BREAKING NEW GROUND

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BREAKING NEW GROUND

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Introduction

• Presented departmental budget June 10, 2004
• Budget debate
• MPs raised concerns

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What were these concerns?
1. Demand
3.Funding
2. Supply
4.Institutional
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1. DEMAND

• Current Demand
• Realised Demand
• Approximately 2,4m households living in informal
  structures
• Only 800,000 on the approved subsidy list
• Unrealised Demand
• Ineligible beneficiaries
• Previously accessed subsidies in another location
• Legal requirements of for eligibility (eg
  dependents not registered legally).
• Future Demand
• Set to grow disproportionately
• Net Population growth, Smaller household sizes
  Rapid urbanisation

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2. Supply
1.6 million houses built since 1994 but

• Major part of the subsidy spent on land
  infrastructure
• Little money left for house
• Little or no community facilities or amenities
• Supply too homogenous no choice
• Lack of access to rental stock
• One house, one plot model
• Construction of poor quality
• Housing supply slow with little monitoring
• Complex and lengthy planning process
• Lengthy deeds transfer process
• Lack of capacity in public and the private sector
• Withdrawal of large construction companies
• Absence of subsidy or consumer information
• Weak estate agency market in township areas

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3.FUNDING
Close to R30 billion spent on delivering to 1,6
million households since 1994.
Overall challenges Funding formulae have not
kept pace with inflation, income cut-offs too
low, lack of flexibility in the funding system
Informal market The low levels of employment
and limited subsidy funding combine to ensure
that overall funding levels are low to
non-existent
Incremental and old township markets Mortgage
finance is unavailable
Privately developed market Mortgage finance is
limited to this market because of perceived
affordability and risk issues
Hardest hit are those that earn between the R
3,000 R 6,000 to 7,000 pm
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4. INSTITUTIONAL

• Subsidy process - complex, slow and bureaucratic
• Suggestions of corrupt local government practices
• Title transfer processes slow
• Integration with other development processes weak
  eg basic service infrastructure, social
  infrastructure.
• The NHFC is an overly bureaucratic institution
• Current Social Housing Association model are
  costly bureaucracies unable to deliver affordable
  housing. Need to separate governance roles from
  operating and managing roles
• Illegal occupation of houses
• Passionate Leadership at all levels is critical
  to success

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AFTER THE BUDGET?

• We listened
• We consulted the politicians, communities, banks,
  construction companies and all those who were
  ready to share their experiences
• We understood the issues
• We have come with a dynamic plan that will be
  tested in 18 pilot projects around the country
  between now March 2004
• We will evaluate the plan after the pilots are
  complete then full steam ahead in April 2005

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Issues to be resolved after the budget debate
What are the real needs and choices facing
different communities ?
How does Government enable the
creation of sustainable
communities ?
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The Evolution of the Plan
Policy in 1994
Strengthen Policy
Houses
Integrated Government Delivery

• Policy Integration
• Sets playing field
• Incentives

Sustainable Communities
Note Source
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THE PLAN FOR EVERYONE

• For all South Africans it provides more money for
  houses and an opportunity to access homes in well
  designed, serviced and located human settlements
• For the hardcore poor ie pensioners and the
  indigent, the ability to access a home for rental
  or ownership with no savings requirement
• The poor ie those with access to some sort of
  employment - the ability to access a home for
  rental or ownership with a cash or sweat equity
  contribution
• Those earning above R3,500 R7,000, a deposit
  to access credit
• All subsidy beneficiaries will get increased
  access to credit and a choice of ownership
  options and top structures

• For urban migrants and highly mobile job seekers
  and seasonal workers, access to a renting in the
  city while owning a home in the rural area
• A decent life for people in the informal
  settlements with security of tenure, access to
  services, housing choices and a better life
• For the financial sector, commitment to a
  partnership with Government and a conducive
  lending environment
• The construction sector too receives the
  governments commitment to a partnership, an
  enabling environment including incentives to
  participate actively in housing delivery to the
  poor.
• For all South Africans, to participate in a fast
  tracked delivery mechanism that creates
  sustainable communities.

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What are human settlements?
Public Transport
Provision of Basic Services
Safety and Security
Funding
Housing
Public Spaces
Community
Title Deeds
EconomicOpportunities
Health Education Services
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• THE PLAN
• High Level Details

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1. Redefinition of role

• Oversee entire residential market.
• Housing to sustainable settlements.
• Policy, Implement, Monitor Audit.
• Create non-racial integerated societies.

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2. SUBSIDIES

• For the hardcore poor Access to R25,800 with no
  savings requirement.
• The poor access a home for rental or ownership
  valued at R25,800 and a cash or sweat equity
  contribution of R2,479.
• Those earning R3,500 R7,000 per month,
  contribution to the deposit required for
  mortgages

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3. QUALITY PRODUCTS

• Choice quality non-negotiable.
• Work smart.
• Multi-departmental approach
• Bulk Infra structure
• Land
• Approach ensures subsidies spent on quality and
  bigger top structure

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4. RENTAL

• Rental
• Rent to buy
• Part of broader urban renewal and inner city
  regeneration
• Housing to be dovetailed with urban development
  zone tax incentive

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5. INFORMAL SETTLEMENTS

• Reduce replace.
• Suitability located upgrade on area wide basis.
• Certainty, access to proper services, security,
  choice and formal top structures.

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6. PRIVATE SECTOR

• Financial Sector
• the governments commitment to a partnership, an
  enabling environment including incentives to lend
  to all households
• negotiate the housing provisions of Financial
  Services Charter
• Review pre-emptive recovery rights of local
  authorities.
• Construction Sector
• Opportunity to partner with government
• Established BEE (men and women) contractors
• Skills development
• Employer Assisted Housing

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7. HOUSING Creating Wealth

• Consumer education on housing as an asset.
• Encourage linkages between primary secondary
  markets.
• Limit barriers for re-sale of subsidised house
  from 8 to 5 years.
• Title deeds.

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8. Housing Institutions

• Evaluate and redefine the mandates of all housing
  institutions.
• Align to the Plan

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9. FAST TRACK DELIVERY

• Delivery chain timelines.
• Strong Project Management.
• Responsibility and Accountability.
• Role of local government.
• Accreditation.

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10. IMPLEMENTATION

• Current Projects to continue
• Next 100days 18 pilot projects
• National Implementation Team
• Inter-Ministerial Committee
• Evaluation Assessment
• Streamline plan full speed ahead by April 2005.

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THE PLAN IN ACTION N2 Gateway Project Cape Town
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Statistics

1. No. of households 10 000
2. Existing densities range from 60-125 / ha
3. Existing area 124 ha
4. Developable area estimated 48 ha
5. Target densities (4 storeys) 150 du/ha
6. Capacity of N2 land 7 200 du
7. Deficit 2 800 du
8. Land identified in Delft Driftsands

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Scope of the Project
CT Int Airport
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The Synergies
Epping Industria
Joe Slovo
New Rest, Kanana, Barcelona
Airport
Industria
URN KYA
URN MP
Scope of N2 Gateway
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Borcherds Quarry Interchange
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Barcelona
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A Vision for Barcelona
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Airport Approach Road
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Kanana
New Rest
NY1