No data available for the deliverable: Introduce a demand-side rental subsidy for affordable housing
Summary
South Africa's rental housing policy framework recognises the growing importance of rental accommodation due to urbanisation, insufficient ownership delivery and mortgage access difficulties. Current rental programmes include Community Residential Units (CRU) for households earning R1,500-R3,500 monthly, social housing for R5,500-R15,000 income brackets, and institutional rental accommodation. The rental housing sector faces significant challenges including inadequate supply, poor maintenance of existing stock and limited private sector participation in affordable segments. The Social Housing Regulatory Authority manages social housing through accredited institutions, but coverage remains limited.
View DetailsIs it working?
Cannot be assessed as the programme has not yet been implemented. As the demand-side rental subsidy remains in the policy development phase, there is insufficient evidence to assess substantive efficacy. Existing rental programmes provide limited insight: •Social housing serves approximately 5,500-15,000 income households but remains severely constrained by supply limitations •CRU programmes focus on hostel redevelopment rather than new rental provision •Private rental market operates largely without government subsidy support The absence of implemented demand-side rental subsidies represents a significant gap in South Africa's housing policy toolkit, particularly given growing urbanisation pressures and the recognised importance of rental accommodation in addressing housing needs
Actions
Limited concrete implementation actions to date. While comprehensive policy frameworks exist, specific demand-side rental subsidy programmes remain largely at the planning stage. Current government rental interventions focus primarily on supply-side support through: • Social Housing Programme providing capital grants to accredited institutions • CRU Programme for hostel redevelopment and municipal rental stock • Institutional subsidies for rental accommodation providers The Rental Housing Act of 1999 provides the regulatory framework for landlord-tenant relationships, with Rental Housing Tribunals established for dispute resolution. However, no specific demand-side rental subsidy programme has been operationalised at scale.
Are there plans?
Yes, a comprehensive policy framework has been developed. The January 2025 White Paper for Human Settlements provides detailed policy statements for affordable rental housing, including: • Development of an overarching policy framework for affordable rental housing with clear definitional parameters • Legislative and strategic amendments to implement affordable rental interventions • Creation of mechanisms for informal rental housing programmes • Exploration of transitional housing solutions for urbanisation challenges The document outlines 13 specific policy statements covering various rental housing subsectors, from formal social housing to informal rental arrangements.
Is it on the agenda?
Yes; the 2024 White Paper gazetted in January 2025 marks the first major housing policy update since 1994, explicitly committing to demand-side rental subsidies, utility rebates and flexible subsidy models to support targeted households in well-located areas. The President’s 2025 SONA confirmed housing subsidy reform as a priority, with a clear shift towards rental options and consumer choice, supporting spatial integration and aligning with the objectives of demand-side rental subsidies.
Goals
The introduction of a demand-side rental subsidy aims to provide affordable rental accommodation options for low- to middle-income households while leveraging private sector capacity in rental housing provision. The reform seeks to address market failures in the affordable rental sector by creating subsidised access to quality rental accommodation in well-located areas, supporting urban densification objectives.
Departments / Govt Institutions
Department of Human settlements National Treasury The Presidency
Summary
South Africa's rental housing policy framework recognises the growing importance of rental accommodation due to urbanisation, insufficient ownership delivery and mortgage access difficulties. Current rental programmes include Community Residential Units (CRU) for households earning R1,500-R3,500 monthly, social housing for R5,500-R15,000 income brackets, and institutional rental accommodation. The rental housing sector faces significant challenges including inadequate supply, poor maintenance of existing stock and limited private sector participation in affordable segments. The Social Housing Regulatory Authority manages social housing through accredited institutions, but coverage remains limited.
View DetailsIs it working?
Cannot be assessed as the programme has not yet been implemented. As the demand-side rental subsidy remains in the policy development phase, there is insufficient evidence to assess substantive efficacy. Existing rental programmes provide limited insight: •Social housing serves approximately 5,500-15,000 income households but remains severely constrained by supply limitations •CRU programmes focus on hostel redevelopment rather than new rental provision •Private rental market operates largely without government subsidy support The absence of implemented demand-side rental subsidies represents a significant gap in South Africa's housing policy toolkit, particularly given growing urbanisation pressures and the recognised importance of rental accommodation in addressing housing needs
Actions
Limited concrete implementation actions to date. While comprehensive policy frameworks exist, specific demand-side rental subsidy programmes remain largely at the planning stage. Current government rental interventions focus primarily on supply-side support through: • Social Housing Programme providing capital grants to accredited institutions • CRU Programme for hostel redevelopment and municipal rental stock • Institutional subsidies for rental accommodation providers The Rental Housing Act of 1999 provides the regulatory framework for landlord-tenant relationships, with Rental Housing Tribunals established for dispute resolution. However, no specific demand-side rental subsidy programme has been operationalised at scale.
Are there plans?
