Township job creation

Given that the unemployment rate in South Africa is so high (32,1% in the third quarter of 2024)¹, enabling homeowners to become entrepreneurs is a key intervention, reducing their reliance on the job market and improving their chances of maintaining a sustainable monthly income. With our support during the 10-year partnership, each homeowner immediately becomes a fully self-sufficient, sustainable property entrepreneur.

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Many of our 95 homeowners are first-time landlords and the task can be overwhelming in the beginning. Really understanding the complexities of rental management requires experience, and the first few months of tenant management can be challenging.

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Most homeowners have good relationships with their tenants. One homeowner has exemplified his commitment to being a good landlord by making his personal amenities available to his tenants at any time, such as his barbecue stand. The inherent value that comes from developing a sustainable rental business on one’s property, combined with the comprehensive support Bitprop provides, makes the process possible at scale. For every homeowner and their family that benefits from the rental income generated, the strain on jobs and unemployment is lessened slightly. And beyond these stakeholders, those hired by homeowners to do additional jobs benefit indirectly from the rental income. The hiring of cleaners alone by some homeowners (15%) for the upkeep of their properties diverts about 20% of their rental income to local, informal businesses; a true example of the multiplier effect in action.

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Another area of significant employment impact is in construction. The construction industry created 3,85 million jobs in 2023, 1.7% up in 2024²; a significant number, but one which has fluctuated a lot since 2020. The township construction industry is, in general, very underdeveloped, with most work carried out by informal construction companies. Levels of education and training differ, job sizes vary, and work is sporadic without much opportunity for consistent income or professional growth.

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Bitprop partners with local contractors who form and run their own NHBRC-certified businesses. As such, they are fully independent entrepreneurs with whom we develop long-term partnerships. When starting with a new contractor, we spend significant time understanding their way of operating, helping them to adjust to our workflow and to achieve the level of professionalism required. Those that we partner with have the qualifications and experience to build our flats, but not much more than that. If a contractor is able to manage multiple projects simultaneously with us, their business becomes more sustainable and they are able to plan for growth rather than just seeking work to put food on the table; a significant positive impact. Often, what most building contractors lack are good skills in administration, materials procurement, project management and planning, particularly regarding cashflow management. Our template process teaches contractors how to follow a strict construction schedule, work with project milestones and manage finances appropriately, receiving additional projects as they succeed.

Bitprop's construction manager is constantly on site, interacting with the lead contractors and their teams, assisting them to stay on track and ensuring smooth, consistent communication amongst all stakeholders. Each contractor has a large team of workers and subcontractors participating on each project. Because we are able to provide them with a constant work stream, the teams remain consistent and each individual is able to earn a stable income to support their family. Our main contractors each create approximately 60 jobs per project between their core team (brick layers, carpenters, metal workers, painters, plasterers etc.) and sub-contractors (electricians, plumbers, engineers etc.).

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≈ 60 jobs created per project

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This amounts to a total of approximately 1280 temporary jobs created in 2024. At an average household size of 3,34 people³, that takes the number of people supported by Bitprop's investment to almost 4 275 people through the contractors, their teams and their families.

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During 2024, Bitprop injected ZAR 28 million (USD 1.47 million) into the local economy. This is significant in an industry which lost 118 000 jobs between 2017 and 2020³. Approximately 40% of the investment is diverted towards labour costs, which amounted to ZAR 11.2 million (USD 0.62 million) in 2024. This income is spent in the community by the construction team and their families. Of the remaining 60% spent by Bitprop that goes to procurement, much went towards local businesses.

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In the backyard rental industry, most developments do not go through a formal application process and are often not built to prescribed quality and safety standards.

Our model aligns the with City of Cape Town’s vision for responsible densification for the future³. Our properties are built according to SANS and NBR, and our contractors are upskilled in the development of formalised properties, making them eligible for larger contracts. We’ve also enabled the formalisation of the contractors’ companies through arranging benefits like standardised training from established specialist plumbing suppliers.

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Through our investment model, we’ve thus been able to connect informal construction businesses with formal construction opportunities and experience that will help them grow in the future.