors, whereby
they not only have complementary interests but also are linked
through day-to-day interactions and “networks of trust and col
-
laboration that span the public-private boundary and bind
state and civil society together” (p. 184).
Evans’s (1997a, 1997b) analysis bears on the problem dis
-
cussed here. External agents cannot be assumed to be always in
competition with communities’ interests and to be their ene
-
mies. Nor can we assume that the relationship between a com
-
munity and other actors is automatically a positive-sum, gener-
ative relationship whose trust and collaboration will pay off in a
win-win situation that strengthens both the community and
other participants. The possibility of such synergy between a
community and other, private and public, actors depends on
contextual factors. In a broad sense, the dynamics of the gov-
ernment, the private sector, and the communities in a collabo-
rative process, as historically defined on their own terms, is a
major factor. But in particular, the relationship between a com
-
munity and other actors is influenced by the institutional envi
-
ronment within which their partnership is to function, as well
as by the arena where the partnership originated. These condi
-
tions matter in how the different sectors relate with each other
and how their partnership will develop. Whether community
participation becomes a cosmetic and exploitive feature of the
collaboration, providing cheap labor but giving the commu
-
nity no say in decisions, or whether, on the contrary, the com
-
munity can exercise a degree of control over the process and
participate in decisions, thus becoming empowered, depends
on the conditions within which the collaboration is
established.
An examination of the South African case, presented later
in this article, will demonstrate the way in which communities’
relationships with other actors, inherently neither zero-sum
nor positive-sum, are shaped by those two factors: the domain
within which the participatory process is conceived and the
degree of institutional support communities receive for mobi
-
lizing their resources. Those two factors are explored in detail
below.
䉴
Conception and Origin of
Participatory Processes
The origin of participatory development matters because
that helps decide whose premises define the rules of the game
and its oversight (Lankatilleke 1999). The achievements of a
participatory process are distinguishable according to whether
the process was initiated by community-based and civic move
-
ments that demand inclusive decision making, by governmen
-
tal enabling frameworks that promote or require communi
-
ties’ participation in development decisions, or by private
sector developers (Abbott 1996, 1999; Helmsing 1997). In
other words, whether the right to participate in decisions is
taken by the community or given to the community makes a
difference in the outcome of participatory development.
Some commentators believe that a participatory process
must be conceived at the community level to secure that the
primary commitment of the process is to the community and
to protect the autonomy of the community’s participation. In
other words, a participatory process should emerge as a result
of the community’s definition of its overall objectives and their
expectation of the private and the public sectors’ contribu-
tions to the process. Once participation is institutionalized,
that is, mainstreamed and required by the government’s
bureaucracy, the conception of the process lies outside the
community realm and loses its original meaning and effect
(Lankatilleke 1999; Blackburn 1998). The ball is not in the
communities’ court, and thus the original meaning of commu
-
nity participation becomes distorted. From this point of view,
when agents outside the community (i.e., government agen
-
cies) initiate participatory processes, the community’s auton
-
omy from the state is undermined.
Others, however, question the possibility of spontaneous
combustion, or immaculate conception, for participatory pro
-
cesses. They point out that in practice, most participatory pro
-
cesses are indeed initiated by a range of agents whose vision is
external to the people concerned—for example, NGOs and
the intellectuals and other members and leaders in civil move
-
ments (Carroll 1992, cited in Farrington and Bebbington
1993; Burkey 1996). Commentators in this camp criticize such
expectations for pure grassroots origins as basismo, the ten
-
dency among intellectuals, peaking in the 1960s and 1970s and
particularly in Latin America, to idealize and romanticize the
poor (Lehmann 1990). To expect communities’ full self-reliance
and autonomous action is viewed as an unproductive exagger
-
ation of the power of the popular sector and of local action in
itself to achieve direct democracy, which is not necessarily
helpful in bringing about meaningful participation.
Housing Policy in Postapartheid South Africa 䉳 229
While the spontaneous combustion of community partici
-
pation is not a realistic expectation, mandatory participation
as an institutional command is also doomed to failure. A push
from below must drive the participatory processes in human
settlement development, and at the same time, government
must support and accommodate meaningful community par
-
ticipation by being willing to qualitatively change its own mode
of operation. Only then can participatory processes build on
the synergy of all parties without subsiding into tokenism and
cosmetic abuse by agents outside the community or into unre
-
alistic and thus unproductive expectations by agents within the
community.
䉴
Institutionalization and Scaling Up
of Community Power
A significant criterion for community participation is the
degree to which it is institutionalized and how it is scaled up.
That criterion has emerged from a critique of participatory
development projects, often promoted by NGOs and CBOs, as
ineffective because of their small-scale and localized actions.
These projects are dismissed as sporadic and uncoordinated
and thus often unable to learn from the mistakes of other pro-
jects, instead replicating them (Edwards and Hulme 1992).
This view argues that participatory development projects have
limited effects because they lack access to the legal, administra-
tive, and financial resources of the state or the private sector.
