Background

The social housing sector is a key focus area for the South African Government, underpinned by its constitutional mandate to achieve the progressive realisation of the right to access adequate housing.

The SHRA was established by the National Department of Human Settlements (NDoHS), in terms of the Social Housing Act 16 of 2008 (Social Housing Act), as a regulatory body tasked with supporting and facilitating the state’s social housing initiatives to redress spatial inequalities and promote a sustainable housing environment.

The SHRA’s mandate includes, amongst other things, the investment of public funds into the social housing sector through the provision of social housing subsidies such as the CCG.

Circular

The SHRA Council resolved to approve the implementation of the revised CCG quantum of R426,308, with effect from 1 April 2023.

The SHRA introduced the CCG, which is made available to accredited social housing institutions (SHIs) and private developers qualifying as other delivery agents (ODAs) in terms of the “Investment Criteria” set out in the regulations to the Social Housing Act (Investment Criteria), in order to facilitate the delivery of social housing units.

The most significant implications flowing from the adjustment of the CCG quantum include revisions to the SHRA’s minimum specifications, clarification of ODA funding obligations, amendments to existing grant contribution thresholds and the discontinuation of geotechnical variation applications. A high-level summation of such implications include:

SHRA minimum specifications

The implementation of the grant quantum adjustment necessitated a revision to the SHRA’s minimum specifications, which requires forthcoming CCG applications to cater for the inclusion of green solutions in the construction phase of its social housing projects.

ODA equity contribution

For ODAs to qualify for CCG funding for its social housing projects, the SHRA maintained its position in terms of the Investment Criteria, which requires ODAs to secure 30% of the development costs via a 20% equity contribution and debt funding, with the inclusion of a caveated condition stipulating that the amount of the revised CCG quantum will be adjusted proportionately if such grant contribution exceeds 70% of the development costs.

Geotechnical variation applications

Geotechnical variation applications will no longer be considered by the SHRA and, as such, all social housing projects should now cater for adverse geotechnical conditions as part of the project concept and viability stage.

What does the social housing sector have in store for the near future?

• The impact of the mooted national budget cuts in respect of housing projects on the primary aims of the revised CCG quantum.
• The SHRA and the NDoHS are in the process of finalising an appropriate model to proportionately allocate the subsidy quantum to the various categories of social housing units, which will be communicated to the sector in the near future.