Date: 11/06/2004
Source: Department of Housing
Title: L Sisulu: Housing Dept Budget Vote debate, NCOP


SPEECH BY THE MINISTER OF HOUSING, MS L SISULU AT THE OCCASION OF THE TABLING OF THE BUDGET VOTE FOR THE DEPARTMENT OF HOUSING FOR THE FINANCIAL YEAR 2004/05, National Council of Provinces, Cape Town, 11 June 2004

Chairperson,
Members of the Executive Council from the Provinces,
Invited guests
Ladies and Gentlemen:

The central tenets of our policy in the new term of government rest on five key pillars which determine our new direction to break new ground in housing. First, we are shifting away from quantity to quality housing. In the past, in the quest to meet the huge demand in housing we unfortunately concentrated on numbers. We now will be dealing with the two but not mutually exclusive components of the same delivery. The second is accelerated delivery. The greatest housing need is in areas of economic activity and we have realised that we not delivering at the rate at which people are drawn into these centres. Even though we have received world acclaim for the rate of our delivery, when we consider the historical legacy from which we move then it becomes clear that we have to pick up pace. A third part of our strategy deals with corruption and mal-administration wherever it rears its ugly head. Many of our people complained and we on our part have responded by setting up the Special Investigative Unit that will help us understand to what extent these complaints are prevalent and whether they are indeed true. Having assessed that we then would be able to deal decisively with the problem. Fourthly, we will give support to black economic empowerment companies. The fifth component will involve the development of medium density housing including rental stock. Sixth, and finally, the eradication of informal settlements.

Chairperson, our people have taken recognition of the achievements of government over the past ten years through the Reconstruction and Development Programme. To 1.6 million houses have been delivered 2.4 million subsidies approved. This rate of delivery has been at the average rate of 160,000 units per annum, which peaked modestly in 1998. The results therefore of the first ten years of democracy relating to housing are tangible. They have vastly improved the living conditions of our people and unblocked the freeze that apartheid placed on housing.

However, due to backlogs in part we are still faced with the serious challenge of informal settlements. In Duncan Village, Cross Roads and Mshenguville, in Lamontville, Soweto on Sea, and the banks of the Jukskei River in Alexander, and more recently in Winnie Mandela Park, Joe Slovo, and the N2 Corridor in Cape Town, our people find still themselves in conditions of squalor, deprivation, and marginalisation. Year in year out they experience flooding and fires which take away their prized possessions. Left on their own, they are unable to escape these conditions, which kill their pride and dignity to which they previously had been condemned to by colour previously and now by poverty. For them tomorrow is too late!

Year in year out, we respond to them on an emergency basis, as if to accept that the conditions of squalor, found in informal settlements could be regarded as the norm, so that when ravaged by fires and flooding alike we declare them disaster areas. Yet we know that the phenomenon of informal settlements continues to be the challenge that blights the total achievements of our government in delivering a better life for all.

It is in this context, Chairperson, that we have declared war on informal settlements. These settlements are characterised by poor quality of life, high unemployment, impermanent shack housing, and a lack of convenient access to social and economic opportunities, such as health care, education, sport and recreation, and local formal employment. Living in such settlements, commonly experienced is the trauma of personal and property crime, often more so than in other parts of the city or country. Policing and access to emergency services in the case of fire, sickness or injury is made even more difficult by the lack of roads. And because there is often no electricity, people living in informal settlements are restricted in what income generation projects they can pursue and are vulnerable to attacks during the night.

Our focus in this new decade of freedom will therefore be to upgrade informal settlements. We will eradicate them on riverbanks, flood plains, on rubbish dumps, on dolomitic land and sink holes. In the overcrowded houses and backyards of Soweto, KwaZakhele, and Khayelitsha, we will ensure that people can choose to relocate, to access land, basic services and decent shelter to rent or to own. The focus will be on providing housing and basic services on a priority basis to those who currently occupy shacks and have no access to running water, sanitation or electricity. We will be pushing back the frontiers of poverty by reducing the housing backlog.

During the first ten years of democratic government we have successfully added more than 10 percent to formal housing stock in the country. This has had the effect of bringing stability to South African society and has meant that there has been a reduction in homelessness and that freestanding informal settlements have remained at approximately 16 percent of the national stock. However, with the reduction in the number of people per household by the time of the 2001 Census, we were already looking at a national increase of 2.1 million new households rather than the expected 0.95 million households. Added to this, an urbanisation rate of 2.7% per year and complex migration patterns mean that urban areas remain the focal point of attention for economic growth. It is estimated that across the nine biggest cities in South Africa, there remained approximately 1,023,134 households living within informal settlements in 2001.

