Newcastle housing project to form part of six new mega housing projects

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The multi-million Rand housing project currently under construction on Hospital Street in Newcastle Central is expected to be completed within the next two years.

The large-scale development project was initially announced by Newcastle Municipality’s former mayor, Dr Ntuthuko Mahlaba, on 14 October 2020. During the ground-breaking ceremony, the former mayor emphasised that the project would change the face of Newcastle by bringing people closer to economic activity.

At the time, Mahlaba added that the necessary construction equipment and materials would be sourced from local businesses, thereby injecting additional revenue into Newcastle.

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With construction starting on 14 November 2020, there has been slow progress on the massive initiative. The Newcastle Municipality’s Communications Unit stated in July 2021 that the housing project would take 24 months to complete.

However, the Newcastle Municipality did explain that unforeseen challenges could impede the progress. Weather, site, economic conditions, and the pandemic were among the leading causes of delays in July 2021.

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Now well over a year later, the housing project is set to see finalisation within the next two years. Furthermore, Mmamoloko Kubayi-Ngubane, Minister of Human Settlements, Water and Sanitation, has announced the construction of six mega social housing projects over the next two years, one of which is the Hospital Street Social Housing project.

Kubayi-Ngubane made the announcement on Monday, 14 February 2022, during a debate on the State of the Nation Address. 

“Over the years, our policies have been refined to be responsive to housing challenges in line with the bill of rights and the ever-evolving economic status of the South African population. The change was a recognition that we needed an approach to housing that provides quality houses in locations that are economically viable, has a higher impact on poverty and inequality, is responsive to the changing nature of housing demand and able to address the limited contribution from the private sector, in particular, the financial sector.”

The primary goals of social housing, according to the Minister, are urban restructuring and regeneration, as well as increasing the supply of rental housing in good locations for low- to moderate-income earners.

“Social housing is financed with a combination of government funding, debt and equity making this subsector more dynamic and attractive for public/private partnership. It is for this reason that social housing has been identified as an integral part of the infrastructure investment, which is central to the success of the Economic Reconstruction and Recovery Plan (ERRP).”

Six social housing projects will be built over two years, beginning in the fiscal year 2022/23.

Five Social Housing Institutions and one other development agency will be funded through equity and debt financing to develop these projects.

The projects include the following:

• Fochville Extension 11 in the West Rand District Municipality, Gauteng. The proposed development will consist of 2,198 residential units, out of which 258 will be Social Housing Units (SHU). This project is expected to create 953 jobs.
• Hospital Street, Newcastle, Amajuba District Municipality, KwaZulu-Natal. The proposed development consists of 53 four-storey building blocks comprised of 1,056 units.
  • Initially, the project was expected to see 1 200 people employed. However, Kubayi-Ngubane says the project is expected to create 3384 jobs.
• Germiston Extension 4 in Ekurhuleni Metropolitan Municipality, Gauteng. The project has planned 201 SHUs to accommodate 601 people. This project is expected to create 847 jobs.
• Kwandokuhle Social Housing Project in Gert Sibande District Municipality, Mpumalanga. The project involves the construction of a total of 492 SHUs in Govan Mbeki Local Municipality in the Gert Sibande District Municipality, Mpumalanga province. This project is expected to create 1544 jobs
• Hull Street Phase 1 in Francis Baard District Municipality, Northern Cape. The Hull Street, Social Housing Project, envisions delivering 600 SHUs in two phases. This project is expected to create 1152 jobs.
• The Willow Creek Project is located in Ermelo, in the Msukaligwa Local Municipality in the Gert Sibande District Municipality, Mpumalanga province. The project entails the construction of 360 SHUs in the Ermelo Central Business District (CBD). This project is expected to create 1062 jobs.

The Minister goes on to say that the government recognises that one of the most fundamental barriers in this sector is a lack of funding, which frequently leads to project failure and, more importantly, a slow pace of transformation.

With this in mind, Kubayi-Ngubane emphasises, “The social housing policy had envisaged that the National Housing Finance Corporation would be a key lender in the short to medium term, and commercial lenders would fill in the gap in the long-term.”

This, however, has not occurred. In response to this challenge, the Minister stated that her Department is converting the National Housing Finance Corporation into the Human Settlements Bank in order to consolidate funding streams for projects and crowd-in a more significant portion of the private sector.

“Work is also ongoing to get commercial lenders to come on board and partner with us and widen the funding pool so that we can be able to meet the housing demand.”

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