Sisulu seeks ways to leverage funds

Lindiwe Sisulu, the Minister of Human Settlements, aims to leverage the financial reserves of the National Home Builders Registration Council and Estate Agency Affairs Board to increase the delivery of affordable housing.

Sisulu also wants to get the Public Investment Corporation, the manager of the Government Employees Pension Fund, to invest in the housing market segment.

She was speaking on the sidelines of the National Human Settlements Indaba, which aims to build partnerships for the accelerated delivery of human settlements through a social contract with partners.

Sisulu said the government had committed R1 billion towards the target of delivering 1.5 million housing opportunities by 2019, which would drive economic development.

“The 1.5 million houses we want to provide is government’s commitment. We can treble that with the support of society,” she said.

Sisulu said the emphasis in the next five years was on megaprojects, while also allowing for pockets of site-and-service and people’s housing projects. Megaprojects, which delivered at least 10 000 housing units, had the advantage of building on scale and generating jobs and subsidiary industries.

Sisulu said human settlements had potential as a great job creator and they intended to harness the energy of the unemployed youth.

“We would like to test the Cuban model of a youth brigade for every project, so that we can deal with unemployment while we skill the youth, she said.

“With all that we have been through as a country, where a house was used as part of a coercive system to subjugate the masses of our people, we can use that same instrument to provide settled communities, responsible to their obligations as citizens and give them a stake in the economy.

“Together we can improve the economy of the country, create more jobs and thrive.”

The indaba follows the social contract entered into in 2005 between what was then the Department of Housing and many civil society partners that resulted in the delivery of 1.2 million housing units in the following five years.

Various organisations made commitments and pledges yesterday towards the social contract. The finalisation and signing of the second social contract is scheduled to take place today.

Pierre Venter, the head of human settlements at the Banking Association of SA, said the banking sector was committed to the social contract if it included all stakeholders.

He said since signing the initial social contract in 2005, the commercial banks in South Africa had lent more than R101bn to more than 2.2 million families to enable them to improve their housing conditions.

He said a key concern of the sector when it signed the record of understanding in 2005 was that the affordable housing market was not a normalised market segment.

“This segment is today commercially viable and sustainable despite the economic recession… and it compares favourably with other segments.

“We now have commercial banks actively competing for market share in this segment because it’s deemed to be very good business and that’s our future middle class,” he said.

A Chambers of Mines representative said the chamber and its member companies were committed to working in partnerships with all stakeholders in areas that would improve the socioeconomic and living conditions of its people.

Asked by Sisulu if the chamber would double the R1bn commitment made by the government, the representative said the funding by its members individually through their social and labour plans collectively exceeded R2bn.

- Business Day

Lindiwe Sisulu says nothing about the N2 Gateway national flagship which was her brain child - which although had Bank buy in has empty units sitting bare for years...

Gigantic effort needed to de-racialise residential spaces - Tokyo Sexwale

Department of Human Settlements budget speech by Minister Tokyo Sexwale in the National Assembly

1. Introduction

In his inaugural State of the Nation Address (SONA) President of the Republic, Mr Jacob Zuma made three pronouncements in respect of the then Department of Housing. These are, name change from housing to human settlements, policy change and the practicalisation of this new paradigm to transform the landscape of housing in South Africa forever.

Over the last four years, we remained seized with the implementation of this new mandate (Outcomes 8). Without any equivocation we state: A firm foundation has been laid towards a sustainable and integrated human settlements objective: Vision 2030.

Consequently, we have a comprehensive strategy premised upon three segments: Housing for the poor; for the GAP Market; and for the middle to the high income earners.

2. Implementing the Vision 2030 Strategy

2.1 Housing for the poor - grant beneficiaries

The main focus of our housing delivery strategy remains the poorest of the poor, many of whom are in and around informal settlements. At this stage, the following message must be clear: Our government does not build slums, imikhukhu, amatyotyombe! These squalid areas have their roots in the Wars of Dispossession, the 1913 Land Act whose centenary is commemorated this year and in subsequent apartheid policies. These policies gave rise to landlessness and joblessness which saw, and continues to see, the destitute escaping rural poverty towards urban areas.

Let me repeat what I said at the Nelson Mandela Metropolitan University concerning slums.

"They are essentially shanty towns littered across all provinces particularly around the more affluent Metros and municipalities. This therefore results in a situation of the classic undesirable urbanisation, which is driven less by economic growth and more by the rural-urban migration of the poor and jobless."

Question: What steps have we taken to address this? As stated, our focus remains the poor. Over the last four years, our department has thus far, delivered, through grants, over 750 000 houses and housing opportunities.

This has made it possible, during this term of government, for the total housing provided since 1994 to break for the first time, into the 3 million units threshold for those earning from R3 500 to zero; to be precise 3,3 million houses and opportunities now at the cost of R85 000 each towards breaking the backlog of 2,1 million houses for 8 to 10 million people.

2.2 GAP Market Housing - The financially assisted.

The second element of our strategy concerns financial guarantees for affordable housing. This policy for citizens who earn above R3 500 to R15 000 was announced by the President in his 2012 SONA. The department's task is to implement this Finance Linked policy which covers housing for, amongst others, school teachers and principals, police and members of the armed forces, nurses, firemen, prison warders, and blue collar workers. The good news is that this is now a reality and is being rolled out in all provinces via the National Housing Finance Corporation (NHFC).

Our implementing agency is the National Housing Finance Corporation (NHFC) through a financial instrument called FLISP - Finance Linked Individual Subsidy Programme. This supports all qualifying beneficiaries with the certainty of being granted loans, bonds or mortgage facilities by Banks and other financial institutions.

