DEPARTMENT OF HOUSING

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DEPARTMENT OF HOUSING

• PRESENTATION TO THE PORTFOLIO COMMITTEE ON HOUSING

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PRESENTATION INDEX

• Priorities for 2002
• World Conference on Sustainable Development
• Issues Raised by Housing Institutions
• Absence of Housing Institutions in Provinces
  other than Gauteng
• Proclamation R293 and the Impact on Transfer of
  Houses to End Users
• Conclusion

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DEPARTMENT OF HOUSING

• Vision A nation housed in sustainable human
  settlements with access to socio-economic
  infrastructure
• Mission To establish and facilitate a
  sustainable process that provides equitable
  access to adequate housing for all within the
  context of affordability of housing and services
  and access to social amenities and economic
  opportunities

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Priorities for 2002

• NATIONAL HOUSING POLICY AND STRATEGY
• A.) Medium Density Housing Development Programme
• Promotion of Higher residential densities in
  existing urban areas aimed at
• Integrated development
• Improved access to socio-economic opportunities
• Improved urban efficiency

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Priorities for 2002

• Identification and development of well located
  state-owned land for medium density housing
  purposes
• Integration of subsidies for medium density
  projects including
• Consolidated Municipal Infrastructure Programme
• Land subsidy by Land Affairs and
• Increased housing subsidy for medium density
  units.
• Guidelines on how to implement and deliver
  densification projects
• Lessons of completed medium density projects in
  the Job Summit Pilot densification projects must
  be evaluated to inform the phased implementation
  of the medium density housing programme

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Priorities for 2002

• B.) Rental Housing Policy and Rental Housing
  Subsidy
• Three challenges must be met
• Large financial deficits incurred on state rental
  stock must be reduced and curtailed.
• Contribution to city integration, urban renewal
  and restructuring must be realised. 
• Mobilisation of the full spectrum of
  non-government investment and management of
  rental accommodations, must be made a priority.

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Priorities for 2002

• C.) Social Housing Policy
• Finalise Social Housing policy and legislation
• The specific goal is to establish 30 social
  housing institutions over 5 years to develop 50
  000 social housing units.
• The following are essential issues for the
  success of the programme
• Government incentives such as tax and VAT for the
  sector.
• Sufficient capacity to manage the social housing
  institutions.
• Capacitation of social housing institutions by
  Government in the form of a once-off grant to
  social housing institutions.

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Priorities for 2002

• D.) National Programme for Housing Development in
  Emergency Circumstances
• Precedent set by Grootboom and the floods.
• Finalising policy prescripts and implementation
  guidelines for housing development in emergency
  situations
• E.) Savings Linked Housing Subsidy Scheme
• Developing detailed policy guidelines to
  operationalise the Governments new Savings
  Linked Housing Subsidy Scheme

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Priorities for 2002

• F.) LEGISLATIVE PRIORITIES
• Disestablishment of South African Housing Trust
  Limited Bill, 2002
• Community Reinvestment Bill and regulations, 2002
  
• Prevention of Illegal Eviction from and Unlawful
  Occupation of Land Amendment Bill, 2002
• Social Housing Bill and regulations, 2002
• Housing Amendment Bill, 2002

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Priorities for 2002

• G.) HUMAN SETTLEMENT POLICY PRIORITIES
• Strategic priorities
• Alignment of housing and land policy and strategy
  
• Compliance with international agreements in
  respect of human settlements
• The promotion of policy and strategy to support
  environmentally sound, safe, healthy and creative
  human settlements
• The development of policies and programmes for
  settlements for the needs of women, children,
  youth, the aged, persons with disabilities and
  people living with HIV/AIDS.
• Actions to be taken
• Provision of technical support for the
  development of a national rapid land release
  programme
• Bi-lateral engagement with the Department of Land
  Affairs
• Promotion of the Habitat Agenda

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Priorities for 2002

• Engagement with the UN Programme for Human
  Settlements (UN-Habitat)
• Support for human settlement initiatives within
  programmes such as NEPAD, and the SADC region
• Development of green financing and incentive
  programmes for the residential sector
• Initiation of a national residential eco-rating
  system
• Development of policy guidelines on safe and
  healthy settlements
• Support for projects relating to sustainable
  housing
• Support for the implementation of guidelines on
  gender issues, the needs of the elderly, youth,
  children and people with disabilities and
• Reporting on implementation iro constitutional
  and other legislative requirements.