Given these dynamics and our housing programme which targets the housing need found in informal settlements, in backyard shacks and rooms, and on the streets where people are functionally homeless, according to the 2001 Census the overall housing backlog stands at some 2.4 million households.

The clearest evidence of the housing backlog is in the informal settlements on the periphery of our cities and towns, and along many of the main transport routes. We are taking up this challenge in the context of accelerated delivery of housing so that the backlog can be meaningfully addressed. Until now the approach has been to emphasise the building of new homes for people who have been under-housed. This has allowed the phenomenal delivery of housing that we have seen.

Despite this, informal settlements have not reduced and with increasing urbanisation those without decent shelter in our urban conurbations have grown. It is for this reason that we believe that our attention must shift to specifically addressing informal settlements directly. The upgrading of informal settlements will present great challenges given the complex nature of consultations required with community-based organisations, and individual beneficiaries, to ensure that we take into consideration the various needs, circumstances and desires of our people. Appropriate solutions will be provided for rural-based families who are only in cities to seek employment, young urban families requiring mobility to respond to economic opportunities or who have left their overcrowded family home to make a new start, people with disabilities or other special needs needing to access social facilities.

Chairperson, the President in his State of the Nation address said we would build on our experiences of the past ten years to intensify the housing programme. He said that we would develop a comprehensive programme dealing with human settlement and social infrastructure, including rental-housing stock for the poor. He said we would in the next three years spend R14, 2 billion to help our people to have access to basic shelter. He committed us to addressing the trend in some provinces where there has been a slow-down in housing delivery as well as addressing the broader question of spatial settlement patterns and implications of this in our efforts to build a non-racial society. Further, through housing delivery we will assist in delivering on the water and sanitation targets.

The human settlement and infrastructure programme will comprise three major thrusts: the development of medium density housing, informal settlement upgrading, and the development of social infrastructure, in well-located areas.

We will identify together with the Departments of Land Affairs and Public Works, in our urban conurbations, suitably located affordable land for the development of medium density housing in inner city areas, infill sites in suburban areas, and vacant land in close proximity to areas of employment. This will constitute the comprehensive land for housing programme, which we should complete in three months. It will further constitute specific resource allocation for social infrastructure in existing and new housing development areas through the human settlement redevelopment programme fund, allocations for which are already being made in 2004/ 2005. This fund will also be prioritised for the upgrading of informal settlements.

In the urban-based metropolitan areas a clear need for rental housing has been determined with rural migrants not wanting to invest their resources to meet their urban housing needs. In addition, young families depend on mobility to secure economic opportunities and therefore remain transient. To respond to this need, we have facilitated the development of rental housing stock, through the promulgation of the Rental Housing Act in 1999, which regulates the roles and responsibilities of landlords and tenants and establishes a framework for the efficient management of rental housing. Rental housing policy will be concluded this year and the rental-housing subsidy will be implemented from the beginning of the next financial year.

The comprehensive programme to be submitted to Cabinet in by end of July will include land acquisition, medium density development strategy and financial models, inner city regeneration programme, measures for the enhancement of the secondary housing market, the principles of the rental housing policy and rental housing subsidy, a revamped social housing programme together with the social housing policy, to ensure well capacitated institutions to manage rental stock.

This programme will prioritise informal settlement areas, sparsely populated suburban areas, and inner city areas, in order to change the spatial settlement patterns through integration and the building of a non-racial society.

Resulting from discussions with Cabinet and our housing MECs, we have agreed to devote ourselves to fast track delivery, building the capacity of municipalities to operate more effectively at all levels; upgrading of informal settlements, relocation to new development areas, and enhancing social crime prevention through all our housing interventions; rooting out corruption and maladministration in the housing programme; promoting urban efficiency and renewal, and racial integration through sound spatial planning, and through support for medium density residential development and increasing rental opportunities for the poor; and maximising the re-distributionary benefits and black economic empowerment through the housing delivery process.

Our interventions are focusing on promoting good governance and attaining sustainable, integrated human settlements. With respect to good governance, we will focus on efficient and effective systems of government and optimise the potential of all stakeholders to constructively contribute towards our goal of housing the nation. We will establish the necessary policy and regulatory environment, systems and procedures, human and financial resources, and an organisational culture that strives for excellence throughout the institutional machinery collectively responsible for achieving the housing mandate. At municipal level we will focus our efforts particularly on building capacity for municipal officials, councillors and emerging contractors, to ensure efficient delivery of housing.

