MOTIVATING MEMORANDUM FOR THE SUBDIVISION OF
INDEX
1 INTRODUCTION 2
2 EXECUTIVE SUMMARY 2
2.1 Provincial context 2
2.2 Housing Summit: Creating Sustainable Human Settlements and Accelerating Housing Delivery in KwaZulu-Natal 3
2.3 Summit Commissions and Resolutions 3
3 BACKGROUND 4
3.1 Demographic Context of the KwaZulu-Natal Provincial Housing Landscape 4
3.2 Dependency ratio in the province 4
3.3 Unemployment in the province 5
3.3.1 Geographic dimension of unemployment in the province 5
3.3.2 Demographic dimension of unemployment in the Province 6
3.3.3 Age dimensions of the unemployment in the Province 6
3.4 Education and Skills Development 6
4 KWAZULU-NATAL HOUSING SUMMIT DELIBERATIONS 7
4.1 Opening Address of the KwaZulu-Natal Housing Summit 7
4.1.1 Introduction 7
4.1.2 Theme of the KwaZulu-Natal Housing Summit 7
4.1.3 Expectations of the Housing Summit 8
4.2 Keynote Address of the Housing Summit 10
4.2.1 Introduction 10
4.2.2 Key Features of the new Comprehensive Plan for Housing Delivery 11
4.2.3 Concluding Remarks 12
4.3 Breaking New Ground in Housing Delivery 13
4.3.1 Comprehensive plan for housing delivery 13
4.4 State of Readiness of KwaZulu-Natal Municipalities to deliver on programmes of the Comprehensive Sustainable Human Settlements 17
4.4.1 Findings of SALGA Surveys 17
4.4.2 Expected Support for Municipalities 20
4.4.3 Some strategic issues to resolve as way forward 21
4.5 The role of the Banking Council in Housing Delivery 23
4.5.1 Introduction 23
4.5.2 Critical Partnership with government 23
4.5.3 The Financial Sector Charter (FSC) 24
4.5.4 FSC Empowerment finance targets 24
4.5.5 Housing Targets 24
4.5.6 Housing’s Non-Financial Targets 25
4.6 Empowerment in Rural Housing Delivery 25
4.6.1 Background 25
4.6.2 Policy Initiatives to address rural housing 26
4.6.3 Challenges facing housing delivery in rural areas 26
4.6.4 Key areas of focus to improve rural housing delivery 26
4.7 Case Study: Successful Implementation of Slum Clearance Projects within eThekwini Municipality 28
4.7.1 Background 28
4.7.2 Informal Settlement Programme (ISP) 28
4.7.3 Slums Clearance Project 29
4.7.4 Lessons learnt from the eThekwini experience 30
4.7.5 Summary 31
5 SUMMIT COMMISIONS 31
5.1 Commission One: Breaking New Ground in Housing Delivery 31
5.1.1 Financial Services Market 32
5.1.2 Incremental Housing 32
5.1.3 Rural housing 32
5.1.4 Social Rental Housing 33
5.2 Commission Two: State of Readiness of KwaZulu-Natal Municipalities to deliver Housing Projects 33
5.3 Commission Three: Empowerment in Rural Housing Delivery 33
5.4 Commission Four: Combating Fraud and Corruption in the Housing Industry 33
6 HOUSING SUMMIT RESOLUTIONS 34
6.1 Policy framework review and realignment 34
6.1.1 Development of a national policy on slum clearance 34
6.1.2 Enforcement of the municipal by-laws 34
6.1.3 Effective law enforcement to reduce / stop illegal land grabs in the province 35
6.1.4 Alignment of development programmes to maximise development impact 35
6.2 Delivery Management System for housing delivery 35
6.2.1 Quantify housing needs in the province 35
6.2.2 Partnership and Collaborative approach to housing delivery 35
6.2.3 Municipal housing sector plans 36
6.2.4 Provincial housing programme 36
6.2.5 Identification and release of appropriate land for low cost housing 36
6.2.6 Criteria for allocation of housing- Child-Headed Households (CHH) 36
6.2.7 Monitoring and Evaluation 37
6.2.8 Review of business processes of Provincial Department of Housing 37
6.2.9 Alternative housing solutions 38
6.2.10 Quality of Housing Products 38
6.3 Capacity Building Programmes for housing delivery 39
6.3.1 Accreditation of municipalities for housing delivery 39
6.3.2 Shared Services Centres as supplementary capacity for municipalities 39
6.3.3 Accreditation of implementing agents 40
6.4 Review of the housing delivery model for rural areas 40
6.4.1 The role of Traditional Leadership Structures in rural housing delivery 40
6.4.2 Coordinated Inter-Governmental and Inter-Departmental approach 40
6.4.3 Institutional capacity of rural housing delivery agencies 41
6.4.4 Infrastructure development in rural areas 42
6.4.5 Appropriateness of housing options in rural areas 42
6.5 Review of housing solutions for sustainable human settlements 42
6.5.1 Incremental Housing 42
6.5.2 Social Rental Housing 43
6.6 Good Governance - Fraud and Anti-Corruption drive 43
6.6.1 Risk management assessment and risk management strategy 43
6.6.2 Setting up of a Fraud and Anti-Corruption Hotline 43
6.6.3 Vetting of housing delivery agencies 43
6.6.4 Blacklisting corrupt developers and implementing agents 44
6.6.5 Developing a Code of Conduct 44
6.7 Review of financial arrangements for provincial housing delivery 44
6.7.1 Financial Services Market 44
6.7.2 Management of housing subsidies 45
6.7.3 Effective utilisation of housing subsidies 46
6.8 Job creation and housing delivery 46
6.8.1 Creation of direct and indirect jobs 46
6.8.2 Training and Skills Development of housing beneficiaries 46
6.9 Communication and awareness of the housing delivery process 46
7 IMPLEMENTATION OF RESOLUTIONS 47
8 CONCLUSION 47
INTRODUCTION
The KwaZulu-Natal Housing Summit of the 23rd and the 24th March 2005 culminated from a process linked to the development of necessary processes intended to ensure the successful implementation of the housing comprehensive plan: “Breaking new ground in housing delivery”.
EXECUTIVE SUMMARY
1 Provincial context
The KwaZulu-Natal is the most populous province in South Africa. The province has one of the highest rural unemployment rate in the country (at 42%). This rate is even higher than the national unemployment average of 37% (KwaZulu-Natal Provincial Profile, 2003).
It is also evident that unemployment is far more prevalent among black Africans. In 2002 the unemployment rate for black households was 55.2%. Unemployment is also higher among females than males, reflecting in part the higher number of females with no schooling in the province. The unemployment rate for women (especially African women) in the province is currently estimated at 54.8%. These demographic dimensions present a challenge for the Provincial Government with regard to the social groups that are to be targeted by the housing delivery programmes.
The province has a youthful population of approximately 56.3% (i.e. 5 302 702 people) of the total population in the province (i.e. 9 426 017 people). The implication of age dimension implies that the province will have to identify programmes that could address the needs of the youth population in the various parts of the province. Although reliable statistics are not available, KwaZulu-Natal is also regarded as a province with a high number of child-headed households (partly due to the prevalence of HIV/AIDS and other communicable diseases).
The above background has implications for the KwaZulu-Natal housing
delivery programme. This has implications for the design of the provincial housing programme, especially with regard to addressing the needs and expectations of the various target groups that are currently experiencing inhumane and unhygienic conditions in the province.
2 Housing Summit: Creating Sustainable Human Settlements and Accelerating Housing Delivery in KwaZulu-Natal
In response to the new Comprehensive Plan for housing delivery, the KwaZulu-Natal Department of Housing initiated the housing summit. The objectives of the summit were to:
• Create a platform for constructive engagement with the provincial housing stakeholders;
• Assess the readiness of the various stakeholders with regard to the implementation of the new housing plan;
• Assess the roles and responsibilities to be played by the key stakeholders in the implementation of the new housing plan, the support mechanisms required to enable the department, municipalities, traditional authorities and communities regarding the implementation of the new housing plan; and
• Identify the opportunities for collaborative and partnership approach between the various spheres of government, the communities and the traditional authorities.
The KwaZulu-Natal Housing Summit was officially opened by the MEC for Housing, MEC Mabuyakhulu and the keynote address was given by the national Minister of Housing, Dr. Lindiwe Sisulu. A number of speakers presented the various papers focussing on the various topics that were part of the theme of the conference: “Creating Sustainable Human Settlements and Accelerating Housing Delivery in KwaZulu-Natal”.
3 Summit Commissions and Resolutions
The Summit had four commissions that deliberated on the various topics of the summit, namely:
• Breaking New Ground in Housing Delivery;
• State of Readiness of KwaZulu-Natal Municipalities to deliver Housing Projects;
• Empowerment in Rural Housing Delivery; and
• Combating Fraud and Corruption in the Housing Industry.
