DEPARTMENT OF HOUSING

1. DEPARTMENT OF HOUSING PRESENTATION TO THE PORTFOLIO COMMITTEE ON HOUSING ANNUAL REPORT 2004/05 Date: 26 October 2005

2. STRUCTURE OF THE PRESENTATION • Aim, Vision and Mission of the Department • Our Values • Our Mandates • Housing Legislation and Regulations • Our Policy Framework • Overview of Economic and Market environment • Overview of Programme Financial Statement • Programme Performance • Conditional Grants

3. DEPARTMENT OF HOUSING AIM The aim of the Department of Housing is to determine, finance, promote, coordinate, communicate and monitor policy in respect of housing and human settlement. Vision A nation housed in sustainable human settlements Mission To establish and facilitate a sustainable process that provides equitable access to adequate housing within the context of affordability of housing, services, and access to amenities and economic opportunities

4. OUR VALUES Our values, based on the constitution, are: • Human dignity, equality, advancement of human rights and freedoms; • Non-racialism and non-sexism; • Supremacy of the constitution and the rule of law; • Accountability, responsiveness and openness

5. OUR MANDATE SA CONSTITUTION • Section 26: Access to adequate housing a basic human right; Govt. to ensure environment conducive to the progressive realisation of the right • Schedule 4: Housing is a concurrent national and provincial legislative function • Botshabelo Housing Accord (1994) Signed by all housing stakeholders • Reconstruction and Development Programme (RDP) – set out framework and principles for sustainable development

6. OUR MANDATE HOUSING LEGISLATION PASSED Housing development programme continues to operate in the following legislative framework: • Housing Act 107 of 1997 (as amended); • Prevention of Illegal Eviction from and Unlawful Occupation of Land Act No. 19 of 1998; • Housing Consumers Protection Measures Act 95 of 1998; • Rental Housing Act 50 of 1999; • Home Loan Mortgage Disclosure Act 63 of 2000 (not yet in operation);

7. OUR POLICY FRAMEWORKS Our overall policy framework continues to be as determined by the White paper on a new housing policy and strategy for South Africa, 1994

8. OVERVIEW OF ECONOMIC AND MARKET ENVIRONMENT • Unemployment rates continue to pose challenges on housing delivery even though current trend show marginal reductions • Employment created within the construction sector statistics reveal large growth in the delivery of both formal and informal employment • At 25 % between April to September 2004 and October 2003 to March 2004 • Low income housing contributing 2,2%

9. OVERVIEW OF ECONOMIC AND MARKET ENVIRONMENT • Core input costs to construction have escalated at rates far in access of the consumer Price Index – putting pressure on government’s targets of delivering at large scale • Mortgage interest rates have continued to decrease making owning a house more affordable while growth in house prices has had the opposite effect

10. SUMMARY OF PROGRAMMESFor the year 2004/05 activities of the Department of Housing are organised in the following six programmes:Programme 1: AdministrationProgramme 2: Housing Policy Planning and ResearchProgramme 3: Housing Programme ManagementProgramme 4: Housing Sector PerformanceProgramme 5: Housing Equity Programme 6: Housing Development Funding

11. PROG 1: ADMINISTRATION PURPOSE: • Administration provides the department with strategic leadership, and administrative and management support services. The Special Investigative Unit, housed within Administration, investigates allegations of maladministration, irregularities, fraud corruption related to the implementation of national housing programmes. MEASURABLE OBJECTIVE: • Provide strategic leadership and administrative and management support services to the department. Its key objectives have been achieved mainly through the following sub programmes and key functions:

12. SERVICE DELIVERYACHIEVEMENTS: • The Department conducted a Skills Development Audit across all occupational categories and compiled a Workplace Skills Plan which was submitted to the SETA and thus informs our training and development initiatives. • The Employee Handbook was developed distributed and contains the following policies : Study Aid, Internship, Overtime, Leave, Recruitment & Selection, Employee Wellbeing, Job Evaluation, HIV/AIDS & Sexual Harassment Policies, to keep all employees informed. • The Department appointed 14 Interns, Coaching and Mentoring programmes are ongoing

13. SERVICE DELIVERYACHIEVEMENTS: • Employment Equity Framework and Employment Equity Plan approved. • Service Delivery Standards reviewed

14. SERVICE DELIVERYACHIEVEMENTS CONT.: • Departmental operations were aligned to Government planning and reporting cycle. • Security was improved according to MISS (physical, Infrastructure and information) • Communication Services • There was improvement on the external communications Strategy aimed at marketing the comprehensive plan on Human Settlements. • Coordination of the Minister’s Public Information Campaigns, imbizos and exhibitions. Advertorials and opinion pieces were published in the mainstream media to communicate with the citizenry.

