Looming electricity price hike to hit vulnerable social-housing tenants hard

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Tenants and social-housing developers need to be protected from the impending electricity-price increase as they will not be able to absorb the cost.

"Currently, social-housing tenants are not cushioned from the high cost of municipal services, including the exorbitant price of electricity in any way," said Karabelo Pooe, general manager of Nasho.

"This is despite the fact that around 35 to 40% of social-housing tenants earn below R6,700 per month, and therefore should qualify as indigent. However, because they rent their homes through an 'institutional landlord', they are not able to apply for indigent benefits. This means that although they are in effect indigent, they are expected to fund their living costs without the safety net of indigent subsidies," he elaborated.

This means that in places like the City of Johannesburg (CoJ) for example, social-housing tenants, or affordable housing tenants, that meet the income criteria that qualify them as indigent, struggle to apply to receive the benefits thereof because of bureaucratic red tape and onerous city processes.

Unfortunately, this is not unique to the City of Johannesburg. Indigent social-housing tenants in most municipalities with social-housing projects across South Africa are also unable to access free or subsidised basic services.

Whether someone owns their property, rents from a private landlord, or lives in social housing, if they qualify as indigent, they should receive the benefits that go along with it.

"If a person is indigent, irrespective of the tenure of where they live, they should be given access to the benefits that go along with indigency in their local municipality.

"However, currently, a large contingent of social-housing tenants is being excluded from these benefits and will be made even more vulnerable upon the implementation of the 40% electricity-tariff increase. This will of course also hold negative consequences for social-housing landlords, who will see their tenants battle to keep up with rents, and possibly lead to rental boycotts which can cripple the sector," Pooe added.

As Nasho, our primary objective is to assist in building a strong and sustainable social-housing sector in South Africa. Nasho is concerned that a large number of social-housing tenants who should be eligible for indigent status will be unable to afford the looming electricity-price increase without indigent benefits, putting them at risk of financial hardship.

Thus, Nasho urges local municipalities that social-housing tenants that qualify as indigent must be treated the same as any other indigent person. Nasho also calls on national and local government to examine the real impact that the electricity price hike is likely to have on social-housing tenants, as well as on social-housing landlords.