Minister Sexwale Must Go!

The IFP calls for the immediate removal of the Minister of Human Settlements, Hon Tokyo Sexwale as he is consistently failing in his duties as Minister.

IFP Spokesperson on Human Settlements, Mr Petros Sithole MP said, "Tokyo must go! The Department of Human Settlements despite having more than adequate funding is still failing to provide housing and sanitation services to our people. The under-spending that is rampant in various provincial departments of Human Settlements is a clear indication that the minister has lost all control of the Department. It is therefore imperative that the Minister vacate his position immediately and allow a capable individual to take over this executive portfolio."

"This under-spending in some provinces raises more concerns as it may lead to a re-direction of funds from planned to un-planned projects or the money be directed back to Treasury. The Provinces, Eastern Cape, Western Cape, Northern Cape, Free State and Gauteng are the main culprits of under-spending with their housing budget allocations and it is impossible for them to spend all of the remaining balances before the end of March."

"Furthermore, we are very concerned about the Ministerial Sanitation Task Team led by Winnie Madikizela-Mandela which seems utterly dysfunctional. We have no idea what it is doing as it does not report. Many people are still using the bucket system and others have no sanitation at all," said Sithole.

The IFP believes that the MECs and Heads of Departments who under-spend their Housing budgets must also be held accountable and be dismissed together with the Minister.

- AllAfrica

Plan to curb grant fraud

GOVERNMENT is to require more than 15 million social grant recipients to re-register for their benefits as part of a drive to eliminate fraud and corruption in the system.

The plan was announced in Parliament yesterday by Social Development Minister Bathabile Dlamini during a briefing to outline the priorities of the cabinet's social protection and community development cluster.

This follows President Jacob Zuma's state of the nation address last week.

Dlamini said the re-registration process, which is to start in April, was aimed at ensuring that government paid social grants to the "correct recipients" following repeated revelations that there were people who received grants fraudulently.

"We want to ensure that we pay the correct recipients.

"That is why we are going to re-register everyone, even children and older persons. We are going to visit them at their homes.

"We also want to deal with what has been said, that we sometimes pay the wrong people," said Dlamini.

There are currently 15,3-million people on the state's R100-billion social grants system, which includes 10,3-million children who receive support.

There have been allegations that the system was fraught with corruption.

Last year alone the Special Investigating Unit arrested at least 15 employees of the SA Social Security Agency on charges related to social grant fraud and corruption.

Dlamini, however, said while the re-registration process was intended to weed out fraudulent beneficiaries, it would also bring in more beneficiaries into the social welfare system as there were more than two million people who do not access benefits for a variety of reasons.

Speaking at the same briefing Deputy Minister of Human Settlements Zou Kota-Frederiks said the R1billion Mortgage Default Insurance (MDI) announced by Zuma last week, was targeted at civil servants such as police, teachers, nurses and other professionals outside the public service who earned between R3501 and R15000 per month.

The MDI, managed by the National Housing Finance Corporation, is guaranteed to encourage banks and other players in the housing sector to grant mortgage loans to those who might otherwise not qualify for such loans.

It fills the gap between those who qualify for RDP houses but do not earn enough to qualify for a housing loan from a bank, commonly referred to as the "missing middle."

In terms of the MDI, people falling within that income bracket would be eligible to apply for a subsidy of R83000 to help them secure housing bonds of up to R300000 from accredited banks.

"The billion rand won't be enough to do the work that we envisage ... that is why we are saying that housing delivery cannot be the responsibility of government alone," said Kota-Frederiks.

- Sowetan

Housing MEC’s subsidy warning

Human Settlements MEC Bonginkosi Madikizela says the national government should not raise “unrealistic expectations” among the public with the announcement of a R1 billion fund to help people secure home loans.

“I doubt that the programme will begin in April, because to implement (it) we need to be ready with the policy and administrative structures… and, as of yet, have received no clarity or guidance,” he said.

During the State of the Nation address last week, President Jacob Zuma announced a R1bn gap housing guarantee fund for those who cannot access RDP housing or home loans from banks, but earn between R3 501 and R15 000 a month.

Those earning R3 501 would qualify for the full subsidy of R83 000, while those earning R15 000 would receive a R4 000 subsidy.

The housing fund will be managed and implemented by the National Housing Fund Corporation.

“My view is that through stabilising the property market and transferring assets into the hands of more people who can pay for and maintain these assets, and lowering the costs of their mortgages, we will avoid a financial crisis brought on by the collapse of the middle-income property market, as was recently seen in the sub-prime mortgage crisis in the US,” he said.

On Monday, Madikizela said he would like to see a much greater amount made available for the fund, “so that the hundreds of thousands of earners in this category in our province can be assisted and people can be quickly empowered with asset ownership”.

