How South Africa’s Social Housing Ignores Urban Economics and continues a history of spatial inequality.

The South Africa Constitution was passed into law in 1994. After four long years of negotiation, celebration erupted around the country and the world – apartheid is finally over.

In addition to repealing the explicitly racist laws on South Africa’s books, the new Constitution also attempted to remedy economic and spatial inequalities that pervaded South African society. A wide range of reforms and redistribution programs were implemented with varying success. Among them, and considered of great importance is “adequate housing” for all citizens.

The South Africa’s public housing initiative, the Reconstruction and Development Program (RDP), was one of the most successful, considering the number of houses built. In Gauteng, the province that contains Johannesburg and Pretoria, for example, South Africa subsidized 925,000 households which constitutes 38% of the population in 2014.

As commendable as this was, the RDP has not alleviated economic inequality in South Africa. In fact, it has cemented it by tying thousands of families to lands far away from the city and prevented the development of high-density housing for the poor.

In order to understand how this housing project promoted spatial and economic inequality in South Africa, one must appreciate what makes cities desirable. Why do people pay a premium to live in cities? Cities are expensive, crowded, dangerous, and polluted so it can be puzzling why people still want to live in them.

Fundamentally, it is because of the large, integrated labor market. This is what draws people. Large labor markets have numerous advantages because they are more efficient and specialized.

Labor Markets Explained

In a one-man labor market, you make or grow everything you consume. In practice, you spend all your time farming just to scrape a living. Adding another person might mean that one of you can farm and the other can work on tools to increase future productivity. As more people are added, production gets more specialized and consumables get variegated.

The city shows a complex version of this pattern. People get specialized jobs as financial analysts or hot dog stand operators. They enjoy the widest possible range of choices in ethnic food, movies, musicals, and more. The higher wages and productivity from increased specialization and the greater variety of ‘consumables’ are the main feature of dense labor markets in cities.

In order to access these benefits, however, you have to live within reasonable commuting distance of the city and its attractions. This is where the RDP fails.

Where the RDP fails

The standards for ‘adequate housing’ were set by a panel of experts who meticulously laid out standards for the size of the house and lot with specific requirements for the number and type of rooms, but they ignored land prices and location. Although the Master Spatial Plan mentions “spatial sustainability,” it makes no reference to the large, efficient labor market that defines cities nor the land markets around them.

The map above shows this fact starkly. The dark purple areas of high job density represent the downtown center of Johannesburg. In most cities, the population density would match up closely with the distribution of jobs; very high in the center of town, and decreasing radially outwards. The population density of Johannesburg is a shocking departure from this optimal distribution. One can easily pick out the high-density patches far away from the center of the city. These include Soweto, Alexandria, and Alberton, which are all predominantly black neighborhoods furnished by RDA public housing. Commuting to the city from these districts is unrealistic even if one could afford a car but most people in these communities can’t, and residents have to use collective taxis which are slow and expensive. The Reconstruction and Development Program distanced these communities from the enriching possibilities of a large labor market.

The Effect

The effects are seen clearly in South Africa’s unemployment rate which has stagnated consistently above 20% for over a decade. There are thousands of homes far away from the labor market. There are zoning laws that keep the area immediately surrounding the city in a low-density suburb. Were it legal to do so, developers would build high-density housing closer to the city’s labor market. There is huge demand for such housing closer to the city among the residents of RDP projects, but they simply cannot afford a single-family stand-alone house in the suburbs around the city.


The 1994 Constitution has been praised for giving popular rights to millions of people and galvanized the South African people on with a culture of equality. Practically, however, it misses the above. A first line of action would be to repeal the zoning laws that enshrine the suburban neighborhoods at the expense of those living in high-density public housing far from the city.

Doing that wouldn’t be cost-less. The housing market face adjustment inertia. The RDP swathes of houses will get abandoned. Notwithstanding this though, the overarching results is better opportunities for all, and better situated, adequate housing for all citizens.


1: Map from City of Johannesburg Metropolitan Municipality Spatial Development Framework 2040
South Africa, City of Johannesburg Metropolitan Municipality, Department of Development Planning. (n.d.). Spatial Development Framework 2040.

2: Presentation on the spatial organization of Guateng

3: Bertaud, A. (2018). Order without Design: How Markets Shape Cities. Cambridge, MA: The MIT Press.

4: Fact sheet on South African constitutional obligation for adequate housing
South Africa, South African Human Rights Commission. (n.d.). THE RIGHT TO ADEQUATE HOUSING FACTSHEET.


Maxwell Tabarrok is an Economics and Math student at the University of Virginia with interests in Urban Economics and Development Economics.

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