29 May 2001
Honourable Speaker
Madame Deputy Speaker
Honourable Premier
Members of the Executive Council
Mayors
Members of the House
Distinguished Guests
Ladies and Gentlemen
Comrades and Friends
It is indeed a great honour to present to this house the Gauteng Housing Budget for the financial year 2001/2002.
The apartheid past is depicted by historic events and policies that significantly shaped the face of our provincial development landscape, and the housing sector in particular. These historical events and policies subjected the majority of our people to squalor, poverty and other appalling living conditions.
The state machinery attempted to thwart the settlement of African people in urban areas. The Group Areas Act zoned residential developments in relation to racial classification, while the Land Act prevented black people from acquiring land, let alone owning it, and the Influx Control Act made it difficult for Africans to settle in urban areas and relegated them to the homeland areas. These were the major influencing factors that have determined the landscape inherited by the present government.
The advent of democracy, which followed the 1994 national elections, ushered in a period of accelerated growth and development, and indeed a paradigm of unprecedented social development and transformation.
We are now six years into our new democracy and this growth, development and transformation is evident in most parts of our country, and the Province of Gauteng in particular. We need to constantly remind ourselves of the common understanding of the mandate that the people of Gauteng have given this government. This mandate is clearly articulated in the Election Manifesto of the governing party and the RDP document, these represent unambiguous expressions of our people's aspirations. Our duty is to translate these aspirations into reality, of course within the constraints of available capacities and resources.
Honourable members, our mandate compels us, now even more than ever before, to deliver quality services and accelerated housing delivery, with the emphasis placed on "building sustainable communities".
When the, the African National Congress, was elected in the 1999 general election we committed ourselves to:
Speed was of the essence in ensuring that the legacy of apartheid that had condemned the majority of our people to homelessness, characterized by poverty and squalor, was eradicated through an integrated development approach. We had to move away from this shameful history that was implemented through deliberate policies and legislation that trampled on the basic human rights of the majority of our population. This resulted in black people being settled on the periphery of towns and cities, thus depriving them of easy access to employment opportunities and basic amenities.
As black people were not recognized as permanent residents in urban areas, and with the systematic implementation and enforcement of the aforementioned policies and legislation, our country and the Province of Gauteng now faces a housing backlog of massive proportions. The waiting lists are an inheritance of our past and did not start occurring in 1994.
KEY ACHIEVEMENTS
Comrade Speaker, it was a year ago in this very room, when I delivered my budget speech, that a promise was made to deliver housing at an accelerated pace; that projects were to be initiated to focus on sectors of our society with special needs; that the promotion of the involvement of women in various roles in housing delivery were to be promoted; that ways were to be found to increase access to finance by the poor by unblocking alternative funding sources; and that the housing waiting list was to be improved and streamlined.
Despite major constraints and challenges we have achieved phenomenal results. Through the departmental initiatives and also those of our strategic partners:
It is as a result of initiatives such as these that more than a million people now have a roof over their heads, clean water, sanitation, access roads and a place they can proudly call "home."
KEY CHALLENGES
Comrade Speaker, Gauteng (according to the Central Statistics Services - CSS) has a population of more than 7.3 million. Of these people, about 3% live in non-urban areas. 19% of these people are aged between 15 and 24 years old. These present a challenge of new family formations over the next 10 years, which works out to about 20 000 new families per year, compounding the existing backlog. In Gauteng, about 28% of economically active people are unemployed. Of those who are employed, about 50% earn less than R1500 per month. This means that more than 50% of the Gauteng population has limited ability to save and thus lack access to finance.
About 6% of the Gauteng population is over 60 years of age, while about 450 000 people have some form of disability or the other. These present a challenge of facilitating access to housing for the aged and for the people with disabilities. This is over and above the more than 500 000 backlog with regard to those people who are homeless or without adequate shelter in terms of our waiting list.
The current backlog in terms of households without security of tenure is estimated at about 200 000, where the focus will be on upgrading informal settlements that have no formalized access to social and municipal services.
The current backlog in terms of households without water and sanitation is estimated at about 300 000. This is besides the estimates derived from the municipal IDP processes with regard to adequate housing and also estimates based on the provincial "waiting list".
Honourable Speaker and Members of the House, the problem is further compounded by the fact that the housing backlog in Gauteng is actually increasing. Close to 50 000 new households are formed every year as a result of the combined effect of natural growth and urbanization.
STRATEGIES
The Housing Strategic Management Planning process has embarked on an ambitious process of developing detailed Business Plans for all the key programmes of the department over the next three years in particular, this within the context of the 5-year framework implemented from the year 2000.
Through the "provincial priorities" we strive to ensure that all new housing projects occur on "well located" land, and to ensure that over the medium term, all informal settlements are transformed into viable, livable and vibrant communities.
