CAPE TOWN, South Africa -- As South Africa prepares to host the world next year for the 2010 FIFA World Cup, one of the country's biggest cities is struggling to host its own population, which has grown rapidly as people migrate to Cape Town from the adjacent Eastern Cape province.

Close to two hundred residents of the N2 Gateway, a housing pilot project launched several years ago that aims to reduce Cape Town's massive housing deficit, marched through the city's streets to the Western Cape Provincial Parliament Tuesday to complain about high rents and poor housing conditions.

Protestors chanted, "We want houses!" and "Long live the spirit of the poor!" Adults and children danced, sang songs, waved palm branches and carried signs that read: "No rent at N2 Gateway flats" and "If I die my children will never have their home, why rent for life?"

The marchers arrived at the provincial legislature, where march leader and chairman of the N2 Gateway Tenant Committee, Luthando Ndadandi, delivered a memo to Western Cape Premier Helen Zille. The memo asked Zille to mediate between the gateway tenants and Thubelisha, the government's housing company that managed the flats from 2006 until earlier this year when the newly created Housing Development Agency (HDA) took over.

The N2 Gateway project, which was aimed primarily at Cape Town's large population of shack dwellers, has been the source of great controversy since it was launched in 2005.

A damning report by the South African Auditor General, introduced in the national Parliament in April, detailed economic mismanagement and other inefficiencies in the project.

Many have also criticized the government for its housing allocation process, the formula for choosing who receives N2 Gateway housing.

Meanwhile the Western Cape continues to deal with a massive housing shortfall. Cape Town mayor Don Plato recently acknowledged the city has 400 000 families on a waiting list for housing and an additional 16 000 being added each year, while only 8 000 homes were being built annually.

Through a microphone at the rally, Ndandi enumerated the resident's demands to Zille and the crowd in front of the provincial parliament. "No to exorbitant rent in phase I (of the N2 Gateway project). No to management from Johannesburg," Ndadandi said, referring to what he called "remote-control" management of the flats by Thubelisha. "We want local government to control this."

Protestors, many of who have refused to pay rent over the last two years, argued Thubelisha had not addressed residents' housing problems.

"We pay more money than the quality of our houses," said Sinclair Mbashae, an original resident of the N2 Gateway rental flats. The personal trainer and father of two said he is supposed to pay R1,500 ($193) per month but has boycotted his rent for two years.

Mbashae said his unit had bad water damage and mold, made worse by a lack of ventilation.

Elijah Congwana, an N2 Gateway resident, also said his rent was too high. "The shacks have cracks and are falling apart," he said.

But Prince Xhanti Sigcawu, Thubelisha's General Manager and head of the N2 Gateway pilot project, said the message of the march was completely unfair and described it as politically motivated, timed to coincide with the Minister of Human Settlement's budget speech Tuesday.

"On the rental issue, it's a lie to say it's exorbitant." Xhanti Sigcawu said, adding that each tenant went through an interview process to make sure rents were commensurate with family size and income. "They signed contracts wherein one agreed how much rent you have to pay," he said.

In addition, Xhanti Sigcawu said tenants had not honoured pledges made during mediation meetings with the Social Housing Foundation and the Johannesberg Housing Company, including a commitment to resume paying rent.

Asked about criticism that Thubelisha had been unresponsive to complaints and did not have an office at the N2 Gateway flats in Langa, he said, "As we speak, all defects have been attended to." He added that Thubelisha had always had two caretakers on the premises available to handle complaints.

Many protestors stressed that they were marching because of their children and to call for the right to own their flats. "If I die, what happens to my children?" asked Nomfudo Malahla, a Langa resident. "Our kids are kicked out."

After signing the memorandum delivered by the marchers, Zille said she and Western Cape Housing MEC Bonginkosi Madikizela will study it closely. "We will analyze the requests one by one. We will determine what the implications are, and we will see how much of the problems we can solve."

"I'm not promising here today that we can solve all of the problems," she cautioned.

Zille also shrugged off responsibility for the problems of the N2 Gateway project. "This was not our project. And in fact, as you know, we were kicked off the project," she told the crowd. "But because I am committed to every resident in the Western Cape, including obviously the residents of Joe Slovo (a community of shacks near the N2 Gateway housing)...I promise you I will give this issue a lot of attention."

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Anna Claire Eddingtion and Nina Jouebert contributed reporting to this story.