Town Planning’s Tangled Mess: Broken Promises And Bureaucratic Costs
Clear the red tape that strangles development. Allow municipalities more autonomy to zone land flexibly such as upzone near jobs, permit small developers or co-ops to build.
Written By: Mukundi Budeli
South Africa’s grand housing plans have long promised “a roof over every head” – yet two million homes are still backlogged, and much of what’s built lies empty or unfinished. Under the old RDP (Reconstruction-and-Development Programme) model, houses meant for the poor often end up in the hands of cronies or speculators. A watchdog report from Cape Town describes how brand-new subsidy houses were vandalised amid feuds over who truly deserved them.
Residents know the “waiting list” is a myth – top-down officials allocate houses arbitrarily, bypassing the official queue. Public servants have been caught grabbing houses themselves, and even non-qualifiers move in through bribery or by simply breaking in. The Gauteng housing department now explicitly warns people that “RDP houses” are not for sale – yet unscrupulous scammers hawk them anyway. In practice, too many beneficiaries treat their free home like an asset: they flip it for cash, defeating the subsidy’s purpose and deepening inequality. Even officials admit the system is broken: Joburg’s premier notes that the “one-dimensional” RDP approach just piles on the waiting list.
Part of the problem is money – or the lack thereof. Municipalities are technically supposed to provide bulk services (water, roads, electricity) but often run out of cash. Developers then foot the bill for infrastructure, passing huge “input costs” on to homebuyers. Industry insiders warn that delays in approving bulk services rack up interest on idle land, making projects unaffordable. In effect, building a house comes with a bureaucratic surcharge: water connections, sewer pipes, street lighting and so on can double or triple costs.
Building-material prices have soared while real incomes have not. As one economist notes, “the construction of new homes… is not doing very well” and supply is constrained – meaning houses remain scarce. Meanwhile, workers “haven’t received wage increases above inflation since 2021”. In other words, costs are rising faster than pay. It’s easy to see how this can stall entire developments: the longer the wait for a title deed or a pipe, the more costly the project becomes, and the higher prices go. No wonder many builders now sell bare-shell houses – letting buyers finish them later – to defer costs.
These financial strains raise the spectre of a bubble. In China, years of overbuilding and debt-fueled home purchases famously ended in a “property crisis” from 2020 onwards. South Africa is smaller, but the warning is the same: if government plans remain unfunded and demand is rationed, we could be “throwing the problem down the road.” Rapid construction inflation and low household incomes risk locking in unpayable mortgages. Already, local economists note that affordable sections (sectional title flats) are outperforming standalone houses, as buyers chase lower entry prices.
Meanwhile, our public infrastructure is buckling. South Africa’s sewage and water works are in a sorry state: a parliamentary report found 334 out of 955 wastewater plants in a “critical” condition (less than 31% compliance). Ministerial auditors have warned that even big cities lack basic maintenance plans – five metros, for example, had no valid licences for some treatment works. As a result, raw sewage spills into rivers, and clean water becomes scarce. Health disasters are not theoretical: in 2014 a pipe failure in Bloemhof poisoned the water supply, killing 18 babies and hospitalising hundreds. Put simply, if we keep piling new houses into gridlocked or unserviced areas, we multiply crises. A new township without adequate sewers or clinics isn’t uplifting people – it’s creating time bombs.
Add to that the uncertainty of home financing. Government schemes like FLISP (first-home subsidies) sound great on paper, but in practice they are tangled in red tape. Applicants can qualify only in a narrow income band (roughly R3,500–R22,000 per month) and still must first secure a bank loan. Many approved beneficiaries report interminable delays – by the time money arrives, prices have climbed. The longer this takes, the more frustrated poor families become, stuck in limbo between renting and buying.