Comrade Speaker as it has become quite obvious from the data put before you, that affordability levels are extremely low and it becomes absolutely imperative that we develop appropriate housing strategies in our province.
It has become imperative that we develop housing delivery options that are creative and innovative.
Given this reality of diminishing resources and an increasing backlog, our multi-year strategic plan allows us to provide:
The Department will ensure that housing delivery is accelerated through various tenure options. To ensure this, we will aim to allocate our budget as follows:
1. Formal Housing 50%
2. Incremental Housing (upgrade of informal settlements) 37%
3. Rental Housing 12.5%
4. Other programmes 5%
1. Formal Housing
In order to give effect to the strategy outlined earlier, formal housing projects will be targeted primarily at households earning up to R2500 per month within the context of development on well-located land in terms of the Spatial, Economic and Industrial development frameworks. These will take the form of mass housing projects and in fill housing schemes.
These projects shall aim to integrate households of varying incomes within mixed housing typologies, including freestanding houses, flats and semi-detached houses. The key feature shall be the involvement of the emerging contractors and developers and the mobilization of credit and savings. Together with other departments, schools, clinics, recreational facilities and other amenities will be provided.
Some of the projects already approved, and in the process of being implemented include:
This programme is aimed at delivering an estimated 27 000 housing units during the current financial year.
2. Incremental Housing
All the programmes that are aimed at developing adequate housing over a period of time, at the rate and pace shaped largely by the affordability levels of the beneficiaries, have been clustered into one priority programme to be known as the Incremental Housing Programme. This will focus on upgrading and servicing sites in informal settlements, whilst ensuring the provision of tenure security to thousands of people living in such settlements. This will be undertaken in collaboration with local government and will upgrade existing settlements and eradicate any new ones. This is targeted at households earning up to R1500 per month.
The most important element of this programme is the harnessing of community based equity and energy. The output will be the building of capacity of communities and local authorities to engage with People's Housing Processes.
The emphasis is on the mobilization of "sweat equity" in support of housing projects by ensuring that even the very poor and the unemployed also have an opportunity to be provided with adequate housing.
Key Projects include:
(a) Peoples Housing Partnership Programme
In support of and to encourage community driven initiatives, the Department will establish a number of Housing Support Centres over the next three years. During the course of this financial year we have budgeted for 10 such centers in:
City of Johannesburg
Orange Farm
Ivory Park
Diepsloot
Alexandra
Ekurhuleni
Katlehong
Kwa-Thema
City of Tshwane
Soshanguve
Mamelodi
Sedibeng
Kanana
West Rand
Rietfontein
Muldersdrift
The idea behind this programme is to assist people living on serviced sites to build their own homes. We believe that this programme has the potential to harness human resources in our communities and unleash a great drive in quality housing delivery. This programme will be supported through public-private-community partnerships with building material suppliers and communities building themselves. This initiative is expected to deliver 20 000 homes by the year 2004.
3. Rental and Social Housing
In keeping with our commitment to providing various forms of tenure, we have allocated 12.5 % of our budget to the provision of rental accommodation.
Focus will be on providing high-density units particularly in the inner cities of Johannesburg, Pretoria and Germiston. Towards this end there are projects already under construction in Germiston and the Newtown Cultural Precinct in Johannesburg.
5000 additional rental units will be provided through the Presidential Job Summit programme, with a subsidy amount of R80 million already been approved for construction in the City of Johannesburg. These projects are earmarked for the Newtown area and Elias Motsoaledi in the Baralink area.
A number of 20 housing institutions will be funded in order to expand institutional capacity to manage rental accommodation. Additional resources allocated from the Job Summit will enable us to increase our capacity to provide rental accommodation to about 25% of our Housing budget in the Province. This programme will deliver about 12 000 rental units over the next three years.
This programme is aimed primarily at beneficiaries earning between R1500 to R3500 per month. The key challenge in this regard is to focus on housing associations and housing co-operatives in order to:
We have also developed strategies to focus on the Private Rental market.
This will endeavour to:
For the stabilization of the rental housing market, the establishment of the Rental Tribunal will be established by June 2001 to deal with disputes emanating from this sector.
(b) HIV/AIDS
For the first time the Gauteng Department of Housing has allocated R1 million for a pilot project aimed specifically at addressing the needs of people living with AIDS and AIDS orphans. The AIDS Campaign Manager post has been created to run on a sustained basis with the programme. A more comprehensive policy and action plan will be finalized during the course of the year.
(c) Women in Housing
A recent survey has shown that women head more than 50% of the households living in informal settlements. We will thus continue to ensure that women's role in low cost housing delivery is promoted and encouraged.