At this amount, beneficiaries have an option to buy an existing house, to build a new one or to purchase land. Therefore, to all those people lost in the GAP Market, earning too much to qualify for an RDP house and too little to access Bank finance we say: Rest assured. This government cares - we back you to get your bond!

2.3 Housing for middle to high income earners

We rely upon three instruments which are the Home Loans and Mortage Disclosure Act, the Community Schemes Ombuds Services Act and the Estate Agency Affairs Act. Thanks to the sterling work of the EAAB Administrator, Mr Taswell Papier, this structure has been stabilised.

In summary, the three elements of our strategy are all critical and applicable for different requirements within the comprehensive human settlements environment. Quite clearly, the continuous allocation of grants for free housing to the poorest of the poor is unsustainable going forward. Strictly speaking, this is more of a welfare programme approach than a long lasting housing policy as this programme is driven by the triple evils of unemployment, poverty and inequity. For as long as this is the case, so long shall this programme remain because we as the ANC government are committed to the poor and shall not abandon them through no fault of their own.

It stands to reason therefore, that given the current socio-economic circumstances, the most optimal and practical human settlements strategic approach is that of the enhancement of the Finance Linked programme.

It is noteworthy that the assistance we provide to our citizens in this regard - black and white - empowers them to become real estate owners; to become real participants in the capital markets as asset owners; real players in the property market as sellers or buyers; as well as in the financial markets where they can borrow against their assets to advance other economic interests. The need therefore, to speed up the issuing of Title Deeds to home owners can never be more emphasised.

3. Integrated human settlements development challenges

3.1 Deracialisation of Residential Areas

Top of the list of all budgetary challenges that confront the entire country is that of having to tackle the unique question of deracialising residential space. This, more than anything else, reflects the real evil of apartheid social engineering which motivated the United Nations in 1973 to pass a unanimous resolution declaring apartheid a crime against humanity. To undo this will take gigantic efforts over a long period, requiring major resources.

At this stage, it is noteworthy to indicate that the United Nations Habitat has requested South Africa to host its next conference on human settlements issues later this year.

Our residential deracialisation strategy is underpinned by seven elements.

3.1.1 Firstly, Deracialising White Suburbs by continuing to oblige Banks through Home Loans and Mortgage Disclosure Act (HLAMDA) and to provide loans to black people desiring to purchase property previously exclusive white suburbs.

3.1.2 Secondly, Inner City Housing

Spearheaded by our agency, Social Housing Regulatory Authority (SHRA), the department has over a period been purchasing many high rise buildings in the centres of major towns and cities. They are refurbished and transformed from office space to rented family units, some with an option to buy. This social housing is popular amongst young couples, students and single mothers.

3.1.3 Thirdly, Inner City Land

Through our Housing Development Agency (HDA), the department has acquired land parcels inside the cities from other government departments and State Owned Enterprises. These strategic pieces of land have been used for settling families.

3.1.4 Fourthly, Outer City Districts

Outer City Districts within the immediate proximity of city boundaries is land which is acquired from other Departments, or in partnership with the private sector, for housing construction. This is earmarked at integrating people within the expanding outer city parametres, a walking distance to vital amenities and facilities.

We congratulate companies that have come on board the Each-One-Settle-One campaign by building thousands of homes upon our subsidies for their employees, particularly in the mining industry.

3.1.5 Fifthly, "No-Man's-Land": Town and Township

The evil utilisation of land as a buffer by the architects of apartheid resulted in the creation of "no man's land" between Johannesburg-Soweto, Cape Town-Gugulethu, Pretoria-Mamelodi, Durban-Umlazi, Port-Elizabeth-KwaZakhele, to name a few, resulting in the black areas having little or no amenities and facilities.

Our approach is to focus on building integrated human settlements in this space to locate people closer to the towns and cities.

3.1.6 Sixth, Townships Upgrading Strategy

It is inevitable that the black townships which were created as a reservoir of labour far away from white cities must be upgraded to improve the quality of life of the inhabitants. On our part, we empower municipalities through the accreditation process by giving them direct funds and authority to construct human settlements within their jurisdiction.

It is for this reason, among others, that in partnership with the Department of Higher Education and the Nelson Mandela Metropolitan University, we launched a four-year Bachelor's Degree in Human Settlements Development, the first of its kind, which will later extend to Masters and Doctoral levels. The same degree will be offered by the Universities of Fort Hare and UNISA in the future.

3.1.7 Seventh, new non-racial towns and cities

Our mandate is to establish new non-racial towns and cities to concretise the principle of a united people in non-racial residential areas.

The new town of Lephalale - Joe Slovo City -under construction in Limpopo, driven by the economies of the Medupi Power Station, is an example in point.

3.2 Other Human Settlements development challenges

3.2.1 Other challenges confronting us are about greater coordination together with other related government departments responsible for big ticket items like bulk services, electrification, water and sanitation, sewerage plants, roads, transportation, etc.

The Presidential Infrastructure Coordinating Committee (PICC) whose efforts are beginning to bear fruit is the answer to the required coordination.

3.2.2 It is unacceptable given the fact after the passing of budgets by this House, we always speedily transfer funds to provinces and accredited municipalities. Many of them discharge their responsibilities perfectly well and are applauded. Yet some fail to spend.

Where some of them do, they sometimes resort to fiscal dumping which often results in shoddy workmanship leading to the wasteful practice of rectification amounting to billions of rands. The newly appointed Board of the National Homebuilders Regulatory Council (NHBRC) carries a huge responsibility in respect of safeguarding proper procedures in the construction industry countrywide.

Furthermore, mindful of the positive work by the Portfolio Committee led by Chairperson Dambuza in its oversight responsibilities, I urge the committee, including the Select Committee to redouble its efforts in coming down hard upon those responsible. On our part, we have taken some of the severest actions against those who engage in shoddy workmanship or fail to adhere to norms and standards on, for example, sanitation.

