No one wants to see politicians debating a housing project while poor people wait in vain for proper shelter, especially at a time of year when flooding is creating unbearable living conditions in informal settlements.
Nevertheless, the policy implications of the mistakes made on the N2 Gateway are far-reaching and should not be ignored.
The N2 Gateway was put forward by Housing Minister Lindiwe Sisulu as a solution to South Africa’s chronic shortage of formal housing.
She promised it would deliver 22 000 houses by last year, but so far it has only delivered about 2 000, many of which have had to be patched up or rebuilt because they are sub-standard.
It is only by having a clear understanding of what went wrong that we will be able to learn anything about tackling Cape Town’s housing crisis from this project.
In recent weeks the Minister of Housing, UCT political analyst Zweli Jolobe and several other commentators have put forward explanations that are factually incorrect.
In the first instance, both the Minister and Jolobe are wrong to argue that the problems on the N2 Gateway have arisen because different political parties occupy the city and province.
It appears that Jolobe has simply assumed that having different parties in different spheres of government automatically creates problems for delivery, without examining the history of the N2 Gateway or of the city’s interactions with the province.
The province and the city work very well together on several projects, such as the Integrated Transport Plan and preparations for 2010.
The N2 Gateway, in contrast, has not been a success thus far, and Minister Sisulu has falsely tried to blame the city for the delays - because we won’t go along with everything that the province and national department demand.
In fact, the biggest delays happened before the multi-party government even came to office, and they had nothing to do with intergovernmental relations.
If we allow this argument to explain away the problems on the N2 Gateway, then nothing will be learned from this experience.
In 2004 and 2005 the Joe Slovo Phase 1 flats (the multi-storey flats that can be seen alongside the N2 freeway) were built by a partnership between the city, province and national government. All three spheres were controlled by the ANC.
But they were rushed through without a proper financial management plan and without signed contracts between the government and the builders.
The stated intention was to make the flats available to be rented to poor families at an affordable cost.
But because building high-density apartments costs more than building ordinary houses, each unit ended up costing three times more than the government housing subsidy grant to poor families.
This created cost overruns on the project in the region of R100 million, for which the government had not budgeted.
The contractors weren’t paid, which led to legal challenges and the stalling of work.
In order to cover the high costs, the flats had to be rented out at a price that was unaffordable to their intended beneficiaries - the shack dwellers and backyarders in the surrounding areas who had been promised they would return to formal housing in the area from which they were moved.
The intended beneficiaries are now being relocated to temporary structures in Delft instead to make more room in Langa for the next phases of the N2 Gateway, creating outrage among the community.
We pointed these things out, and questioned several transactions, including the procedures that were followed in the appointment of certain consultants.
As a result, at the end of 2005, the minister removed the city from the project and handed it to the parastatal Thubelisha Homes.
Thubelisha has been responsible for Joe Slovo Phase 2 and the Delft Symphony developments. Again, there have been massive delays.
Instead of looking at the real cause for the delays, the minister has blamed the city for questioning aspects of the Land Availability Agreement, and requiring certain conditions be met before we signed away some of the city’s best housing land.
We wanted the province to give us certain land in return, so that we could extend housing opportunities in poor communities, and we wanted guarantees that at least some of the sites in the N2 Gateway would be available to beneficiaries on the city’s housing waiting list on a first-come, first-served basis.
While these negotiations were underway, the developers had access to the land, so there was no delay in the project whatsoever.
Their access was not dependent on the Land Availability Agreement.
The real cause of delays in Joe Slovo Phase 2 was the difficulty that provincial officials and contractors had in trying to reach agreement with the community on the relocation of shacks, together with a number of other issues.
In Delft 7-9 the delay was caused because the developers couldn’t agree with the contractor on the price of the houses to be built, and also because about 200 units were built with substandard foundations and were condemned by the National Home Builders’ Registration Council.
