Moving up the Ladder or Stuck on the Bottom Rung? Homeownership as a Solution to Poverty in Urban South Africa


In the global South, policies providing property titles to low‐income households are increasingly implemented as a solution to poverty. Integrating poor households into the capitalist economy using state‐subsidized homeownership is intended to provide poor people with an asset that can be used in a productive manner. In this article the South African ‘housing subsidy system’ is assessed using quantitative and qualitative data from in‐depth research in a state‐subsidized housing settlement in the city of Cape Town. The findings show that while state‐subsidized property ownership provides long‐term shelter and tenure security to low‐income households, houses have mixed value as a financial asset. Although state‐subsidized houses in South Africa are a financially tradable asset, transaction values are too low for low‐income vendors to reach the next rung on the housing ladder, the township market. Furthermore, low‐income homeowners are reticent to use their (typically primary) asset as collateral security for credit, and thus property ownership is not providing the financial returns that titling theories assume.