It is totally unacceptable that although we provide funds, responsible government entities and certain municipalities fail to even build a simple toilet whilst there is a serious stench of the bucket system in some parts of the country. Where they are built, some are left uncovered such as in the recent scandalous cases in Makhaza and Moqhaka, in the Western Cape and Free State respectively, even prompting the Human Rights Commission to get involved!

Our response of taking away funds from poor performers, as required by the law, will continue but is inadequate. Capacity issues need to be addressed. Most importantly, political parties must ensure that their deployees are capable - and there is nothing the matter with cadre deployment - and in turn such deployees should select appropriately qualified employees for the public service.

Our commitment and resolve to rooting out and exposing corruption remains undiminished. We continue to take a dim view of those housing beneficiaries who are engaged in double dipping - a practice of people coming from other parts of the country where services such as sanitation and housing have already been provided for them, yet they flock to informal settlements. This is wrong.

Others engage in the corrupt conduct of selling their houses before the expiry date, including to foreigners, with the help unscrupulous lawyers and fly-by-night estate agents. This is fraudulent. We implore members of civil society to expose such chance takers who, like many we have caused to be prosecuted, should face the full might of the law.

4. Budget focus 2013/14 to 2015/16

The department has been allocated a budget of R28.1 billion for the 2013/14 financial year representing an increase of R2,9 billion. The allocation is expected to grow to R32,7 billion in 2015/16. The conditional grants to provinces constitute a R53, 7 billion over the Medium Term Expenditure Framework (MTEF) period while the Urban Settlements Development Grants to municipalities will be receiving an allocation of approximately R30 billion in three years of MTEF.

The conditional grants and transfers to Human Settlements Institutions constitute 97% The total capital grant allocation amounts to R26.1 billion which consists of the Human Settlements Development grant of R16.9 billion, the Urban Settlements Development Grant of R9 billion and the Rural Households Infrastructure Grant of R107 million in 2013/14.

To conclude, the National Development Plan states: "The inefficiencies and inequalities in South Africa's settlement patters are deeply entrenched. Bold measures are needed to reshape them."

In the context of all we have articulated, the 2013-2014 human settlements budget is important to the extent that it's a continuation of the critical stimulus we provide to the total economic development of the country. Our budget should be seen as a catalyst in this process including job creation through our twin empowerment and construction programmes of Women and Youth Builds.

Incrementally throughout our term, the budget has been earmarked primarily to address the poorest of the poor. In continuing to do so, let there be no doubt that our quest is not to be patted on the back for chasing numbers at the cost of quality.

We are mindful that in addressing the unique challenges of reengineering integrated human settlements in our country, there can be no socio-economic equality without providing our people with quality. On this, there is no compromise.

I thank you.

- Issued by the Department of Human Settlements, May 22 2013

Department of Human Settlements Welcomes Public Protector's Report

The Department of Human Settlements notes and welcomes the observations made by the South African Human Rights Commission and the Public Protector before the Parliamentary Portfolio Committee on Human Settlements this morning.

The two presentations dealt with matters relating to the delivery of human settlements as the department strives to achieve its vision. These relate to issues of housing allocation lists, corruption, defective houses, provision of basic services, title deeds, amongst others.

Director-General in the Department of Human Settlements Thabane Zulu told the committee that it was not a mistake to change the mandate of the department from just dealing with the provision of housing to human settlements in 2009.

"The issues raised talk to our mandate in terms of the delivery model. Our turn-around strategy talks to houses being closer to work, education, and health facilities. Gone are the days when housing development projects can take place far away from social and economic amenities," said Zulu.

The department would soon be implementation its housing rectification programme to deal with defective houses built from 2002. Contractors who were responsible for this shoddy workmanship are currently being prosecuted and public monies being recovered.

Housing contracts worth R20 billion have been identified for investigation by the Special Investigating Unit at the request of the Department of Human Settlements in terms of the Presidential Proclamation of 2007.

A total of 59 housing contracts worth R4 billion have already been investigated and finalized. These relate to the payment of contractors for incomplete and poorly constructed houses.

The Special Investigating Unit (SIU) is currently conducting 13 criminal investigations on this matter

Potential public funds recoverable on this category of an investigation amount to R101 million.

On the issue of public servants from various national, provincial and local municipalities who fraudulently benefited from government housing programme, the department revealed that 1 061 such officials were prosecuted between 2010/11 and 2011/12 financial years.

A total of 1 002 of these officials were convicted.

And R17,9 million recovered.

The Director-General informed the Portfolio Committee that from the next financial year, no provincial business plans would be approved without bulk services.

Zulu said the department would be working very close with the Human Rights Commission and the Public Protector to make sure the two institutions were kept abreast of developments.

"We want to inculcate the culture of human rights in as far as human settlements is concerned. I can confirm that most of the issues raised are on the implementation side and the soon to be established Project Management Unit will ensure that the quality is not compromised," he said.

- Department of Human Settlements

Public Protector asks Human Settlements Portfolio Committee to request a progress report from government on RDP Preliminary observations

Public Protector Adv Thuli Madonsela has asked the Portfolio Committee on Human Settlements to request the Department of Human settlements and other relevant role players to brief Parliament on progress made in addressing RDP concerns where there is consensus that there are problems. The Public Protector said while briefing the Portfolio Committee on preliminary observations and progress made by her team in the RDP systemic investigation she is currently conducting. 

She told the Committee that complaints relating to alleged maladministration in the delivery of RDP housing are categorised under planning, procurement and post allocation. Her systemic investigation focused on the following specific areas:

• Planning inadequacies
• Procurement irregularities (including corruption and fraud) leading to defective houses among many inadequacies
• Allocation irregularities and
• Post allocation challenges such as missing title deeds and illegal sale of RDP houses.