To improve the effectiveness and efficiency of participatory
human settlement development, it is argued, communities
should overcome such isolation by extending their activities
beyond the territorial community and engaging other agents
(Annis 1998; Bolnick 1999).
Whether institutionalization of community participation
does increase the effectiveness of participatory projects and
processes is, however, seriously questioned. Skeptics point out
that the advantage of participatory strategies lies precisely in
their flexibility due to small-scale, localized scope and inde
-
pendence from the state’s bureaucracy (Blackburn 1998).
The key to this discussion lies in clarifying our understand
-
ing of institutionalization of participation. I take the definition
of institutionalization from Blackburn (1998, 169-71): not “a
mandate that is issued” but “a condition that is built.” As he
puts it, participation will not simply “happen” as the result of a
government decree. It has to be built through a long-lasting
process nurtured over time. For example, in Bolivia, where
community participation is law, researchers have found that
institutionalization has bureaucratized participatory methods
(Blackburn and de Toma 1998). The remedy for such
problems is to recognize that participation should be seen as a
process, not an outcome, and also as an ideal toward which we
can adapt our practices. Meaningful institutionalization is not
a one-time act or a bundle of rights to be handed over but
rather a process that requires constant vigilance.
Furthermore, the institutionalization process does not
relate only to exogenous factors (Blackburn 1998). Govern
-
ment agencies, donors, NGOs, and all organizations that pro
-
mote decentralization of power and the institutionalization of
participation should examine their own internal modes of
operation and the dynamics internal as well as external to their
organizations. Institutional change should be intraorgani
-
zational and intrasectoral as well as interorganizational and
intersectoral. In some cases, internal change poses the biggest
challenge to the possibility of meaningful institutionalization
of community participation.
Scaling-up strategies go hand in hand with institutional
-
ization, having similar challenges and limitations. As with the
concept of institutionalization, a great deal of confusion sur
-
rounds the term scaling up. The term lends itself to an unfortu-
nate interpretation implying a quantitative purpose for these
strategies. Scaling up is not a question of size or magnitude of
delivery but of a qualitative change in how agencies see their
roles, responsibilities, power, objectives, and procedures and
of how well prepared they are for changes (intraorganizational
and interorganizational) in their power structures (Williams
1999). Such qualitative change is necessary for there to be any
possibility of scaling up, that is, increasing the impact of partic
-
ipatory processes.
Gaventa (1998) applies the distinction between qualitative
and quantitative changes by using two terms: scaling up versus
scaling out. Scaling up is quantitative, referring to working with
higher organizational levels, but scaling out is qualitative,
referring to expansion in realms of communities’ influence
and control. He argues that both scaling up and scaling out are
required to achieve effective institutional change and thus
meaningful participatory development. While scaling up has
often consisted of simply inserting participatory practices into
larger-scale organizations, expanding participatory practices
into new realms of decision making has often been overlooked
and poses a greater challenge.
The formal adoption of community participation by gov
-
ernment organizations, national policies, or international
agencies does not necessarily increase its impact. To ensure
that communities’ participation makes a difference, they need
to have the capacity to exercise their rights and see their deci
-
sions implemented. They must operate on a level playing field
with the other sectors in human settlement development,
which is not possible without the resources and strategies
230 Miraftab
provided by institutional support. Governments’ strategies to
institutionalize grassroots participation must, therefore,
include the legal and financial frameworks necessary for com
-
munities to effectively mobilize their resources. Furthermore,
it does not make sense for a government to launch participa
-
tory processes without rethinking its own power structure and
mode of operation and also its relationship vis-à-vis the private
sector and civil society (Chambers 1998).
In the next section, the principles outlined above are
applied to the case of South African housing policy. The analy
-
sis will reveal the policy’s limitations in achieving meaningful
community participation in the processes of decision making.
䉴
The Case of South Africa’s
Housing Policy
The new South African constitution of 1996 is one of the
few progressive constitutions that recognizes housing as a fun
-
damental human right. In the preamble to the Housing Bill of
1997, the Parliament of South Africa recognizes that
housing as adequate shelter fulfills a basic human need, is
both a product and a process, is a product of human
endeavor and enterprise, is a vital part of integrated devel-
opment planning, is a key sector of the national economy,
and is vital to the socioeconomic well-being of the nation.
(cited in Mackay 1999, 1)
The initial Housing White Paper of 1994, the official hous
-
ing policy of the new government, in line with the overall devel
-
opment framework of the Reconstruction and Development
Program,
1
stresses the significance of communities’ participa
-
tion in responses to the problem of housing. The white paper
advocates a people-centered process wherein communities as
important players enter into partnerships with private devel
-
opers and local governments to provide shelter for low-income
groups. National government acts as an enabler of these pro
-
cesses, with implementation power transferred to provincial
and local governments
2
(Department of Housing 1994a). The
white paper states that the government’s approach to housing
is aimed at “harnessing and mobilizing the combined
resources, efforts and initiatives of communities, the private
sector, commercial sector and the state,” and underlines the
importance of the long-term partnership among these sectors
(Department of Housing 1994b, 5).
