South Africa’s Housing Financialisation Crises and Social Resistance

Author: Patrick Bond ID

The world’s most unequal country suffers from various housing crises, especially when it comes to excessive reliance upon a private sector prone to market failures, especially affordability. State housing finance strategy during the transition from apartheid to democracy relied upon augmentation of formal banking finance so as to promote home ownership. But as macro-economic conditions changed in the late 1980s, the resulting mass defaults on individual families’ home mortgage bonds led not only to foreclosures by a (white) state, but (black) working-class resistance organised by the country’s leading urban social movement, known as the ‘bond boycott.’ Even after democracy, a worsening housing backlog coincided with resurgence of household debt crises in the wake of the 2008 global financial meltdown. That generated a new housing finance strategy led by Mastercard and a local fintech firm (supported by the World Bank): collateralisation of welfare grants which in turn allowed debit orders for repayment of microfinance (typically used for minor home improvements). Again, social resistance played an important role, as the strategy caused even worse personal debt crises, and a welfare NGO’s successful fight to close Mastercard’s partner. But beyond periodic revolts of these sorts, a durable housing finance policy has remained elusive.

PDF

172 views

References

Bateman, M., P. Bond, L. Lavinas and E. Torkelson 2023. ‘Incoming World Bank President Ajay Banga’s predatory-finance background threatens even more prolific Bank poverty-creation.’ CADTM, 12 April.  Retrieved 24 April 2024, from  https://www.cadtm.org/Incoming-World-Bank-President-Ajay-Banga-s-predatory-finance-background

Bond, P. 1998. Uneven Zimbabwe. Trenton: Africa World Press.

Bond, P. 2000. Cities of Gold, Townships of Coal. Trenton: Africa World Press.

Bond, P. 2003. Against Global Apartheid. London: Zed Books.

Bond, P. 2013. ‘Debt, Uneven Development and Capitalist Crisis in South Africa.’ Third World Quarterly 34 (4): 569-592. https://doi.org/10.1080/01436597.2013.786283

Bond, P. 2014. Elite Transition. London: Pluto Press.

Bond, P. 2015. ‘Contradictions in Consumer Credit.’ Critical Arts 29 (2): 218-239. https://doi.org/10.1080/02560046.2015.1039206

Bond, P., C. Malikane 2019. ‘Inequality caused by Macro-Economic Policies during Overaccumulation Crisis.’ Development Southern Africa 36 (6): 803-820. https://doi.org/10.1080/0376835X.2019.1701416

Butcher, S. 2016. ‘Infrastructures of Property and Debt: Making affordable housing, race and place in Johannesburg.’ PhD thesis, University of Minnesota, Department of Geography, Environment and Society. https://conservancy.umn.edu/bitstream/handle/11299/182191/Butcher_umn_0130E_17330.pdf?sequence=1

Center for Global Development 2023. In Conversation: Ajay Banga and Afsaneh Beschloss on the Future of the World Bank. Washington, DC, 5 April 2023. Retrieved 24 April 2024, from https://youtu.be/y6cq02qRVkw?t=554

Christophers, B. 2013. Banking across Boundaries. Chichester: Wiley-Blackwell.

Coco, L. 2014. ‘The Cultural Logics of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.’ Critical Sociology 40 (5): 711-727. https://doi.org/10.1177/0896920513513965

Dutta, S. 2022. ‘Countering Financial Claims: On the political economy of de-fnancialization.’ Pp. 58-69 in B. Braun, K. Koddenbrock (eds.) Capital Claims: Power and Global Finance. London: Routledge.

Euromonitor 2017. Income Inequality Ranking of the World’s Major Cities. Retrieved 24 April 2024, from https://web.archive.org/web/20230330184005/https://www.euromonitor.com/article/income-inequality-ranking-worlds-major-cities

Federal Reserve Bank of St Louis 2024. Real Residential Property Prices for South Africa. St Louis:  Federal Reserve Bank of St Louis. Retrieved 24 April 2024, from https://fred.stlouisfed.org/series/QZAR628BIS

Financial Sector Campaigns Coalition 2013. Statement of the Financial Sector Campaigns Coalition. Johannesburg: Financial Sector Campaigns Coalition.

Gabor, D. and S. Brooks 2017. ‘The digital revolution in financial inclusion: international development in the fintech era.’ New Political Economy 22 (4): 423-436. https://doi.org/10.1080/13563467.2017.1259298

Government of South Africa 2023. White Paper on Human Settlements. Pretoria: Government of South Africa, Department of human settlements. Retrieved 24 April 2024, from https://insite.co.za/wp-content/uploads/2024/03/49895-18-12-HumanSettlements.pdf

Graeber, D. 2011. Debt. New York: Melville House.

Harvey, D. 1982. The Limits to Capital. Chicago: University of Chicago Press.

International Finance Corporation 2016. IFC Invests in Net1 to Promote Proven Technology that Expands Financial Services to Poor in Africa and Beyond. Washington, DC: International Finance Corporation. Retrieved 24 April 2024, from https://pressroom.ifc.org/all/pages/PressDetail.aspx?ID=18785

Johnson, K. 2013. ‘It's all in the (biometric data) cards for CEO Ajay Banga.’ Washington Post 31 May. Retrieved 24 April 2024, from https://www.washingtonpost.com/business/its-all-in-the-biometric-data-cards-for-ceo-ajay-banga/2013/05/30/3f460ac4-c7b9-11e2-8da7-d274bc611a47_story.html

Kabundu, E., S. Mbanga, B. Botha and G. Crafford 2022. Housing Quantum and Innovative Building Systems in South Africa. Critical Housing Analysis 9 (2): 18-29. https://doi.org/10.13060/23362839.2022.9.2.546

Lavinas, L. 2017. The Takeover of Social Policy by Financialization. New York: Palgrave Macmillan.