On progress made, the Public Protector indicated that her team has been using early resolution measures to resolve individual complaints while the systemic investigation is ongoing. 

The Committee members welcomed the investigation and agreed with the general observations, including policy considerations in terms of Prioritisation of allocations, risk management, compliance with Section 26 of the Constitution, infrastructure challenges in response to rapid urbanisation and informal settlements as well as standardization of sizes of RDP houses. Clarification of the role of the National Home Builders Registration Council (NHBRC) was also covered. 

The Public Protector also called on Parliament to note the need for a uniform approach regarding accountability of wrongdoers such as staff, professionals, public office bearers and contractors in cases where payment has been made for work not done or poorly executed and urgently address policy or regulatory gaps.

- Public Protector

SONA Ping: Half the amount spent on GAP vs Nkandla

Honourable Members, Distinguished guests & Homeless South African Citizens...

In last year's address we raised the issue of the gap market, the people who earn too much to qualify for an RDP house and too little for a bank mortgage bond.

From April 2012 to December 2012, Provincial Departments committed a budget of 126 million rand of the Human Settlements Development Grant for this programme, known as the Finance Linked Individual Subsidy programme.

The money is being used through the National Housing Finance Corporation, which has been appointed to deliver houses to people within the Gap market in twelve registered projects.

A total of 70 million rand of this amount has been used to date.

Projects include Walmer Link in the Eastern Cape, Lady Selbourne, Nelmapius, Bohlabela Borwa, Cosmo City and Fleurhof in Gauteng, Intabazwe Corridor Housing in the Free State and Seraleng in North West.

The implementation of these eight GAP housing projects is currently underway...

State of the Nation Address - SONA

Housing - Each One Settle One campaign Open invitation

In a desperate attempt to tackle the housing backlog, housing minister Tokyo Sexwale is appealing to the Good Samaritan in each South African to invest in SA’s future by buying another South African a house.

Housing minister Tokyo Sexwale is appealing to the Good Samaritan in each South African to invest in SA’s future by buying another South African a house.

He calls it his Each One Settle One campaign and says it has received a “heart warming response” from a number of companies since it was launched at the JSE a few weeks ago.

Anglo Platinum, Impala Platinum and Old Mutual have been the first to pledge their involvement, but it’s not just aimed at big corporates. “Someone called yesterday saying they would give us [enough for] 200 houses from their family foundation,” says Sexwale. “I’ve had calls from school principals, families, and individuals. Someone has offered us 2m bricks.”

So how does it work? Will donations be pooled into one big fund? Will it be used to give away RDP-type houses to the poor or is the idea to build and sell larger, quality houses to those in what is known as the gap market, who earn too much to qualify for government subsidies but too little to service a mortgage bond? If so, how will this campaign make gap housing more affordable?

Despite a lengthy interview, the FM is still none the wiser. Sexwale says there is no preferred funding or delivery model behind the campaign. “It’s very open, there’ll be a multiplicity of approaches so that it’s open to whoever wants to come. There’ll be a model for every specific situation.

“If you can help one South African to the tune of R55000 [the current government housing subsidy] do it on your own — if you know what to do . But if you don’t ,” says Sexwale, “give us your money and we’ll put it to good use”.

Given the well-meaning intentions of such a scheme it seems churlish to remind ourselves that 87% of the houses built by government between 1994 and 2010 are considered “high-risk” structures. This is due to various defects. Also, the minister had to take back R463m in unspent housing grants from provinces last year.

That aside, how can Sexwale expect companies that already pay high taxes and are involved in many social responsibility projects and BEE initiatives to donate more to government?

“You’re doing your duty to yourself and your country,” he says . “SA is being confronted by service delivery protests every day and they’re becoming increasingly violent. There’s a lot of impatience out there, so people can’t just sit back and say: ‘Sexwale must deal with this thing’.”

The background document outlining the campaign states that “unless we take individual responsibility for housing our fellow citizens, SA may find itself in a catastrophic recession similar to that of the US”. It also claims that the campaign could create “tens of thousands of jobs”.

These claims are overblown — the US is not in a recession, nor is this campaign likely to provide the kind of growth catalyst that could prevent SA entering a recession.

“The minister has, since his first days in office, demonstrated a flair for political theatre and gestures calibrated to win media attention,” says Rhodes University lecturer and housing expert Richard Pithouse. He feels “there is simply no way that a campaign like this has any chance of making a substantial contribution to overcoming the housing crisis”.

Pithouse also warns against the danger of making social rights the responsibility of business, arguing that only the state has that duty. Unfortunately, he says, Sexwale “hasn’t demonstrated any willingness to move beyond superficial gestures and to get to grips with the structural issues at the heart of our chronic urban crisis”.

Sexwale does not take kindly to armchair critics who dismiss his campaign as being populist or short on substance. Nay sayers, according to Sexwale, do not understand the magnitude of the problem.

Certainly, the scale of SA’s housing backlog is huge. The department has built over 3m subsidised houses since 1994, roughly 200,000/ year.

However, in 2008, SA’s housing backlog still stood at 2,1m. Since then it has grown to 2,3m because of rising urbanisation, population growth and decreasing household size.

The housing backlog means SA now has roughly 2,500 slums and about 12m people without access to decent houses, according to the department. Its goal is to clear the backlog by 2030 but it recognises that it can’t do this alone.

At the same time, Sexwale is impatient with the suggestion that a tax benefit be provided to encourage campaign contributions, saying: “When someone sticks his arm in your car window at a traffic light you don’t attach conditions.”

He is in the process of appointing “a very senior business person” to head the Each One Settle One desk in the national housing department. Campaign contributions will be made into a separate bank account and overseen by an independent board of trustees.