However, here too the contractor went ahead and installed services before the Land Availability was signed - they had full access to the land.
In Boystown and New Rest, community disputes have delayed progress, not the Land Availability Agreement. In fact I received a letter from the Boystown Project Committee - which is a residents’ committee - asking for a meeting with me. They wrote: “This came as a result of being undermined by the Minister’s team which tries to politicise the whole issue of this project.” It is not clear to which minister they are referring.
For a long time the City of Cape Town has been concerned about the ability of this project to deliver houses to the poor at the pace needed. That is why we required a Land Availability Agreement - to ensure the land that the city gave up for this project would be replaced with land that we could develop elsewhere under a more sustainable model in partnership with the banks and the private sector.
The N2 Gateway Project has moved too slowly, has been poorly planned, and many of the houses and flats have not met National Building Regulations. It is also way beyond the reach of the poor financially.
It has been an important lesson in how not to approach South Africa’s housing crisis.
So far, as we have seen with similar projects internationally, the N2 Gateway Project risks providing subsidised housing mainly to the middle class, who can afford alternatives, while the poor remain homeless.
If the initial intention was to create homes for shack dwellers, that goal is not being met.
If the intention was to create housing for low-income earners, then the Gap housing model would have worked better from the start.
In this model, the state provides serviced sites to households in the income group between R3 000 and R7 000 a month, and the banks make small home loans available for the actual houses to be built on those sites.
That is the model that the City of Cape Town has adopted in order to accelerate housing delivery.
The Gap housing approach leaves the state with the capacity and the subsidy funds to help the truly indigent.
Minister Sisulu has admitted that mistakes were made on the N2 Gateway.
I welcome her openness, and I hope that in future the project will proceed more smoothly.
On the basis of a frank and fair exchange the city is more than willing to work co-operatively with her and with MEC Richard Dyantyi in the province.
There is just too much at stake to allow politics of any kind to get in the way of delivery.
We also welcome the fact that First National Bank has put nearly R1 billion into the project.
I hope that this will be the first step toward making the project more viable. - Cape Argus
Nevertheless, the policy implications of the mistakes made on the N2 Gateway are far-reaching and should not be ignored.
The N2 Gateway was put forward by Housing Minister Lindiwe Sisulu as a solution to South Africa’s chronic shortage of formal housing.
She promised it would deliver 22 000 houses by last year, but so far it has only delivered about 2 000, many of which have had to be patched up or rebuilt because they are sub-standard.
It is only by having a clear understanding of what went wrong that we will be able to learn anything about tackling Cape Town’s housing crisis from this project.
In recent weeks the Minister of Housing, UCT political analyst Zweli Jolobe and several other commentators have put forward explanations that are factually incorrect.
In the first instance, both the Minister and Jolobe are wrong to argue that the problems on the N2 Gateway have arisen because different political parties occupy the city and province.
It appears that Jolobe has simply assumed that having different parties in different spheres of government automatically creates problems for delivery, without examining the history of the N2 Gateway or of the city’s interactions with the province.
The province and the city work very well together on several projects, such as the Integrated Transport Plan and preparations for 2010.
The N2 Gateway, in contrast, has not been a success thus far, and Minister Sisulu has falsely tried to blame the city for the delays - because we won’t go along with everything that the province and national department demand.
In fact, the biggest delays happened before the multi-party government even came to office, and they had nothing to do with intergovernmental relations.
If we allow this argument to explain away the problems on the N2 Gateway, then nothing will be learned from this experience.
In 2004 and 2005 the Joe Slovo Phase 1 flats (the multi-storey flats that can be seen alongside the N2 freeway) were built by a partnership between the city, province and national government. All three spheres were controlled by the ANC.
But they were rushed through without a proper financial management plan and without signed contracts between the government and the builders.
The stated intention was to make the flats available to be rented to poor families at an affordable cost.
But because building high-density apartments costs more than building ordinary houses, each unit ended up costing three times more than the government housing subsidy grant to poor families.
