Government is ending free housing projects – here's what it will offer instead

Business Insider SA
Row of low-cost RDP homes under construction in We
Row of low-cost RDP homes under construction in Western Cape, South Africa (Getty)
  • The national department of housing and human settlements has ordered provincial governments to immediately downscale free housing projects.
  • Serviced sites, where people can build their own homes, will be preferred.
  • Housing projects will only be supported if they benefit the elderly, child-headed homes, people living with disabilities, and military veterans.
  • For more stories, visit

The national department of housing and human settlements has told provinces it will no longer support new housing projects except for those benefitting elderly people, military veterans, people living with disabilities and child-headed households.

This effectively ends South Africa's policy of providing free houses for the poor.

Human Settlements Minister Lindiwe Sisulu has previously said that the policy has had unintended consequences, with many of these houses ended up being sold or rented out by the new owners. She also said that the free houses created "a culture of entitlement" among South Africans.

The new strategy will still involve government support for medium and high-density developments, and existing contracts will be honoured. Other than that, though, the housing subsidy programme has been deemed financially unsustainable in light of the Covid-19 pandemic's impact – and contracts to build new housing projects have been frozen.

Instead, the focus will be on handing over serviced sites where people can build their own homes.

In 2019, the human settlements said it would deliver 470,000 housing units, 300,000 service sites, 30,000 social housing units and upgrade 1,500 informal settlements. It only managed to develop 126 informal settlement upgrading plans.

The total housing backlog across the country is estimated at 2.6 million units.

“We can confirm that provincial departments are being engaged to revise their business plans in order to respond to the current financial difficulties as a result of Covid-19,” said human settlements spokesperson McIntosh Polela.

The department "had to come up with innovative ways of ensuring that people have decent shelter over their heads," he said.

"One of these innovative ways is to upscale the provision of serviced sites to enable people to build houses for themselves."

The change has left developers involved in government projects anxious.

“That is very worrying for us because we’ve got one or two contracts pending and we’re completely in the dark," said John Mathews, one such developer. "There’s a lot of planning that goes into a development like this and now we don’t know whether the project is going to be approved or not."

Receive a daily news update on your cellphone. Or get the best of our site emailed to you.

Go to the Business Insider front page for more stories.

Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo