Crime, Inequality and Subsidized Housing: Evidence from South Africa

Key Issue

Inequality and crime are pressing issues in South Africa, which has the highest Gini coefficient in the world and a homicide rate 6 times larger than the global average. Moreover, 1 in every 24 households on a suburban block was likely burgled in 2018. To date, the evidence of the relationship between inequality and crime in South Africa is limited to cross-sectional analyses of income and consumption inequality, yet, an important dimension of inequality – disparities in the quality of housin – has been largely neglected. The unequal distribution of adequate housing has a long history and continues to be a major concern in South Africa. In the aftermath of apartheid, only 65% of households lived in a formal dwelling. In this context, the housing programs embedded in the overarching Reconstruction and Development Program became a tool to fight poverty, inequality and economic stagnation. Our paper provides the first study that examines the relationship between inequality in housing conditions and crime in South Africa.

Approach and Methodology

We use spatial fixed effects to account for correlating crime incidence across space. We collect information from police stations and use census data to construct an index measuring housing conditions. Additionally, we focus on the Western Cape Province to investigate the likely effects on crime in a prominent post-apartheid housing program for low-income South Africans.

Key Findings and Conclusions

We find that an increase of one standard deviation in housing inequality explains between 9% and 13% of increases in most criminal offenses. Spillover effects among districts are significant and constitute approximately 30% of a district’s crime levels. Moreover, we estimate that an increase of 1,000 subsidized housing units per 100,000 people is associated with a reduction in housing inequality of 0.04–0.16 standard deviations and with a decrease in violent crimes of 5–6%. This shows that a housing program aimed at fast-tracking development may have had the indirect effect of mitigating violent crimes by reducing inequality. These findings suggest the important role that equality in housing conditions can play in combating crime in a high-inequality, emerging economy context.

Authors

Roxana Manea

Patrizio Piraino

Martina Viarengo

Publication

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