Yes, a comprehensive policy framework has been developed. The January 2025 White Paper for Human Settlements provides detailed policy statements for affordable rental housing, including: • Development of an overarching policy framework for affordable rental housing with clear definitional parameters • Legislative and strategic amendments to implement affordable rental interventions • Creation of mechanisms for informal rental housing programmes • Exploration of transitional housing solutions for urbanisation challenges The document outlines 13 specific policy statements covering various rental housing subsectors, from formal social housing to informal rental arrangements.
Is it on the agenda?
Yes; the 2024 White Paper gazetted in January 2025 marks the first major housing policy update since 1994, explicitly committing to demand-side rental subsidies, utility rebates and flexible subsidy models to support targeted households in well-located areas. The President’s 2025 SONA confirmed housing subsidy reform as a priority, with a clear shift towards rental options and consumer choice, supporting spatial integration and aligning with the objectives of demand-side rental subsidies.
Goals
The introduction of a demand-side rental subsidy aims to provide affordable rental accommodation options for low- to middle-income households while leveraging private sector capacity in rental housing provision. The reform seeks to address market failures in the affordable rental sector by creating subsidised access to quality rental accommodation in well-located areas, supporting urban densification objectives.
Departments / Govt Institutions
Department of Human settlements National Treasury The Presidency
No data available for the deliverable: Introduce a demand-side rental subsidy for affordable housing
No data available for the deliverable: Introduce a demand-side rental subsidy for affordable housing
No data available for the deliverable: Introduce a demand-side rental subsidy for affordable housing
No data available for the deliverable: Introduce a demand-side rental subsidy for affordable housing
No data available for the deliverable: Redesign the First Home Finance subsidy to increase uptake
No data available for the deliverable: Redesign the First Home Finance subsidy to increase uptake
Summary
FLISP was rebranded to First Home Finance(FHF) in 2023, with subsidies ranging from R38,878 to R169,264 depending on household income. Until 2023, the subsidy had very limited uptake due to the fact that it could only be used to access mortgage finance from commercial banks. Subsequent reforms delinked the subsidy from mortgages. Some significant reforms were made to the subsidy in 2022, including an increase in the upper income threshold and subsidy quantum. Most significantly, reforms allow the subsidy to be used for non-mortgage housing finance. It can now support options such as unsecured or pension-backed loans, employer-assisted schemes and stokvels. It also applies to building on self-owned or Permission to Occupy (PTO) land, extending access to rural areas. Beneficiaries can self-build incrementally using savings, materials or family support. The subsidy is also available for rent-to-own and instalment sale models. Administrative improvements have been made, along with the requirement that new homes in rural areas include solar panels and rainwater harvesting systems.
View DetailsIs it working?
Mixed results so far. While the programme demonstrates strong financial leverage, generating R7.7bn in private sector investment against R1.1bn in government subsidies over 2020-2024, absolute numbers remain modest - 4,623 units facilitated in 2023/24 represent a fraction of South Africa's significant housing backlog. The NHFC achieved only 72% of its targeted impact over the 2020-2024 Medium-Term Strategic Framework period, with key efficacy challenges being: • Geographic concentration limiting spatial transformation objectives • Slow processing times causing mortgage pre-approvals to lapse • Higher-income beneficiaries crowding out lower-income target groups • Limited awareness and understanding amongst potential beneficiaries The 2021 implementation evaluation found that intended lower-income first-time homeowners were not benefiting as much from FLISP, with higher income earners crowding them out.
Actions
Implementation guidelines for non-mortgage products were approved in 2023, expanding the programme beyond traditional mortgage-linked subsidies to include pension-backed loans, employer-assisted schemes and community-based financing options.
Are there plans?
Yes, a comprehensive policy framework has been developed. the OV phase 2 Q2 progress report outlines plans to complete the financial modelling and design work for these subsidy reforms (January 2026)
The 2024 White Paper includes specific provisions for scaling up FHF implementation through increased capital and operational funding to the National Implementing Agent. The NHFC has developed plans to expand its geographic footprint beyond Gauteng, which currently dominates 69% of subsidies (reduced from 82% in 2022/23).
Is it on the agenda?
Yes - it is prominently featured in government policy frameworks. The reform is explicitly included in Operation Vulindlela Phase II as a priority reform under "Strengthen demand-side housing policy to support densification" with the Department of Human Settlements designated as the responsible authority. President Ramaphosa highlighted housing subsidy redesign in his 2025 Sona, stating that government is "redesigning the country's housing subsidies and directing more funding towards programmes that enable people to buy or rent a home in an area of their choice".
Goals
In an effort to increase homeownership among households in the gap market (earning too much for RDP housing but too little to access mortgage finance), this subsidy aims to strengthen the affordability of these households. Operation Vulindlela 2.0's objective is to ensure the subsidy leverages private sector investment to deliver affordable housing at pace and at scale.
Documents
Departments / Govt Institutions
Department of Human settlements Department of Public Works and Infrastructure National Treasury The Presidency
No data available for the deliverable: Redesign the First Home Finance subsidy to increase uptake
No data available for the deliverable: Redesign the First Home Finance subsidy to increase uptake
No data available for the deliverable: Redesign the First Home Finance subsidy to increase uptake
No data available for the deliverable: Redesign the First Home Finance subsidy to increase uptake