A Self-Financing Approach to the Establishment of Townships
High costs had given rise to the housing shortage; reducing these costs therefore formed the department’s main attack on the urban housing crisis. One study of Orlando, an African housing scheme close to Johannesburg built in 1944, revealed that it had cost £472 to build each house. Although they were provided on “a reduced scale when compare to those services supplied to European residential areas,” essential services were provided to each house for an additional £379, bringing the total cost of a house to approximately £800[39]—an untenable basis for resolving the housing shortage on a mass scale. African impoverishment lay at the heart of the housing problem: by some accounts, almost 60 percent of Africans in the Johannesburg metropolitan area fell within the “subeconomic” category, meaning that a majority of renters would require subsidization in some form, and only a minuscule minority would ever be in a position to purchase their own homes.[40] Like local authorities and employers, Verwoerd opposed subsidization. But he was convinced that Africans were able to afford nonsubsidized (i.e., “economic”) housing: the key to a self-financing approach to African housing lay in reducing the costs of housing. This goal consumed by far the greatest proportion of the energy and resources marshaled at the behest of the department between 1950 and 1955.
Very little of what emerged in this period was new, however. Contrary to official claims,[41] the brilliance of the department’s response lay, not in the technical discoveries it made in the early 1950s, but in the manner in which existing knowledge and administrative resources were combined: managerial competence, not brilliant innovation, distinguished the department’s attack on the housing problem. Virtually all of the elements that comprised the eventual solution were familiar to administrators in the 1940s. But these lay in scattered form across the urban areas and lacked the coherence that was necessary to broach the housing crisis on a national basis. With all local authorities fearful of the losses they were expected to incur even when they made use of housing funds from the state in the 1930s and 1940s, the cost of housing remained the single most important obstacle to a concerted national African housing policy. To resolve the issue of costs was therefore to resolve the housing issue as a whole.
The problem in devising solutions lay in the fact that high costs were not concentrated in one or two factors but dispersed across every aspect involved in the planning, design, and construction of townships. After extensive research into the cost structure of African housing, A. L. Glen, Senior Research Officer of the NBRI, concluded, “Since no element costs more than 41% of the prime cost of a dwelling, it is obvious that costs cannot be radically reduced by reducing the cost of any single element.” [42] D. M. Calderwood went even further, observing that “the method of achieving cost reductions is not necessarily found in revolutionary new building techniques or new materials, although these can contribute greatly, but rather in the careful inspection and control of each small expenditure making up the whole cost.” [43] To reduce costs, the entire approach to African housing had to be reconfigured from scratch.
The first step was to devise a financial formula that local authorities would find attractive. Segregationist governments had pursued inconsistent policies with regard to this issue.[44] The Housing Act of 1920, recognizing that private enterprise had refrained from entering the area of African housing because no profits were to be gained there, and tacitly conceding the indifference of local authorities, authorized the Minister of Health to make funds available for this purpose. Housing loans, however, were extended at the “economic” rate of 3¼ percent interest, well above what Africans could afford, and so were barely used. Unwilling to bear the losses that subsidization of African housing would incur, local authorities—with the important exception of those in Springs and Bloemfontein—made little use of the available subeconomic loans. By 1942, of the £15,000,000 that the Department of Health had made available for the purpose, only £6,333,000 had been spent on housing for Africans. As late as 1945, not even Cape Town had used these loans for its African population, 70 percent of whom lived in squatter camps within and around the city.[45] Resigning in protest against “the mean and niggardly policy” of the Johannesburg City Council, J. Young, Senior Welfare Officer of the municipal Non-European Affairs Department, observed in 1950 that the council’s housing program for the preceding two years “consisted entirely of a description of what was done for the non-Europeans before 1948.” [46] Between 1936 and 1949, local authorities across the Union lost a paltry £565,000 under the various subsidy schemes for Africans, in comparison with the £1,400,000 borne by the central government.[47]
Yet even when they did participate in the subeconomic housing program, local authorities incurred very few losses to themselves. By charging deficits to the city council’s segregated Native Revenue Account, the burden was shifted back onto Africans in virtually every urban area.[48] An odious principle darkened this practice even further, for profits from the sale of Kaffir Beer accounted for a large part of the Native Revenue Account. This meant that in consuming beer produced and distributed under the system of a municipal monopoly—the system prevailing in most urban areas—Africans not only defrayed the losses borne by white city councils but actually created capital assets for the councils in the process. Between 1936 and 1945, for example, funds totaling £434,653 from the Native Revenue Account were used to cover the Johannesburg City Council’s losses on African housing, while redemption and renewal funds amounted to £608,518. This meant that “assets now belonging to the municipality exceed the total amount of accumulated deficits for a generation.” [49] Between 1914 and 1937, the Johannesburg City Council’s policy was to debit all losses sustained in Native administration to the general rate fund. These losses declined steadily once the City Council became involved in manufacturing and selling beer in municipally run establishments. In 1957, Johannesburg’s Native Beer Account sported profits of £525,101: generated in a single year, this sum exceeded the entire cumulative loss (£301,012) that the general rate fund had sustained between 1914 and 1937.
