The CRU (Community Residential Units) Programme replaces the National Hostel Re-development programme and the proposed "Affordable Rental Housing Programme".

There are approximately 2 000 public hostels that need to be addressed by government.  There are also 200 000 residential units in the ownership of Provinces and Municipalities.  The programme therefore provides a coherent framework for dealing with the many different forms of existing public sector residential accommodation.

POLICY INTENTION

The CRU programme aims to facilitate the provision of secure stable rental tenure for lower income persons.  The programme targets low income persons and households earning between R800 and R3 500 per month who are not able to enter the formal private rental and social housing market.

The CRU programme covers:

• Public hostels that are owned by Provincial Housing Departments and Municipalities.
• "Grey" hostels that have both private and public ownership.
• Public housing (EEDBS) stock that cannot be transferred and has to be managed as rental accommodation.
• Post 1994 newly developed public residential accommodation owned by Provincial Housing Departments and Municipalities.
• Dilapidated, derelict and dysfunctional buildings.

Hostels and accommodation that are being used to accommodate public sector employees do not form part of the CRU programme.

PRINCIPLES

The CRU programme seek to:

• Facilitate communication and participation of residents throughout the process.
• Provide a variety of rental housing options.
• Ensure that equity is part of the programme.
• Provide rental options for low income persons and households.
• Ensure long term rental charge structures.

• Existing residents.
• Displaced persons e.g. Informal Settlement Upgrading, evictions.
• New applicants.
• Qualifying indigent groups.

OWNERSHIP

• The housing stock must be owned by either a Provincial Housing Department of Municipality.
• CRU housing stock should remain in public ownership and cannot be sold or transferred to individual residents.  There is no pre-emptive right to purchase.
• Ownership of existing stock should be transferred from Provincial Housing Departments (where it is applicable).

• Funding will be provided for capital costs of project development and long term capital maintenance costs.
• Funding will be provided for development or refurbishment of the properties.
• Funding will be administered by the Provincial Housing Departments.

PROJECTS

CRU projects will have the following primary development options for housing stock:

• Stabilisation intervention.
• Demolition and site rehabilitation.
• Refurbishment.
• Conversion.
• New building infill on existing sites.
• New building on greenfields sites.
• Complete redevelopment.
• Long term capital maintenance.

• The Provincial Housing Department or Municipality as the owner will be responsible for ensuring that a proper property management and rent collection system is in place.
• Property management may be outsourced to a private company.

RENT CALCULATION

Rent setting needs to be conducted in a manner which ensures that operating costs are recovered whilst affordability for the target market is ensured.  Therefore cost-recovery rentals will apply.

The standard m² rate will be used to calculate the rentals. This m² rate will be calculated by taking the total operating budget for the housing stock and dividing it by the total m² of housing stock that the Municipality or Provincial Housing Department owns.

Rent        = Operating budget
                    per annum
                    ______________
                    Total size (m²) of
                    housing stock

e.g.        =  Operating budget per
                    annum of R120 000
                    __________________
                    1 000 m² of housing
                    stock
                =    R10.00 per m²

Therefore a unit of 40m2 will pay a rental amount of:

• R400.00 per month or,
• R100.00 per week or,
• R15.00 per day.

Annual rent increases will relate to the operating cost.  These increases are set amounts from Treasury that has to be applied by all Municipalities and Provincial Housing Departments.

Rates and taxes should be captured in the operating budget for the stock and will therefore be provided in the rentals.  Municipalities should however look to reduced rates and taxes on this public stock where possible to facilitate affordability for the target market.