On the basis of the deliberations of the four commissions, a number of resolutions were developed, and presented to the plenary on the second day of the Summit. The resolutions can be summarised as follows:
• Legislative and policy framework review and realignment;
• Development and implementation of capacity building programmes;
• Breaking new ground in housing delivery;
• Assessment of readiness of municipalities to implement the new comprehensive housing plan;
• Good governance – fraud awareness and anti-corruption drive;
• Review of housing delivery model of rural areas;
• Review of financial model for provincial housing delivery;
• Housing delivery as an instrument for socio-economic transformation;
• Communication and awareness of the provincial housing delivery programme.
The above resolutions form a package of interventions aimed at creating sustainable human settlements, through the involvement of all the various stakeholders in the housing supply chain, while simultaneously encouraging the participation of the private sector, communities, community-based organisations and traditional leadership structures.
BACKGROUND
1 Demographic Context of the KwaZulu-Natal Provincial Housing Landscape
KwaZulu-Natal Province is the third smallest province in South Africa and is
home to 21% of the country’s population, i.e. a population of 9 426 017 (Census 2001). It occupies 92, 100 square kilometres, equivalent to almost 8% of the total land area of the country. According to the 2001 Census, KwaZulu-Natal is a predominantly black province, with black people making up some 85% of its total population of 9.4 million people.
KwaZulu-Natal is relatively a rural province, with about 54% of the total population living in the rural areas, compared to 11% in Western Cape and 4% in Gauteng. The rural areas are occupied predominantly by black people, while white, coloured and Indian people live mainly in the urban areas. In 2002, it was estimated that approximately 65% of the total black population in the province lived in the rural areas.
2 Dependency ratio in the province
The province has a high dependency ratio, with about 3.3 million people below the age of 15 years and 437 000 aged 65 years and over. The burden of dependency is bigger than what the age distribution portrays, if account is taken of the large number of people who are unemployed.
The percentage of the province’s households receiving income below the poverty line stood at 53% in 2002 (Provincial Profile, 2003). This translates into a total of 5 084 162 poor people in the province in 2002. The incidence of poverty is highest in the rural areas where some 74% of the population live on incomes below the poverty line.
These people rely mainly on the social welfare system that supports the poor and vulnerable through direct income support (grants) and welfare services. Currently, the province provides the bulk of the government’s social security support programmes and welfare services. The rural KwaZulu-Natal is characterised by demographics which reflect past policies, namely:
• Higher density areas with strewn settlements;
• Populations suffering from the lack of economic opportunities;
• Workers who live in isolated rural areas facing high transport costs;
• High levels of poverty and unemployment;
• Historical restrictions on entrepreneurial development and poor support.
3 Unemployment in the province
In 2001, it was estimated that the average unemployment rate was approximately 42% (according to the strict definition). The expanded definition (this definition includes those unemployed people who are able to work but have stopped actively seeking employment) provides a far grimmer picture, with unemployment at 48.7% of the labour force.
Given the fact that employment opportunities are concentrated in urban areas, poverty levels are much greater in the more rural districts. An unemployment rate of 48.7% (according to the expanded definition) means that if we are to meet government’s goal of halving unemployment and poverty by 2014 then we will have to create well in excess of one million new jobs. This is based on today’s unemployment rate and population and not that of 2014.
1 Geographic dimension of unemployment in the province
The unemployment rate for the majority of the rural districts was even higher than the provincial average of 42%, and also higher than the national unemployment rate of 37% (Provincial Profile, 2003). This has serious implications for the rural –urban migration patterns in the province, and ultimately the need for housing and other social facilities / infrastructure in the receiving areas.
The need for housing in the urban centres in the province are reflected in the increase in densities (thereby leading to overcrowding in existing townships), emergence of informal settlements and also mushrooming of slum areas due to the locational opportunities presented by areas that are in close proximity to employment opportunities. It is in the light of this background that the slum clearance projects have become the priority programmes for the Department. The Provincial target for clearance of all slums is 6 years from the 2005/06 financial year.
2 Demographic dimension of unemployment in the Province
It is also evident that unemployment is far more prevalent among Black Africans. In 2002 the unemployment rate for black households was 55.2%. Unemployment is also higher among females than males, reflecting in part the higher number of females with no schooling in the province. The unemployment rate for women (especially African women) in the province is currently estimated at 54.8%, which is even higher than the national average of 37%. These demographic dimensions present a challenge for the Provincial Government with regard to the social groups that are to be targeted by the housing delivery programmes.
3 Age dimensions of the unemployment in the Province
As indicated before, KwaZulu-Natal is the most populous province in South Africa. The province has a youthful population of approximately 56.3% (i.e. 5 302 702 people) of the total population in the province (i.e. 9 426 017 people). The KwaZulu-Natal youth under the age of 25 are greater in numbers than the entire populations of the Free State (2 706 775), Limpopo (5 273 642), Mpumalanga (3 122 990), Northern Cape (822 727), North West Province (3 669 349) and Western Cape (4 524 335) (Census 2001).
The implication of age dimension implies that the province will have to identify programmes that could address the needs of the youth population in the various parts of the province. Although statistics are not available, KwaZulu-Natal is also regarded as a province with a high number of child-headed households (partly due to the prevalence of HIV/AIDS and other communicable diseases).
4 Education and Skills Development
The success of the provincial growth and development strategy will depend, to a greater extent on human capital. Education and training at all levels of society constitutes the fundamental platform from which strategies and programmes must be derived, managed and implemented. The impact of the lack of education for the majority of the provincial population is also reflected in the high unemployment levels, which are higher in rural areas than the urban areas.
The Provincial Profile report (2003) reflects that 22% of the population in the province did not have schooling, compared to the national average of 18%. The black population in the province constitute the majority of people with no education at all (at 97%).
Every year some 20% of school leavers will enter higher education institution and only a small proportion of new market entrants will actually find work. The challenge for the Housing delivery programme will not just to create new job opportunities, but to exit people from the programme better equipped and better skilled to find work outside of the housing delivery programme.
KWAZULU-NATAL HOUSING SUMMIT DELIBERATIONS
1 Opening Address of the KwaZulu-Natal Housing Summit[1]
1 Introduction
In his opening address, the MEC made reference to three very critical documents, namely: The Constitution of the Republic of South Africa (Act 108 of 1996), the Reconstruction and Development Programme Policy (1994) and the Freedom Charter (1955). From these documents, there is a resonant mandate, “…that we use the provision of housing as a tool to reverse the ravages of apartheid, that we use housing as a means to restore the dignity of our people and create a society characterised by equality and justice”.
2 Theme of the KwaZulu-Natal Housing Summit
The theme of the Summit was: “Creating sustainable human settlements and accelerating housing delivery in KwaZulu-Natal”. In order to deliver on this theme, the MEC outlined the key topics that were to be the focus of deliberations of the Summit, namely:
• Breaking new ground as appropriate, sustainable, quality housing solutions for both urban and rural areas;
• Eradication of slums in KwaZulu-Natal;
• Empowering Municipalities to deliver quality housing through effective partnerships;
• Creating long-term wealth for our people through housing assets; and
• Combating fraud and corruption.
3 Expectations of the Housing Summit
The MEC also highlighted his expectations with regard to the Summit, namely:
1 Sustainable Housing Solutions
The Summit to look at the housing delivery that will speedily respond to the challenges that are to a greater extent facing the rural areas, and also the urban areas, especially people who are living in informal settlements. Of significance the recognition of the role to be played by the traditional leadership structures in the delivery of housing in the rural areas of the province.
2 Addressing the needs of Vulnerable Groups
The need for the housing delivery programme to respond to the challenges and needs of special groups such as women, youth and traditional leaders, whilst simultaneously attracting the participation of both public and private sector institutions.
3 Integrated Planning and Development
Reaching consensus on the need for integrated planning for housing delivery. Such consensus should result in strengthening the relationships between the traditional leadership structures, communities, municipalities and the provincial authorities.
4 Capacity Building of Municipalities
The need for the capacitation of local municipalities to address the challenges of both urban and rural areas by ensuing that planning and approval processes improve the turnaround times in decision-making. This will call for the review of the business processes of both the provincial Department of Housing and that of the municipalities with a view to streamlining the turnaround times for housing delivery. In this regard, the Department will also be expected to reach protocol agreements with sister departments in the province (e.g. Department of Agriculture and Environmental Affairs), with regard to ensuring that there are streamlined approval processes in environmental impact assessment studies.
5 Development of Housing Sector Plans
Ensuring that all the municipalities have housing sector plans that will be consolidated into a provincial housing programme.
6 Corporate Governance
a). Fraud and Corruption
With regard to corporate governance issues, the Summit was expected to identify programmes that will address the issue of fraud and corruption and also setting up the necessary systems and mechanisms to detect fraud and corruption in the supply chain of housing delivery in the Department, such as fraud and anti-corruption hotline, blacklisting of corrupt delivery agents and service providers, amongst others.
b). Code of Conduct
Code of conduct for all stakeholders involved in the delivery of housing to be addressed.
7 Quantity and Quality of Housing Products
The Department to ensure that the quantity and quality of housing that is delivered for the various stakeholders is acceptable to the beneficiaries. The need to limit the number of active projects to four (4) per implementing agent to be considered by the Summit. This will ensure that the implementing agents are able to focus on their projects and deliver expected quantity and quality housing products without cutting corners.
