Since 1994, the government has driven large-scale delivery of state subsidised homes to low-income families across the country.

In the past 19 years, nearly two-million subsidised homes have been built, mostly in the Reconstruction and Development Programme and Breaking New Ground housing projects. It is a notable achievement by any measure. But all is not good, and a recent report by Seri found that the housing system was particularly vulnerable to maladministration, corruption and fraud.

There’s a widespread public perception that the state-subsidised housing system is corrupt. But Seri found that this perception related not only to the amount of real corruption that had been exposed, but also to the clumsiness, confusion and unpredictability in the housing programme.

A lack of transparency frustrates intended beneficiaries and creates the impression that there is more corruption than there likely is, and leads to public protest, often in the form of illegal occupation of government-funded houses.

One of the primary issues is the concept of the “housing queue”. According to Seri, the dominant belief around housing delivery is that there is a “waiting list system” or a housing “queue”, and that people must patiently wait until their name comes up in terms of a “first come first served” process. Any perversion of this system is referred to as “queue-jumping”, and this term is consistently used by politicians and government officials.

Seri’s report pointed out that politicians and government officials – at all levels – had created “the impression that housing allocation is a rational process, which prioritises those in the greatest need, and those who have been waiting for a subsidised house the longest”. The idea of a waiting list underlines this. But in fact, Seri found, there was no waiting list at all.

According to the research, instead of a waiting list, there are a range of different, and sometimes contradictory, policies and systems in place to respond to housing need.

These range from housing demand databases and the National Housing Needs Register which attempt to respond flexibly to the rapidly changing nature of housing need; lottery systems, which allocate housing to beneficiaries by chance, in a manner that has nothing to do with need or the length of time spent on the list; and other, localised and often community-based methods of allocating housing developed to adapt to local situations.

The murkiness of the systems fuels feelings of despair and hopelessness, which in turn result in accusations of corruption, queue-jumping and often violent protests. This is not to dismiss misconduct in the system, though. Seri said various unofficial and illegal practices were at play in housing programmes, such as:

  • Public servants allocating state-subsidised houses, intended for people in greater need, to themselves;
  • Individuals who would actually qualify for subsidised housing occupying houses without being officially allocated them – which included the possibility of bribery taking place;
  • People recorded as having qualified for and been allocated a house, who had not actually been given one; and,
  • Allocated houses being sold or informally transferred by poor beneficiaries in need of ready cash and/or wanting to live closer to economic opportunities elsewhere in the country.

In recent years a number of oversight bodies have investigated corruption in housing delivery. In 2005, the auditor-general’s report on housing identified a number of loopholes in the allocation of housing subsidies, these included:

  • Subsidy approvals to applicants under the age of 21 years;
  • Subsidy approvals to applicants with invalid identity numbers;
  • Duplicate subsidy approvals for a specific property;
  • Approved housing subsidies not listed on the National Housing System Database; and,
  • Government employees earning salaries greater than the housing subsidy threshold, yet receiving subsidies.

In April 2007, then president Thabo Mbeki mandated the Special Investigating Unit (SIU) to probe fraud, corruption and maladministration in the development and delivery of low-cost housing. The SIU and the national Department of Housing signed an agreement to: clean up the national housing database of housing subsidy beneficiaries who aren’t entitled to the subsidy; recover losses suffered by the department as a result of maladministration and corruption; and institute corrective action, which included civil, criminal and disciplinary action. The SIU identified challenges and constraints faced by the housing department, namely:

  • Information on the Housing Subsidy Scheme (HSS) was incorrect;
  • Filing systems were poor, with missing and untraceable files;
  • The HSS system was often offline;
  • Tracing officials was difficult; and,
  • Site numbers in the field were unreliable.

According to the SIU’s 2010/2011 annual report, investigations into the mismanagement and misuse of the state’s housing scheme resulted in 1 291 acknowledgements of debts being signed to the value of R16 275 157. A total of 625 unlawful beneficiaries were arrested and taken to court in conjunction with the SAPS, and 528 beneficiaries were convicted.

Housing corruption rife in Gauteng

In March 2012, a provincial Standing Committee on Public Accounts (Scopa) report revealed the gross irregularities in the Gauteng department of local government and housing. It found that R7-million in housing subsidies was paid to beneficiaries not appearing on the HSS. Scopa was concerned that while the waiting list for housing was growing annually, subsidies for housing were being given to people who were not qualified and approved beneficiaries. The report also indicated that in Gauteng, corruption and fraud was rife in housing allocation.

The Seri report noted that getting a state-subsidised home was a political process and that councillors played a powerful role, often deciding who got housing and who did not.

Frustration rises

While there is corruption, maladministration and fraud involved in housing allocation, there is also confusion and anger among the intended beneficiaries over the housing waiting list system, demand databases, selection criteria and the allocation process itself. Seri found that the confusion and frustration over the different systems were extremely serious and could lead to:

  • General distrust of local authorities and accusations of corruption, undermining trust in the state;
  • Violent protests, including invasion or occupation of incomplete or unallocated housing as well as broader protests targeting counsellors’ houses, public buildings or roads; and,
  • Violence against foreign nationals who were seen as illegally occupying subsidised housing.


In a recent research report, the Socio-Economic Rights Institute (Seri) explains why the South African housing system is particularly vulnerable to maladministration, corruption and fraud. A lack of transparency in housing allocation is an added complication, leading to confusion and frustration among intended beneficiaries – which, in turn, fuel service delivery protests.
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