THE IMPACT THAT GOVERNMENTíS INCLUSIONARY HOUSING POLICY (IHP) WILL HAVE ON THE PROVISION OF HOUSING BY THE PRIVATE SECTOR IN SOUTH AFRICA: LESSONS TO BE LEARNT BY OTHER EMERGING COUNTRIES?

Graeme Jay and François Viruly

ERES from European Real Estate Society (ERES)

Abstract: The institutionalized policy of apartheid in South Africa during the period 1948 to 1994 created not only segregation based upon race, but also inequalities and inefficiencies in terms of access to economic opportunities. The policy of separate development followed by the pre-1994 Government in South Africa meant that white and black people could not live in the same areas together. As black people were also denied access to resources, one the resulting effects of the policy of apartheid was that white people were able to live in suburban areas whereas black people had to live in designated townships away from white suburban areas. The post-1994 democratic dispensation in South Africa has ensured that people of any colour may live where they wish to, but the fact is that many black people who were denied access to economic opportunities during the days of apartheid, do not have the resources to move into suburbs that were formerly exclusively inhabited by white people. The Government has introduced a policy known as Inclusionary Housing Policy (IHP) in order to try and reverse some of the economic effects of apartheid. In terms of the IHP, private sector developers will in future have to provide a certain number of housing units in new developments for affordable housing purposes. According to the policy, this should ensure integration of different socio-economic groups and allow people to live in suburban areas who were previously denied this opportunity because of their race. South Africa still has significant income disparities between white and black people. The implementation of a policy like IHP may encounter significant problems in that people of different economic groupings may not wish to live together. Although other countries have implemented their own version of South Africaís IHP, the eventual outcomes of the implementation of such a policy will naturally vary from country to country. The purpose of this paper is to share the results of research which has: ï Compared South Africaís IHP to those of other countries; ï Investigated the impact that the application of the IHP may have on private sector developers and the subsequent provision of housing; ï Whether or not the policy is likely to ultimately have the intended outcomes that it is supposed to; ï Potential problems that may be encountered when people from different economic groups live together; and ï Suggested how other emerging countries that may wish to implement such a policy could do so successfully.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2010-01-01
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