8 Use of legislative and policy instruments in slum clearance
The Summit was also expected to raise awareness of municipalities regarding the use of available legislative and policy instruments with regard to slum clearance.
9 Participation of Financial Institutions
The Summit also has expectations regarding the participation of the financial institutions in housing delivery in the province of KwaZulu-Natal. The Department is expected to develop and implement stakeholder management programmes and thus ensuring desired participation of financial institutions in prioritised areas.
10 Release of Land for low cost housing
The Summit was also expected to raise the issue of release of suitable prime land for low cost residential developments in the province. Municipalities to identify their land parcels through the asset registers with a view to releasing such land for low cost housing development in the province. The Minister of Housing, in her address to the conference reiterated the fact that municipalities re now compelled to release land for low cost housing, without a cost premium.
11 Alignment of Development Programmes
The need to align development programmes in the province cannot be overemphasised. This will maximise the development impact of the various programmes and simultaneously ensure that resources are made available for bulk infrastructure, while the housing subsidies are fully allocated for the top structures.
In his concluding remarks, the MEC was indeed excited indeed that KwaZulu-Natal was the first province to have taken this initiative of bringing together the various stakeholders to deliberate, comprehend and internalise the comprehensive housing plan that will be implemented from the 1st April 2005.
2 Keynote Address of the Housing Summit[2]
1 Introduction
In her keynote address, the Minister of Housing reiterated the housing delivery challenges facing the province. The Minister reflected on the mud houses and shanty towns lining the outskirts of the towns, including Durban. These are landmarks of the poor, reflecting a backlog of some 325 616 houses as of the last Census count in 2001. There is no doubt that these are the earliest manifestations of the country’s historical development which sough to exclude Black people from the urban areas, through a number of political, social and economic instruments.
2 Key Features of the new Comprehensive Plan for Housing Delivery
The KwaZulu-Natal Department of Housing is now obligated to plan and implement its housing programmes guided by the following:
1 Reference to the Breaking new ground in housing delivery programme
The new government has put in place policies that will be eradicating impediments to access to housing. Building on these in 2004 in the third term of our democratic government, the state now has a comprehensive plan on human settlement which aims to break new ground in the housing delivery.
3 Use of available policy and legislative instruments to enhance sustainable settlements delivery
The plan seeks to utilise opportunities created in housing delivery such as the installation of infrastructure, the actual construction of houses, the construction of social and economic infrastructure and the management and maintenance of housing stock to create jobs (through the use of labour-intensive construction and maintenance methods).
To achieve this plan, the Minister reiterated the need to have integrated communities to ensure that the poor have access to basic services and supporting infrastructure. It seeks to end the contradictions that prevail accepting that urbanization is rapidly changing the urban landscape thus presenting the state with both opportunities and threats to development.
6 Sustainable and integrated communities
The new housing plan seeks to move towards the integration of communities. The plan conceptualizes eradication and upgrading of informal settlements that is designed to progressively upgrade the tenure rights for people living in informal settlements, walking from access to land and essential services to more comprehensive services, a variety of land tenure options and ultimate adequate housing and supporting social amenities.
7 Addressing the needs of the poor
The focus of the plan is to continuously focus on the needs of the hardcore poor in the various areas where we work and also the needs of those who can relatively afford and to strengthen the sectoral interventions to address the creation of broader range of housing for people with high incomes. Those with higher incomes will also create the necessary market conditions for a healthy, wealthy residential sector to give greater scope to the more active participation of private sector construction and finance organisations.
8 Access to land for low cost housing
Access to appropriate prime state land for low cost housing is also a major challenge for the new housing plan. The building of capacity of the municipalities as housing delivery agents / developers will be critical in ensuring that he accreditation process is implemented with success.
9 Cooperative governance, partnership and collaborative approaches
Increased inter-governmental cooperation requiring unique commitment of the three spheres of government to work in collaborative and co-operative manner to effect immediate, meaningful, sustainable improvements in the living conditions of our people.
3 Concluding Remarks
In her concluding remarks, the Minister of Housing reiterated that “a conference of this nature happening at this time is absolutely critical for us. First we are able all of us to analyze and interpret the plan first hand in a common manner, internalize what it means to each sector we present, bring to the fore all those impediments which in the past held us back so that we can resolve this…finally, it allows us to craft a common commitment to deliver to our people and relieve them from their misery, because together we can”.
3 Breaking New Ground in Housing Delivery[3]
1 Comprehensive plan for housing delivery
1 Background
Following decades of entrenched policy of separate development and poor investment in housing delivery in the country, the new Government introduced the Housing Policy and Strategy (1994). The Policy focussed on stabilizing the environment to transform the extremely fragmented, complex and racially-based financial and institutional framework inherited from the previous government, whilst simultaneously establishing new systems to ensure delivery to address the housing backlog.
Since 1994 the new government has allocated funding for housing delivery, which has increased to approximately R4.5 billion during the 2004/05 financial year (i.e. national budget allocation). The rate of under-spending of housing funds in the different provinces ranged between 17% (in 2000/01) to 11% (during 2003/04) (Comprehensive Housing Plan, August 2004). The slow spending pace of housing funds is attributed to a number of factors, namely:
o Withdrawal of large construction groups from the state-assisted housing sector due to low profit margins;
o Decline in private lending for low cost housing;
o Lack of affordable and appropriate land for low cost housing developments;
o Uneven application of housing policies in all the nine provinces and the various local government institutions;
o Capacity constraints of delivery agents and local government institutions.
Whilst government believes that the fundamentals of the 1994 Housing Policy and Strategy remain relevant and sound, a new plan is required to redirect and enhance existing mechanisms to move towards more responsive and effective delivery. The KwaZulu-Natal Housing Summit is being held in the context of seeking ways to break new grounds in the housing delivery. The government is concerned about the eradication of the contradictions that presently define the housing landscape of the country in general and the KwaZulu-Natal Province in particular.
2 The objectives of the new Comprehensive Plan on Housing Delivery
In the light of the above constraints, the National Department of Housing developed a Comprehensive Plan on Human Settlement that aims to break new ground in housing delivery. The objective of the new human settlements plan reinforces the vision of the Department of Housing to promote the achievement of a non-racial, integrated society through the development of sustainable human settlements and quality housing.
To achieve this plan the state hopes to introduce a package of development interventions aimed at creating sustainable human settlements, through the involvement of all the various stakeholders in the housing supply chain, while simultaneously encouraging the participation of the private sector, communities, community-based organisations and also traditional leadership structures. The various interventions of the comprehensive housing plan are summarised below as follows:
a). Supporting the entire residential property market
A number of interventions aimed at the entire residential property market in the country, with a focus on the following, namely:
▪ Expanding the scope of the housing mandate
▪ Shifting from product uniformity
▪ Enhancing the role of the private sector
• Construction capacity and collapsing of the subsidy bands
• Provision of housing finance
• Project Management and other support
• Employer-assisted Housing
▪ Creating linkages between the primary and secondary residential property market
b). From housing to sustainable human settlements
Government has committed itself to developing more liveable, equitable and sustainable cities and rural areas. Key elements of this framework included pursuing a more compact urban form, facilitating higher densities, mixed land use development and integrating land use and public transport planning, so that to ensure more diverse and responsive environments whilst reducing travelling distances. The plan will also create an enabling environment for the private sector to create the necessary social and economic infrastructure, and also enhancing the quality of the housing product offered to beneficiaries.
c). Existing and New Housing Instruments
A range of housing instruments were developed to respond to the policy imperatives of the first 10 years of delivery. It is not anticipated that any of these instruments will be discontinued or terminated, rather, existing instruments will be supplemented by additional instruments to provide flexible solutions to demand-side needs. The new instruments will focus attention on sectors which have been previously neglected, e.g. informal settlement upgrading instrument, social (medium-density) housing instrument and developing a rural housing instrument.
d). Adjusting Institutional arrangements within Government
The key initial requirement for improved institutional arrangements in the housing sector is to achieve a clear understanding among the three spheres of the appropriate, legislated roles and responsibilities (of all spheres of government). This will also involve the expanded role of local government with regard to housing delivery, especially with regard to determining the location and nature of housing as part of a plan to link the demand for and supply of housing.
The increased role of municipalities with regard to housing delivery will require the municipalities to be accredited, particularly the nine metropolitan areas, secondary towns and ultimately to all municipalities. In order to be accredited, municipalities will have to demonstrate their capacity to plan, implement and maintain both projects and programmes that are well integrated within the IDPs and within the 3-year rolling capital investment programmes mandated by the Municipal Finance Management Act (MFMA, 2004). For example, municipalities will be required to:
• Establish housing units with staff complements adequate to carry out project and programme requirements;
• Establish cross-sectoral, sustainable human settlements planning committees including senior staff from at least but not limited to the municipal offices for housing, planning, economic development, infrastructure / engineering, MIG PMU, and land reform;
• Submit complete inventories of municipally-owned land including identification of land suitable for low cost housing and justification for execution of other municipally-owned land; and
• Submit a Council resolution indicating the willingness of the municipality to meet national Department of Housing anti-corruption, monitoring and reporting requirements as an integral part of the overall performance reporting required under the Municipal Finance Management Act (MFMA).