The department also undertakes to conduct regular media briefings and televised appearances to report on the campaign’s progress.

Leon van Schalkwyk, Impala Platinum group executive (strategic finance) thinks there is a business case for non mining firms to facilitate employee home ownership, saying it results in a “solid, satisfied workforce, staff retention and less pressure on employers to keep raising salaries, because workers at last have affordable housing”.

Impala is investing R2bn developing the new Sunrise View estate in Rustenberg. So far 1,500 houses have been built and a R17m school is next on the cards. But instead of renting or giving away RDP-type units, the mine has developed a more sustainable model.

It involves building quality two- and three-bedroom homes, costing up to R265000 each, and selling them to employees. This ensures that workers have an appreciating capital asset.

To ensure affordability, the mine has partnered the government’s National Housing Finance Corp (NHFC), which provides qualifying workers with mortgage bonds of up to R190,000. In addition, Impala provides these employees with a R75,000 interest-free loan. The lowest-paid workers also qualify for a government subsidy, which is offset against the bond to reduce the monthly instalments.

As a result, workers pay R1820/month for a three-bedroom unit whereas they would be paying R4043 at market rates.

Impala deducts beneficiaries’ mortgage instalments from the payroll. If a home- owner leaves the firm, he also has to begin paying interest on the R75,000 company loan. This helps to retain staff. Only 29 of the first 1,300 home owners have resigned over the past three years.

“We did it initially because we were driven by the mining charter, but now we see it works. It’s real upliftment,” says Van Schalkwyk. “It’s the right thing to do, to anticipate and invest in the future. It means our workers’ children will grow up in a decent environment and go to a decent school. In 10 years’ time they may work for us.”

Anglo Platinum is participating in a similar programme, facilitating the building of 20000 houses for its employees over the next 10 years, through an employer-assisted housing scheme that will cost that company R1,4bn. But normal companies don’t have the capacity to install bulk infrastructure, as the mines have done. If government could undertake to provide serviced sites, leaving it to firms to just pay for the top structure, then Sexwale’s appeal would look more attractive. It would stand even more chance if the SA Revenue Service could give incentives to companies to provide a housing benefit as a condition of employment.

“Then this thing could really work,” says Van Schalkwyk. “If we all do it, it’ll make for a better SA.”

- FM

Mortgage Default Insurance to boost housing market

With a large number of South Africans not qualifying for home loans from the commercial and private banking sector, while also not qualifying for the State-funded subsidy housing programme, the introduction of a mortgage default insurance product is timely, according to the National Housing Finance Corporation.

It said on Monday that this would go a long way in ensuring that risk sharing with lenders took place, while addressing the housing finance needs of the low to middle income households.

"In his State of the Nation Address in February 2010, President Jacob Zuma announced government's plans to set up a guarantee fund of R1 billion to incentivise the private banking and housing sector to develop new products to meet the housing demand in the country. This was later followed with an announcement by Minister of Human Settlements, Honourable Tokyo Sexwale, where he mentioned that the NHFC, through its Mortgage Default Insurance Programme (MDI) would serve as an optimal means of utilising the R1 bn government guarantee.

"The NHFC has maintained a clear line of sight of government imperatives to compliment the housing finance market endeavours, to improve access to affordable housing," the body said in a statement.

Chief Executive Officer Samson Moraba said: "The MDI programme is at an advanced stage of development and at different levels of engagement with relevant stakeholders."

MDI is a form of credit insurance that protects a lender against the default risk of a residential mortgage borrower.

Thus, largely the underserved segments of the housing market - first-time home buyers, professionally self-employed, public servants and other lower-income households - would have a greater ability to access affordable mortgage finance.

"In line with public policy, this product will go far in expanding the number of low to middle income households that can access affordable housing, on a commercially sustainable basis," Moraba added.

- Businesslive

Housing policy isn't working - Madikizela

"Housing policy needs new foundations"

The housing challenge in this country presents an opportunity for us to take a fresh look at housing policy going forward. We need to take a conscious and well thought out decision around this matter and provide guidance as to what is in the best long term interests of the country. The numbers in terms of housing needs are alarming; there is no way that we will be able to match this demand with the available resources, both in terms of land and finance.

The current backlog is estimated at around 500,000 provincially, and with in-migration to this Province estimated at 1, 7% annually. With the current allocation of just over R2billion from the national treasury, we can only build 16,000 units and 16,000 serviced sites. We also need about 9,000 hectares of land, and at this rate it will take us no less than 28 years to clear the backlog.

Unfortunately the backlog is not static; it is a moving target due to in-migration patterns. Factor in the current economic crisis which affects the revenue collection, which means less budget allocation in the following financial years, then it becomes clear we are dealing with crisis.

One cannot deal with this issue in isolation to the general socio-economic conditions of our people.

We need to find a sustainable way of delivering houses by ensuring partnerships in which people share responsibility with government to either contribute to or build their own houses.

A number of countries have adopted this approach to deal with this challenge and we should certainly learn from them.

The most pressing need for us currently is to ensure that at least everyone has access to basic services like water, sanitation, electricity, roads and refuse removal. It will take us a very long time to deal with the housing backlog so we must ensure that people are waiting under acceptable conditions. We need to spend more money to accelerate access to basic services.

We also need to look seriously at some housing policies which have become an albatross around our necks because they are stalling the process of speedy housing delivery. Planning processes need to be streamlined to ensure quick and effective service delivery. It makes absolutely no sense, for instance, to have 11 different grants to put together a single housing unit.

Again it doesn't make sense to have a separate Municipal Infrastructure Grant (MIG) from a housing grant because you can't build any houses without infrastructure. Another serious problem that is stalling the housing delivery is land invasion. The requirement by the Prevention of Illegal Eviction Act (PIE Act) for people to be provided with alternative accommodation before they can be moved off invaded land encourages this practice.

