poor out of property market

While a lot of ground is yet to be covered, the government's reconstruction and development programme has gone a long way in helping the poor to have a roof over their heads.

While a lot of ground is yet to be covered, the government's reconstruction and development programme has gone a long way in helping the poor to have a roof over their heads.

Few dispute the fact that millions of poor people have benefitted from government housing. Most had never owned a house in their lives. The process has brought pride to many families.

As a reaction to shoddy workmanship by contractors and complaints about the housing size, Gauteng recently came up with better housing models that would make living in the township not very different from some urban areas.

Eastern Cape has embarked on a campaign to deliver quality housing by withholding payment to unscrupulous contractors while a thorough inspection is conducted.

The public-private partnership has resulted in massive urban low and medium-income houses dotting the city outskirts and filling the townships' open spaces. But there is a huge problem in the whole process.

Holding title deeds in their hand or owning a house has not helped to improve the lives of the poor or assisted them to join the property market.

New research seems to vindicate arguments forwarded by the SACP, which has found that the government's land titling for low-income people has not had an impact on the poor households, instead it favours the rich.

A study released on Wednesday by the Wits Centre for Urban and Built Environment Studies (Cubes) and the Urban LandMark, said the current property system was designed for the wealthier sections of society and did not appropriately support low-income households.

The research, conducted at three sites in Ekurhuleni, forms part of a larger international study focusing on similar issues around the world, involving UN-Habitat and the Norwegian government. It looks at the social and economic impact of land titling on poor households.

Land titling forms part of the government's attempt to redress imbalances in land ownership. But the research established that the process had been conducted with little research on the impact of the programmes.

The research shows that land titling does have an impact on poor households, but indicates that it does not generate a better financial situation for low-income homeowners.

It found that possessing a title deed had little effect on improvements and household investment in their homes.

Less than half of households with formal tenure and only one-third of households with some form of intermediate ownership had made any improvements to their homes.

About one-third of people living in informal households had also made improvements to their households, most claimed the reason they had not invested in their homes was a lack of finance.

A title deed had little effect on borrowing or accessing credit. Only about 14 percent of low-income households borrowed money at all as they feared debt. Not one household had used their home as collateral.

About 95 percent of the respondents said they would not sell their homes.

"This indicates that people do not see their houses as an investment from which they could generate a profit. They rather see their homes as an urban base for the extended family network. The extended family has 'use rights' and can be accommodated in the unit, though they cannot own it," the report says.

The study also found that possessing a title deed had little effect on owners' perception of their security of tenure. This is regardless of whether they lived in formal or informal households.

"There is a recognition of the fact that the urban land market is not working for poor people, and low-income households consistently feel alienated from it," said Colin Marx, an independent researcher, and Margot Rubin, a researcher at Cubes, who worked on the project.

"This is an opportune time to unpack and understand the role of titling in housing policy and delivery and assess whether it is usefully redressing past inequalities."

It also found that the title did not help households save money. Over two-thirds of the households surveyed - 67 percent - did not save money due to low incomes. However, households who were renting were more likely to save than those who owned property.

The research found that banks did not cater for low-income households, or consider the value of title deeds or help low-income households to join the property market. Poor households lacked access to the tools, instruments and systems to effectively utilise the legal system.