At the national and provincial levels, the Department of Housing will consider the review the institutional arrangements of a number of housing institutions that were established after the 1994 Housing Policy and Strategy to assess their relevance and appropriate in the context of the Comprehensive Plan for Housing Delivery. In addition, it is envisaged that the plan will also promote inter- and intra-governmental co-ordination and alignment.
e). Institution and Capacity Building
Institution and capacity building is a critical component of the new human settlement plan. The comprehensive programme for capacity building will focus on organizational institutional arrangement support, systems and procedures training and adequate resourcing. The key institutions to be capacitated include the provincial Department of Housing, municipalities, various housing institutions, financial institutions and communities.
f). Financial Arrangements
In order to address increased demand and accommodate greater responsiveness to demand, several amendments will be effected to the existing housing subsidy scheme. The amendments involve the restructuring the subsidy instrument by collapsing the subsidy bands and also extending the subsidy limit. In addition, the plan will also adjust the beneficiary contributions and criteria, enhance funding flows (between national Department of Housing and the beneficiary Municipalities) and also addressing fraud, corruption and maladministration in the housing delivery programme.
g). Job Creation and Housing
The use of housing delivery as an instrument for social transformation to address the socio-economic and socio-political conditions facing the majority of housing beneficiaries will be considered by the Department. Housing delivery will be used to contribute towards alleviating poverty and addressing unemployment by providing both direct and indirect jobs.
h). Information, Communication and Awareness Building
Several inter-related strategies are required to provide housing related information to sector stakeholders and communities. The communication and awareness raising will cover various housing topics with a view to empowering various stakeholders.
i). Systems, Monitoring and Evaluation
The Comprehensive Plan is to introduce certain interventions that will enhance data collection, management information, monitoring and evaluation and performance management. The specific information of interest in the housing sector will be the Housing Subsidy and Expenditure Data and the Performance Measurement based on key performance indicators. The regular (weekly, monthly, quarterly and annually) collection of specific data for monitoring purposes will assist the Department in reviewing policy positions.
4 State of Readiness of KwaZulu-Natal Municipalities to deliver on programmes of the Comprehensive Sustainable Human Settlements[4]
1 Findings of SALGA Surveys
The survey on municipal capacity was conducted by SALGA with a view to highlighting issues (realities) to consider in determining municipal readiness for housing delivery. The survey methodology involved the issuing of questionnaires to all municipalities in the provinces, follow-up telephonic interviews and municipal visits (for selected municipalities).
1 Municipal capacity assessment
The municipal capacity assessments revealed the following:
o Most municipalities are involved in managing existing (rental) housing stock, not delivery of new (public) housing developments.
o Most municipalities lack the necessary human settlement development skills.
o They also do not have other scarce support functions such as engineers, planners, etc.
o The municipal capacity requires complex institutional designs such as:
▪ Fully fledged housing departments (in the metro);
▪ Housing sections in Technical Services;
▪ Housing sections in community services;
▪ Housing Units as sub-sections of other.
On the basis of the assessment, it is clear that eThekwini is the one of the well capacitated municipalities, followed by KwaDukuza, Msunduzi, Hibiscus Coast, Emnambithi and Umhlathuze. The rest of the municipalities in the province are no where near in terms of capacity that is required for a municipality to deliver in terms of housing delivery as per the Comprehensive Plan.
To date only eThekwini Metropolitan Municipality has been accredited as a housing developer. The reasons behind the slow accreditation process included the lack of capacity at the municipal level for a number of municipalities to an extent that they did not qualify to be accredited as housing developers. There is a general lack of understanding regarding the accreditation process of municipalities as housing developers and this must be clarified as part of the capacity building programme of municipalities for housing delivery.
2 Funding Constraints
The supply of funding is less than the demand for housing in the various municipalities. This is partly because there is only so much money available at any point in time and this implies that the municipalities have to consider thorough prioritisation processes to be able to provide housing where the need is as opposed to providing housing to areas where there is no need for such housing supply.
Over the years, the profit margins in the industry end up being reduced to an extent that it is not attractive for the industry stakeholders, hence the decline in participation of major construction companies in the lower end of the housing market. Another constraints regarding funding for municipalities is the inability of municipalities to provide bridging finance for housing projects when the municipalities are still waiting for the approval of projects.
3 Poor information management systems
The poor records of accurate number of indigents, particularly in the rural areas poses a problem with regard to the kind of assistance to be provided to this category of people. This is one of the contributing factors to poor planning and decision making regarding budgeting for housing purposes in the various areas. The provincial Department of Housing must consider providing support regarding the development and implementation of the necessary information management systems to drive the delivery of housing.
4 Limited tenure options
Concern was raised regarding the neglect of the traditional housing and tenure options that have been used in a number of areas, especially in the rural areas.
5 Slow housing delivery pace
The lack of adequate programme and project management capacity impacts negatively on the pace of delivery of housing. Another concern relates to the slow project approvals by the provincial departments. This is also complicated by the slow transfer of funds from the province to the municipalities. On average this takes approximately 2 to 3 months to have housing funds transferred to local government. This impacts on the escalation of material costs and also affects the original budget for the development. In addition, contractors end up being paid very late due to cash-flow crisis of the municipalities. The delayed payments to contractors also impact on the progress regarding the implementation of housing projects on the ground.
6 Access to affordable and appropriate land for low cost housing delivery
The slow pace of land reform and post-settlement limitations also needs to be looked at, if an attempt to improve the access to land for low income housing is to be made.
7 Peculiar circumstances of rural municipalities
In addition to the challenges facing the various urban municipalities, the rural municipalities also face other unique challenges, namely:
o High transport costs of materials, due to their distances from the urban centres;
o Lack of water and bulk infrastructure;
o Traditional models are not supported, thus there is a bias towards “:urban” forms in rural areas.
o Rural to urban migration of skilled people in housing, implying that the critical capacity that is required for housing delivery in the rural areas is depleted and this also impacts on the delivery pace of housing projects in the rural areas. In addition, the rural-urban migration trends pose new challenges with regard to housing the rural migrants to urban centres, even though there is housing provision for them in the rural areas where they come from.
o There is also a need to mitigate the impact of HIV/AIDS in the housing delivery, especially when it comes to allocation criteria for housing by the municipalities and also the contractors, workers and the general communities in the jurisdiction of the various municipalities.
2 Expected Support for Municipalities
1 Capacity building and skills development
It is expected that the municipalities will have to be assisted to enhance their capacity and skills to be able to implement the comprehensive housing plan. The municipalities require some technical and project management skills.
2 Coordination and relationship between the three spheres of government
There is also a need to enhance communication and strengthen relationship between the province and the municipalities in the province.
3 Review of business processes
In addition, the Department of Housing has to simplify the provincial approval process and decrease bureaucracy resulting in: speedy processing of applications and approvals and speedy transfer of funds to municipalities.
4 Clarification of roles and responsibilities
The Department must clarify the operational roles and responsibilities, with a view to ensuring that each sphere of government has its scope clearly defined to avoid / minimise ambiguities and duplications of functions.
5 Review of the accreditation regime
There was an indication that the accreditation regime needed to be reviewed for it to be more empowering:
o Current status of the municipality that has been previously accredited and yet incapable of delivering desired housing products- systems, processes required, skills required to improve such a municipality.
o Non-accredited municipality located within prioritised housing delivery node- steps of ensuring that the necessary capacitation takes place; timeframes and accreditation.
6 Communication and information dissemination
There is a need to increase the accessibility to housing information and policies.
3 Some strategic issues to resolve as way forward
1 Sustainability
There is a need to define municipal “sustainability” to include financial aspects.
2 Mandates, Roles and Responsibilities
The National Department of Housing must urgently clarify the mandates, roles and responsibilities of the various spheres of government in order to minimise duplications and also address ambiguities with regard to their obligations.
3 Land Tenure
The province to accelerate the land tenure and upgrading processes. Flexibility is needed to allow for traditional housing solutions in local areas. The provincial department must ensure the development and implementation of programmes relating to land identification, acquisition, and use for housing development.
4 Capacity, Capability and Competencies
There is a need to build the minimum capacity and capability to assist the various municipalities and provincial departments. Municipal readiness depends on ability to deliver housing programmes within the guidelines of the provincial and national policy frameworks.
5 Standards and Service Levels
The Province has to re-evaluate the existing standards and service levels for housing delivery and align according to the new comprehensive plan.
6 Operational and Maintenance Costs
The need for the operational and maintenance costs of housing infrastructure to be allocated by the municipalities.
7 Implications for the indigents
The authentic database of indigents in each municipality and the issue of affordability of municipalities with regard to housing the indigents.
8 Access to land
The need to identify and allocate appropriate prime land for low cost housing is a challenge that must be addressed by the municipality.