Savanna City, often touted as a mixed development model, offers a cautionary tale. After 13 years, its mega-project had built only a fraction of its planned homes – thousands of stands lie empty. Billions of rand poured in, yet whole neighbourhoods remain incomplete. This “start-stop” approach leaves would-be homeowners waiting decades. Inadequate planning plus financial shortfalls turn promises of “integrated living” into half-finished sub-divisions.
Even more fundamental is the mismatch of property regimes. For many South Africans, especially in rural and township communities, land and homes are family affairs, not the sole property of one individual. Yet current housing policy hands an official title deed to one person – often the eldest – and ignores the extended kin. Anthropologists observe that over 60% of South Africans rely on off-register (“communal” or customary) land rights. These locally-recognised family claims can provide shelter and wealth for generations, but they don’t fit neatly into Western-style titles. Policymakers have largely failed to reconcile this: on one hand pushing for formal deeds, while on the other hand offering only weak legal protection for traditional holdings.
The result is confusion and injustice. Politicians in the land portfolio often treat tenure like a political battlefield, with each faction promising land in exchange for votes. Meanwhile, many transfers happen on paper only: unscrupulous owners will “sell” a government house to a stranger using fraudulent affidavits or fake documents (a practice that courts refuse to recognise). Under-the-table deals proliferate because the formal system is so opaque and slow. This alienates the very people the housing programme is meant to serve, worsening inequality instead of closing gaps.
If the status quo is untenable, what is to be done? Any solution must be rooted in choice, transparency and community control, not more heavy-handed top-down mandates. A few policy approaches could include:
End the secretive waiting-list shuffle. The government could publish clear rules for beneficiaries (by income, need and location),or even use open lotteries or bidding systems with strict residency checks. Importantly, houses should be indexed to real need – perhaps allowing multiple beneficiaries per dwelling, rather than one-owner-fits-all – to reflect how families share property.
Clear the red tape that strangles development. Allow municipalities more autonomy to zone land flexibly such as upzone near jobs, permit small developers or co-ops to build. Encourage densification in existing suburbs (apartments, townhouses) instead of only sprawling new estates. Where governments own land, lease it to community-led projects or joint ventures with strict performance targets.
Experiment with alternative ownership models that respect traditional concepts. For example, a “family title” allowing several relatives to own one plot, or a community trust that holds land for a village. This would recognise customary sharing of wealth while still enabling banks to lend against homes. South Africa could pilot co-operative housing schemes in townships, giving residents a stake in neighbourhood businesses and services.
In infrastructure, require beneficiaries (private or public) to pay for major amenities, but transparently and upfront. For instance, if a developer lays out a new suburb, a clear impact fee system could recover costs over time. Alternatively, municipal bonds or loans (protected by land-value taxes) could fund sewers and roads, rather than ad-hoc building. Partnering with private finance (properly monitored) could even speed up long-delayed projects like Savanna City.
Digitise all housing waiting lists and transfers, making them publicly searchable. Use mobile technology to confirm that each subsidy reaches a rightful beneficiary (by live geo-tagging). Enforce laws: selling a subsidised house via affidavit should carry stiff penalties or require heavy fines to repay the subsidy. Above all, empower civil society watchdogs – when communities can report abuses directly, graft is harder to hide.
Taken together, these reforms would move us away from the “big state does it all” model and toward individual freedom and accountability in housing. A libertarian-leaning approach doesn’t mean abandoning the poor; it means unleashing markets to serve them and securing real property rights so asset ownership isn’t a hollow promise. Housing shouldn’t be a lottery or a political football. It should be built by builders, sold to savers, and owned by those who live there.
In the end, South Africa’s real estate drama will only resolve when “town planning” means planning with towns – not just for them. That means involving residents in every step, cutting the red tape that feeds cartels, and giving people genuine control over the homes they call their own. Only then can we turn sprawling waiting lists into vibrant, integrated communities – instead of haunting ghost towns of broken dreams.
Mukundi Budeli is a final year LLB student at the University of Witwatersrand and an Associate of the Free Market Foundation.