No sign of President’s SONA promise on more affordable housing funding
24 August 2025
The City of Cape Town is concerned that President Ramaphosa’s State of the Nation promise for increased affordable housing funding is yet to materialise. The City hopes to see increased funding channelled to the Social Housing Regulatory Authority (SHRA) in the coming medium-term budget policy statement. This is necessary to ignite the affordable housing sector in the country’s biggest urban centres, according to Cape Town’s Mayoral Committee Member for Human Settlements, Councillor Carl Pophaim.
‘The City is pioneering efforts to enable greater social and affordable housing delivery and this is aimed at households earning between R1 850 and R32 000 per month. Immense progress has been made in this term of office, with more land released for social housing than in the 10 years prior under our Priority Programme to accelerate affordable housing.
‘Cape Town projects feature strongly in the national pipeline, but a constrained funding and red tape is making it harder for developers to deliver viable projects at scale and pace, with national strategies lagging behind the reality of what is needed on the ground.
‘In particular over the last two years, we have sped forward in our enabling and support of social and affordable housing developments on well-located land in urban centres across the metro, such as Woodstock, Salt River, Maitland, Pinelands, Zonnebloem, Parow, Goodwood, Bellville among others.
‘As such an affordable housing pipeline of 12 000 well-located units have been developed across the city on 21 valuable land parcels released in our important urban nodes. Now we need the President to make good on his SONA promises and ensure more funding to really ignite the affordable housing sector nationally,’ said Councillor Pophaim.
Key City interventions include:
• Passing discounts for discounting land release to maximise social housing yield and development viability
• Significant legislative reform to make it quicker and easier to get building approval in Cape Town
• Hands-on support for micro-developers including a new township development fund to help reduce development costs, and pre-approved building plan templates
• Creating a partnership-rich environment for social housing institutions and other developers
‘Now we need national government to really come to the party. A metro cannot change the face of housing delivery on its own. While this administration is highly effective in delivery according to the funding that we do receive, for instance spending the majority of our human settlements budgets where it is intended to go, the resource constraints, lack of budget pipelines at a national level are major hurdles to the game-changing interventions we have brought in,’ said Councillor Pophaim.
City Council this week approved the further release of land for social and affordable housing at the Fruit and Veg site in Zonnebloem in the inner city. A further three sites were also greenlit for development at Annandale Milnerton, Beacon Hill in Wesfleur, and also Paardevlei in Somerset West.
Much progress has also been made in the City’s partnership role in the Western Cape Government’s Founders Gardens project at the Foreshore, which will see more than 2 600 affordable housing opportunities being developed.
‘All of these developments continue and are based in well-located urban centres across the metro, designed with aesthetic and environmental care and valuable contributors to investing in local economies, while upgrading under-utilised land for more prosperous and integrated neighbourhoods.
‘Our human settlements delivery is improving access to more affordable housing and eradicating spatial apartheid patterns despite the odds. We now need to see decisive, tectonic changes on a national level to transform our cities at the pace required,’ said Councillor Pophaim.
The City is pursuing the following urgent reforms at a national level:
• Funding reform: Although SHRA follows Division of Revenue Act (DORA) processes (and is protected by the DORA), the City strongly advocates for Social Housing funding to be administered like all other housing programme grants to provide greater certainty to the City and other role players about funding availability over the medium-term budget timeframe, and indicative budgets over the term of the Human Settlements Plan. This could be facilitated by moving SHRA funding for Social Housing into the same DORA funding grant framework structure (as per other Human Settlements Grants).
• Sustainable funding model required: In the context of limited SHRA funding, a new approach to delivering and funding Social Housing is required. Where appropriate, this may entail a revision or augmentation of funding mechanisms to support the Social Housing sector. Social Housing Institutions (SHIs) require different funding and capacitation needs at different points in their lifecycle. Offering greater support to emerging SHIs, while enabling the flow of commercial finance (principally debt) to more established SHIs through deploying alternative public finance instruments with fewer regulatory restrictions reflects a partnership approach to sectoral development; and
• Enabling new SHI growth: To support the Social Housing sector, SHRA needs to provide focussed and strategic accreditation and capacitation for emergent SHIs.
• Land release: The City will continue to engage national government on the release of well-located mega-properties in Cape Town for affordable housing opportunities such as Wingfield and Youngfield;
• Subsidy quantum: The National Department of Human Settlements should rationalise the cost of housing and human settlement products and review the Norms and Standards. This could lead to new mechanisms to explore the potential of other housing and human settlements products. The national department should commit to allocating adequate funding, streamlining administrative processes, and implementing transparent criteria for subsidy allocation to eligible beneficiaries; and
• Income thresholds, development and management costs, and changing income levels to be revised annually (in line with inflation): not maintaining outdated financial data (e.g. tenant income bands) fundamentally undermines the sustainability of the programme.
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Published by:
City of Cape Town, Media Office