5 The role of the Banking Council in Housing Delivery[5]
1 Introduction
The presentation focused on “The Role of the Banking Industry in Housing Delivery- State of Readiness of the banks in supporting the comprehensive approach in housing delivery. The paper also touched on the following areas, namely:
o The role and impact of the Financial Sector Charter in addressing low income housing finance;
o The state of readiness of the Banking Council in providing loans to beneficiaries earning between R1500 to R7000;
o Support mechanisms provided by Banking Council to low income earners; and
o Partnership with the KwaZulu-Natal Housing Department.
2 Critical Partnership with government
The Breaking New Ground in Housing Delivery announced by the National Minister of Housing late last year (September 2004) specifically addressed the financial sector and the construction sector, namely:
o the government’s commitment to a partnership, an enabling environment including incentives to lend to all households;
o using the provisions in financial sector charter;
o reviewing pre-emptive recovery rights of local authorities.
The agenda for the financial sector in the context of the comprehensive housing plan will include the following:
o Increased penetration in conventional markets;
o Normalization of non-performing markets;
o Increased provision of finance for intermediate housing, alternative tenure options and incremental construction
o Re-engineering of the housing value chain;
o Transparent performance measurement for housing finance institutions, housing role players and housing markets;
o Legislative and regulatory reform;
o Integrated development; and
o Building sustainable capacity.
In order to drive the implementation of this agenda, the national Department of Housing Minister will be convening a special meeting with the Chief Executive Officers of the South African Banks on the 31st March 2005. The meeting will pave the way for the signing of the Memorandum of Understanding between Government and the Banks.
3 The Financial Sector Charter (FSC)
In August 2004, the NEDLAC Financial Sector convened its summit. At this summit, the Financial Sector made voluntary commitment to formulate a transformation charter. A draft document was presented to the National Minister of Finance in October 2003. The document addresses issues such as:
o Empowerment financing;
o Access to Financial Services;
o Procurement;
o Ownership;
o Human Resource Development; and
o Corporate Social Investment.
In order to facilitate the implementation of the targets, the Financial Sector Charter Council was formed (in October 2004). This body will have oversight over the targets and other aspects of the Charter. It is made up of representatives from the community, labour, government and the financial sector.
4 FSC Empowerment finance targets
In the Charter very specific targets for the next five years have been identified for Empowerment Financing, an amount in the order of R123.5 billion is on the table. This is made up as follows, namely:
o Housing (R42bn);
o Infrastructure (R25bn);
o Small Micro Enterprises (R5bn);
o BEE Transaction Financing (R50bn); and
o Agriculture (R1.5bn).
5 Housing Targets
The implications of the new comprehensive housing plan requires the Banks to work towards achieving their stretch targets. They also have to do business in new ways, since they have to account on an annual basis to the Charter Council as individual institutions. The KwaZulu-Natal Department of Housing must equally find its place within this directive and relate to the financial institutions.
6 Housing’s Non-Financial Targets
1 Broad Based Black Economic Empowerment (BBBEE)
Housing finance and management of risk are not the only issues in the housing market. There are a number of dimensions that are being brought in focus to help in meeting the housing challenges. There is clear indication that the issue of the two economies and poverty alleviation are some of the indicators that will be used to measure the impact of housing contribution by the banking industry. These will also be used to measure the achievement of the Broad Based Black Economic Empowerment policies of government.
2 Housing value chain
For the private sector housing funding to have the maximum impact, it is necessary that we consider the entire housing value chain, i.e. land availability and acquisition, bulk-infrastructure, land servicing and costs; planning, regulatory approvals, subsidy systems, financing, tenure delivery, top structure delivery organisations and systems, creation of new stock, management of stock.
3 Collaborative approaches to housing delivery
The essential element of the new human settlements programme of government is the creation of functioning viable wholesome communities being created through the involvement of many players in partnership with government. Resources are limited and the unlocking of popular energies together with the injection of financial and human resources will need to be carefully managed and developed.
6 Empowerment in Rural Housing Delivery[6]
1 Background
The rural areas of our country represent the worst concentrations of poverty. No progress can be made towards a life of human dignity for our people as a whole unless we ensure the development of these areas. It is estimated that 70% of rural African exist in conditions which can be described as inadequate or intolerable in terms of access to shelter, energy, water and sanitation.
2 Policy Initiatives to address rural housing
Government’s commitment to rural housing and integrated development is reaffirmed by a number of policy initiatives such as:
o Amendments in 1995 to the Local Governmet Transition Act;
o The Rural Development Framework published in1997;
o In 1998 the White Paper on Local Government advocating the development role of Local Government and the introduction of IDPs;
o The Municipal Demarcation Act of 1998 and the Municipal Systems Act of 2000;
o Supporting strategies such as the Integrated Rural Development Strategy (ISRDS);
o Rural Development Framework (RDF);
o KwaZulu-Natal Integrated Rural Development White Paper;
o The Introduction of Chapter 11 of the Housing Code in 2000 to deal with rural subsidies;
o The adopting and use of the Institutional subsidy instrument for implementing rural housing in KwaZulu-Natal in 2001;
o The Amended Rural Guidelines for KwaZulu-Natal were adopted in 2003 to address the fears and concerns of Traditional leaders; and
o The two Tranche System was adopted for Rural Housing projects in KwaZulu-Natal in 2004.
3 Challenges facing housing delivery in rural areas
A sound policy framework has been developed over a number of years, for the delivery of integrated rural housing development. The greatest challenge facing us is therefore not in creating an enabling policy environment, but in setting up workable systems for practical delivery. Infrastructure and housing projects in rural areas are usually found to be unviable and unsustainable (the reasons for this are many and varied).
4 Key areas of focus to improve rural housing delivery
• Integrated Development Planning
o Address the planning vacuum between the IDP level planning and project planning; and
o Alignment between sectors
▪ Improve the alignment and integration between sectors.
• Norms and Standards
o Establishment of norms and standards for rural areas.
• Expanded Public Works Programme
o Adapt the EPWP to suit the housing industry and the needs of the and develop standard documentation.
• Procurement Processes and Contracting Strategies
o Review current procurement processes and contracting strategies; and
o Ensure that the Department of Housing has the technical skills to evaluate rural projects from a logistical and cost perspective.
• Transfer of subsidy payments
o Streamline the two tiered (or three tiered) approach to payments and in particular the Tranche System; and
o Subsidies
▪ Formalise the reservation of subsidies (determination of equitable share) per district or municipal area.
• Accreditation process
o Implement an accreditation process for implementing agents and consultants. Clarify the roles and responsibilities of agents;
• Cooperative Governance
o Strengthen ties and relationships between municipalities, traditional leaders and communities.
• Capacity Building
o Intensify and align capacity building programmes aimed at municipal and departmental officials.
o Provide human resources to municipalities where required.
o Ensure that capacity building programmes focus on technical and financial skills development.
• Categorisation of development
o Categorise and distinguish between different levels of rural development such as deep rural projects versus those on the urban fringe.
7 Case Study: Successful Implementation of Slum Clearance Projects within eThekwini Municipality[7]
1 Background
Within the eThekwini Municipality there are over 500 urban and peri-urban informal settlements comprising approximately 200 000 families. In terms of population size, the total informal population translates to approximately 900 000 people (assuming a household size of 4.5 people). These settlements range in size from a few dwellings to almost 14000.
The average informal settlement comprises approximately 350 dwellings. The municipality has a number of large sprawling informal settlements as well as countless small informal settlements interspersed and in between formal settlements. Informal settlements contribute to over 70% of the municipality’s housing backlog.
The large majority of households living in informal settlements have a household income of less than R1500 per month and are almost entirely reliant on the housing subsidy to meet their housing needs. Unemployment rates are very high and bank loans virtually non-existent for these households.
2 Informal Settlement Programme (ISP)
The municipal Informal Settlement Programme was initiated during 1997 to address the housing challenges for the poor. The main objectives of the programme were to:
o Gather as much data as possible on each settlement;
o Assess the development potential of the land being occupied;
o Identify appropriate interventions for each settlement;
o Identify criteria to prioritise projects;
o Prioritise projects;
o Identify project implementation times frames; and
o Determine funding requirements for the Programme.
The goal of the programme was to create a sustainable initiative which will systematically upgrade and relocate (where appropriate) informal settlements and give residents at the end of the queue some tangible signs of development via the provision of certain basic levels of services. The Informal Settlement Programme comprises three crucial components, namely: a comprehensive audit of all settlements, prioritisation of appropriate projects and project programming over predetermined timeframes. This programme is the municipality’s proactive attempt in addressing the informal settlement challenge and it is the first known comprehensive programme established for informal settlements at a metropolitan scale.
3 Slums Clearance Project
The slums clearance programme of the municipality is being implemented in a phased manner. The first phase involves the clearance of slums largely within the central area of Durban, while Phases 2 and 3 will begin to address settlements across all regions of the municipality.
1 Integrated Housing Development Plan
The municipality prepared an integrated housing development plan that identified the slum clearance as a major challenge that had to be attended to as one of the housing solutions.
