The Social Housing Regulatory Authority oversees projects across the country using government grands and donor funding.
Almost two out of every three homes expected to be built by the Social Housing Regulatory Authority (SHRA) projects are stuck in limbo.
The portfolio committee on human settlements on Wednesday received a presentation from SHRA on blocked social housing projects under its umbrella.
SHRA provides state-subsidised rental housing units for low-income earners and uses a combination of government grants and “delivery agents” who facilitate donor funding.
Almost R2bn for housing projects
SHRA stated that it had 52 housing projects on its books, with 42 marked as active, and 10 listed as blocked.
The 42 active projects have a total capacity of 23 462 units, with the 10 blocked projects expected to provide 6 147 units.
At the blocked developments, only 2 273 have been completed, with only 1 082 of the completed units currently housing tenants.
Of the 10 stalled projects, five require additional funding to continue, two have been terminated and three require a new delivery agent — an entity willing to take responsibility for guiding the project.
The total value of the contracts for the projects reached at least R1.97 billion, with at least R1.06 billion in grants having been disbursed already.
The grants come in two forms, one being Restructuring Capital Grants in the shape of government funds earmarked for social housing developments in designated urban zones.
The second is Consolidated Capital Grants consisting of donor funding, debt funding and capital investment made delivery agents or proxies.
Terminated contractors
Among the worst performing projects is the conversion of an office block in the Port Elizabeth CBD.
Launched in 2016, the total contract value was listed at R180 million to provide 220 units, yet only 109 have been completed.
The project was meant to take 24 months, but half the units are still outstanding after the contractor was liquidated with an uncoverable loss of R12 million.
A separate project signed off in 2018 for 452 units in Tembisa has yet to complete a single unit despite R45 million in grants being disbursed.
The main contractor was terminated and the project has needed to be revised due to an escalation in the cost of materials.
In Kimberley, a R96 million grant disbursement from 2020 delivered zero units in a development meant to provide 372 homes.
The initial contractor was terminated and only replaced in November 2024, with a new completion date envisioned for November 2026.
A development in KwaZulu-Natal saw the disbursement of R112 million in March 2020 yet none of the 492 proposed units have since been completed.
These situations are replicated throughout the projects, where only brick shells stand where families should be benefiting.
Litigation and funding pending
SHRA have been led by acting CEO Lebowa Letsoalo and new chairperson Pulane Thobejane who both took office this year.
Letsolao explained that unblocking the developments would require ending all litigation pending at the sites and securing more funding.
He presented a variety of funding models but uMkhonto weSizwe (MK) Party’s Saira Abader warned that tighter controls would need to be implemented before projects restarted.
“With regards to the presentation, it reveals a deeply entrenched structural failure in how social housing projects are planned, financed, overseen and executed across the country,” said Abader.
“What stands out is not just a few isolated stalled developments, but a pattern of systemic dysfunction that repeats across provinces, developers, contractors and funding partners,” she added.
Thobejane took charge in January, but admitted the entity was still evaluating the details of the projects and would have to return to the committee with more information.
“As SHRA, we cannot just be in a hurry dealing with these matters. As we said, there is an issue of finances, there is an issue of legacy projects that we need clarity on before we apply our mind,” said Thobejane.
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