To respond to the large demand from its constituency
among the poor, however, the government needed strategies
able to deliver basic housing quickly to the vast number of peo
-
ple deprived of adequate shelter during the apartheid era
3
(see Table 1). This pressure for greater and faster delivery of
housing to the poor faced the ANC government with the
dilemma of serving a greater number of people with smaller
subsidies, thus producing a poorer quality of shelter, or serving
a smaller number of households with bigger subsidies, thus
providing a better quality of shelter. To balance need and
resources, the final outcome of the discussions around this
issue was breadth/quantity over depth/quality (Goodlad
1996; Tomlinson 1998). Therefore, as a goal and a promise to
its constituents, the ANC government placed less emphasis on
quality, targeting to produce 1 million houses in its first five-
year presidential term (1994 to 1999). It approached the pri-
vate sector as the main actor of housing delivery and assigned
itself a facilitating role to secure cooperation between commu-
nities and developers.
At the end of this initial five-year period, however, the policy
was challenged on the grounds of both its quantity and its qual
-
ity of housing delivery. While the number of units produced
was short from the targeted 1 million (745,717 units, also see
Table 2), the poor quality of units and their remote locations
were to the degree that the poor families in some cases refused
to leave their shacks and move into these units. Referring to
these newly constructed units as “matchboxes,” these families
were correctly concerned that the remote location of these
projects would ultimately deprive them of access to job
opportunities.
It is crucial to understand the nature of the contradictions
that contributed to paralyzing housing delivery for low-income
families and to limiting of community participation in the pro
-
cess. The following sections first briefly describe the policy’s
main program to house the poor in South Africa. The ways in
which the discourse of participation and a people-centered
approach have failed are examined. A preliminary summary is
as follows: first, the strategy expected the communities to
Housing Policy in Postapartheid South Africa 䉳 231
Table 1.
Housing backlog.
Province Backlog
Eastern Cape 361,271
Free State 123,200
Gauteng 518,897
Kwazulu-Natal 402,803
Mpumalanga 211,620
Northern Cape 48,576
Northern Province 426,605
North West 411,221
Western Cape 280,000
RSA 2,784,193
Source: Department of Housing (2001).
participate in processes originated in the public sector and
controlled by the private-sector developers. Second, it failed to
capitalize on existing civic movements by providing institu-
tional support to grassroots initiatives. As a result, the role of
communities is limited to ad hoc participation in processes
formed and controlled by other actors. In the subsidy scheme
that constitutes the main feature of South Africa’s housing pol-
icy, the emergent relationships between communities and
other actors in human settlement development (government,
private sector developers, and financial institutions) reveal no
hint of synergy. Those relationships can be best described in
zero-sum terms.
A further program, the PHP, which was conceived with sig
-
nificant input by grassroots and civic organizations, is
described next. This program, although marginal and small
scale, has the potential to create a synergistic relationship
among the community, the market, and the government.
Should this program succeed in providing institutional sup
-
port for communities’ actions, a synergistic relationship
between communities and the other actors might develop.
The next sections develop these summarized assessments.
䉴
Housing Subsidy Scheme
The key feature of the South African housing policy is its
Subsidy Scheme, which provides one-time subsidies to low-
income families (Jenkins 1999; Lalloo 1999).
4
Subsidy levels
are linked to income levels, graduating from R15,000 down to
R12,500, for families with monthly income less than R800 to
those with up to R1,500.
5
Depending on whether the beneficiary
has access to other funds, subsidies could be used for a serviced
site, a serviced site with a rudimentary
structure, in situ upgrading of a com
-
munity, or a portion of the cost of a
flat or a house. Later on, social hous
-
ing and rental accommodations
including improvement of hostels
were added as options (Tomlinson
1998, 140; Watson and McCarthy 1999).
Subsidies could be provided to
individual households or to groups on
a project basis. In the case of project-
linked subsidies, the subsidies due to
qualified households are transferred
directly to the developer, who is sup
-
posed to act on the projects with com
-
munities as partners. The developer
could be a private-sector firm, a com
-
munity-based organization, or a local
authority. In practice, the limited amount of the subsidy left
people at the lowest income levels still unable to purchase land
and service it as individuals. Therefore, subsidies are granted
predominantly through projects (Jenkins 1999).
6
Moreover,
given CBOs’ and local authorities’ lack of technical capacities
and supportive resources, the project-linked subsidies, with
few exceptions, have been carried out by private-sector firms;
the local and provincial governments act as facilitators by pro-
moting the environment for partnerships between communi-
ties and private developers (Jenkins 1999).
In summary, the South African Subsidy Scheme operates by
providing poor families with housing grants or subsidies
(R12,000 to R15,000) to use toward land, services, and dwell
-
ing. Since individual families cannot cover all these costs
through their individual subsidies, in practice, grants work by
going to a developer who will be in charge of housing delivery
for a group of families (projects). The developer will assume
buying and servicing large tracks of land for a large number of
families and, if sufficient funds remain, also constructing a
minimal one-room unit referred to as the “top structure.” The
government in return administers the grants and facilitates the
relationship between the developer and communities involved
in these projects.