15. SERVICE DELIVERYACHIEVEMENTS CONT.: • Financial Services • All necessary reports were submitted to governance structures, other units in the Department and to the National Treasury. • A risk assessment exercise, which commenced at the end of the previous year, was completed, culminating in risk assessment and fraud prevention plan documents. • A cash management policy document was developed and approved as part of an attempt to improve internal controls and reporting.

16. SERVICE DELIVERYACHIEVEMENTS CONT.: • Financial Services cont. • Although the updating of the procurement policy will be finalised in the following year adjustments were made on the procurement process to ensure compliance with the Supply Chain Management Framework. • We continued to support provinces on the Debtors systems ensuring that necessary changes are made on the system and training is given to users on request.

17. PROG 2: POLICY PLANNING AND RESEARCH PURPOSE • To develop sound national human settlement and housing policies, supported by research and underpinned by an appropriate legislative framework. MEASURABLE OBJECTIVE • Upgrading of all informal settlements by 2014 through policy, legislation and research that enables housing delivery in sustainable human settlements, in line with the MDG targets.

18. SERVICE DELIVERY ACHIEVEMENTS • Draft Farm-worker Housing policy • Model for the alignment of Housing Development Plans with Integrated Development Plans • Successful engagement in World Urban Forum and CSD ( 12th Session) • African Ministers Conference on Housing and Urban development • Draft housing land policy • Guidelines for mainstreaming gender in housing

19. SERVICE DELIVERY ACHIEVEMENTS Cont. • Prevention of Illegal Eviction from and Unlawful Occupation of Land Amendment Bill, 2005 • Less Formal Township Establishment Amendment Bill, 2005 • Housing Consumers Protection Measures Amendment Bill, 2005. • Housing Amendment Bill, 2004. • Regulations under Home Loan and Mortgage Disclosure Act, 2000. • Audit of Provincial Housing Legislation and Policy. • Liaising with State Departments and Provinces for purposes of co-ordinating and aligning legislation.

20. SERVICE DELIVERY ACHIEVEMENTS • Informal settlement upgrading policy and guidelines • Research network • Research support to informal settlement upgrading, Peoples housing process, Township Property Market Study, ex-servicemen policy, alternative technologies

21. PROGRAMME 3 : PROGRAMME MANAGEMENT PURPOSEThe Programme: Programme Management manages national housing and human settlement programmes and consists of three sub-programmes, namely National Housing Programmes, Capacity Building and Special Programmes Support.MEASURABLE OBJECTIVETo develop, administer and fund capacity-building frameworks and programmes, the Housing Subsidy Scheme, the Human Settlement Redevelopment Programme and the Presidential Pilot Project on Rental Housing in order to support housing delivery and improve the quality of human settlements

22. SERVICE DELIVERY ACHIEVEMENTS • The Development of a Set of Technical Standards and Specifications that will serve as the National Norm for the Public Sector Hostel Redevelopment Programme. • Extension of the National Home Builders Registration Council’s [NHBRC] Warranty Scheme. • Special Housing needs of Disabled People with specific impairments

23. SERVICE DELIVERY ACHIEVEMENTS Cont. • Develop detailed Deposit Taking Strategy at provincial and municipal level • Development and implementation of the new procurement regime • Detailed Guidelines for National Savings Programme for Housing (NSPH) • Annual adjustment of the quantum of the housing subsidy • Adjustment of SCCCA variation • Payment for completion of top structure prior to the registration of transfer (P5 before P4) • Management of Human Settlement Redevelopment Programme (HSRP) • Management of aspects relating to Presidential Pilot Project on Rental Housing (PPPRH)

24. SERVICE DELIVERY ACHIEVEMENTS Cont. • Provincial Housing Capacity Building Business Plans. • The professionalisation of the housing sector. • The Housing Consumer Education Pilot Programme • Housing Scholarship Programme • The Housing Sector Skills plan, seminars and workshops on housing policies and programmes and the train the trainer programme. • Sanitation Health and Hygiene Training Modules

25. PURPOSETo monitor the implementation and performance of national housing policies and programmes and evaluate their impact on beneficiaries, the environment and the three tiers of government.MEASURABLE OBJECTIVETo conduct effective monitoring and regular evaluation of policy implementation, by using information systems that provides accurate, strategic and statistically sound data PROG 4: HOUSING SECTOR PERFORMANCE

26. SERVICE DELIVERY ACHIEVEMENTS • Schedule of data sets are collected, compiled and populated based on user requirements including Provinces and is maintained in the InfoHub. • The development of a comprehensive information and knowledge base with the operational system that is aligned with policy, expenditure data on HSS was aligned with BAS data. • Continuous technical support and training to PHD’s to utilize the system effectively conducted periodically.

