South Africa’s housing crisis deepens as R34 billion budget faces backlash over corruption and inefficiency
Political parties have rejected the Department of Human Settlements’ R34 billion budget for the 2025/26 financial year, accusing the department of mismanagement, inefficiency, and making promises that will not materialise.
Democratic Alliance (DA) Member of Parliament Luyuyo Mphiti, quoting President Cyril Ramaphosa, warned that unchecked corruption threatens to erode faith in democracy itself.
“If corruption is not arrested, the greatest damage will not be in the funds stolen, the jobs lost, or the services not delivered. The greatest damage will be in the belief in democracy itself.”
Mphiti pointed to what he called a “catastrophic collapse” within the department, citing ongoing investigations, suspensions, and resignations of senior officials across major housing entities such as the National Home Builders Registration Council (NHBRC), the Social Housing Regulatory Authority (SHRA), and the National Housing Finance Corporation (NHFC).
He criticised the appointment of Human Settlements Minister Thembi Simelane, referring to corruption allegations and an active SAPS investigation.
This comes after revelations that, during her tenure as mayor at the Polokwane Municipality, Simelane took a loan from Gundo Wealth Solutions through the now-defunct VBS Mutual Bank to purchase a coffee shop in Sandton.
“Minister Simelane cannot be trusted with a single rand, let alone R33 billion of this budget,” Mphiti said. “The dysfunction is impeding the delivery of affordable housing in our country.”
Simelane tabled the Department of Human Settlements’ 2025/26 Budget Vote under the theme “Leveraging technologies for resilient, sustainable human settlements,” pledging to deliver over 41,944 housing units, 32,250 serviced sites, 3,000 social housing units, and eradicate 8,047 mud houses.
She announced that over the next five years, the department plans to deliver 237,000 Breaking New Ground units, 314,000 serviced stands, 140,000 housing subsidies for the “missing middle,” upgrade 4,075 informal settlements, build 15,000 social housing units, and register and hand over 80,000 title deeds.
Simelane stressed the importance of completing stalled housing projects and improving budget efficiency, saying, “We must complete what we had started and prioritise the completion of existing housing projects.”
She acknowledged that 90.7% of the department’s R34 billion budget would be transferred to provinces and metros, with R336 million allocated to disaster housing relief,a figure she said is “unlikely to meet our emergency housing needs.”
Despite this, Simelane acknowledged budget limitations, particularly in disaster-struck provinces like KwaZulu-Natal and the Eastern Cape.
She noted that the sector continues to face budget constraints, stalled projects, and a housing backlog, challenges she said “are not insurmountable.”
Simelane addressed governance renewal in housing entities, announcing that boards and councils have been appointed at the Housing Development Agency (HDA), the National Home Builders Registration Council (NHBRC), and the Social Housing Regulatory Authority (SHRA). Others are being finalised and expected to be fully functional by July 2025.
On the rollout of digital infrastructure, she revealed the development of the National Digital Human Settlements Management System, saying it “will modernise the way we manage human settlements data and improve coordination across departments.”
She also highlighted HDA’s Beneficiary Experience Tracking Application (BETA), which captures real-time feedback from subsidy recipients and assesses the impact of spatial transformation efforts.
Simelane warned against poor construction standards, referencing the 2024 George building collapse as a reminder of “the cost of regulatory failure,” and noted the NHBRC is reviewing high-risk projects and retraining inspectors.
“With this, we want to send an unequivocal message to the sector: compliance is non-negotiable.”
In a push toward climate-resilient housing, she announced plans to mainstream Innovative Building Technologies (IBTs), with an international summit on IBTs to be convened later this year. “We would like to see the actual implementation of these IBTs through the establishment of IBT residential areas,” Simelane said.
She added that these would showcase alternatives to conventional brick-and-mortar homes.
However, the Economic Freedom Fighters (EFF) also slammed the budget. MP Mbali Dlamini labelled it “an empty promise wrapped in inflation and false hope.”
She argued that the budget increase was meaningless given the May 2025 Consumer Price Index of 5.2%: “What does a bigger budget mean when inflation swallows it? The department still fails to address the housing backlog of 2.3 million units,” Dlamini said.
She also condemned the return of unspent funds, saying: “In 2023/2024, over R1.4 billion in urban settlement development grants were returned. That is a betrayal of the poor.”
Dlamini criticised the outsourcing of departmental work to consultants, accusing the department of “hiding behind PowerPoint presentations instead of facing the communities they have abandoned.”
“The EFF does not apologise for standing with the landless. Land occupation is not a criminal act. It is an act of desperation and resistance.”
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