A closer look at these projects reveals that the operation of
the project-linked subsidies has relied on two assumptions: (1)
communities could be active participants in the projects and
equal partners with the developers through social compacts,
and (2) banks would grant low-income households credit to
finance construction of a structure once they had obtained
their serviced lots. It is now clear, however, that in the absence
of institutional support for these assumptions, the interests of
the communities are sacrificed.
232 Miraftab
Table 2.
Houses completed or under construction
through government subsidy scheme.
Province 1994/1997 1997/1998 1998/1999 1999/2000 2000/2001 Total
Eastern Cape 6,511 42,223 29,659 10,459 7,997 96,849
Free State 16,042 21,001 20,391 8,177 21,561 87,172
Gauteng 65,660 83,416 28,726 144,575 21,825 344,202
KZN 17,553 78,468 53,103 28,997 24,770 202,893
Mpumalanga 19,884 10,873 16,838 4,808 14,071 66,474
Northern Cape 8,532 6,103 6,621 1,558 6,613 29,427
Northern
Province 11,108 15,743 22,899 12,401 1,561 63,712
North West 21,287 20,977 18,367 12,944 11,149 84,724
Western Cape 25,321 43,834 34,575 26,916 23,513 154,159
Total 191,898 322,638 231,181 250,835 133,060 1,129,612
Source: Department of Housing (2001).
All subsidized projects require that beneficiaries and devel
-
opers agree on the terms of the projects and sign a social com
-
pact. The social compact is meant to enforce the participatory
component of these projects by requiring active participation
of communities in decisions that affect their lives. In practice,
though, the social compact has been short lived (see Jenkins
1999; Tomlinson 1998, 1999). Developers often receive
exemption from this requirement by arguing that community
participation makes the process too cumbersome and lengthy
to be feasible. Under the preamble of the Development Facili
-
tation Act, which responds to the urgency of service delivery in
disadvantaged areas, developers have been able to sidestep the
social compacts with the rationale of fast-tracking the projects.
In other cases, the requirement of community participation is
abused when one or two of the community members sign the
social compact as a formality, in the name of the community.
7
Furthermore, the small amount of the subsidies
8
available
to low-income households and the profit-maximizing drive of
the private-sector developers have combined for the end result
of a serious failure to satisfy the projects’ beneficiaries
(Tomlinson 1999). Once the developers take their margin of
profit from the small magnitude of the subsidies available to
low-income households, what is left is too small to construct a
decent residential unit. As a result, in vast areas outside the city
in remote locations, it is cheaper and easier to provide serviced
lots with no structure or only a poor-quality unit of one room.
The bleakness of these scenes has even been condemned by
the Minister of Housing as “toilets in the veld.”
The subsidy scheme relied on the assumption that recipi-
ents could go on to receive credit to fund the construction of a
structure on their minimally serviced land (Bond 2000a;
Jenkins 1999; Mackay 1999). But most of the poor—70 percent
of them—could not secure bank loans from private financial
institutions.
9
Nonetheless, such support as the government
has provided to improve low-income families’ access to hous
-
ing loans has been predominantly through private banks, with
mechanisms to reduce their risks from housing loans to low-
income applicants (Jenkins 1999, 435).
These mechanisms include a mortgage indemnity fund to
guarantee banks against politically related nonpayment of new
housing bonds; Servcon, a parastatal organization created with
private-sector financing and nongovernmental status, to
resolve the problems of nonpayment with properties in posses
-
sion; the National Urban Reconstruction and Housing Agency
to guarantee bank-originated bridging finance for developers;
a state-controlled National Housing Finance Corporation to
provide wholesale funding to retail banks, to increase their
low-income loan portfolios; and a warranty fund against defec
-
tive building (Bond 2000a, 302; Jenkins 1999, 435). The war
-
ranty fund was also supported by establishing the National
Home Builders Registration Council to respond to banks’ con
-
cerns that some defaults were caused by lapses of the builders
(Tomlinson 1998, 144). The private sector conditioned its
commitment to make housing loans to low- and moderate-
income households on effective operation of these
institutions.
Despite these incentives, the banks failed to deliver the
50,000 bonds they had committed to deliver in the first year,
granting only 20,000 bonds in the applicable areas within the
intended price range (Bond 2000a, 303). Furthermore, banks
have tended to favor the upper range among the low-income
subsidiaries, for increased security of repayment.
10
They also
have tended to make relatively fewer, but large, loans to groups
of applicants through developers rather than many small loans
to individual applicants, with the aim of reducing their opera
-
tion costs (Bond 2000a).
