Social housing is essential, but should it be rental-only?

Mail & Guardian

25-05-2025

Housing: Leeuloop Precinct Development in Cape Town, along with two other proposed mixed-use projects, will provide much needed affordable rental accommodation in the innter city. Photo: Supplied
Protesting for social housing across South Africa has been a long-standing, contentious issue. I recently wrote about the first inner-city affordable housing development announced by the Western Cape government in Cape Town's city centre.
The Leeuloop Precinct Development will have about 840 residential units and consist of two towers on a 3 000m2 erf owned by the city. The towers will have 18 to 20 storeys with retail on the ground floor.
Tower One will consist of 490 open market units, while Tower Two will have about 350 social housing units.
Funding for this project is a mix between private and public. Completion of this project is expected to be in 2027-28.
As far as sustainability goes, the plan is to have a four star green building, and level one (construction waste) net zero carbon certification from the Green Building Council of South Africa.
Leeuloop is one of three mixed-use developments that will tackle the issue of affordable housing in Cape Town. The other two are Founders Garden and Prestwich Precinct.
With more than 7 000 apartments and 3 300 businesses in the inner city, these developments, with an almost 50/50 split of social housing units, should make quite an impact.
This got me thinking about a thought-provoking question I was recently asked: 'What's your opinion on the fact that social housing is rental only?'
It's a simple question on the surface, but the answer digs deep into issues of policy, economics, empowerment and our country's painful history of inequality. It brings into sharp focus the delicate balance between accessibility and opportunity, between preservation and progression.
First things first: social housing in South Africa is intentionally rental-based. It's part of the policy framework designed to address a huge and ongoing housing shortage for low- to middle-income households.
People who qualify for social housing subsidies live in households that earn R3 000 to R22 000 a month. They are too 'rich' to qualify for RDP housing but are not earning enough to qualify for bonds in the traditional property market. This group has long been squeezed out of ownership opportunities and quality rentals. Social housing aims to fill that gap, providing safe, dignified, well-located accommodation at below-market rentals.
And here's the key: if these units were made available for purchase, they'd probably be flipped. Imagine someone buys a unit at a subsidised rate, holds it for a short period and then sells it at market value. This is great for the seller, but it's not so for the next buyer, who now has to fork out more for what was meant to be an affordable unit. Especially in areas such as Cape Town's inner city, where property prices offer potential capital growth and promising yields that will soar far beyond the stipulated social housing rates.
This is what's known as the 'honeymoon period problem'. Ownership might be the dream, but without strong controls in place, it opens the door to speculation and profit-making. Before long, what was meant to serve the working class becomes unaffordable again.
We have also observed that when people receive their RDP houses, many choose not to move in. Instead, they live in more affordable accommodations and rent out the property.
I don't have an issue with this entrepreneurial approach to creating an income stream — the money is still circulating in the South African economy — but I do have concerns about this flaw in the RDP housing system.
So, yes, when it comes to social housing, rental-only keeps the asset in the social housing ecosystem. It ensures long-term affordability. It allows the units to cycle through tenants who need them, instead of disappearing into private hands.
But here's the catch.
Ownership equals empowerment. As much as I understand the logic behind rental-only housing, I can't ignore what ownership represents, especially in South Africa.
It is still one of the most powerful tools for wealth creation. It allows people to build equity, borrow against their assets, and leave something behind for the next generation. It's also psychological. Owning property gives people a sense of stability, control and dignity that renting doesn't always offer.
And, more importantly, it helps people move out of the social housing system. If we want social housing to be transitional and not permanent, we need to give people a pathway to progress. That path usually includes ownership.
So now we've got a problem: on one hand, we need to protect affordable stock. On the other, we need to create a system that doesn't just house people, but also uplifts them.
Is there a middle ground? Yes, this doesn't have to be an 'either-or' debate, but it's tricky. What we need is a tiered model — a more nuanced approach that accommodates both access and advancement.
Over the years, I have familiarised myself with a few ideas that have been floated in policy circles, and that I believe deserve more airtime.
Rent-to-buy schemes allow tenants to rent a unit for a fixed number of years, with the option to buy after that period, often at a discounted rate. This gives them time to build financial stability while creating a clear pathway to ownership.
Then there is the shared equity ownership model. This is when a housing institution retains part ownership of the property, while the resident buys a share. This limits resale profits and keeps the unit partially in the public domain, while still allowing residents to build some equity.
We could also look at the concept of capping resale prices. This solution is slightly more controversial, but worth exploring. Some developments internationally allow owners to sell — but only at a capped return (linked to inflation or a fixed formula). That way, people benefit from ownership, but can't exploit the system.
Last, maybe the core of social housing stock stays rental-only, but adjacent units or pilot schemes within a development are made available for sale under stricter rules. Essentially, this would be ownership of non-core units. This creates a dual system that caters to both short-term needs and long-term growth.
The goal with social housing should always be to give people the tools to move forward, not to keep them stuck in a system that only meets their basic needs.
We have to think long-term when it comes to social housing. We have to find ways to protect affordability and create opportunity, to keep the public good intact, and to support private growth. It's not easy, but it's not impossible either.
I understand why social housing is rental-only. It makes sense. But we also need to keep asking the tough questions: are we just housing people, or are we helping them build a future? If it's the latter, then ownership — even if limited, delayed or carefully managed — has to be part of the conversation.
Because real transformation isn't just about where people live, it's about what they can build from there.
Ask Ash examines South Africa's property, architecture and living spaces. Continue the conversation with her on email (