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World Conference on Sustainable Development (WSSD)

• Background
• Dates 26 August 4 September 2002
• Place Johannesburg
• Theme People, Planet, Prosperity
• History
• Earth Summit, Rio, 1992 (Agenda 21 and the Rio
  declaration)
• Rio 5, New York, 1997 (5-year review of Agenda
  21)
• - WSSD (10-year review of Agenda 21 and
  Johannesburg declaration)

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World Conference on Sustainable Development (WSSD)

• Participation
• Formal WSSD meeting Government to Government
• Civil Society Global Forum Civil Society
  Partners
• Business Lekgotla Business Action for
  Sustainable Development
• Local Government Forum ICLEI
• Ubuntu Village and Exhibition All stakeholders
• Side Events including Round Table on Sustainable
  Cities in Africa hosted jointly by UN Habitat
  Department of Housing

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World Conference on Sustainable Development (WSSD)

• Outcomes
• Political Commitment (Type 1) Johannesburg
  declaration
• Global Consensus (Type 1) Chairmans Paper
• Global Commitments (Type 2) Implementation
  Planning for key themes
• Enhanced delivery partnerships (Type 2)

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World Conference on Sustainable Development (WSSD)

• Preparations
• National IMC and NSC (SA Country Report and SA
  Positions)
• Global 4 Preparatory Committee meetings
  (Johannesburg declaration and Chairmans Paper)
• Logistics JoWSCo (www.joburgsummit2002.com)

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World Conference on Sustainable Development (WSSD)

• Substance
• Crucial importance of human settlements in
  achieving sustainable development
• Overall objective to improve the social,
  economic and environmental quality of human
  settlement and the living and working
  environments of all people, especially the urban
  and rural poor.

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HOUSING SUPPORT INSTITUTIONS

• Nurcha Peoples Housing Partnership Trust
  Servcon National Home Builders Registration
  Council Social Housing Foundation Thubelisha
  Homes
• National Housing Finance Corporation Rural
  Housing Loan Fund

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PROVINCIAL REPRESENTATION

• Where there is a need for institutions to have
  regional offices these have been established,
  e.g. Servcon and NHBRC.
• The projects undertaken by other institutions do
  not justify provincial offices and these are run
  from the head office.

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NURCHA

• THE SAVINGS PROGRAMME
• Misalignment
• Nurchas original mandate/new project linked
  subsidy.
• THE PUBLIC FINANCE MANAGEMENT ACT
• budgeting, financial planning, authorisation
  procedures
• PROJECT PROBLEMS
• JVDF Project in Cape Town
• All Africa Games Village

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Peoples Housing Partnership Trust (PHPT)

• RESOURCE PROBLEMS
• INSTITUTIONAL PROBLEM
• ORGANISATIONAL PROBLEMS
• FUNDING PROBLEM

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SERVCON HOUSING SOLUTIONS (PTY) LTD

• CUT OFF DATE (31/8/1997) Servcon vs Non-Servcon
  Properties
• IN SITU SUBSIDIES e.g Mining areas.
• NEW SUBSIDY RULES Contribution by beneficiaries
  RIGHTSIZING IN KATLEHONG BLOCKED Community
  resistance to rightsizing.
• BREAKDOWN OF LAW AND ORDER - People move back
  into properties after eviction.
• POOR COMMUNITY LEADERSHIP - Mislead and misinform
  the community.
• UNEMPLOYMENT AND POVERTY
• LACK OF FINANCIAL DISCIPLINE - Monthly payments

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SERVCON HOUSING SOLUTIONS (PTY) LTD (cont.)

• LACK OF EDUCATION AND UNDERSTANDING OF HOUSING
  ISSUES Mortgages
• ENVIRONMENTAL CONDITIONS - Poor infrastructure
• RESISTANCE TO RIGHTSIZING - Clients are reluctant
  to accept a smaller house
• ACTIVE INTERFERENCE BY COMMUNITY STRUCTURES -
  Resistance to both evictions and rightsizing.
• RATES AND TAXES - Huge bills are accumulated.
• LACK OF SECONDARY MARKET - Problems of
  refinancing.
• HIV/AIDS - Number of parentless households
• ABSCONDED SPOUSES -Spouse no longer available
  remaining spouse cannot get relocation
  assistance.