䉴 PHP
To address some of the shortcomings of the housing sub-
sidy scheme and the needs of the poorer group among low-
income families, who were refused housing loans and credit
through private financial institutions, the South African gov-
ernment launched another program in 1998 to support self-
help by the poor. This pilot program, called the People’s
Housing Process, was announced as the final component of
the new housing policy and has been a significant addition in
that it approaches housing differently. Civic organizations
such as the CBOs and NGOs, which have been working with
the resources of the communities and providing houses of low
cost and relatively high quality, significantly influenced the
new program’s format. Thus having actively engaged the com
-
munity sector in its formulation, the PHP facilitates incremen
-
tal housing by scaling up participatory processes and relying
on self-help processes, communities’ resources, and empower
-
ment (Department of Housing 1998).
To strengthen community initiatives, the program liaises
with grassroots groups. It has set up housing support centers to
stimulate and assist self-efforts and community efforts by pass
-
ing on information, identifying and channeling subsidies, pro
-
viding technical advice, and developing cooperative arrange
-
ments to purchase material (Jenkins 1999, 435; Mackay 1999).
Furthermore, to build capacity and give technical support for
NGOs, CBOs, local governments, informal groups, and those
private companies willing to develop sustainable and participa
-
tory housing together with the National Housing Finance Cor
-
poration, the program has created the Social Housing Fund.
11
This fund assists with technical training of new builders
(Mackay 1999).
Housing Policy in Postapartheid South Africa 䉳 233
The financial support to this program, however, has been
minimal. For example, in 1999, only 1 percent of subsidies
were canalized through PHP (DAG, personal communication,
2001). In Western Cape, which is the state with largest number
of PHP houses, since its inception, the program has achieved
only 420 units completed and 6,284 units with approved funds
(PHP provincial office, personal communication, 2001).
䉴
Homeless People’s Federation
One of the community-based initiatives that has influenced
the formation of this program and its experience and has
worked as the forerunner of PHP is the Homeless People’s Fed
-
eration. The Homeless People’s Federation, which is a federa
-
tion of community-based groups in informal settlements and
townships, has demonstrated an impressive capacity to mobi
-
lize community self-help resources for housing. During the
past seven years, since its inception in 1995, the list of federa
-
tion affiliates has grown from less than 250 to more than 1,500
savings collectives (Nsukuzonke), with a spread to all major cit-
ies and towns of South Africa. Today, the federation’s member-
ship has reached 100,000 families (85 percent female) who
have saved more than 3.5 million rands (http://www.dialogue.
org.za/pd/index.htm). Its activities are supported by a small
NGO, the People’s Dialogue on Land and Shelter, which also
manages the uTshani Housing Fund
12
providing low-interest
housing loans to the poor (Bolnick 1996). These loans are
mostly used in combination with government housing subsi
-
dies toward self-help construction of houses.
13
They are bridg
-
ing funds to assist the poor to build while waiting for subsidy or
supplement their subsidies while repaying their loan. By 1999,
the uTshani housing fund had granted 2,926 loans with an
average size of just less than R10,000 to homeless families (Peo
-
ple’s Dialogue 1999, 11). This brings the total number of
houses built through the uTshani fund (including those built
with subsidies) to 4,256 units.
Although the magnitude of houses produced through the
Homeless People’s Federation and the PHP program alike is
small, the success of these cases should be understood in terms
of their methodology, which allows communities’ mobilization
and empowerment, and the quality of housing produced. The
houses built by the federation members are clearly superior to
what is achieved through the private sector under the govern
-
ment subsidy scheme, which often amounts to no more than a
toilet or a mere shell without walls and in rare cases a unit of
twenty-five square meters (Bolnick 1999, 8). Houses built by
the federation members and through these grassroots saving
groups are on average fifty to sixty square meters and in good
shape and quality. It is also important to understand the
limited output of the federation and PHP projects, in light of
their financial disadvantage to the mainstream subsidy
scheme. Their success is in mobilizing people’s resources,
demonstrating the capacity of community members to create
affordable and quality housing with comparative advantage
over the private sector.
There is, however, a long way to go before the government
takes a serious step toward giving local communities and their
organizations, such as the federation, more support and influ
-
ence on their housing policies. The main area in which the
federation has been pressing on the government is access by
community-based groups to funding by private financial insti
-
tutions to support the communities’ resource mobilization.
They have been lobbying the government to establish interme
-
diary financial institutions that link the community savings
groups with the private banks and thus give grassroots groups
access to the resources of the private sector (see Bolnick 1999).
Although certain initiatives were taken at the local level by the
Port Elisabeth Municipal Council and the Cape Metro City
Council to set up intermediary financial organizations in sup-
port of the federation’s community-based saving schemes for
housing, these initiatives have had limited scope and success.
In the section that follows, I will analyze aspects of the two pro-
grams sketched above.
䉴 Analysis of South Africa’s
Housing Strategies
Several conditions have contributed to the dominance of
the private sector and the marginalization of communities in
South Africa’s housing policy. These include pressure from the
international financial sector on the new government to adopt
neoliberal policies (see Cheru 1997; Bond 2000b) and the
internal pressures by the ANC’s constituents for the speed and
scale of housing delivery. Those pressures constituted the con
-
text in which the new government chose to rely on the private-
sector developers as the main agents of housing delivery and
on the private financial institutions as the main creditors of
low-cost loans to supplement government subsidies for hous
-
ing the poor. Indeed, the new government continued essen
-
tially the same subsidy scheme that had existed under the
apartheid government, although its policy guidelines aspired
to a people-centered approach (Wilkinson 1998).