2 Identification of funding
On the basis of the Integrated Housing Development Plan of the
municipality, a Business Plan was developed. The Business Plan guided the sourcing of funding from the KwaZulu-Natal Department of Housing, and an amount of R200 was allocated for the project and the municipality contributed R70 million towards the project.
3 Implementation Model
The implementation of Phase 1 of the project involved five large Greenfield housing projects in KwaMashu, Welbedacht, Ottawa and Waterloo with a combined total of 10 500 sites. These projects were essentially implemented to either accommodate families from settlements elsewhere earmarked for complete relocation, accommodate an overspill of families who could not be accommodated in an upgrade project or accommodate families already residing informally on portions of the Greenfield project land as was the case in Welbedacht.
4 Lessons learnt from the eThekwini experience
1 Project Planning and Innovation
The municipality spent at least a year planning and preparing for the implementation of the project. The implementation of the project was boosted by a combination of good project co-ordination, political backing, community support, commitment of various municipal service units and the KwaZulu-Natal Department of Housing.
2 Community Consultation and Participation
The consultation with the beneficiary communities regarding the implementation of the Slums Clearance Project was crucial for the success of the project. There was commitment and buy-in of the housing beneficiaries and co-operation regarding the move from the old areas to the upgraded or developed areas.
3 Cooperation and collaborative approach
The participation of the various municipal service entities and the KwaZulu-Natal Department of Housing played a critical role in ensuring that the slum clearance project was a great success. The ability of the local communities, municipal councillors and the various municipal entities in working together was an indication that integrated planning and development can be achieved within local authorities.
4 Sustainability
The housing subsidy from the KwaZulu-Natal Department of Housing as well as Municipal funding for the provision of services was crucial to he continuation of the project. The participation of the various line departments such as Education, Health, amongst others was crucial to ensuring that the support services of the new developments and the upgraded areas were provided to support the normal livehood of communities. The creation of economic opportunities for a number of beneficiaries in the various parts of the municipality where the projects were being implemented.
5 Summary
To date approximately families from over 40 settlements have been successfully relocated to safer sites in the various Greenfield housing projects. The beneficiaries have benefited from the project by gaining access to:
• Secure title to a property;
• A 30 square metre house;
• Non-ratable property;
• 6 kl of free water per month;
• 50 kw of free electricity per month;
• Good access to public transport;
• Removed from an unhygienic and life threatening environment.
• Implementation of the Slum Clearance Project
SUMMIT COMMISIONS
On the basis of the presentations on the first day of the Summit, the delegates participated in four Commissions that were established to deliberate in detail on the issues that were raised by the various Summit Speakers. The Commissions were facilitated by various speakers. The facilitators were required to present the findings and draft resolutions of the various Commissions for adoption by the Summit.
1 Commission One: Breaking New Ground in Housing Delivery
This commission looked at a number of issues facing housing delivery, namely: financial services market, incremental housing, rural housing and social rental housing, namely:
1 Financial Services Market
The comprehensive plan has recently included beneficiaries earning R3500 to R7000 per month;
Our townships currently have a non-existent secondary market;
The process involving government and banking associations exclude the previous agreement between Government and Civil Society on how to develop and manage housing lending market programmes;
Existing NEDLAC decisions are also not catered for in the Government and Banking Association negotiations;
Housing Cooperatives / Village Banks should be established in instances where the Banks have no interest of engaging in the housing lending market;
The current Government and Banking Association negotiations exclude persons employed by the informal sector; and
There are no consumer education programmes in areas identified as prime entry for the implementation of Government and Banking Association decisions.
1 Incremental Housing
• Quality of incremental housing products needs to be re-looked at;
• Improved value of the house from the current state of shelter;
• Access to land for housing development;
• Rural-Urban migration patterns vis-à-vis local economic development programmes at non-urban areas;
• A need to revisit the RDP Housing design;
• Community participation in planning, implementation, monitoring and evaluation;
• Quantity vis-a-vis Quality of housing products;
• Child Headed Households and succession plans;
• Slum Clearance budget vis-à-vis existing housing developments.
2 Rural housing
• Rural institutional capacity to be looked at;
• Rural land- discrepancies in identification and allocation;
• Slow pace in infrastructural development in rural areas;
• District / Local Council funding for infrastructure- exclusion of prioritisation for rural areas;
• One Thousand allocations per housing project in rural areas- lack of flexibility in instances where the rural areas differ with policy;
• Urban-based housing designs found to be inappropriate for rural areas;
• Succession plan for rural housing;
• Limited or no Rural Community Liaison Officers in the rural areas;
• Inadequate training programmes for rural areas;
• Delays in finalisation of disputes relating to rural boundaries;
• Government asked to consider use of Rural Homesteads Programme.
3 Social Rental Housing
• Finalisation of the formalisation programme for backyard tenants;
• Hostel upgrading programme to be considered in a holistic way.
• Improved public stock management programme.
10 Commission Two: State of Readiness of KwaZulu-Natal Municipalities to deliver Housing Projects
• The need to remove administrative bottlenecks to housing delivery;
• Review of procurement procedures;
• Capacity of municipalities and delivery agencies;
• Access to Finance and Credit Facilities; and
• Legislative and Policy frameworks.
11 Commission Three: Empowerment in Rural Housing Delivery
• Empowerment of Traditional Authority, Municipalities, Department of Housing; Communities and implementing agents.
12 Commission Four: Combating Fraud and Corruption in the Housing Industry
• Assessment of the risk management in the housing supply chain that will inform the development of a fraud and anti-corruption strategy.
HOUSING SUMMIT RESOLUTIONS
The KwaZulu-Natal Housing Summit was held in the context of seeking ways to come up with alternative delivery methods. The government is concerned about the eradication of the contradictions that presently define the housing landscape of the country in general and the KwaZulu-Natal Province in particular. The key resolutions will involve the development and implementation of provincial programmes intended to realise the Comprehensive plan for Sustainable Human Settlements, namely:
1 Policy framework review and realignment
Development and Implementation of relevant amendments to existing policy to accommodate requirements of the new comprehensive housing plan. In cases where the existing provincial housing policy framework is in place, this could involve the realignment process thereof. Legislative and Policy frameworks
1 Development of a national policy on slum clearance
The national and the provincial Departments of Housing must develop a policy framework for the implementation of the slum clearance programmes. This will assist the various municipalities with regard to processes that have to be followed and also minimise unintended consequences due to inconsistent approaches by the individual municipalities in the province. There will be a need for orientation workshops of municipalities / implementing agents with regard to the implementation of such a policy to ensure that there is thorough understanding of what needs to be done.
3 Enforcement of the municipal by-laws
The municipalities must be urged and assisted to introduce and enforce of municipal legislative and policy instruments such as by-laws, especially with regard to the clearance of slum areas. Municipalities must secure their environments against new invasions. They should also monitor the destruction of the shacks once beneficiaries have been allocated houses. This arrangement must be included in the social compact agreement.
4 Effective law enforcement to reduce / stop illegal land grabs in the province
The illegal occupation of land by illegal occupants has to be addressed by the Department. This will require close cooperation between the Department and the law enforcement agencies such as the South African Police Services (SAPS), the National Intelligent Agencies, amongst others.
5 Alignment of development programmes to maximise development impact
There is a need to improve coordination between the various programmes that potential of maximising the impact in so far as housing delivery is concerned. The programmes such as the Municipal Infrastructure Grants (MIG) will have to be realigned with a view to ensuring that they promote the achievement of the housing delivery targets.
3 Delivery Management System for housing delivery
1 Quantify housing needs in the province
The KwaZulu-Natal Department of Housing has to carry out an assessment of the housing needs in the province. This will assist the Department in understanding the extent of demand for housing and the nature of housing products to be provided (based on the profile of housing target groups to be serviced).
2 Partnership and Collaborative approach to housing delivery
There is a need to strengthen the relationships between the Traditional Leadership structures, Communities, Municipalities and the Provincial Department of Housing. This could be through a Stakeholders’ Forum comprising of the various stakeholders throughout the province. The Forum will provide platform for constructive engagement on issues of significance that will impact on the planning and implementation of the programme. Some of the issues for consideration will include the alignment of the various development programmes at a planning stage in order to maximise the development impact of the human settlements programme.
3 Municipal housing sector plans
The information gathered from the assessment of the housing needs by the provincial department could also be used to inform the development of the municipal sector plans by the various municipalities. The municipalities will consider the demographic trends and planning data from the various sources, namely: Statistics South Africa, Population Census, the Indigent databases of the municipalities and also from the Provincial Profile of the KwaZulu-Natal Province. Every municipality will be required to develop a housing sector plan that addresses the housing needs of that municipality.
Department of Housing will provide financial assistance to municipalities.
4 Provincial housing programme
The Department to consolidate all the Municipal Housing sector plans into a Provincial Housing Plan that will guide the delivery of housing in the province.
5 Identification and release of appropriate land for low cost housing
The KwaZulu-Natal Department of Housing must work closely with the various stakeholders, including the national Department of Public Works (as the custodian of national land) and Land Affairs Department to identify and access suitable underutilized state land for housing delivery. Municipalities must also ensure that municipal land is prioritized for housing projects for all income groups rather than selling prime land to private companies. Municipalities need to do audit of all land available in their assets registers. Feasibility studies on land suitability have to be done. If suitable, it has to be included in the municipal IDP for housing development.
