Standing in front of a clutch of shiny tin shacks, Priscilla Siziwe reels off a litany of challenges that go hand in hand with life in one of South Africa’s impoverished informal settlements.

There is having to line up to use one of the few toilets serving hundreds of residents; the fire hazards of having shacks cobbled together from bits of wood and other materials; and the chore of walking to collect water from a communal tap. And then there are the elements. “We are living inside the shack, but it was like living outside,” she says. “Because of the materials, the wind would come inside and the rain would come inside.”

Siziwe is among the hundreds of people living in Sheffield Road, an informal settlement of ramshackle, makeshift homes built on land reserved for a road extension. The settlement is illegal and bereft of services, with a community crammed into a small section of Cape Town’s sprawling Philippi township.

In Sheffield Road, however, conditions have begun to change after the intervention of an alliance of non-governmental organisations led by iKhayalami. Under the NGO’s initiative, clusters of shacks have been demolished and rebuilt with walls of zinc aluminium. And, critically, while the “new” homes continue to cover the same land area, they have been reorganised to make the best use of the space.

This has meant that where there was once a haphazard warren of shacks, there are now relatively neatly aligned rows of huts, allowing courtyards and clearly defined alleyways to emerge. The structured formation increases security and the zinc aluminium walls – thicker and more flame resistance than the materials traditionally used – reduce the ever-present risk of fire. It has also created more space for the municipal authorities to install additional toilets.

The concept, dubbed “blocking out”, was conceived by Andy Bolnick, iKhayalami’s founder. She was seeking a solution to help ease South Africa’s massive housing challenges, which are a result of decades of segregation under apartheid and people flooding from rural areas to urban centres in the years since.

The government has built about 2.7m subsidised housing units for poor black families since the first full-franchise election in 1994, but it has failed to keep pace with demand as more people have moved to cities in search of work.

It is estimated there were 300 informal settlements in the country 18 years ago, but by the end of 2010, the number had mushroomed to 2,700, home to some 1.2m families, while another 1m are stuck in “backyard shacks”, says Steve Topham, director of the National Upgrading Support Programme at the Department of Human Settlements.

Many informal settlement dwellers have applied to receive free government housing and see their situation as a temporary predicament. But most end up waiting for years to be allocated homes as the government struggles to meet the demand.

Given the backlog, the hope is that the blocking-out model can be extended across the country and make informal settlements more liveable, with improved access to basic services.

“There needed to be a way of addressing this huge problem, which affected so many millions of people, in a way that was far quicker and more affordable,” Bolnick says.

The iKhayalami NGO, supported by funding from Selavip, a Chilean NGO, and South Africa’s Percy Fox Foundation, first had an opportunity to test its model after a fire in 2009 in another Cape Town township destroyed more than 500 homes. Working with the Informal Settlements Network (ISN) and the Community Organisation Resource Centre (Corc), it replaced 125 of the shacks.

Sheffield Road was then chosen as pilot to implement blocking out under more normal conditions and to gauge whether residents would support the concept. Not only did the community have to accept their homes being knocked down and rebuilt in a day, but they were also expected to contribute 10 per cent of the R3,000 ($370) cost for a 15 sq m shelter.

“It’s a means of convincing the state or other donors that … they are committed to this process, that they themselves are prepared to put something in,” Bolnick says.

The initiative is intended to be community-led, with residents involved in the replanning, but initially there was resistance as people waiting for government housing questioned why they should have to make a financial contribution. “They didn’t see the logic of an improved layout,” Bolnick says. “Their minds and their focus was: ‘we want the promised house’.”

Gradually, however, increasing numbers of households have been convinced of the programme’s benefits and, working in clusters of about a dozen houses at a time, the project has rebuilt 152 homes since it began in 2010.

“What we have seen is members of the community are much more positive now they have seen how it is panning out,” says Nozusakhe Mandlevu, who moved to Sheffield Road when the settlement first sprung up in 1994. “In the past we did not even have enough space for the children to play in.”

She shares her shack with her husband and four children, a curtain splitting the home in two – a bedroom and a living area. A small courtyard – a result of the blocking process – looks out on to the road and provides space for the family car and, importantly, a washing line that Mandlevu shares with just three neighbours. Before, she had to dry clothes on a communal line, which meant she or one of her children had to guard the laundry to ensure nothing was stolen.

After the success in Sheffield Road, Cape Town municipality has earmarked another 22 informal settlements where it will work with NGOs to implement the blocking-out model, says Ernest Sonnenberg, a councillor who sits on the mayoral committee for human settlements.

“We are very optimistic about this process. We believe it should be rolled out in all municipalities where people have to wait long [for housing],” he says.

Hundreds of thousands of people in Cape Town fall into this category. There are almost 194,000 informal units in the city, which has a housing waiting list of 310,000 families. In the financial year that ended in June, the municipality targeted providing 8,800 new homes, and yet Cape Town has an inward migration of 18,000 new households per year, Sonnenberg says, highlighting the housing challenge the city faces.

Topham at the central government’s human settlement department says there are already plans to use the blocking out model around the country.

“While they [the projects] are small, they are really significant in the sense that what they are doing is putting the community in the driving seat,” he says. “It’s demonstrating a better way of doing things for the state and the community … and will lead to stronger and better organised communities.”

There is an acknowledgment that it is not a long-term solution to South Africa’s housing problems. Shacks still rely on electricity illegally tapped from nearby houses for power; there are only five water taps for the entire Sheffield Road settlement, and in spite of efforts to raise up the newly built huts, they are still susceptible to floods.

But in Sheffield Road there is a genuine sense that blocking out has provided the community with an uplift and helped inject a little more pride into the shack dwellers.

“The place was dirty, it was smelly,” Siziwe says, sitting in her shack, the walls painted bright orange and the roof blue. “After blocking out, people started to feel they are living differently.”

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