This makes the housing demand database or waiting list impossible to manage. As a result of the PIE Act, people are holding government to ransom by invading any land that is earmarked for development because they know that they will be moved to alternative accommodation. The sad part about this is that those people living in backyards that have been on the waiting list for years become compromised by this Act.

This cannot be right and surely needs to be revisited. In this case it's usually individuals that hold us at ransom and delay the development for thousands of people. People cannot demand their rights at the expense of others which is why we must act immediately to remove people who are illegally occupying land before a stipulated time in the PIE Act has lapsed.

We will never succeed in addressing the challenge of housing if we continue like this. The current approach of housing delivery is further entrenching and deepening poverty on our people. Free houses will never be a substitute for a job and a solution to poverty. We must change our policy in order for us to respond to most vulnerable groups of our society (like elderly people, disabled people, child-headed households etc), inculcate and encourage our economically active people to play a more active role and to take more responsibility in the provision of their homes. While we understand that people have rights we must ensure that we balance those rights with responsibilities.

We must change our criteria for people who qualify for our subsidised state housing. It doesn't make sense for instance that because a person is 18yrs old and has a baby that he/she therefore must qualify for a house. This policy inevitably has unintended consequences encouraging teenagers to have babies and promoting dependency.

We also know that people get subsidised state houses and often sell them for next to nothing. They then go back to shacks, thereby increasing the demand and the spread of informal settlements. I personally did a door to door survey with my department officials in some areas where we discovered that many of the state subsidised houses have been either sold or rented out to people who do not qualify for subsidised housing. Which means that even though we are boasting about having built close to 2, 8million houses over the last 16 years, this has not really changed the quality of life for many people.

In addition, the obsession with chasing numbers has compromised the quality of these houses. According to a report presented by the National Human Settlements department to Parliament Portfolio Committee, we'll need more than R30billion to rectify and do the remedial work to a number of houses built over the years that are currently falling apart.

We must now pay more attention to the "Affordable" or "GAP" market (people earning between R3501 - R15000 who do not qualify for state subsidised house and a mortgage bond from the bank) in order to deal with unintended consequences as a result of neglecting that market. These are the people who are buying subsidised state houses from the poor because they have no recourse. Not that I blame them, we can't neglect people who are contributing to our economy by prioritising poor only.

It is very clear to me that most of the commentators have no clue what they are talking about when commenting on housing challenges. To some of them delivering a house is a simple exercise that must be done by government. Unfortunately it's not as simple as that. Often the development in these areas is blocked or hijacked by people who would do anything to delay or prevent it for the following reasons;

1. Some people received a state subsidised house before, sold it and went back to informal settlements. They know that if an area is developed they will not benefit, so they disrupt the development

2. Those involved in illegal activities often prefer to block infrastructure development because it's not easy for law enforcement to trace them.

3. Some earn too much to qualify for a subsidised house and prefer to live in an informal area where they will not pay for any services.

4. Some instigate communities deliberately to fight their political battles in order to oust the incumbent leaders/councillors.

5. Some trade their formal houses for informal areas where they can conduct business because there are no laws and zoning regulations there.

6. In most cases we also get entangled in community leaders fighting over which is the legitimate group to engage with.

7. There is almost always conflict over access to limited resources in poor communities.

As the Provincial government we have raised with National government the negative impact these issues and many legislations has in service delivery. National government is the competent sphere to deal with these issues in terms of the Constitution, yet so far we have received no response. I'm raising these issues because I get very disturbed when people make sweeping statements without understanding what we are dealing with.

We acknowledge that we have many short-comings. We are committed to deal with these where we can, yet we also need the support of National government and communities to deal with some of the legal issues and community dynamics that prevent us from executing our mandate of service delivery. Housing development is not possible without functional partnerships.

Bonginkosi Madikizela is the Provincial Minister of Human Settlements in the Western Cape. This article first appeared in the Cape Times.

- polticsweb

Sexwale unveils new rental housing project

Human Settlements Minister Tokyo Sexwale on Thursday unveiled 341 units of the Morgan’s Village III affordable housing project in Mitchells Plain, Cape Town.

The project is a partnership between the national human settlements department, its Western Cape counterpart, the National Housing Finance Corporation (NHFC) and the Cape Town Community Housing Company (CTCHC).

The Morgan Village housing project provides affordable rental units to people earning between R1500 and R3500.

“Our priority is to ensure that we provide not only decent, but affordable rental units within the city centre in line with our mandate to ensure that people stay nearer to places of work, clinics and schools,” Sexwale told guests at the event.

The Morgan’s Village project is the second to be opened by Sexwale in the past two days, the first being in Polokwane.

He said the government was increasing the pace of providing affordable rental units within the city centres across the country, in line with its programme “to do things differently and faster”.

“Part of our objective as a department is to ensure that we increase the pace at which we construct and renovate inner city buildings.

“These houses we are opening today provide exactly that; it gives our people dignity and decent shelter at a very affordable rate,” Sexwale said.

Affordable rental units in the inner cities would also help alleviate the housing backlog in the country.

“Many of our people come to cities for work. They come from different provinces of our country, leaving their homes. What they are looking for is decent and affordable rental options, a place they can put their head down, but a decent place,” he said.

The aim was to build more than 25 000 rental units over the next three years.

Once complete, the Morgan's Village project would consists of 682 mixed development units.

- Sapa

Home builder struggles on

Sea Kay Holdings has narrowly escaped a liquidation claim lodged against it by the National Housing Finance Corporation (NHFC), but the company’s losses have mounted under a drastic housekeeping operation.