The reason why a municipal monopoly system became universal across the country is underscored in the “Five Year Master Plan” drawn up for Daveyton Location in Benoni. From a deficit of £3,526 in 1955–56 (the result of capital expenditures on the construction of “a very large and up-to-date Brewery and Malting Plant”), surpluses were projected to increase steadily to just under £70,000 four years later.[50] Although moneys collected under the Native Services Levy Act—which authorized local authorities to tax employers in order to provide essential municipal services to urban locations—exceeded profits from the sale of beer, Mathewson noted that “the Beer Account forms an extremely important part in the economics” of local urban authorities.[51]
An important reason for the high cost of rents resided in what was meant by “rent.” Like whites, Africans paid a rent that included three components: maintenance charges for the renewal and repair of aging housing units; charges for essential services such as sanitation, electricity, water, roads, administration, and medical services; and interest and redemption charges on the loan.[52] As a number of observers and commissions, including the managers of the NAD, pointed out in the 1940s, the problem lay in the unfair assumption of local authorities that, despite their general penury, Africans were liable for interest and redemption charges.[53] The result was reflected in the high cost of “economic” rentals as well as in the impossibly expensive purchasing price of houses constructed at “economic” rates. A report by Miriam Janisch in 1944 observed that out of an average monthly income of £5.6.8, Africans in the Johannesburg area paid £1 on rent and only £2.14.8 on food. The latter amount, Dr. F. W. Fox (South African Institute of Medical Research) calculated, amounted to approximately half the cost of a suggested minimum diet, which would cost £4.15.3 per month. With 86.8 percent of the urban African population earning less than the Poverty Datum Line of £8, both the Smit Committee (an interdepartmental review committee headed by D. L. Smit) and the Bus Services Commission could illustrate that Africans residing in municipal locations routinely sacrificed adequate food in order to pay a rent that accounted for at least 20 percent of monthly income.[54] Still, location residents were by no means the worst off. A combination of inadequate municipal housing and their dislike of greater state controls in the location ensured that the majority of Africans actually resided outside urban locations—in Johannesburg, the figure was estimated at 71 percent.[55] In these “non-controlled areas,” rents were astronomical by any yardstick, varying anywhere from 73 to 100 percent higher than rents in municipal locations.[56] The result was that, after deducting the cost of transport to and from their places of employment in the white city, Africans almost uniformly paid a rent that exceeded the “international accepted basis that rental should…not exceed 20% of income.” [57]
The formula that the department settled on in 1950 was designed to eliminate losses on economic houses completely, while providing a generous incentive to local authorities to deal with the subeconomic group: for every £100 it borrowed for the latter purpose, a local authority would repay only £80 over a span of four decades.[58] At the same time, Verwoerd authorized the department’s Housing Section to examine “any way in which the provision of Native housing could be placed on a sound economic footing” based on three principles: the greatest possible number of Africans should be made to pay economic rentals; losses on subeconomic housing would be reduced to the “barest minimum”; and subsidization would be extended only to Africans who were legally qualified to be in the urban areas under Section 10(1) (a), (b), and (c). Migrant workers with (d) exemptions were to be housed in single-sex hostels, while the operation of the labor bureau system would ensure that “illegals” would be either “canalised” to the farming areas or directed to the reserves. After discussing this strategy, a conference of urban officials in September 1951 resolved to “recommend to the Department that the fullest use be made of Native Trust Land for closer settlement purposes to cater properly for the squatter who has no right to claim accommodation in an urban area; and that further, when no Native Trust Land is available, the rural local authority concerned should itself establish an emergency camp.” [59] To expedite this process, in 1957 Verwoerd secured an amendment to the Native Trust and Land Act releasing the department from the obligation to first provide land in a rural area before expelling “squatters” under the terms of the Prevention of Illegal Squatting Act of 1951. The Urban Areas Division was thereafter divested of any responsibility for the “squatters” it evicted to the reserves, passing the problem onto the Lands Section in charge of developing the Bantustans.
The department’s decision to cull the numbers of Africans eligible for subsidization placed a premium on information about the African population. With some surprise, the department discovered that while some information, such as about Section 10 rights, was readily ascertainable, little was known about more specific data dealing with household income, family size, or family budgets. While the results of several sociological studies undertaken in the 1940s were well known, these studies were reported in aggregate terms that covered entire metropolitan areas.[60] Aggregate data of this nature posed something of a problem, for the department “was not building houses for abstract populations…but had to take into consideration the actual financial ability of Native families, as well as their specific needs.” [61] A crucial step, therefore, was to ascertain the financial and social condition of the Africans who were to be removed to the “properly planned Native residential areas.”
