Small-scale Private Rental in South Africa

Small-scale private rental is an international phenomenon, and is not unique to South Africa. This sub-sector is generally one of the most successful, efficient and pervasive accommodation delivery systems in South Africa. Of the 2.4-million South African households that rent their primary accommodation, 850 000 (35%) occupy small-scale private rental units. This equates to approximately 10% of all South African households.

This study examines the small-scale private rental sub-sector and its potential to deliver housing in South Africa. The research describes this sub-sector as a housing delivery system that is based on contracts between landlords and tenants, and exists on privately held land. It presents a continuum from single room, affordable-for-low-income-group options to the ‘granny flat’ options more commonly found in the suburbs.

There are various reasons why small-scale private rental should be considered a viable option within South Africa’s human settlements strategy and programmes. These include the following:

• there is a significant demand for housing from single people to small family units for whom the standard Reconstruction and Development Programme (RDP) solution (i.e. low-cost, subsidised housing to buy) is not appropriate;

• many people have sufficient disposable income to afford low-end rentals offered privately;

• in most residential areas (whether suburbs or townships) infrastructure already exists, so additional small-scale private rental in these areas is not a significant cost to the state;

• accommodation within existing residential areas gives many locational advantages (e.g. access, transport or amenities).

Various barriers to more effective delivery of housing by this sub-sector like, perceptions that it promotes ‘slums’, and various current policy and delivery failings or gaps are also examined in the study.

Finally, the study recommends that new policy is required that enables the small-scale private rental sub-sector to deliver housing as an integral part of the state’s human settlements strategy and programmes.