“The subsidy to help people earning between R3 501 and R15 000 a month will not benefit everyone, but only a limited few, and on a first come, first serve basis. I welcome the government’s initiative to provide a housing subsidy of up to R83 000.

“However, the subsidy will need to be drawn from the Western Cape government’s budget allocation, and we will not be given any extra funding for this. As such, the amount of subsidies we will be able to offer will be limited.

“I would welcome an increase in the Western Cape human settlements budget in order to better serve the gap market,” he said.

He said the statement of R83 000 for everyone must be clarified because those earning R3 501 a month would qualify for the full subsidy of R83 000, which would be decreased on a sliding scale as the income of the applicant increased, which might result in those earning R15 000 receiving only around R4 000.

On Monday night, Madikizela held a public meeting at the Andile Msizi Hall in Khayelitsha to explain how housing allocations will take place for the Nuwe Begin Housing Project in Mfuleni.

About 900 RDP houses will be allocated to residents of Khayelitsha’s TR Section out of a total of 1 900 houses.

The beneficiaries will be drawn from people living on the wetland and also those from surrounding areas, based on the City of Cape Town’s housing list.

The rest of the housing will include 700 gap houses, and another 300 RDP houses will be allocated to people in Mfuleni.

He said the selection would prioritise those who had been waiting the longest – the elderly and the most deserving.

- Cape Argus

Zuma’s house subsidy gift

Thousands of Capetonians could soon afford housing in greater Cape Town, following a key announcement by President Jacob Zuma.

The affordable housing is aimed at people who earn too much to qualify for RDP housing but not enough to persuade banks to grant home loans.

In his 2010 State of the Nation Address, Zuma announced that the government was planning to set up a R1 billion fund to “incentivise the private banking and housing sector” to put roofs over more heads by promoting access to loans.

In his speech on Thursday, Zuma illustrated the plight of many by using the example of Mzukisi Mali, a public servant from the Fingo area in Grahamstown, who had written to Zuma, saying: “In 1994 my income was too high to get an RDP and too low to get a bond, this continued until to date. When I apply for an RDP I am told that I do not qualify and cannot get a bond because I am risky to the banks...”

Zuma announced: “Fortunately we have gone some way to address the problem facing Mr Mali and many others. We are pleased to report that this fund will start its operations in April, managed by the National Housing Finance Corporation.”

He said that from April, “people earning between R3 500 and R15 000 will be able to obtain a subsidy of up to R83 000 from provinces, to enable them to obtain housing finance from an accredited bank”.

Leading property company owner Bill Rawson said the subsidy was “great news”.

“There is a huge chunk of people who want ownership, who want to get into the housing market, and who are looking for ways to afford to do so.”

He said the R83 000 loans would essentially serve as deposits buyers could put down on properties, to help persuade banks to fund the balance through loans.

Rawson said the Parklands-Sunningdale suburb on the West Coast had shown just how big this market was in greater Cape Town. Houses there that were now selling for far more than R500 000 had been introduced as affordable housing in the 1990s and had met a huge gap in the property market at the time.

Speaking for the City of Cape Town, mayoral committee member for human settlements Ernest Sonnenberg welcomed the initiative.

“The city is a major supporter of the GAP housing initiative as part of our suite of housing delivery options.

“The city already has agreements in place with Standard Bank and Nedbank in particular, where the city has made well-located land available specifically for the GAP housing market.

“While it is difficult to quantify the number of Capetonians who will benefit from this fund, we know that it will help many of the city’s nurses, teachers and policemen, who are unable to access housing finance in the private bond market,” said Sonnenberg.

A report would be submitted to the council soon to extend the possible GAP market beneficiaries from those earning R10 000 a month to those earning R15 000 to align the GAP policy with the new fund, he said.

MSP Developments, part of the Mevelaphanda Holdings group and widely regarded as the largest developer of affordable housing in greater Cape Town, is working on on more than 9 000 houses in three large developments – in Blue Downs, between Kraaifontein and Durbanville, and between Somerset West and Firgrove.

Commercial director Philip van der Berg said: “We’re essentially building whole new towns, and this subsidy could offer great incentive for more such developments...

“The problem is that you will sometimes sell the same unit three times over because of the difficulty many people have with getting home loans. And of this, the biggest constraint has been in securing a deposit, with banks still being reluctant to grant 100 percent bonds in line with the National Credit Act.”

But Rawson warned that there were several potential obstacles to the roll-out of more suburbs like these.

First, buyers would still have to prove exemplary payment profiles – that they had managed their debt responsibly in the past – because this was the key factor banks used to decide whether to grant loans.

Second, even if there was a proven market for houses priced up to about R500 000, aided by the new subsidies, property developers would still battle to access finance to fund such new developments.

Third, banks still categorised many poorer Cape Town suburbs as “red line” areas, where they remained extremely reluctant to grant housing bonds.

- Cape Argus

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