Many of the estimated 82000 people in the city who do not earn enough money to qualify for social housing live in overcrowded and unsafe conditions in the inner city's buildings to be closer to their places of work.

The City of Joburg Property Company has asked the city council for R40m to roll out the rental units, which will be cheaper to build than fully equipped flats.

The units, with shared ablution and kitchen facilities, are expected to cost R30000-R50000 a unit to build.

Geoff Mendelowitz, programme manager for the Better Building Programme, a city initiative to upgrade buildings in the inner city, said the project, the first by a city, would help to make rental accommodation more affordable.

It would also help address the problem of the growing number of people flocking to the city in a bid to find work.

There is no real incentive for profit-driven companies to develop "low-end"

accommodation. As a result there is a shortage of this form of accommodation.

Low-cost housing projects in the inner city survive only because of heavy subsidisation by government.

Mendelowitz says to the Johannesburg city council in a report: "The money needed to fund the purchase and renovation needs to be viewed as long-term investment in real property assets and social upliftment, with no real expected repayment of either capital or interest."

He says money invested in these facilities is not lost, "as the facilities will assume a capital asset value which will grow in time".

His suggestion is that the city either remain the owner and custodian of these buildings, and regulate and manage them through lease agreements, or sell the facilities "with enough contractual safeguards built in to prevent the purchaser changing the nature of rental agreements".

The buildings are likely to be managed by one of the many social housing organisations, such as the Johannesburg Housing Company, although some commercial organisations have expressed an interest in taking on some buildings as part of their social responsibility contribution, according to Mendelowitz.

"There are members of organisations like the Property Owners and Managers Association, consisting of managers and landlords, which specialise in inner city rejuvenation, who are interested and we may have to put the project out to tender," he said.

"We are still in the process of discussing how the project should be handled and how much control the city should retain.

Research by the city found that many of the people living in inner-city slum buildings could not afford to pay even R800 a month for accommodation.

Most people can contribute a maximum of about R500 a person, and this must include payment for electricity, sewerage, refuse and water.

Social housing requires an income of at least R3500 a month.

Mendelowitz conceded that these units would make only a small dent in providing sufficient homes for the city's poor, but said he hoped the project would snowball, encouraging other departments in the city to do the same in other areas of Johannesburg.

"We are also aware that as these low-cost units become available, more people will come to the inner city because there is affordable accommodation and so the project could well continue for years to come."