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NATIONAL HOME BUILDERS REGISTRATION COUNCIL
(NHBRC)

• Entry into the State Housing Subsidy
• Establishment of a Training Fund for the
  Historically Disadvantaged Home Builders
• Application for Exemption from the Housing
  Consumer Protection Measures Act, 1998 (Act 95 of
  1998)
• Amendment of the Housing Consumer Protection
  Measures Act, 1998 (Act 95 of 1998)
• Establishment of Council Advisory Committee
• Establishment of the NHBRC Tender Committee.
• The engagement of Section 14(2) of the Housing
  Consumers Protection Measures Act, 1998 (Act 95
  of 1998)

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SOCIAL HOUSING FOUNDATION (SHF)

• Essential to the successful management of the Job
  Summit medium density rental housing stock
• GOVERNANCE Decision making structure of the
  organisation.
• Board composition/mix of board members.
• Availability of board members for meetings.
• Competency, still understanding and experience of
  board members.
• Private sector funders have limited
  confidence/faith in the governance structures of
  SHIs and see them as a risk.

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SOCIAL HOUSING FOUNDATION (SHF) (cont.)

• TENANTS/RESIDENTS
• Diminish number who fall within subsidy
  requirements
• Awareness and understanding of social housing.
• Awareness of rights and responsibilities as a
  resident

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SOCIAL HOUSING FOUNDATION (SHF)(cont.)

• GENERAL ISSUES
• Local Authorities and Provinces ability to
  monitor/support emerging and established Social
  Housing Institutions
• Limited funding support at start-up making SHI
  vulnerable to risks.
• Pool of expertise on Social Housing limited.
• Perceptions around low cost housing vs social
  housing.
• Development of capacity takes time.
• Lack of incentives for SHIs to stay in the
  sector.
• Private sector funding and involvement limited
• Starting in installment sale yet this is very
  risky sector (long-term)
• Formation of shell companies by developers in
  order to access subsidy

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THUBELISHA HOMES

• ABSCONDED SPOUSES -The spouse remaining behind
  has no contractual capacity to receive relocation
  assistance.
• THE R2,479.00 CONTRIBUTION - The rightsizing
  clients are by definition indigent-use this as an
  excuse.
• INCONSISTENT NORMS STANDARDS - Provinces impose
  their own increased standards.
• INCREASED SUBSIDY
• raised expectations in terms of the size
• Contractors increasing their prices

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THUBELISHA HOMES (cont.)

• QUEUE JUMPING - Rightsizing clients are seen as
  queue jumpers.
• PREVIOUS SUBSIDIES - Some of the provincial
  offices are rejecting applications because the
  beneficiary has already had a subsidy.
• NEGATIVE EQUITY - RDP units will decrease the
  value of bonded houses.
• THE INEFFECTIVE EVICTION PROCESS
• GENERAL LACK OF LAW AND ORDER

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NHFC

• Lack of effective rapid land release programmes
  resulting in the primary market not developing as
  expected.
• Private banking sector concentration on Mortgage
  and fully secured lending.
• Legal issues transfer fees, evictions, stamp
  duties, VAT etc.
• The economic problems of retrenchment and general
  unemployment.
• Crime, which affects building developments in
  theft of material, intimidation of contractors
  etc.

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NHFC (cont.)

• Limited number of developers remaining in the low
  income market through lack of funding for low
  income products (funding from the JVDF does not
  appear to have addressed this issue), problems
  with accessing subsidies, etc.
• Lack of management capacity in intermediaries
  which necessitates substantial training and
  handholding in managing the NHFC risk of capital
  advanced.
• The increasing resistance of employers, including
  State, to allow payroll deductions for housing
  and the problem of finding other secure methods
  of collecting installments to reduce defaults.

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RURAL HOUSING LOAN FUND

• Identify and address hitherto neglected markets
  in the rural sector.
• Support existing clients and emergence of new
  rural focused intermediaries
• Adequately capacitated housing finance
  institutions.
• Support for improving intermediaries marketing
  strategies and plans.

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Proclamation R293 and the Impact on Transfer of
Houses to End Users

• Paragraph 9.2.b of the Discount Benefit
  Guidelines (Chapter Nine of part Three of the
  Housing Code) provides that a beneficiary must
  first receive registered title to the unit
  concerned in ownership, leasehold or deed of
  grant before a consolidation subsidy for erection
  of a top structure may be allocated. 

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Proclamation R293 and the Impact on Transfer of
Houses to End Users

• Section 118 of the Municipal Systems Act, 2000
  requires payment of two years rates and service
  charges to be made before a municipality can
  issue a clearance certificate to allow
  registration of transfer to proceed.
• The effect has been to halt transfers of all
  subsidised properties, including those relating
  to Proclamation R293.
• A Bill is pending to rectify this situation by
  exempting a transfer to the first purchaser of a
  state-subsidised property from the provisions of
  Section 118.

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Thank You