Dept raises subsidy quantum to speed up housing delivery

Friday, March 31, 2023

In an attempt to address the ever-increasing building costs, the Department of Human Settlements will increase the subsidy quantum with 29.7% for the 2023/2024 financial year, to help speed up the pace of housing delivery while also addressing the quality of homes provided to beneficiaries.

Human Settlements Minister, Mmamoloko Kubayi made this announcement during a media briefing on policy changes to accelerate performance in the housing sector.

Among the policy changes the department is making is the subsidy quantum, the enhancements on fully subsidised housing (Breaking New Ground, commonly known as RDPs), and a new approach to the Emergency Housing Programme.

Last year the department made the decision to increase the subsidy quantum which had not changed for five years. The change has been necessitated by the inflationary impact on the cost of building material which had been accelerated by the COVID-19 pandemic and the July 2021 riots.

“With the Ukraine/Russia conflict and the electricity supply challenges, the economic situation has shifted such that the cost of material has gone up again, and the changes we introduced last year are no longer viable for the sector.

“Nevertheless, the situation is such that we are compelled to effect another increase; otherwise, more projects will be left incomplete and construction companies will find it hard to survive,” Kubayi said at the briefing held in Cape Town on Friday.

Kubayi also announced that, from 1 April 2023, the department’s housing programmes will be adjusted as follows:

  • Breaking New Ground (BNG) services and top structure will move from R196 887 to R255 364;
  • Houses for persons with disabilities will move from R209 071 to R271 166;
  • Military veterans' houses will move from R240 607 to R312 069;
  • First Home Finance will move from R130 505 to R169 265; and
  • Social housing will move from R327 667 to R424 984.


The amendments will enable the department to accelerate housing delivery, and avoid projects being abandoned.

“We continue with our call to our implementing agents, contractors and developers to deliver quality work on time and within budget.”

BNG enhancements

Enhancements on BNG projects that will start from 2023/24 financial year onwards.

Additionally the change in the quantum is exclusive of the enhancements that are being introduced and is at a reasonable cost that will be kept.

The enhancements include solar panels, where every BNG unit will be fitted with a solar kit so that households can have access to basic electricity. This change will ensure that households who are far from electricity infrastructure can get access to electricity.

“This will also help reduce the network load. We are cognisant of the concerns raised around security and the rising incidence of theft of solar and associated components. We are planning to work with the security cluster and the community forums to find a way to secure these units.

“We have been in contact with the team at the University of Johannesburg that has done work in the provision of solar solutions in village/rural settings. We believe there are lessons to be learned and we can only improve going forward.”

Another enhancement is the fitting of burglar bars in all the units delivered to people with disabilities. This follows reports received by the department that houses provided to persons with disabilities are vulnerable to burglaries and other security issues.

“We will also provide rainwater harvesting devices in rural areas. This will mainly ensure that rural communities have access to essential water services, “said the Minister.  –