The JSE-listed developer of homes for the low to middle income housing market, released its latest financial results at the end of last week. This was after the group announced that it had reached a settlement agreement with the NHFC which had filed for liquidation in order to recover money owed by Sea Kay.

Sea Kay rose to prominence when it entered the JSE in 2007 with the promise of dominating the largely neglected low to middle income housing market. Under the stewardship of former CEO Corne Kruger, the operation grew quickly through both organic growth and corporate activity. Revenue reached R841m at the end of the 2009 financial year.

Harsh trading conditions and severe cash flow problems badly affected the group’s fortunes as reflected in the figures for the 12 months ended June this year. Sea Kay’s revenue declined to R647m.

Sea Kay’s performance was hit by significant impairments. The group posted an operating loss of R181m compared with an operating profit of R101.3m last year.

In its latest statement of results, Sea Kay said a decision was taken by the board to impair all remaining goodwill to the value of R90.4m.

The group also took a decision to further impair trade receivables to the value of about R29m. The latter decision was taken in light of uncertainties regarding the recoverability of the trade debts.

As a result of the settlement agreement, Sea Kay reclassified certain portions of its financial liabilities. This saw the group reclassify R97.7 m from current liabilities to non-current liabilities.

Explaining these drastic measures, the group said directors embarked on a process to address the uncertainties identified by management and alluded to in the auditors’ qualified opinion.

This process includes reviewing and restructuring of receivables and payables, to ensure that the group is in a position to operate adequately. The re-engineering process will also include a fundraising exercise.

The group said a potential funder had been identified. “The most significant factor to continue as a going concern is that the directors procure funding for the ongoing operations,” said the group.

“In this regard, the settlement with the NHFC that was made an Order of Court on December 6 2010 is an important milestone for the group,” said the group.

The settlement effectively removed the liquidation applications against both Sea Kay and Sea Kay Engineering Services and re-opened the group’s ability to access normal credit lines.

The settlement involves initial payment of R44m to be made during January 2011 to the NHFC plus a guarantee of R6m that will be issued to the NHFC. Sea Kay has also committed to repay R65m to the NHFC over 60 months.

Sea Kay also pointed out negotiations with its debtors, including provincial governments of the Western Cape and Gauteng, were at a mature stage. Sea Kay said an amount of about R29.5m was likely to be paid directly from the Western Cape into the coffers of NHFC during the course of January.

The balance due to NHFC should be realised from the Gauteng Department of Housing “where adequate funds are available to achieve this,” said the group.

The turnaround of Sea Kay is taking place under a relatively new leadership.

Kruger resigned last year but remaines a shareholder. Pieter van der Schyf was made acting CEO early this year.

At the beginning of this month the group brought in Landiwe Mahlangu as non executive chairman of the board.

- The New Age

Sexwale warns building hijackers

HUMAN Settlements Minister Tokyo Sexwale yesterday has vowed to take building hijackers head-on and "restore the dignity of Johannesburg as the capital of Gauteng".

He was speaking in the city centre after giving the thumbs up to a previously hijacked building, Cavendish Chambers, which was bought three years ago and renovated at a total cost of R40million.

"Street by street, block by block, it should be our number one priority to renew cities. We are coming for building hijackers. We are meeting the Hawks and Bheki Cele to see how we can deal with this issue," he said.

About R33million was supplied by the National Housing Finance Corporation for the 13-story building that has 187 units. The NHFC has already spent about R150million on similar projects.

Gauteng housing MEC Kgaogelo Lekgoro said it was time people took ownership of the inner city and improved it.

- Sowetan

Sexwale’s idea for housing

Human Settlements Minister Tokyo Sexwale is hoping to address the housing backlog by claiming back old dilapidated buildings and making them habitable places.

“People keeping on saying that we need land to address the housing backlog,” Sexwale said on Tuesday at the launch of a block of flats in the Johannesburg central business district.

“But we have these old dilapidated buildings that we can refurbish and put our people there,” he said.

During the launch of the Cavendish Chambers, he said the project would be used as a prototype to address the issue of housing in the country.

The building was originally built in 1950 and became vacant in the early 1990s.

The building was hijacked and later reclaimed by government and refurbished to house people who earn low incomes.

“The city is coming back ...cities never die,” he said.

Sexwale said that during his tenure as premier of Gauteng he was pained to see the demise of Johannesburg's inner city.

However, he said it was because of the private public partnership that the city was becoming the Johannesburg that it used to be.

“Cities like Paris, New York and London inner-city also went down so this is not a unique South African situation.”

He said about 2,500 informal settlements in the country were indicative of the challenge that government was facing in providing its people with decent houses.

He said close partnerships between business, government and communities were needed in order to address the housing crisis.

“Why worry about when we will get space to build houses if we can find these old buildings, rejuvenate them and provide housing for our people.”

He also warned people who hijacked buildings, saying that his department was currently in talks with police and the Hawks about enforcing evictions and stopping the trend of building hijacking.

- Sapa

Sexwale finding it tough

PROVINCES and municipalities have refused to provide the national department of Human Settlements with progress reports regarding housing projects in their areas.

Minister Tokyo Sexwale said in his annual report, tabled in Parliament yesterday, that the tendency made it impossible for the national department to know whether housing projects were going ahead or stalling.

He said some provinces and municipalities just ignored his department when they asked for progress reports.

He said that to make matters worse, vacant posts in the housing planning and delivery support unit meant that "it has been impossible to track the progress made with other projects" he said.

Six housing projects were affected including the Duncan Village project in East London, Grasslands project in Free State, and the Emnambithi housing project in Ladysmith, KwaZulu-Natal.

Sexwale said the KZN provincial housing department was "reluctant to use housing funds" for the Emnambithi project. The department was not even willing to attend a meeting to discuss the matter, he said.