6 Criteria for allocation of housing- Child-Headed Households (CHH)
The provincial department has to consider the review of criteria for the allocation of housing units in the province, especially with regard to child-headed households. This is mainly because the scourge of HIV/AIDS is having such a negative impact in the composition of households to an extent that the majority of households are headed by children below the age of 21 years.
7 Monitoring and Evaluation
1 Key Performance Indicators (KPIs) for housing delivery
The KwaZulu-Natal Department of Housing must develop a set of Key Performance Indicators that will be used to monitor progress regarding the implementation of the housing programmes in the province. This will allow the Department to monitor the performance of municipalities and also identify areas of support required by the delivery / implementing agents and the municipalities (in cases where the delivery agents are different organisations to municipalities).
2 Standard Reporting and Monitoring Templates
In line with the housing delivery indicators, the Provincial Department to develop standard templates for reporting progress regarding the implementation of the various housing programmes.
8 Review of business processes of Provincial Department of Housing
1 Housing delivery application processes
The Department of Housing has to review the business processes with a view to speeding up the processing of applications for new housing development projects. The turn around time with regard to the approval of housing projects, signing of agreements and the processing of invoices of work done must be addressed.
In addition, it will be important that the Provincial Department of Agriculture and Environmental Affairs be consulted with a view to reviewing the turn around times for approval processes of environmental impact assessment studies. The approval of the planning processes by the Department of Local Government and Traditional also needs to be reviewed.
2 Review of procurement processes
Turn around times
The Department will have to review its Supply Chain Management Processes to identify the areas where there are delays that could impact on the turn-around time for Housing delivery. Some of the areas for review could be the tender validity period (90 days to say 45 days) and addressing the turn-around times for tender award.
Appointment of Implementing Agents
The KwaZulu-Natal Department of Housing expressed concern regarding the pace of spending of the housing budgets by the various municipalities. The slow pace of spending impacts on the progress of the provincial department with regard to housing delivery. Each Implementation Agent should not be responsible for more than four (4) active projects at any given time. This will ensure that projects are completed according to time frames.
As a result, the provincial Department will be entering into a Tripartite Agreement with the municipalities and the implementing agents / service providers with a view to monitoring the implementation of the projects at a municipal level. This will be done in such a manner that it will reinforce the capacity building efforts of the municipalities to enable them to gain accreditation once they have met the minimum requirements for accreditation. The procedures with regard to how this will be carried out will be developed by the provincial Department.
11 Alternative housing solutions
The current housing design is of an inferior nature and cannot be used as a collateral to raise finance or cover limited risk for financial institutions. There is a need to consider the review of the housing design options for the beneficiaries. There is a need to offer house design options that will be affordable to the beneficiaries in the various areas. In this case consideration must be given for incremental housing, social rental housing, communal housing and other appropriate housing options as opposed to the one size fits all approach.
12 Quality of Housing Products
The provincial department has to develop quality specifications for the various housing options to be implemented by the various municipalities. There will be a need for the Department to beef up the professional and technical capacity to check and monitor the quality of housing options that will be implanted in the various municipalities.
4 Capacity Building Programmes for housing delivery
Develop and implement capacity building programmes for the province and municipalities addressing the following:
1 Accreditation of municipalities for housing delivery
The increased role of municipalities with regard to housing delivery will require the municipalities to be accredited as housing developers. In order to be accredited, municipalities have to demonstrate their capacity to plan, implement and maintain both projects and programmes that are well integrated within the IDPs and within the 3-year rolling capital investment programmes mandated by the Municipal Finance Management Act (MFMA, 2004). For example, municipalities will be required to:
o Establish housing units with staff complements adequate to carry out project and programme requirements;
o Establish cross-sectoral, sustainable human settlements planning committees including senior staff from at least but not limited to the municipal offices for housing, planning, economic development, infrastructure / engineering, MIG PMU, and land reform;
o Submit complete inventories of municipally-owned land including identification of land suitable for low cost housing and justification for execution of other municipally-owned land; and
o Submit a Council resolution indicating the willingness of the municipality to meet national Department of Housing anti-corruption, monitoring and reporting requirements as an integral part of the overall performance reporting required under the Municipal Finance Management Act (MFMA).
2 Shared Services Centres as supplementary capacity for municipalities
The fact that a number of municipalities will not in the short- to medium-term be able to mobilise the necessary professional and technical capacity implies that the Provincial Department of Housing will have to consider setting up Shared Services Centres that will provide temporary capacity relief to municipalities.
The Shared Services Centre will be in the form of a provincial agency that will be created with the aim of providing the necessary professional and technical capacity to various municipalities in the province. The one-stop agency will provide support in the following areas, namely: material supplies, access to finance, technical and professional assistance.
3 Accreditation of implementing agents
The Provincial Department will have to develop a database of service providers who will be considered for selection to implement the various housing programmes in the municipalities. The Department must consider the accreditation of professional and technical service providers who could be selected and appointed to provide support to the various municipalities with regard to housing delivery. As indicated in Section 2.2.8.2, there will be a limit with regard to the number of active projects to be awarded to any Implementing agent at any given time. The maximum active projects would be 4, once the implementation agent can then be appointed to implement another 4 projects.
5 Review of the housing delivery model for rural areas
1 The role of Traditional Leadership Structures in rural housing delivery
As mentioned above, the KwaZulu-Natal is relatively a rural province, with about 54% of the total population living in the rural areas, compared to 11% in Western Cape and 4% in Gauteng. The rural areas are occupied predominantly by black people, while white, coloured and Indian people live mainly in the urban areas. In 2002, it was estimated that approximately 65% of the total black population in the province lived in the rural areas.
In the light of the above, it is expected that there will be a significant role to be played by the Traditional Leadership structures in the rural areas in so far as housing delivery is concerned. The Department will ensure that the rural housing strategy that was developed is operationalised with the traditional leaders playing an important role in housing delivery. This strategy focuses on the development of houses in Ingonyama Trust Land.
2 Coordinated Inter-Governmental and Inter-Departmental approach
The role of other national and provincial departments in providing complimentary services and infrastructure to augment housing funding has to be considered. For example, the housing subsidy will be allocated for the top structure, while the bulk infrastructure will be funded through other programmes such as the Municipal Infrastructure Grants (MIG). The various provincial departments must also be encouraged to participate in funding other support infrastructure such as schools, health facilities, amongst others.
The challenge for the Department of Housing is that there must be coordinated efforts between the various national, provincial and local government institutions if the maximisation of the development impact of the housing programmes is to be achieved. There is also a need to align the various development programmes that are being implemented within each municipality in order to maximise the development impact.
3 Institutional capacity of rural housing delivery agencies
The majority of rural areas to be targeted for housing do not have the necessary institutional capacity to facilitate delivery of housing. The responsibilities of rural Municipalities to be linked to their capacity in order to ensure that the allocated funds are indeed adequate for them to implement the various projects and that they are able to spend the allocated housing budgets within the allocated timeframes. Some of the institutional capacity building initiatives in the rural areas could include the following:
• Government needs to draw a checklist on related constraints faced by rural councils or housing agents and should hold workshops to qualify mechanisms of addressing needs such as infrastructural development, capacity building; improved revenue base; communication; finalization of issues on boundaries and inclusion of rural plans in IDPs.
• An integrated strategic plan must be developed to include needs of the rural community and traditional leaders in rural housing development programmes.
• An integrated infrastructural development plan, incorporating other departmental plans must be shared and agreed upon before implementation at rural level.
• The provincial Department must avoid using one size fits all design for rural areas and designs must be locality biased and as per needs of beneficiaries.
• The provincial Department must ensure that traditional leaders share a common approach of the release of PTO’s for rural housing development.
• Government must develop and implement training and capacity building programmes, with a long-term view towards accreditation.
4 Infrastructure development in rural areas
The costs of infrastructure development in the rural areas are very high due to low densities and spatially segregated areas, partly due to topography and partly to historical settlement patterns. There is a need to consider the appropriate infrastructure developments in the rural areas, with a view to bringing the infrastructure costs to a manageable level.
5 Appropriateness of housing options in rural areas
The one size fits all housing design seems not to be applicable in rural areas as it excludes individual or environmental needs of rural housing beneficiaries. There is a need to consider special design options for rural areas and allow for flexibility with regard to such designs.
6 Review of housing solutions for sustainable human settlements
The implementation of the comprehensive plan on housing delivery requires the public and the private sector to implement a number of interventions aimed at “breaking new ground in housing delivery”, namely:
1 Incremental Housing
Government must include in its programme of action with regard to the following:
• Houses previously built in the province should also be included in plans finalized in terms of the Comprehensive Housing Plan;
• Council commitment guidelines should be included in the implementation of various housing developments;
• Further debates should be held with regard to land management of residual land subsequent to the construction of a house;
• Government should consider implementing LEDs in peripheral towns thereby limiting rural-urban migration;
• Government must finalise RDP redesign programme in order to qualify improved asset value of houses. The one size fits all concept must not apply;
• Government must develop and implement programmes accommodating prevalent child headed families/households; and
• The slum clearance budget should be de-linked from the conventional housing development budget.