Massey, R., A. Gunter 2019. ‘Housing and Shelter in South Africa.’ Pp. 179-185 in C. Rogerson, J. Knight (eds.) The Geography of South Africa. London: Springer.

Mazzucato, M., C. Perez 2014. ‘Innovation as growth policy.’ Sussex: SPRU Working Paper Series 2014-13.

Mertens, D., C. Metz 2022. ‘Night of the Living Debt.’ Pp. 169-188 in B. Braun, K. Koddenbrock (eds.) Capital Claims: The Political Economy of Global Finance. London: Routledge.

Mkokeli, S. 2016. ‘Overpricing is Where the Real Leakage Is, Treasury’s Kenneth Brown Says.’ Business Day, 6 October. Retrieved 24 April 2024, from https://www.businesslive.co.za/bd/economy/2016-10-06-overpricing-is-where-the-real-leakage-is-treasurys-kenneth-brown-says/

Naidoo, S. 2023. ‘Mmamoloko Kubayi on better SA Human Settlements and Empowering Women.’ MoneyWeb, 29 August. Retrieved 24 April 2024, from https://www.moneyweb.co.za/investing/property/mmamoloko-kubayi-on-better-sa-human-settlements-and-empowering-women/

National Credit Regulator 2023. Consumer Credit Market Report. Pretoria: National Credit Regulator. Retrieved 24 April 2024, from https://www.ncr.org.za/documents/CCMR/CCMR%202023Q2.pdf

Oladeji, J., B. Zulch, J. Yacim 2023. ‘Implications of macroeconomic risks on NHFC’S incremental housing finance in South Africa.’ International Journal of Housing Markets and Analysis 16 (7): 80-102. https://doi.org/10.1108/IJHMA-01-2023-0010

Omarjee, F., C. Smith 2016. ‘How the New Garnishee Ruling will Impact Lenders, Debtors.’ News24, 14 September. Retrieved 24 April 2024, from https://www.news24.com/fin24/money/debt/how-the-new-garnishee-ruling-will-impact-lenders-debtors-20160914

PwC 2018. Global Economic Crime and Fraud Survey 2018. 6th South African edition. PwC: Johannesburg. Retrieved 24 April 2024, from https://www.pwc.co.za/en/assets/pdf/gecs-2018.pdf

Rappeport, A. Davenport 2023. ‘U.S. Nominates Ajay Banga to Lead World Bank.’ New York Times, 23 February. Retrieved 24 April 2024, from https://www.nytimes.com/2023/02/23/business/world-bank-president-nomination.html

Ross, A. 2014. Creditocracy and the Case for Debt Refusal. New York: OR Books.

SocioEconomic Research Institute 2024. Usindiso Building Commission of Inquiry. Johannesburg: SocioEconomic Research Institute. Retrieved 24 April 2024, from https://seri-sa.org/index.php/advocacy/securing-a-home/usindiso

Soederberg, S. 2013. ‘The US Debtfare State and the Credit Card Industry.’ Antipode 45 (2): 493-512. https://doi.org/10.1111/j.1467-8330.2012.01004.x

Subasat, T., S. Mavroudeas 2023. ‘Financialization Hypothesis: A theoretical and empirical critique.’ World Review of Political Economy 14 (2): 204–233. https://doi.org/10.13169/worlrevipoliecon.14.2.0204

Torkelson, E. 2020. ‘Collateral Damages: Cash transfer and debt transfer in South Africa.’ World Development 126 (February 2020): 104711. https://doi.org/10.1016/j.worlddev.2019.104711

Transparency International 2024. Corruption Perceptions Index. Berlin: Transparency International. Retrieved 24 April 2024, from https://www.transparency.org/en/cpi/2023

Treasury 2023. An Inclusive Financial Sector for All. Pretoria: National Treasury, Republic of South Africa.  Retrieved 24 April 2024, from https://www.treasury.gov.za/comm_media/press/2023/2023112701%20An%20Inclusive%20Financial%20Sector%20for%20all%202023.pdf

World Bank 2021. South Africa Country Partnership Framework 2022-26. Washington, DC: World Bank Group. Retrieved 24 April 2024, from https://documents1.worldbank.org/curated/en/139701627178427304/pdf/South-Africa-Country-Partnership-Framework-for-the-Period-FY22-FY26.pdf

World Economic Forum 2018. Global Competitiveness Report 2018. Davos, Switzerland: World Economic Forum. https://www3.weforum.org/docs/GCR2018/05FullReport/TheGlobalCompetitivenessReport2018.pdf

Please, login first to add a comment.
Document Type
article
ISSN
2336-2839
Volume / Issue
11 / 1
Pages
81-93
https://doi.org/10.13060/23362839.2024.11.1.566
Date of publication
24.6.2024
Keywords:
globalisation , housing finance , housing in developing countries , welfare policy

Cite this article

copy
Bond, P. 2024. ‘South Africa’s Housing Financialisation Crises and Social Resistance.’ Critical Housing Analysis 11 (1): 81-93. https://doi.org/10.13060/23362839.2024.11.1.566