The contradictory aspect of the housing policy, whereby
private-sector developers are expected to drive the people-
centered aspiration of the housing policy, is often explained in
the literature by the dynamics of the National Housing
Forum—the negotiating body that drafted the initial housing
policy of the new democratic government (Tomlinson 1998;
234 Miraftab
Bond 2000a, 2000b; Lalloo 1999). The National Housing
Forum (1992-1994) was composed of housing stakeholders
who included the construction sector and banks as well as
NGOs and democratic movements. In analyzing the dynamics
of the forum’s negotiations, some observers underline the
dominance in this forum of businesses and the private sector as
compared to civic organizations (Lalloo 1999). Others argue
that because the advocates of opposing principles (market rep
-
resented by the private sector and community represented by
the NGOs) did not come to a consensus, the final document as
policy guideline ended up either including both views, as
Tomlinson (1998) puts it, or settling for the lowest common
denominator, as Jenkins (1999) argues. Lalloo (1999), how
-
ever, explains the policy contradictions in terms of the weak
-
ness of the NGOs and the other opposition in the forum dur
-
ing negotiations, which prevented them from pushing their
agenda fully. So, he argues, they settled for a half deal, the social
compact but not much more, to secure a people-centered pro
-
cess. Bond (2000a, 2000b), on the other hand, argues that
these contradictions represent a typical ANC strategy of “talk
left, act right.”
The analysis here of the South African experience of com-
munity participation in providing housing is most concerned
with those specific aspects of the government’s housing strate-
gies for translating policy guidelines into implemented pro-
grams that failed the policy’s participatory and partnership
aspiration. In other words, what specific misconceptions or
shortcomings of the government strategies caused the people-
oriented aspirations of the policy guidelines to be
marginalized as the actual programs were formulated, so that
implementation of the housing policy relies primarily on the
private sector, leaving only a limited role for communities and
mobilization of their resources and social capital? For answers
to that question, I return to the conceptual elements pre
-
sented earlier in this article.
First, a central misconception of South Africa’s housing
policy and programs was in the assumption that the relation
-
ship among the private sector, communities, and government
would by default be one of cooperation, partnership, and
complementarity. In the absence of the conditions necessary
for a synergistic relationship to emerge between communities
and external agents, their relationship has indeed turned out
to be a zero-sum game, in which the private sector dominates
the process and communities are marginalized. As pointed out
earlier, although communities do not necessarily enter a zero-
sum relationship with the other actors in the human settle
-
ment development process, neither do they automatically find
government or the private sector benevolently pushing for a
fair process of power sharing, unless the communities are
mobilized and strong enough to claim their rights and
institutional support is in place to let them stand on a level with
historically privileged actors in the collaboration.
Second, the Subsidy Scheme, the main feature of South
Africa’s housing policy, expected that communities would par
-
ticipate effectively in processes that are initiated by the govern
-
ment and controlled by developers. In this case, as we
observed, the notion of community participation is conceived
outside the community and within the government’s official
realm. Community participation, prescribed through social
compact, has been made a decree issued from above rather
than ongoing efforts on the ground given institutional sup
-
port. It is therefore no surprise that the social compact as a
lever for the community participation in South Africa’s subsi
-
dized housing projects is frequently abandoned.
The case of the PHP, however, is different. In contrast to the
Subsidy Scheme, in this program, communities participate in a
process that they have taken part in establishing. It is within the
communities’ realm that the process of collaboration is initi
-
ated, and it is under substantial influence and input from the
community-based groups that the government has adopted
this participatory program. But even in the PHP, where the ori-
gin of participatory process lies in the community arena, com-
munities’ initiatives have lacked institutional support. That
lack has prevented communities from participating with the
private sector in the housing process on a level playing field.
Therefore, despite its alternative conception, the program has
had only limited success in fulfilling its potential to establish
synergy and generative relationships between communities
and other actors.
Third, to move beyond the rhetoric of community partici
-
pation, effective institutional support for communities’
resource mobilization is critical. In a context like South Africa,
marked by large disparities, it is indeed the role of government
to exercise its regulatory power and mediate to ensure that dis
-
advantaged communities have the legal, financial, and institu
-
tional support to operate on a level field with other actors. As
observed in the case of the Homeless People’s Federation, the
resources of low-income communities mobilized through
their saving groups need the government’s institutional sup
-
port to establish the intermediary financial organizations that
link the community-based saving groups to private banks. This
move can enhance communities’ mobilized resources, to
enable a meaningful community participation in housing
development that exceeds their token presence in developer-
controlled processes under the Subsidy Scheme. However, as
observed, the major financial mechanisms set up by govern
-
ment to drive the housing policy in fact accommodate primar
-
ily the interests of the private banks and developers in reduc
-
ing the risks of their participation in housing development for
low-income groups.
