This synthesis document summarises the core arguments and conclusions of the project, noting that the reality of informal settlements should be understood as a national crisis, requiring extraordinary measures and targeted investment. Using a just urban transition frame, this crisis can become a vital opportunity, not only for informal settlement residents but also for the urban systems that these settlements are part of. It can result in upgrading processes that are inclusive and empowering, that build resilience and create livelihoods opportunities. It can transform spaces of neglect into vibrant, dignified, sustainable and safe spaces to live, play and work in. It can facilitate social and economic connections within neighbourhoods and within the city, contributing to the local economy and overall quality of life.

Advancing a just urban transition approach to informal settlement upgrading means pursuing key development outcomes, such as resilience, sustainable livelihoods, dignity, social inclusion and urban integration. Critically, this requires a systems approach, rather than a project orientation, towards informal settlement upgrading and climate resilience. Yet, funding instruments are fragmented, not utilised effectively, and, frankly, insufficient. Climate finance and new economic value chains present new opportunities for investment in informal settlements, but to harness these possibilities and advance inclusive, outcome-oriented informal settlement upgrading as scale requires new capabilities, systems and governance arrangements based on co-governance and accountability.

In a context of high unemployment, informal settlements represent the failure of South Africa’s labour market. A just urban transition places significant emphasis on economic considerations as central to any form of (climate-informed) development. Place-based, place-making and circular economy approaches hold significant potential for foregrounding the economic dimensions and potential of informal settlement upgrading. Through the creation of social value, public employment programmes can play a critical role in the transformation of informal settlements into resilient, safe and liveable neighbourhoods, as lessons from the Social Employment Fund show.

Since 1994, South Africa has witnessed exponential growth in informal settlements, currently housing about a quarter of households in urban areas. Informal settlements are particularly vulnerable to climate impacts, such as heat, flooding and storms. Climate adaptation and disaster relief, especially community-led initiatives, are really important, but to achieve systemic change, at scale, a fundamentally new approach to informal settlement upgrading is needed – one where innovation, targeted investment, capacity enhancement and community agency take centre stage.

For the past 5 years, Isandla Institute and the Development Action Group (DAG) have partnered to create greater recognition of, and support for, the informal backyard housing sector in South Africa. The Backyard Matters Project engaged in enumeration, research, community engagement, dialogues, learning initiatives and advocacy to augment the collective understanding of backyard housing and its contribution to affordable housing, livelihoods and township economic development and to identify policy and programmatic interventions to support and improve this sector, in all its diversity and complexity. At the conclusion of the project, we asked various stakeholders in government, civil society and local communities to reflect on the project and its impact.

In the context of the national housing crisis, supporting and enabling self-build incremental housing construction resulting in safe, dignified housing is a vital response. People do not only need money to build better and meet safety standards; they also need technical advice and support on how to build and augment dwellings over time, how to comply with the municipality’s requirements, and how to navigate the municipality’s organisational structure to access relevant services. This is where Housing Support Centres (HSCs) can play a vital role. In 2024, an HSC pilot was conducted in a partnership between the City of Cape Town (CoCT) and the Backyard Matters (BYM) project (itself a partnership initiative between Isandla Institute and the Development Action Group). This paper draws lessons from the pilot for replication and contextualisation of the HSC model in other municipalities and other human settlements contexts. Recommendations are made for municipalities seeking to replicate and contextualise the HSC model, for national/provincial policy and institutionalisation, and for CSOs and other support organisations keen to partner with a municipality in piloting and/or rolling out HSCs.

Small-scale affordable rental housing is increasingly recognised as both an important housing option and a significant contributor to township economic development. The small-scale affordable rental housing sector is highly diverse, incorporating a variety of landlord, tenant and housing typologies, with varying degrees of compliance to norms, standards and regulations. Awareness of crucial differences in small-scale affordable rental housing typologies is important for understanding the varied ways in which they operate as well as their future growth potential and capacity to formalise. Appreciating this diversity is key to developing appropriate responses and support interventions that adequately respond to the needs and opportunities inherent to specific sub-sectors of this housing market. While there may be common issues (e.g. the importance of adequate access to basic services), there is no ‘one-size-fits-all’ approach that municipalities can adopt to address key challenges present in the sector and to capitalise on the opportunities it presents. This pamphlet maps out these differences, provides guidance on what municipalities can do, and how responses and support interventions can adequately respond to the specific sub-sectors of this housing market.

Many people live in unsafe informal structures which disproportionately expose them to climate change impacts, while the construction sector is among the largest emitters of greenhouse gases. This paper looks at how alternative building technologies (ABTs) can be a game changer for affordable housing that is safe, dignified, climate-resilient and potentially low-carbon, and their great potential for job creation.

South Africa’s economy needs to shift away from its reliance on coal and move towards a low-carbon economy. Cities as drivers of the economy need to play a leading role in this transition, in a manner that advances climate resilience, socio-economic inclusion and equity. Informal settlements cannot be left behind. In fact, informal settlement upgrading should be an urgent national development priority, that has been made even more pressing due to the disproportionate climate impacts in informal settlements. A just urban transition posits informal settlements at the centre of investment, innovation, partnerships and resilience building, which will not only result in dignified, safe, vibrant and sustainable neighbourhoods; it will contribute to the urban dividend.

Informal settlements as catalysts for a just urban transition is a joint initiative of Isandla Institute and National Treasury’s Cities Support Programme, supported by SouthSouthNorth. Informed by a series of critical dialogues, the project has produced insightful knowledge products that conclude with key recommendations for improved practice and policy.