Sisulu, now defence minister, had wanted to remove thousands of people from the Joe Slovo informal settlement in Langa to make way for 1500 houses, many being houses out of the financial reach of the area's mostly unemployed residents.
Madikizela made the announcement last night to about 1000 people packed into the Joe Slovo's informal settlement's wood and tin "community hall".
He was set to announce his new plan for the area at a press conference to be held at provincial government offices this morning.
Madikizela told Sowetan that he would build 2800 houses, enough to accommodate all 8000 people living in the settlement.
He said "no one will go to Delft" (a temporary relocation area about 30km away).
The MEC also promised to do away with the "70-30 formula" where 30% of the houses would have been allocated to backyard dwellers from other communities.
But Madikizela also warned the crowd "not to bring their relatives".
The only people who would have to move were people who earned too much to qualify for a government-subsidised house, or those who had previously received a government subsidy, he said.
Joe Slovo task team leader Mzwanele Zulu, who led the residents' campaign not to be forcibly removed to Delft, praised the announcement.
"Thus far we are on the same page if government is playing with open cards, unless they are going to disappoint us."
But others in the crowd were sceptical, saying it was not clear who qualified for houses and who didn't.
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