Housing options for lower-income people

Sunday Times - Property
People earning less than R1,500 month, qualify for a government housing subsidy to the value of R36,528, which is the cost of building a RDP house. To buy a similar house, it would cost about R100,000
Buli Gotyana lives in a shack in Seaview, near Port Elizabeth. She had an RDP house, but had to vacate it when it was found she had been incorrectly assigned the tiny home in Greenbushes. At the time, she was six months pregnant and the stress of having to return to shack life – without electricity and having to collect water from the community tap – concerned her. She had no idea how she would look after her new baby in this kind of environment.
Nevertheless, she was able to buy a used shack for R400 and after her baby son was born in October she settled into motherhood in her new home – determined that her child would have the best she could give.
Buli decided to approach her employers for help in finding out how she could buy or build a small house in her area.
The first thing Buli discovered in a phone call to the Mandela Bay municipality was that she needed to visit her local housing department in Port Elizabeth to apply to be placed on a waiting list for an RDP house. In order to apply, she needed her ID document and her son‘s birth certificate. If she were married, she would need her marriage certificate as well.
Even though she is single, she qualifies because she has a dependant son who relies on her. She also needs the ward number of her place of residence, her ward councillor‘s name and her pay slip.
Once she is on the waiting list, she will be in line to claim a house when a housing programme becomes available in her area. She found out by speaking to people in the housing department that it works in her favour that she permanently lives in shack in Seaview as that makes her eligible for a house when a housing project starts there.
How long she will wait depends on the area she lives in and if a housing project is planned for that area. She may also have to relocate to the next available area where houses are scheduled to be built.
The Government‘s housing department has a useful website – www.housing.gov.za (click on subsidy info on the left) – that points out that because Buli earns less than R1,500 month, she qualifies for a housing subsidy to the value of R36,528, the cost of building a RDP house.
The grant she gets can only be used to build or purchase a house and is not available as cash. She has to be over 21 to apply and not have been the beneficiary of any other government funding.
If Buli earned more than R1,500, she would have to make a contribution of R2,479 upfront to gain access to the Housing Subsidy Programme.
In other words, because of her salary, Buli qualifies for a free house when one gets built in her area. If she had a higher salary, she would have to pay a deposit to get a housing subsidy. According to the website, people who earn more than R3,500 do not qualify for a housing subsidy.
If she bought a house from an estate agent, the average price in similar areas to hers is about R100,000, but estate agents have confirmed there are no available houses in the areas she wants to live in. However, if she moved to Motherwell or New Brighton there are houses available in the R100,000 range, with one in New Brighton going for R45,000.
“The bond repayment on R100,000 is about R1,000 a month and you need to earn three times more than that to qualify for a bond. So Buli will need to earn R3,000 to qualify for a R100,000 house. With regards to other expenses, electricity and water will cost about R250 a month and rates are about R50 a month in Motherwell as it is an urban renewal area,” says Nobuntu Plaatjies of Genprop in Port Elizabeth.
Plaatjies is marketing homes in Motherwell and New Brighton in a variety of price ranges and she could help Buli if she decided to relocate.
“If she wants to stay in the Seaview area, my advice to her would be to register for a RDP house and wait her turn. The areas she wants to live in have mostly RDP houses and these are never supposed to be sold,” says Plaatjies.
Household insurance against theft and damage can be arranged for a bricks and mortar home, not a shack, but the actual cost depends on the area‘s profile. If the area is high risk, she will pay more.
Currently her employer pays R200 to ensure household contents in an area five minutes from her, so she is using that as her base. She did not pay for water and electricity when she lived in her RDP house in Greenbushes so the same should apply if a RDP house is given to her in Seaview.
She will also need to start saving for furniture for her new home. Luckily her employer had a baby a year before she did, so she won’t need to purchase a cot or other baby needs.
Produced by Johncom Group Newsroom, originally commissioned for our sister newspaper, the Weekend Post

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