Generally, South Africa has been more successful than other countries in the region at targeting subsidies and engaging the private sector in low-income housing delivery because of how explicit lending criteria has been. Making low-income housing delivery a priority, South Africa implemented a version of the United States’ Community Reinvestment Act for banks, which then prompted banks to form a Financial Sector Charter (FSC) and commit capital to priority sectors, like affordable housing. The FSC has been very successful. exceeding their lending goals within the mortgage and construction sectors.
Additionally, South Africa has implemented a series of capital subsidies programs, passing the Finance Linked Individual Subsidy Program (FLISP) most recently, giving buyers and one-time capital contribution when they access a mortgage and buy a home. Through the Enhanced People’s Housing Process (ePHP), the South African government has provided subsidies to low-income household so they can incrementally improve their informal settlements. Despite this variety of subsidies available, there remains a shortage of affordable housing – signaling the need for additional solutions.
Source:
World Bank Group. (2015) Stocktaking of the Housing Sector in Sub-Saharan Africa : Challenges and Opportunities. World Bank, Washington.
Link: https://openknowledge.worldbank.org/handle/10986/23358.