This created cost overruns on the project in the region of R100 million, for which the government had not budgeted.
The contractors weren’t paid, which led to legal challenges and the stalling of work.
In order to cover the high costs, the flats had to be rented out at a price that was unaffordable to their intended beneficiaries - the shack dwellers and backyarders in the surrounding areas who had been promised they would return to formal housing in the area from which they were moved.
The intended beneficiaries are now being relocated to temporary structures in Delft instead to make more room in Langa for the next phases of the N2 Gateway, creating outrage among the community.
We pointed these things out, and questioned several transactions, including the procedures that were followed in the appointment of certain consultants.
As a result, at the end of 2005, the minister removed the city from the project and handed it to the parastatal Thubelisha Homes.
Thubelisha has been responsible for Joe Slovo Phase 2 and the Delft Symphony developments. Again, there have been massive delays.
Instead of looking at the real cause for the delays, the minister has blamed the city for questioning aspects of the Land Availability Agreement, and requiring certain conditions be met before we signed away some of the city’s best housing land.
We wanted the province to give us certain land in return, so that we could extend housing opportunities in poor communities, and we wanted guarantees that at least some of the sites in the N2 Gateway would be available to beneficiaries on the city’s housing waiting list on a first-come, first-served basis.
While these negotiations were underway, the developers had access to the land, so there was no delay in the project whatsoever.
Their access was not dependent on the Land Availability Agreement.
The real cause of delays in Joe Slovo Phase 2 was the difficulty that provincial officials and contractors had in trying to reach agreement with the community on the relocation of shacks, together with a number of other issues.
In Delft 7-9 the delay was caused because the developers couldn’t agree with the contractor on the price of the houses to be built, and also because about 200 units were built with substandard foundations and were condemned by the National Home Builders’ Registration Council.
However, here too the contractor went ahead and installed services before the Land Availability was signed - they had full access to the land.
In Boystown and New Rest, community disputes have delayed progress, not the Land Availability Agreement. In fact I received a letter from the Boystown Project Committee - which is a residents’ committee - asking for a meeting with me. They wrote: “This came as a result of being undermined by the Minister’s team which tries to politicise the whole issue of this project.” It is not clear to which minister they are referring.
For a long time the City of Cape Town has been concerned about the ability of this project to deliver houses to the poor at the pace needed. That is why we required a Land Availability Agreement - to ensure the land that the city gave up for this project would be replaced with land that we could develop elsewhere under a more sustainable model in partnership with the banks and the private sector.
The N2 Gateway Project has moved too slowly, has been poorly planned, and many of the houses and flats have not met National Building Regulations. It is also way beyond the reach of the poor financially.
It has been an important lesson in how not to approach South Africa’s housing crisis.
So far, as we have seen with similar projects internationally, the N2 Gateway Project risks providing subsidised housing mainly to the middle class, who can afford alternatives, while the poor remain homeless.
If the initial intention was to create homes for shack dwellers, that goal is not being met.
If the intention was to create housing for low-income earners, then the Gap housing model would have worked better from the start.
In this model, the state provides serviced sites to households in the income group between R3 000 and R7 000 a month, and the banks make small home loans available for the actual houses to be built on those sites.
That is the model that the City of Cape Town has adopted in order to accelerate housing delivery.
The Gap housing approach leaves the state with the capacity and the subsidy funds to help the truly indigent.
Minister Sisulu has admitted that mistakes were made on the N2 Gateway.
I welcome her openness, and I hope that in future the project will proceed more smoothly.
On the basis of a frank and fair exchange the city is more than willing to work co-operatively with her and with MEC Richard Dyantyi in the province.
There is just too much at stake to allow politics of any kind to get in the way of delivery.
We also welcome the fact that First National Bank has put nearly R1 billion into the project.
I hope that this will be the first step toward making the project more viable. - Cape Argus
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