The Chief Albert Luthuli Extension Six project in Ekurhuleni was also affected. This new project was supposed to provide houses for shack dwellers from the Gabon, Emandleni, Chris Hani and Home Seekers informal settlements, but Sexwale said because of a lack of staff, he was unable to know if the project was still on track.

People waiting for houses to come from the Disteneng project near Polokwane threatened earlier this year to block the main road to the city if they didn't get houses.

Sexwale said this project had run into problems after "contractors failed to perform, and there were payment disputes which led to the project becoming blocked", he said.

His department only learnt that there were problems at a late stage "because the Polokwane municipality and Limpopo Provincial department did not submit progress reports, in spite of numerous requests", Sexwale added.

The Lerato Park project in Kimberley, Klarinet project in Witbank, and Khutsong project had also run into "challenges", the Annual Report stated.

The Human Settlements department had R13billion to spend last year - R12,5billion of this was directed straight to the provincial housing departments.

Only Mpumalanga and Western Cape failed to spend all their housing money. But Western Cape and Eastern Cape were good at providing regular progress reports, the Annual Report found.

Meanwhile, the department is one step away from a clean audit after running up almost one R1million in irregular spending last year.

In its Annual Report, tabled in Parliament yesterday, Auditor-General Terence Nombembe gave Tokyo Sexwale's department an unqualified audit.

- Sowetan

Progressive projects fail to get off the ground

Controversial government plans to build low-cost housing next to plush suburbs has not changed South Africa's housing landscape.

The much-vaunted programme to end shack living, launched in 2004, was meant to integrate rich and poor communities to address a backlog of some 2.4 million homes.

Officially known as Breaking New Ground, the policy would result in apartments and multi-storey complexes built next to expensive suburbs and gated communities, with the not-so-well-heeled becoming neighbours of the wealthy.

But, six years later, some of the projects, meant to showcase the country's progressive policy of promoting racially integrated cities, have either been shelved or failed to materialise.

This could seriously hamper state plans to speed up housing delivery to the poor and have all South Africans accommodated in formally planned settlements by 2014.

In Cape Town, plans to build about 750 houses and triple-storey flats for low- and middle-income families in upmarket Constantia have been shelved because of a land claim dispute.

In Durban, inclusionary housing in Westville, Chatsworth, Phoenix, KwaMashu and Newlands East has failed to get off the ground two years after it was launched.

ANC councillor Nigel Gumede, who heads the city's housing committee, said no oversight role or monitoring system had been in place.

The N2 Gateway project next to the Joe Slovo shack settlement in Cape Town, intended to benefit 20000 shack dwellers, has also been beset with problems.

But Nathan Adriaanse, spokesman for the Western Cape Department of Human Settlements, said that despite this, 8186 families had been accommodated in new houses.

He said the greatest challenge over the past year had revolved around the closure of Thubelisha Homes, appointed to manage the project after the withdrawal of the City of Cape Town in 2006.

Professor Marie Huchzermeyer of Wits University said an inclusionary housing policy should never be viewed, implemented or assessed only on a project basis, as in South Africa.

"It's a policy that has to be entrenched through zoning and municipal revenue systems. Yes, we do need innovative projects, but these will never come off the ground as long as there are only a few 'inclusionary' zones and the rest of the city may remain segregated," she said.

Thabani Zulu, the director-general of the national Department of Human Settlements, said a major challenge was the lack of suitable and affordable land.

"Problems are being addressed and resolved. The not-in-my-backyard mentality of some middle- to high-income families has in many cases delayed and constrained the programme," he said.

He said the N2 Gateway was never intended as an integrated development but targeted at low-income families. He said that Cosmo City in Randburg, Bendor in Limpopo, Zanemvula in Port Elizabeth, and Olievenhoutbosch in Centurion had yielded positive results.

- Times Live

Cape Town Community Housing Finally meets its match!

Five families in Newfields Village face their verdict for their evictions on the 10/06/2010 (on the day the opening ceremony of the World Cup 2010 will be held).

Background

In 1994 President Nelson Mandela promised to build one million houses and accordingly the City of Cape Town and the National Housing Finance Company (NHFC) tried to make this dream a reality for the poorest of the poor by forming a Section 21 Company called Cape Town Community Housing Company. Eight years ago CTCHC started to build the worst houses in the history of our country with both latent and patent defects. Accordingly, the residents of the nine villages (Newfields Village, Hanover Park Phase 1, 2 and 3, Luyoloville, East Ridge, Woodridge, Manenberg (Tornado Victims) and Phillipi) went on a rental boycott, had marches to the Company, they occupied their administration office, they handed over numerous memorandums of demands and even occupied the administration building in Tijger Valley. The company changed directorship, because of bad management of fances and the pressure from the different communities. All that the community wants is to honour the original understanding and agreements made that they will get a subsidized houses and pay-off the balance over four years with affordable rental.

Because of the struggle for their own homes, unjust administrative action as well as legal action in the form of eviction applications by the Cape Town Community Housing Company.

The Company, because of the bad Installment Purchase Agreement (IPA) have attempted to reformulate the original contract by calling the new contract The Affordability Programme. As a result, all the families have attempted to unknowingly sign this proposed contract with the goal of saving the bad houses, paid by their own subsidies, that they made their homes.

Many families evictions’ are being sort by the Company, but the families have managed to secure the assistance of an attorney as well as an advocate and have through them presented their case in the Wynberg Magistrers Court. We are going back to Wynberg Court together will all the affected communities on the 10th of June 2010.

We will attach our heads of argument to this press release so that everybody in South Africa and the World can see what the struggles have been about for the past eight years.

For more information, please contact:

Gary: 0723925859

Ashraf: 0761861408

Attorney: Mr. S. Parker

Read more here - Western Cape Anti-Eviction Campaign