Effects of Government Housing Subsidies in Khayelitsha, Cape Town

Year: 2014
Working paper number: 346
Author: Muyeba, Singumbe
Unit: SSU
Abstract:
Property rights are widely imagined to have considerable direct and indirect effects on urban poverty. Evidence is however scarce, more so in Southern Africa. This paper examines the effects of property rights in South Africa through a case-study of subsidised privately-titled housing for poor people in Khayelitsha, Cape Town using a difference-in-differences estimation strategy. The results show that housing subsidies are associated with better physical health and (counter-intuitively) higher occurrence of teenage pregnancy. Improvement in health is attributed to better housing quality and environment. The effects of titling extend to human capital, which is understudied in the literature. Scholars thus need to go beyond examining economic effects alone. Since titling showed no effect by most measures, it is likely that poverty is driven so strongly by factors such as unemployment that property rights make little overall difference to poverty.
Publication file: WP 346.pdf