Although it rapidly lost much of the salience attached to it in the early 1950s, the need for detailed knowledge about specific African communities introduced a new tenor into the department’s approach to housing. Between 1948 and 1950, the housing issue had been depicted in essentially quantitative terms that portrayed the immensity of the backlog, the number of Africans to be removed, and the projected costs involved. As the department’s plans took shape, however, these statistical concerns began to share center stage with what Fred Rodseth, in an article he co-authored with colleagues from the National Housing Office and the NBRI, described as “the human dimension of the problem.” [62] This somewhat more sensitive approach never became a dominant theme in the bureaucratic effort to resolve the housing issue and was much more prevalent at the local level, where municipal administrators were generally more alert to the “human dimension” of their programs. The importance of this theme, however, was that—temporarily at least—it diluted the department’s tendency to view Africans in the urban areas as a conglomerate mass of “rootless évolués, ” differentiated only by whether they were present in the urban areas legally or illegally. This blunt differentiation slowly gave ground as knowledge about the subjects about whom plans, architectural blueprints, and cost projections were being drawn up shed light on the socioeconomic categories within the urban population.[63] Moreover, statistical forays into the private lives of urban Africans in the early 1950s did not cease once the housing issue had been tamed. They were superseded by detailed market research on the consumption patterns and consumer preferences of urban Africans from approximately 1960 onward.[64] The stabilization of the urban African population and the dispersal of families into tens of thousands of individual mass-produced houses extended the market for mass-produced commodities as South Africa made the transition to monopoly capitalism from the late 1950s onward.
Placing “Native housing on an economic basis” therefore required the “scientific” categorization of Africans. Prior to the 1950s, it was widely believed within departmental and municipal circles that “a sizeable number of urban Natives are capable of paying for their accommodation at the economic rate,” but no empirical research appears to have been undertaken on this point.[65] In 1950 the department urged local authorities to undertake “socioeconomic surveys” of their respective African populations, recommending that information about family size, number of offspring, number of aged dependents, ethnicity, and religion be ascertained alongside the important issues of individual and household income. “All these important details,” J. E. Mathewson, the manager responsible for the survey in Benoni, observed, “should be carefully gathered by means of a socioeconomic survey and the facts gleaned therefrom tabulated to reveal a true picture of the need that must be satisfied to achieve the best results.” [66] The Johannesburg NEAD was one of the first to comply, in 1950. The next year a comprehensive survey was undertaken in Springs and Benoni, followed by a succession of local surveys in different urban areas.[67]
A standing trilateral Committee on Socio-Economic Surveys for Native Housing Research, composed of DNA, NHPC, and NBRI personnel, was appointed and charged with coordinating social research in different parts of the Union, beginning with the Witwatersrand area. One of the first of these research surveys was conducted in Springs in 1951 by H. J. J. van Beinum, Assistant Research Officer in the Architectural Division of the NBRI. The NBRI, a subdepartment of the Council for Scientific and Industrial Research (CSIR), had been established in 1946 to investigate ways to provide cheap mass housing for all South Africans, regardless of race. The results of van Beinum’s report were particularly influential in shaping the department’s response in the early 1950s. Van Beinum’s survey was based on an analysis of 319 of the 4,000 families in Payneville Location. The study was guided by the general proposition that “before a family can afford to pay rent, it must have an income sufficient to provide its members with those necessities of life essential to the maintenance of minimum standards of health and decency.” [68] Based on his results, van Beinum allocated African families into one of three categories: an economic group capable of paying full rents; a subeconomic group in need of some degree of state assistance; and a sub-subeconomic group unable to afford any form of rent. The economic group accounted for 40.4 percent of the sample; the subeconomic group, 12.9 percent; and the sub-subeconomic group, 46.7 percent.[69]
From his position at the NBRI, van Beinum seems to have sensed the ends to which his report could conceivably be put. The report firmly concluded that the state should cater to the three different housing categories by constructing three different types of houses. Van Beinum warned that “economic houses may have to include more than the barest necessities in order to attract inhabitants” and concluded that “it is incorrect to treat any housing scheme as being for one economic class only, when the social survey of the future inhabitants indicates three economic classes.” His last warning was explicit: “If planning is dictated only by social and economic pressures and is unrelated to the fundamentals of the problem [low wages], the results may well be social malpractices, malnutrition, spread of disease and finally, social disintegration of the urban Native community.” [70]
Verwoerd was undeterred by the fact that the largest category was unable to pay any rent at all. Instead, van Beinum’s “scientific findings” were received like stone tablets brought down from the celestial heights of Science. What was important for Verwoerd was that 40 percent of urban African families could absorb a nonsubsidized rent. Moreover, he insisted that van Beinum’s report “confirmed a very important principle” and quoted its reassuring logic: “ By reducing the cost of the house,…[i]n other words, by reducing rent, some families of the sub-economic group will be brought into the economic class. ” [71] Even if this solution did not affect the bulk of families caught in the grips of the sub-subeconomic condition, which van Beinum thought precluded them from paying any form of rent no matter how formulas were manipulated or houses were built, Verwoerd was optimistic that “a majority of Natives in the urban areas could now be made to pay economic rentals.” [72] Verwoerd seized upon this three-pronged disaggregation of urban African families as vindication of his belief that an economic solution was possible. More than any other socioeconomic survey conducted in the early 1950s, van Beinum’s report was widely circulated among administrators and extensively quoted in their publications.[73] His conclusions about the three groups eventually came to serve as a common reference point for the extraordinary burst of “scientific research” that erupted from 1952 onward.