It is clear, as the housing programme has matured over the last decade that certain vested interests have begun to operate to take advantage and abuse the system of benefits that have been put in place. In the more extreme cases this can be referred to as clearly corrupt practices by officials and individuals from the private sector or even by community members. The Department will establish a Special Investigative Unit in the Office of the Director-General that will explicitly deal with fraud, corruption and maladministration in the implementation of National Housing Programmes. This directorate will closely liase with provincial departments and all other state organs responsible for fighting corruption to ensure that investigations are carried out effectively. It will further finalise the outstanding cases of fraud and corruption with the National Prosecutions Authority.

The Department has already appointed KPMG as a second task team to support the work of the Directorate in the elimination of fraud, corruption and mal-administration in the implementation of national housing programmes and will immediately establish a toll free whistle blowing hotline to be manned twenty four hours a day to enable members from the public to report any allegations of fraud and corruption. A report of their findings will be submitted to Parliament by the end of the year.

The contribution that housing projects make to improve urban efficiency will continue to be pursued in partnership with the other Departments responsible for investing in the built environment. The benefits to urban efficiency of development on well located land, at higher built densities, with appropriate typologies of housing combined with the range of facilities needed to support economic development, and appropriate tenure arrangements are to be pursued through the medium density housing programme.

We are revising the current hostels policy, to replace it with a policy that will enable the creation of humane living conditions, and one that will provide affordable and sustainable housing opportunities on either a rental or homeownership basis. A few pilot redevelopment projects, that could inform the revision of the current policy and which could provide certain examples of best practices were launched. The Department also prepared a set of technical specifications for the upgrading or provision of new services and the upgrading (redevelopment) of the hostel buildings. The enhancement of the implementation guidelines, which will direct the redevelopment of the Public Sector Hostels Redevelopment Programme, will be finalised by the end of this financial year.

Effective from 1 April 2002, Government introduced the principle that, all qualifying housing subsidy beneficiaries must contribute towards achieving access to the benefits of the housing subsidy. The objective of this was to ensure subsidy beneficiary participation in the resolution of their housing needs, that an environment was established to instil a culture of savings and that the value of the assets provided through the housing subsidy could be realised by beneficiaries.

The low income housing sector has the potential to contribute further to the objectives of the Extended Public Works Programme through infrastructure provision in delivering some of its programmes such as green-field housing projects, Presidential Pilot Projects on Rental Housing, Informal Settlement upgrading and Emergency Housing, although the technology employed in the infrastructure component of housing delivery is already aligned to the EPWP ideals. The Department will finalise its input for the Social and Economic Sectors by the end of June.

We will be embarking on an Imbizo to find out from each community what its needs are and second what it is willing to contribute in this partnership. Working closely with the Departments of Provincial and Local Government, Water Affairs and Forestry, Public Works and Land Affairs and Agriculture we will be ensuring that the money set aside for subsidy is actually used for the top structure because as you would know one of the reasons for the bad quality of houses we spoke about is that fact that most of the subsidy is used up on infrastructural development.

From what I have discussed what we shall then be delivering to Cabinet by the end of July is the how, and how many in respect of our new strategy. That is our commitment. And now for the second part of this social contract - you. What will you contribute towards this?

The housing allocation formula, which determines the allocation of budgets to provinces, has been brought in line with the new census information so that the resources are available in the areas where there is the greatest need. The value of housing subsidies is now increased annually to keep pace with inflation. Allocations to the provinces are made as follows for the 2004/5 financial year:

PROVINCE (SAHF): IN MILLIONS OF RANDS

* EASTERN CAPE: R598.9
* FREE STATE: R385.641
* GAUTENG: R1117.463 (i.e. R1.1 billion)
* KWAZULU-NATAL: R748.463
* LIMPOPO: R369.818
* MPUMALANGA: R296.457
* NORTHERN CAPE: R89.442
* NORTH WEST: R421.378
* WESTERN CAPE: R446.035
TOTAL: R4473.597 (i.e. approximately R4.5 billion)

In addition, the following grants will be made this year to the housing institutions:

* R37, 166,000 to Servcon;
* R15, 347,000 to the Social Housing Foundation; and
* R3, 034,000 to the National Urban Reconstruction and Housing Agency.

The total budget allocation for the human settlement redevelopment programme is R115, 540,000 for the financial year.

At the National Assembly yesterday, Chairperson, we are acknowledged the contribution of our former Minister of Housing, Sankie Mthembi-Mahanyele, in driving the housing programme since 1995. For this she has already been thanked and awarded by the international community. In this house I would like as well to take this opportunity to thank her on behalf of us all as well as for many South Africans who now enjoy the benefit of a better life. On her hard work, I will add my bit so that we can accelerate the delivery of houses.

I thank you.

Issued by: Department of Housing
11 June 2004
Source: Department of Housing (http://www.housing.gov.za)