Housing Policy in Postapartheid South Africa 䉳 235
This bias marks a significant weakness in the formulation of
the South African housing strategies—namely, the way in
which institutionalization of community participation is
understood and practiced. The central and the provincial gov
-
ernments have failed to support the social, financial, and tech
-
nical capacity of communities and local governments; there
-
fore, certain aspects of their participatory mandate have
remained rhetorical. For example, the provision under the
policy that local governments and CBOs can act as developers
to work with communities has in practice been overtaken by
the private sector developers, because those other sectors are
left without financial and technical capacity.
There has not been sufficient public intervention to
address these imbalances. In the PHP, communities are
expected to scale up their participatory and self-help strate
-
gies, and in the Subsidy Scheme, they are expected to act as
partners to developers and government in large-scale housing
development projects; yet those significant expectations have
scarcely budged the operational modes of government and the
private-sector financial institutions. In the attempt to scale up
participatory processes and community participation in the
South African development of housing for poor populations, a
quantitative interpretation has emphasized the magnitude
and scale of operations, and there has been limited qualitative
shift in the public or the private sector’s mode of operation.
䉴 Conclusion
This article demonstrated that when translating progres
-
sive prescribed rights and aspirations about community partic
-
ipation into practice, certain specific conditions are critical—
namely, the realm in which participatory processes are initi
-
ated and the way in which community participation is institu
-
tionalized. The article also has shown that the nature of the
relationships that emerge between communities and other
actors depends on the context in which they are negotiated.
Therefore, when communities, the government, and the pri
-
vate sector act as partners in the processes of housing develop
-
ment, to proceed on the assumption that without ensuring
support from the environment for communities’ resource
mobilization and action, a positive-sum and synergistic rela
-
tionship can be achieved is, if not a betrayal, at best a naïve
expectation that guarantees failure.
Although a democratic government and tightly organized
communities are important conditions for meaningful partici
-
patory processes fostering a generative relationship between
communities and other actors, they are not sufficient. It is true
that South African housing policy has recognized the right of
communities to participate; indeed, it has made that a require
-
ment for publicly assisted housing projects. But in practice, the
institutional requirement has not furthered the power of low-
income communities in decision making and exercise of their
participatory right.
The housing policy of the South African government has
not managed to capitalize on the invaluable social potential
that the oppression under apartheid created among the
poor—namely, their highly mobilized communities. Instead of
finding creative ways to tap into this forceful social energy, the
new South African government stayed with traditional means
of private-sector financing and delivery for housing. That
choice was to a certain degree influenced by the pressure for
fast and large-scale delivery; in actuality, however, while the pri
-
vate sector received major resources and control of the pro
-
cess, neither is the magnitude of the problem handled (as
demonstrated in the extent of backlog per Table 1) nor is the
quality of shelter addressed, as remote locations of these hous
-
ing projects often compromise the livelihood opportunities of
the poor.
Meanwhile, the failure to engage the civic movements and
their organizations effectively has contributed to their decline
and significantly diminished the stock of social capital that in
1994 had been high in South Africa (see Seekings 2000). Even
the PHP, which had some possibility of achieving a meaningful
participatory process and capturing the potential of grassroots
housing movements, lacking adequate financial and institu-
tional support, has remained impotent.
The good news, however, is the current resurgence of civic
and anti-privatization movements in South Africa and the
vitality of the debate over housing. The limitations of the ANC
government’s efforts with respect to fast provision of afford
-
able housing to the poor and the urgent need for shelter
among the majority of the population have somewhat revived
the pre-1994 social energy in the townships and low-income
neighborhoods. The growing disillusionment there has drawn
back leaders of civic movements who had left them after the
1994 elections to join the democratic government and pursue
changes from within. Thus, in recent years, civic movements
are gradually reviving, pressing the government to be heard
and effectively included in the formulation of official strategies
and programs. They seek to influence regulation of the private
sector including developers and financial institutions (i.e.,
Anti-Privatization Campaign). Unquestionably, the govern
-
ment cannot afford to ignore these movements. It must be
remembered that the housing question is key to the political
and social stability of the country. More than anywhere else, in
South Africa, an ugly history and the struggle against its injus
-
tices are intimately linked with the issues of urban
236 Miraftab
development and homelessness. That history keeps the hous
-
ing debate in South Africa not only current and lively but also
bound to stay open to change.
Author’s Note: This paper was first submitted to JPER in March 2001.
Hence its content does not report on some aspects of South Africa’s fast
changing terrain of housing and grassroots movements in the last 2 years.
I am grateful to Vanessa Watson, Patricia Wilson, and Victoria Beard for
their earlier review of this paper and the insightful comments they provided,
which strengthened the arguments posed in this paper. This paper has also
benefited from the insights gained through serving as a consultant to the
Community Development Program of UNCHS, in particular my close col
-
laborations with Chris Williams to synthesize the participatory experiences
of communities in Africa, Latin America and Asia. My special thanks to
Ken Salo for long discussions to help me better understand the South Afri
-
can reality. Furthermore, I am extremely grateful to all local organizations
and individuals in Cape Town that generously received me and shared their
information and experience with me. The responsibility for the shortcomings
of the paper, however, stays with the author.
