Affordable housing for tenants

Access to safe, affordable housing remains one of the most significant challenges globally, and the scale of the challenge is only expanding as urbanisation and population growth rapidly accelerate¹. South Africa's unique history means cities are geographically segregated, with low-income, less safe areas on the periphery and safer, more established suburbs located closer to the city centre². Large government housing programmes, including the Reconstruction and Development Programme (RDP)³ and the Breaking New Grounds (BNG) programme⁴, have built 3,3 million houses as of 2018⁵. Unfortunately, this will never achieve the scale needed to solve the housing crisis and because of financial constraints, progress has largely halted in the last few years. Newer programmes have focused more on inner city developments, often through private or third party developers, but this comes with added challenges such as neglecting development in the peripheral townships. Multiple solutions across different spheres of the housing spectrum are needed to address the shortage, and one of those is the provision of affordable rental accommodation in township areas where people can live safely in good environments within the communities they grew up in, rather than moving elsewhere.

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The township construction context is generally very informal, poorly managed and inefficient in use of resources. Given that most backyard rental flats do not go through municipal approval nor comply with minimum quality requirements, there is a high prevalence of fire safety issues, a lack of formal connection to sewerage and plumbing, limited legal electricity connections that result in a higher risk of electricity-related accidents, poor security, a lack of natural sunlight, and poor air quality. These factors affect the overall health and well-being of tenants⁶.

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In the last decade, a large amount of planning has been focused on the development of affordable or social housing, usually near the city centres. In Cape Town, only 1 of 11 social housing projects announced in 2017 have actually been complete⁷ and with the City of Cape Town having a waiting list of 367,592 people as of January 2023, the City itself has estimated that at the current rate of progress it will take over 70 years to erase the backlog⁸. Only 6 500 social housing units are currently planned across 50 land parcels.

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76% of Cape Town’s population, approximately 3,7 million residents, earns below ZAR 22 000 (USD 1 158) per month, yet only 34% of the housing market caters to this income range. More than 500 000 houses need to be built to meet this shortfall.⁷

In 6 years Bitprop, a small, privately funded start-up, has built almost 10% of what the City of Cape Town governmental body has built since 1997.⁹

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Our rental flats are studio apartments that are designed to incorporate a double bed, and include well-designed functional kitchen spaces, built-in cupboards and workstations in the lounge area with natural light and ventilation. The en-suite bathrooms have toilets, basins and showers connected to formal plumbing and sewerage, efficient water heaters as well as prepaid water and electricity meters.  

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Our rental flats are built according to National Building Regulations based on location, and align with the City of Cape Town’s vision for responsible densification for the future¹⁰. The flats have superior physical properties compared to traditional backyard rental flats, such as greater strength, better thermal retention and improved acoustic qualities due to the environmentally responsible materials used. For the tenant looking for accommodation in the township, our flats compare favourably with other options. While there are many backyard rental flats available, given the high demand and the fact that most do not meet the required building standards, our flats are very popular. Our homeowners, together with our homeowner relationship managers, are able to fill vacant flats almost immediately and our vacancy rate is less than 3%.

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The typical Bitprop tenant is a young professional such as a nurse, police worker, call centre agent or a student with an average age of 31 years old. They earn, on average, well below the upper limit of ZAR 22 000 (USD 1 158) defined as requiring affordable housing¹¹. They are attracted to our flats because of the quality of design, the support provided and their location relative to major transport hubs and retail spaces. The features of our flats and the location provide additional benefits through reduced transport costs and lower energy expenses for tenants.

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Bitprop's consistent output of affordable housing addresses a serious problem affecting South Africa and the world; an estimated 3 billion people will live in sub-standard housing by 2030¹². Improved affordable housing can also have an indirect effect that creates huge value. A homeowner in iLitha Park mentioned that she regularly gathers recyclable materials from her tenants to pass on to a local recycler in the community. This neighbour sells it to buyback centres and the influx of Bitprop tenants has inadvertently provided her with a boost in income that supports her and her family.