Poverty and unemployment are problems that South Africa has not been able to overcome successfully. In the urban areas, poverty has led to the growth of Informal Settlements which are basically, but not necessarily so, residential areas for the low-income groups. The most noted cause of Informal Settlements is high migration from rural areas by people who are in search of job opportunities and better living conditions than what is available in the rural areas. This has led to more demand for low-cost housing in most urban areas in South Africa. History has shown that labour-based methods of work have long been used in creating remarkable infrastructure works. Labour-intensive programmes generate more direct and indirect local employment
opportunities and income by using locally available inputs (materials, simple tools and local labour) and thus create a greater demand for local products and services than do high-technology programmes reliant on imported technology and equipment. Investment in low-cost housing has a huge potential to redress the high unemployment and poverty levels in South Africa and also correct the skill deficits in disadvantaged communities. From a theoretical perspective supported by experience elsewhere in Africa, there are reasons for considering that properly formulated labour-intensive programmes could be established to construct and maintain the required physical infrastructure, thus creating employment, skills and institutional capacities. The paper looks at the experiences, and problems and outlines the potential contribution of employment creation programmes in alleviating the unemployment problem in other African countries through the construction of low-cost housing through the use of labour-intensive methods. The paper then describes the potential problems that have been encountered in South Africa in relation to employment creation through the construction of low-cost housing. The paper closes with some recommendations for the future.