䉴 Notes
1. The Reconstruction and Development Program was the
African National Congress’s overall plan to bring about socioeco-
nomic improvements by focusing on redistribution of resources
and remobilization of government resources. It was later replaced
by the Growth, Employment, and Reconstruction program, which
is formulated within a neoliberal framework stressing economic
growth as a way of achieving socioeconomic improvement.
2. Based on the new South African legislation, the national
government promotes an effective functioning of the housing
market but retains the powers to allocate finance and administer
subsidy schemes (Mackay 1999, 4; Jenkins 1999, 434). Provincial
and local governments are, however, involved in implementation
of the policy as developers or facilitators. Municipalities have been
given powers to promote housing development by a developer,
undertake development, enter a joint venture, and facilitate and
support other role players. Due to the recent creation of the local
governments and their limited technical capacity to perform their
role in housing development, often the provincial governments
take charge of the local governments’ responsibilities until their
capability is established.
3. A backlog of 1.3 million units was estimated in 1994, rising
to 3 million units including hostels—single-occupancy rental
accommodations—and rural areas, plus an additional annual
requirement of 200,000 units for new family formation
(Tomlinson 1998, 137). The ability of the new housing policy to
absorb families residing in hostels is particularly important. These
single rooms, each previously occupied by one man, now are hous
-
ing large families since women and children are no longer
restricted in joining their husbands and fathers in the city. The
overcrowding of these units is acute (Goodlad 1996).
4. Indeed, this overwhelming focus has been unfortunate.
Lalloo (1999), in his analysis of the processes and dynamics of
housing policy formulation, stresses how the exaggerated policy
emphasis on the capital subsidy scheme sidetracked the discus
-
sions at the forum away from the question of achieving social jus
-
tice and a viable living environment by restructuring the urban
space and racial integration of the apartheid city. He states that the
involvement of the forum in working out the conditions of subsi
-
dies narrowed its focus, early on, from the larger picture to the pro
-
duction of shelter.
5. U.S.$1 equals 7 South African rands, per exchange rate year
2000.
6. Of the subsidies allocated by 1998, just more than 10 per
-
cent had not been in “ ‘projects’ of various kinds” (Mackay 1999, 12).
7. See Jenkins (1999) for further examination of community
involvement in housing delivery and the fate of the social compact.
Also see the study by Tomlinson (1999) illustrating the communi
-
ties’ lack of awareness of the social compact in projects developed
through the project-linked subsidy mechanisms. This reveals the
limited role and impact of the social compact in securing commu
-
nities’ participation in the process to work with developers as part
-
ners. Elsewhere, Tomlinson (1998, 143) provides examples of how
the social compact became “a key perceived impediment to the
implementation of policy” that was extremely difficult for develop
-
ers, who were at sea with the social processes of community partici-
pation and more comfortable in an environment of production
and delivery.
8. South Africa’s housing budget constitutes 1.4 percent of the
total national budget. This makes for a total of 3.4 billion rands in
2000/2001 and 3.7 billion rands in 2001/2002 (Development
Action Group 2001, 7). (8 rands = U.S.$1, per 2001 exchange rate.)
9. “Between 1994 and 1996, only 18 percent of houses built
under the subsidy scheme were linked to credit” (Bond 2000a,
304).
10. “43 percent of the Housing Facilitation Fund was directed
to those beneficiaries who, because they were in higher income
categories, were more likely to secure these loans” (Bond 2000a,
304).
11. The National Housing Finance Corporation undertook to
establish the Social Housing Fund because it identified lack of
technical capacity as one of the weaknesses of the housing activities
among low-income groups (Mackay 1999). Therefore, the Social
Housing Fund was created with the support of the National
Housing Finance Corporation to protect security of housing loans
provided to low-income groups and communities. Despite these
intentions, the Social Housing Fund ameliorates the problem of
capacity building for the community sector only to a limited
degree.
12. The uTshani Fund began operation in 1995. It was first
kicked off with donors and a government grant and managed to
mobilize members’ resources to provide small loans for housing to
accumulate 28 million rands by 1998. The average repayment rate
by 1998 was 93 percent (Bolnick 1999, 9).
13. The interest rate charged by the federation is 12 percent for
housing loans, 24 percent for income-generating loans, and 1 to 2
percent for emergency loans (Bolnick 1999, 7, 15). The interest
rates charged by banks are at the market rate, at one time as high as
30 percent. Ironically, commercial banks of course offer home
loans to the poor at higher interest rates than rates for the middle
and upper classes. By 1996, this was 22 percent for the poor as com
-
pared to 17.5 percent for the middle classes (Ruiters and Bond
1996, 29).
Housing Policy in Postapartheid South Africa 䉳 237
䉴
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