SELECT COMMITTEE ON PUBLIC SERVICES

1. SELECT COMMITTEE ON PUBLIC SERVICES 1. Servcon’s Role 2. Rightsizing 3. Performance on KPA’s 4. Issues 5. Swamp 6. Towards a New Vision 7. Draining the Swamp 8. Evictions 9. Job Creation and Community Development Project 10. HIV/AIDS 11. Institutional Approach 12. Segmentation Model

2. SERVCON PAYMENT NORMALISATION PROGRAMME “SERVCON IS HERE TO HELP” PRESENTATION TO SELECT COMMITTEE ON PUBLIC SERVICES IN PARLIAMENT – CAPE TOWN JUNE 2002

3. SERVCON’S ROLE • Joint venture * Department of Housing * Banking Council • Deals with Banks Repossessed Properties * Cut off date 31 August 1997 • Rehabilitation programme * Subsidised rental (13% - less than mortgage) * Buy back option – instalment sales * Rightsizing (Thubelisha Homes) * Aged and disabled • Twin Focus * Relief for ex-owners * Dispose of portfolio over 8 years

4. RIGHTSIZING “Assistance to relocate to affordable house” • Targeted at those who cannot afford existing house * Alternative to eviction * Affordable interim rental * Government pays special subsidy (relocation assistance * Thubelisha procures alternative house * Client relocates * House sold back into the market

5. PERFORMANCE ON KPA’S • Dispose of Properties * 14 248 (42,8%) Disposed of. (Target 41%) Resale to ex-owner 4800 Other Sales 420 Voluntarily Vacated/Vandalised 1840 Successful Eviction 1189 Other Arrangements 3825 Rightsizing 2174 • Rental Performance * Between 53% to 65% tenants pay • “Good Book/Bad Book” Split * Good Book 59% * Bad Book 41%

6. ISSUES * Payment of subsidies “in situ” in certain circumstances * Cut of date – access to rightsizing * New Subsidy rules – issue of contribution * Resale of vacated properties in possession * Environment has not “normalised” * New Lending?

7. Breakdown of Law and Order / Defiance Lack of Education And Understanding Environmental Conditions HIV AIDS Poor Community Leadership Structural Defect Unemployment/ Poverty Lack of Financial Discipline THE HOUSING SWAMP

8. Towards a New Vision NEW VISION Bridge Breakdown of Law and Order / Defiance Trend Line Trend Break Unemployment/ Poverty THE HOUSING SWAMP

9. Breakdown of Law and Order / Defiance Lack of Education And Understanding Environmental Conditions Mission Poor Community Leadership *Create an enabling environment *Reestablish secondary market *Uplift Communities What is needed is A Package of Measures to address Each issue individually But also holistically Lack of Financial Discipline Structural Defect Unemployment/ Poverty HIV AIDS DRAINING THE SWAMP

10. EVICTIONS • Implemented only where: * Occupant refuses to join * Defaults on agreement * Refuses to relocate “All Evictions Can Be Prevented” • Status * 6700 instructed * 2400 carried out * 560 failed (24%) • Issues * Cooperation from police and sheriffs? * Open resistance and defiance * Evictees move back in * Difficulty to press charges “People do come forward when evictions are successful”

11. JOBCREATION/COMMUNITY DEVELOPMENT PROJECTS“Rebuilding Communities” • Support for Servcon clients trying to improve their financial circumstances • Support activities which will benefit broader community “SERVCON CLUBS” * Networking * Skills Training * Needs analysis * Marketing channel * Data base of skills * Opportunities “Activities” * Computer Training * Internet Access * Sewing & Knitting * Baking * Recycling * Vegetable Gardening

12. HIV/AIDS PROJECT “Growing number of Parentless Households” Joint venture with AIDS Consortium – USAID Grant • Education • Counselling • Home Based Care Investigating problem of AIDS (and other) orphans

13. “INSTITUTIONAL APPROACH TO HOUSING DELIVERY” • Project to sell Properties in Possession * Old houses – especially occupants rightsized * Institutional Subsidies (R20 300) * New qualifying buyers * 5% Deposit * Instalment sale 10 – 12 years “Market Potential?”

14. INSTITUTION APPROACH TO HOUSING Based on: Interest rate of 15,50% and 10 year term Institutional subsidies of R20 300