27. SERVICE DELIVERY ACHIEVEMENTS • Number of records have been uploaded and successful searches were conducted. • Updated information sets and tables on indicators were used as required to support and informed various users. • Information is updated and available on and off-line.

28. SERVICE DELIVERY ACHIEVEMENTS • Reports produced on: • Impact assessment of information on the national housing programmes on the beneficiary, environment, socio-economic and the three tiers of Government. • Impact assessment of projects delivered under the Human Settlement Redevelopment Programme. • Functional M&E systems for special housing programmes with adequate feedback mechanisms for housing interventions.

29. SERVICE DELIVERY ACHIEVEMENTS • Reports produced on: • Monitoring and evaluation of the performance of the construction and housing sector, and the state of the building industry, including indicators such as business confidence, employment in the construction sector and the building cost index, etc. • Monitoring and evaluation of the performance of the macro-economic sector, including indicators such as inflation, exchange rates, GDP and their impacts on housing delivery evaluated quarterly.

30. SERVICE DELIVERY ACHIEVEMENTS • Reports produced on: • Monitoring and evaluation of the performance of the financial sector, including indicators such as national savings, national expenditure, interest rates done quarterly. • Monitoring and evaluation of the performance of the housing institutions, in terms of targets and explanations of targets met. Presentations by institutions on their business plans including mid term reviews conducted and submission of the review reports, and recommendations made to the Minister.

31. PROG 5: HOUSING EQUITY PURPOSE Eradicate discrimination and unfair practices to do with access to housing finance, by implementing and administering theHome Loan and Mortgage Disclosure Act (2000) and its regulations. MEASURABLE OBJECTIVE Increase the level of private sector finance for affordable housing in line with the Financial Sector Charter targets of R 42 billion by the end of 2008, through monitoring and analysing lending practices, and by supporting the development of appropriate instruments by lending institutions and appropriate partnerships between lending institutions, government, housing support institutions and other lenders

32. SERVICE DELIVERY ACHIEVEMENTS • This programme has been in discussions with the financial institutions around the Financial Sector Charter and the Breaking New Ground Policy on Housing Delivery which concluded in the signing of a Memorandum of Understanding by the Minister of Housing, the Managing Director of the Banking Association South Africa and the CEO’s of the four major banks on 31 March 2005. • The regulations under the Home Loan and Mortgage Disclosure Act (HLAMDA) have been developed and submitted for approval. • Compliance manual on reporting requirements is still in a draft form and will be finalised once the regulations are finalised, hence financial institutions are still not briefed on reporting requirements.

33. PROG 6: HOUSING DEVELOPMENT FUNDING Purpose: To fund national housing programmes in terms of the Housing Act (107 of 1997 Measurable objective: To disburse and monitor funds for housing delivery in compliance with the Public Finance Management Act (Act 1 of 1999) and Division of Revenue Act requirements to ensure that expenditure matches annual delivery commitments

34. SERVICE DELIVERY ACHIEVEMENTS • 92% of the allocated funds to benefiting Provinces was spent. Challenges • Need for serious intervention for unblocking of projects to fast track service delivery and complete all old projects, • Improvement of planning and spending and alignment to the project life cycle.

35. CONDITIONAL GRANTS EXPENDITURE REPORT 31 MARCH 2005 Post Audit Final Results

36. Percentage analysis

37. Expenditure Status 31 March 2005.

38. Expenditure Status 31 March 2005.

39. Provincial Spending Analysis

40. Provincial Analysis

41. Expenditure trends

42. Expenditure trends

43. Number of Units Completed or Under Construction Over 6 Financial Years

44. Number of Units Completed or Under Construction Over 6 Financial Years

45. Number of projects 332 780 104 19

46. Number of planned units

47. Number of beneficiaries

48. Subsidy percentage split by gender

49. Number of Projects

50. Number of Projects