The backyard rental market, a thriving, informal market in the townships and informal settlements, has the potential to become a catalyst for township economy revitalisation, if formalised. Rental housing is an important economic activity that contributes positively to the economic activity of townships and adds income streams to households.
Most townships and informal settlements have a thriving backyard rental market that provides affordable accommodation to most people who can’t afford the rental housing provided by the big players in the social housing market.
The problem with the backyard rental market in the townships and informal settlements at present is that it has failed to eradicate shack dwelling (if anything, it increases shacks and informality) and does not comply with building and emergency services safety requirements. This compromises living standards and places a burden on existing infrastructure (for example, electricity through bridging), creating unnecessary service delivery backlogs. Also, the sector has operated outside legislation, with no dispute resolution channels in place, largely operating on verbal agreements.
Through the implementation of the Gauteng Backyard Rental Housing Policy, we want to formalise and structuralise the backyard rental market to create opportunities for owners to charge and collect rent and give municipalities new sources of revenue through rates and taxes. We want to revitalise and mainstream the backyard rental market in townships as part of township economy revitalisation.
This requires our municipalities to be at the forefront of mainstreaming the backyard rental market, with township proclamation and a title-deeds programme to give township dwellers security of tenure. It will also require our municipalities to evaluate and change municipal by-laws to ensure that they support and provide a healthy environment for the township rental market to flourish.
As an example, Ekurhuleni has created a special land-use zone that is intended to create a legal framework within which formalised backyarding can occur and be adequately regulated. This includes relaxed building lines, increased densities and relaxed building norms and standards.
We plan to work with our municipalities and development finance institutions to invest in infrastructure upgrades and connections (bulk infrastructure) and regularising ownership and rental arrangements, to catalyse the township rental market and create a tangible economic asset for owners. We are also looking at other innovative ideas, such as off-grid sanitation and electricity options to reduce the stress on bulk infrastructure and the cost of services to tenants.
Through the National Housing Finance Corporation, Indlu and Umastandi, social capital entrepreneurs can enable township property owners to develop formal backrooms from which sustainable incomes can be generated. This has the potential to give 250,000 people affordable rental in decent living conditions.
We are looking at a model that allows us to upgrade properties of township dwellers for backyard rental, by creating a rent-sharing agreement between the main landlord and funder. This will be affordably spread over a period that allows rental costs to be kept within a reasonable range of their informal sector equivalent for a term length running until the costs of upgrades are paid off.
Our role as government beyond the policy framework in enabling each transaction will include lining up credit guarantees, running with community facilitation and enabling landlord training and providing official dispute resolution channels between the landlord and the tenant, providing a measure of security for all parties to the rental contract.
Also, the commercial space across multiple adjoining properties can be combined into common frontage – effectively creating new township high streets. This whole programme will also be supported by the development of township real estate agents and developers, providing a localised boost to youth employment and SMME development in townships, in partnership with stakeholders such as the Estate Agency Affairs Board.
One of the brutal truths that has confronted us as a nation through Covid-19 and the resultant lockdown, is the inhuman living conditions that too many South Africans are still living in and the need for the government, with other stakeholders, to come up with innovative solutions to our growing housing problems. The formalisation and development of the township backyard rental market is one such solution, with the economic spinoffs that it would bring as a critical element of revitalising and mainstreaming the township economy. DM