Helping informal communities improve their living spaces would bring lasting benefits

Evidence from the National Income Dynamics Study  — Coronavirus Rapid Mobile survey shows just how hard the Covid-19 lockdown has hit poor communities.

Unemployment among people living in urban townships and informal settlements appears to have more than doubled. Almost half of households thus ran out of money to buy food, causing extensive hunger and social distress.

The situation would have been even worse without government grants, which were topped up in June and reached about half of households in these areas. One in four survey respondents also benefited from the new Covid-19 grant aimed at unemployed adults with no other income. These special payments were only supposed to provide temporary relief and could be withdrawn this month.

Whatever happens to these grants, there is clearly much more to be done to help low-income communities recover from the slump. Cash transfers are a vital stopgap, but not a lasting solution to multidimensional poverty. Engaging people in creating jobs and livelihoods by upgrading their settlements is much more rewarding and worthwhile.

The following general lessons for what might be done — and what to avoid — can be learnt from experience of how the state has managed townships and informal settlements over the last six months:

So how could these broad principles be translated into practical actions? “Economic density” is a useful umbrella concept for thinking about rebuilding  in a better way. It is about converting crowded shack settlements into more functional neighbourhoods through investment in the built environment and essential infrastructure. Local people should be directly involved in building and maintaining these assets. This would provide transferable skills and work experience.

Replacing shacks with two- or three-storey buildings would create more living space for families and free up land at ground-floor level for basic infrastructure and economic activity, and public space for social interaction.

Backyard rental housing provides an excellent illustration of how improvements in the physical fabric can generate economic multipliers and attract private investment. There is prodigious demand for decent affordable rental accommodation in cities and townships. Low-income homeowners are beginning to realise the opportunity to convert their backyards into solid rental units. Small-scale developers are also getting involved in redeveloping free-standing structures into small blocks of flats.

This process generates ongoing income for these groups and encourages entrepreneurial dynamism. It creates more work for local builders, labourers and rental agents, and more demand for building materials, furniture and fittings. External financiers recognise the enormous potential to lend to microbuilders and are devising innovative funding models.  

The missing ingredient is an enabling state. With active support instead of red tape, municipalities could streamline their regulatory procedures and provide hands-on advice to enable these buildings to meet essential standards. Conferring legitimacy through formal approvals would fuel local real estate markets and attract further investment. Real momentum could be generated through property development that boosts jobs and incomes and helps put townships on the road to recovery.

Ivan Turok is NRF research professor at the University of the Free State and distinguished research fellow at the HSRC.