2 Social Rental Housing
Government must include the following:
• Government must develop and implement the formalization of backyard tenants programme;
• Improved management and upgrade programme of public stock and disposal; and
• Capacity building programmes incorporating needs of the community.
7 Good Governance - Fraud and Anti-Corruption drive
1 Risk management assessment and risk management strategy
The provincial department to conduct a risk management assessment with a view to identifying potential areas for fraud and corruption in the Department. This will also assist the provincial department in the development of a risk management strategy.
2 Setting up of a Fraud and Anti-Corruption Hotline
The Department will set up a Fraud and an Anti-Anticorruption hotline to deal with fraud and corruption challenges in the delivery of sustainable human settlements. The hotline number has to be publicised widely to ensure widespread utilisation.
3 Vetting of housing delivery agencies
The Department will consider a security vetting system for all the housing delivery agents in order to weed out all the unscrupulous delivery agents. This could also address some of the risks that the Provincial Department usually faces when dealing with delivery agents. This will be done within the Tripartite Agreement that will be entered into between the Provincial Department, the Municipalities and the Implementing Agents.
4 Blacklisting corrupt developers and implementing agents
The housing delivery agents that are found to be conducting their business with the Department or municipalities in an unethical manner, it must be able to blacklist them for a predetermined duration (where they will not be allowed to do business with the Provincial Department and the Municipalities).
5 Developing a Code of Conduct
The provincial department will develop a Code of Conduct for all parties involved in housing delivery. The code will be used to promote ethical and professional business conduct in housing delivery. All the parties involved in housing delivery will be subjected to the Code of Conduct.
8 Review of financial arrangements for provincial housing delivery
1 Financial Services Market
Government and Banking Association negotiations must include the following:-
1 Excluded beneficiaries (earning R3500 to R7000 per month)
The current housing subsidy programmes exclude persons earning R3500 to R7000 per month. This is a large number of beneficiaries who are not able to benefit from the various. The discussions between the government and the Banking Sector must facilitate a process whereby beneficiaries are able to access the available financial instruments for housing. Inclusion of potential beneficiaries earning R3 500 to R7 000, i.e. certain amount be specified to serve as deposit towards an approved banking homeloan.
3 Secondary housing market in townships
Revival or establishment of the secondary market in townships must include viability, sustainability compliances and BEE partnerships.
4 Housing Cooperatives / Village Banking
For some time there has been some decline in home loans in the townships. The reasons for this trend were many and varied and included the risks that were experienced by the Banks in the early eighties during the boycott of the payments to the banks. This tended to limit the investment opportunities for the majority of Black people who reside in these townships. With the growth of the housing sector in the various parts of the province, this presents an opportunity for the various banking institutions in terms of setting up village banking or housing cooperatives to address the gap that currently exists.
5 Persons employed in the informal sector
Persons who are self-employed or employed by the informal sector are excluded from the banking qualification criteria for home loans. This presents an opportunity for the various banking houses to fill the gap in this sector by designing appropriate products to meet demand in this sector.
7 Housing Consumer Education
Necessary consumer/client education programmes must be developed and implemented in the province. This will be part of the Capacity building scope of the Capacity Building Directorate in the Department.
2 Management of housing subsidies
The KwaZulu-Natal Department of Housing has to review its management of the housing subsidies with a view to reducing the turn around time for the transfer of housing subsidies to municipalities. The improvement in the turn around time of housing subsidies will improve the cash flow management of beneficiary municipalities and ultimately accelerate the delivery of housing by the various implementing agents.
3 Effective utilisation of housing subsidies
There is a need to ensure that the use of available resources is maximised. This will involve the use of the full subsidy amount of R31 900 subsidy for the top structure and the bulk infrastructure to be funded from other government programmes such as the Municipal Infrastructure Grants.
9 Job creation and housing delivery
1 Creation of direct and indirect jobs
The use of housing delivery as an instrument for social transformation to address the socio-economic and socio-political conditions facing the majority of housing beneficiaries will be considered by the Department. Housing delivery will be used to contribute towards alleviating poverty and addressing unemployment by providing both direct and indirect jobs.
The implementation of the KwaZulu-Natal provincial housing programme has the potential of creating much needed jobs and offering opportunities for training and skills development. In this regard the Department must identify the job creation potential of the various housing projects and ensure that these projects incorporate the principles of the Expanded Public Works Programmes through the Municipal Infrastructure Grants (MIG). This will require the Department to realign its procurement and contract documentation to incorporate the principles of the Expanded Public Works Programmes, so that the housing delivery can meet other socio-economic challenges.
2 Training and Skills Development of housing beneficiaries
The delivery of housing in the province must also facilitate the provision of training and skills development. The provision of training and skills development in the delivery of houses must be part of housing delivery in the Province.
10 Communication and awareness of the housing delivery process
There is a need to communicate and raise awareness of all the housing policies, legislations and programmes in the province. The target audience for such communication and awareness raising will be predominantly groups that will be targeted as beneficiaries and active participants in the housing delivery / supply chain. The content and scope of communication will be informed by the target audience and the frequency of such communication. The type of communication medium will also be determined by the target audience for such communication.
IMPLEMENTATION OF RESOLUTIONS
A Departmental Implementation Committee has already been established to drive the implementation of the Resolutions. The Implementation Committee will be comprised of the Senior Managers in the Department and convened by the Chief-Director: Project Management.
The Key Performance Indicators emanating from the Conference Resolutions will be cascaded to the individual senior managers’ performance agreements and the progress regarding the implementation of the resolutions will be monitored on a frequent basis (weekly, monthly, quarterly and annually) as part of their performance management reviews. The Resolutions were adopted by the KwaZulu-Natal Housing Conference on the 24th March 2005.
CONCLUSION
In the closing address, Honourable MEC for Housing, Local Government and Traditional Affairs, MEC Mabuyakhulu reiterated the fact that this was a watershed housing summit in the province. He re-emphasised that the summit offered all the key stakeholders an opportunity to express their views freely regarding the challenges facing the housing sector in the province, and most importantly, the possible solutions and alternatives that must be considered by all the housing stakeholders.
The summit offers the KwaZulu-Natal Department of Housing a package of resolutions that will become the guiding light for the Department. The summit must not be remembered by good resolutions that were endorsed by the summit, rather by the impact of the implementation of the resolutions in the province. The Honourable MEC urged all the stakeholders to become foot soldiers working towards the implementation of the resolutions, and urged all the stakeholders to become involved and no spectators will be entertained.
The summit offers clear message for the municipalities with regard to the preparation of the sector plans that are in line with their IDPs and also respond to sustainable housing solutions in the various parts of the province (within the jurisdiction of the municipalities). The building of institutional capacity for municipalities and the accreditation processes will be crucial in ensuring that the municipalities meet the housing delivery obligations.
The MEC reminded the summit that rural housing is as important as any other housing, and warned that the one size fits all approach will have to be seriously considered, in the light of the peculiar circumstances and challenges facing the rural areas in the province.
The KwaZulu-Natal of Housing, Local Government and Traditional Affairs will make the necessary commitments with regard to the allocation of resources to implement the resolutions that were endorsed by the Summit. The Department will also present the resolutions at the Cabinet Cluster level to ensure that all the key provincial departments that are to play a meaningful role ion addressing some of the resolutions do indeed take part in the process. The Department will also ensure that the various provincial and national Departments are indeed coordinated to address the identified and perceived bottlenecks that could hinder the deliver of housing and its associated infrastructure in the province.
In conclusion, the Honourable MEC thanked the national Minister of Housing for gracing the occasion (by being the Keynote Speaker on Day One of the Summit), the Honourable Premier of the Province of KwaZulu-Natal, Premier Sbu Ndebele for his motivating speech at the gala dinner of the first day of the conference. In addition, the MEC thanked his Mpumalanga counterpart, MEC Mahlangu for his participation in the two days of the housing summit. All the Members of Provincial Legislature (MPLs), the Mayors, Amakhosi, the Private sector stakeholders and staff members of the Department and the other provincial departments who were part of the summit were thanked for their sterling efforts and hard work.
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[1] The Opening Address was given by the KwaZulu-Natal MEC for Housing, Local Government and Traditional Affairs, MEC Mike Mabuyakhulu.
[2] The Keynote address was given by the National Minister of Housing, Dr. Lindiwe Sisulu.
[3] Paper presented by Mr. A. Vawda, Deputy-Director General: Policy and Programme Coordination, National Department of Housing.
[4] Paper presented by Ms. M. Khoza, Chief Executive Officer of the South African Local Government Association (SALGA)
[5] Paper presented by Mr. V. Suparsad, General Manager, Banking Council.
[6] This paper was presented by Mr. Dave Pay, KwaZulu-Natal Housing Consultant
[7] Paper presented by Mr. Coughlan Pather, Head of Housing, eThekwini Metropolitan Municipality.
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