Towards this end, we have committed 10% of this financial years budget for women led construction companies.
(d) Better Management Systems
The department has taken steps to improve the management of subsidies in order to:
The National Department of Housing is currently developing a new subsidy system. It will be an integrated subsidy, project and financial system which will go a long way in improving record keeping and providing an effective management tool for the department.
During the current financial year, clients will be able to access the waiting list through the internet. This facility, looked at in the context of the gautengonline.com initiative, will improve access as clients will be able to register wherever there is internet and email facility available.
The waiting list is of great importance as it will be the only tool for allocating subsidies. Exceptions in cases where there are compelling needs can only be considered and approved by the MEC for Housing upon recommendation by local authorities. Strict adherence to the waiting list will ensure that queue jumping and other corrupt practices are eliminated.
A new Sub-Directorate for contract management has been established under the Legal Services and Contract Management Directorate with effect from April 2001.
One of the Objectives of this Sub-Directorate is to ensure that the nature of needs and requirements, as well as the extent of such requirements are clearly identified before contracts for consulting work are put out to tender.
All existing contracts entered into since 1994 between the Department and Consultants and Contractors are being reviewed to ensure that the interests of the Department and the Government are fully protected. The contracts review process being undertaken will also review contracts concluded for the purpose of skills transfer and capacity building. Where these priorities are not clearly indicated in the contract, contracts will be revised or addendums made to the contracts made to highlight the priorities.
The Sub-Directorate is establishing a filling system that will ensure that there is complete, relevant, accurate information on all contracts. This system will be implemented by 1st July 2001. It will ensure that payments are made only when performance objectives of consultants/contractors and outputs are met, and that payments made are in accordance with the contract agreement.
In line with the recommendations of the Public Protector, an internal investigations unit has been established. In general, the establishment of this Directorate will give the department the capacity to eliminate fraud, corruption and ensure value for money through better management of contracts.
For the past three years, the department has in collaboration with the Wits P&DM School provided capacity improvement courses for the department and local government authorities and this year we have allocated R1 million for this purpose.
NHRB
The National Department of Housing obtained Minmec's approval to apply the requirements of the Housing Consumers Protection Measures Act with the aim to improve the quality of these housing products. New projects and housing products in the subsidy only market must conform to the specifications as determined by the National Home Builders Registration Council (NHBRC).
This Act provides for all homebuilders to be registered under the National Home Builders Registration Council and gives homebuyers structural defects warranty for five years. The implementation date is planned for 1 April 2002. This initiative will support the Department's objective to place more emphasis on the quality of the housing products.
CURRENT BUDGET
The total allocation to Budget Vote 7: Housing for this Financial Year is R849.3m. The funding allocations to different Programmes are as follows:
TOTAL R849.3m
Included in the above allocations are the following amounts with regard to capital expenditure:
TOTAL R709.7m
Operational Expenditure R139.6m
CONCLUSION
Comrade Speaker, this budget is not about facts and figures, but about how on a daily basis we can make the lives of our people better. We have gone a long way. However, the challenges facing us will require close partnership between the government, the private sector and communities.
The strategy in which government is responsible for 90% of affordable low- income housing is unsustainable. We need to move speedily to unlock private sector funding for this housing market segment.
We will have to learn from experiences of other countries such as China and Malaysia, where affordable low - income housing is provided through cross-subsidization by private sector initiatives financed by banks. This strategic shift is critical because it integrates low and high-income housing developments. It also creates an environment to provide quality affordable housing to the broadest possible sections of our communities.
This is the route we have to take. The creation of viable sustainable communities requires private/public partnerships. We believe that the Budget presented here today reflects the positive steps that we will be taking in the coming year to meet the challenge of combating homelessness, thereby contributing to the improvement of the lives of ordinary people.
Everyday a brick is laid, a water tap is installed, brings hope to thousands of people who are desperately waiting. Together with them, we shall strive to make this dream a reality. Together, we shall build sustainable communities.
Lastly, let me take this opportunity to thank honourable Mohammed Dangor, Chairperson of the Housing Standing Committee and all Members of his Committee. Your continued regular engagement with our Department has been most fruitful.
Let me also thank the HOD, Sibusiso Buthelezi, the Chief Directors, Willem Odendaal, Carien Engelbrecht, Malindi Nembambula and Yasmin Coovadia, and all other managers and the entire staff of the Department. These are dedicated and competent men and women without whom I cannot succeed in my work. I am indeed greatful for your effort and wish all of you success in your difficult tasks. Let us continue the partnership with our people to bring about sustainable communities. As they say, "a journey of a thousand miles begins with a single step," we have taken the first.
Thank you very much.
For more enquiries contact: Delca Maluleke (Gauteng Department of Housing) - 082 493 3844