The developing world is characterised by considerable social and economic problems. The unavailability of sufficient housing opportunities in the countries of the developing world is one of the key factors that contributes to their socio-economic malaise. The provision of shelter for the homeless of a country serves not only as an important political act, but also as an important socio-economic development tool for that country. For majority parties in governments to remain popular, housing serves as a basis for the provision of tangible delivery, which at the same time has the capacity to contribute to the countries socio-economic development. The provision of housing in many countries has been implemented with the objective of providing not only shelter, but also to encourage social and economic development for communities. The approaches taken have varied from time to time and have in many respects been implemented in an attempt to address the needs, constraints and opportunities faced by communities. In South Afica, the implementation of a housing policy that encompassed these issues, came into operation in 1994, with the onset of a democratic order. While successes have been recorded, it has been found that few projects have met their objectives. This thesis attempts to analyse the effects of the implementation of this housing policy on the communities of Ntuthukoville and Site 11, both of which are located in the town of Pietermaritzburg, Kwazulu-Natal. The study focuses on the amount of money and resources expended by these communities on the upgrading of their houses outside of the assistance provided by government. In this way an attempt is made to analyse whether or not the state's role as facilitator rather than provider has been achieved. Further, the economic spinoffs that emerge from the spending of individuals capital is assessed as a stimulus for local growth and development. The approach adopted includes an analysis of two communities within which different management styles have been used in the implementation of the housing policy. Information in the case studies has been extracted using interviews with key informants and the administration of a questionnaire on a face to face basis, on a sample population in each of the respective communities. The findings of the study reveal that the one community has spent more time and money on their houses in the form of new extensions, upgrading of existing buildings and new internal finishing as compared to the other. The primary reason centres on the manner in which the respective developments were implemented and the management style that was used in each. In the one community there was a community driven approach to development as compared to a State driven approach in the other. The study also reveals that the housing policy currently in operation, has the potential to give impetus to, community participation, social and economic development for the community, as well as the area in general. This policy also has the capacity to provide skill's enhancement, kick start local economies and it provides for the State to act as facilitator rather than provider. This capacity however is dependent on the proper implementation of the policy. The capacity of local government needs to be boosted in order for the maximum gains to be made from the provision of housing to communities. As is indicated by the study, local government lacks the skills and the resources to effectively implement the responsibility devolved upon it by national government to provide and facilitate housing. There is thus a need for change in the approach of local government to housing delivery. A fresh approach should be that of facilitating and managing effectively with communities rather than for communities. The nett effect of which is likely to be, the building of capacity, stimulating the local economy and delivering to the poorest of the poor. / Theses (M.Sc.U.R.P.)-University of Natal, 1998.