DEPARTMENT OF HOUSING

1. DEPARTMENT OF HOUSING PRESENTATION TO THE SELECT COMMITTEE ON PUBLIC SERVICES (NATIONAL COUNCIL OF PROVINCES) 18 MAY 2005 BUDGET 2005/06 TO 2007/08

2. STRUCTURE OF THE PRESENTATION • Aim, Vision and Mission of the Department • Our Values • Our Mandates • Housing Legislation and Regulations • Our Policy Framework • Strategic overview and policy shifts • Housing Comprehensive Plan • Key Challenges and Trends • Linkages to Government Policy Priorities • Strategic Policy: Shifts • Budget overview and Key activities per Programme • Conclusion

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. HOUSING LEGISLATION 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. HOUSING LEGISLATION (CONT.) • Currently in process • Housing Amendment Bill ( Being amended to take into account all matters related to the new plan); • Social Housing Bill ( Being amended to take into account all matters related to the new plan); • Rental Housing Act 50 of 1999; • Community Reinvestment (Housing) Bill (Held in abeyance pending negotiations through the Charter); • Less Formal Township Establishment Amendment Bill.

8. REGULATIONS AND GUIDELINES • National Housing Code • Sets out National Housing Policy in detail including a user friendly guide • Contains the detail prescripts pertaining to the Housing Subsidy Scheme • Currently under review/ being overhauled in order to be in line with the “BNG” plan • National Norms and Standards For Permanent Residential Structures • Sets guidelines on the amounts to be used from the subsidies for various aspects of housing development (to be reviewed) • Sets the minimum size of houses

9. REGULATIONS AND GUIDELINES • Guidelines For Human Settlement Planning And Design (“Red Book”) • Planning – movement networks, transport, open space, subdivision layouts, design to reduce crime • Engineering services - storm water, roads, water supply, sanitation, solid waste, energy • Guidelines For Environmentally Efficient Low Cost Housing • Energy and water efficient planning and design for low cost housing; and • Urban greening guidelines

10. 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

11. STRATEGIC OVERVIEW Comprehensive Plan for Housing Development • To find a new focus for housing policy for the next decade of government, the Department embarked on a comprehensive policy consultation process, which culminated in the National Housing Summit in November 2003. • The comprehensive Plan adopted by Cabinet in September 2004 builds on the 1994 White Paper for housing and envisages expanding the mandate of the Department to encompass the entire housing market. • The Plan focuses on moving from housing to sustainable human settlements.

12. STRATEGIC OVERVIEW • The nature of demand for government-assisted housing in South Africa has changed significantly over the last five years: • A 30% increase in the absolute number of households over the period 1996 - 2001, where only a 10% increase was expected and household size has also declined. • One fifth of urban residents are relative newcomers to urban areas (i.e. first generation residents) and urban areas are expected to continue to grow at a rate of 2.7% per annum. • Population growth trends however reveal significant regional differences and increasing spatial concentration in metros & secondary cities.

13. STRATEGIC OVERVIEW • Unemployment, on the official definition, leapt from 16% in 1995 to 30% in 2002, placing pressure on household incomes. • Housing and service provision has not kept pace with household formation, and a range of other factors have had negative impact on social coherence and crime, particularly contact crimes (comprising 40% of all crimes). • The size of the backlog has increased. There are over 1.8 million dwellings which can be classified as inadequate housing. The number of households living in shacks in informal settlements and backyards increased by 26%, which is far greater than the 11% increase in population over the same period.

14. STRATEGIC OVERVIEW • Key Challenges and Trends. • Over the last 10 years, state-assisted housing investment of some R29.5bn has provided 1.6 million housing opportunities, often on the urban periphery and achieving limited integration. • Transforming the extremely complicated bureaucratic, administrative, financial and institutional framework inherited from the previous government and building capacity of all spheres of government. • The 1.6 million subsidy-houses that have been built have not in most cases become “valuable assets” in the hands of the poor. • Housing subsidy grants increased from R2,692bn in 1996/97 to some R4,5bn in 2004/2005 and will increase to R5,3bn in 2006/07. These increases in housing development funding have largely gone towards funding the increases in the quantum of the housing subsidy, which is now adjusted annually for inflation.

15. STRATEGIC POLICY SHIFTS • The key policy developments embedded in the Comprehensive Plan include: • A policy to upgrade informal settlements progressively based on an integrated community development approach and involving the community as a whole. • A housing land policy will serve to prioritise the release of public land and the acquisition of private land for low cost housing projects. • A social housing and medium density policy and programme aims to establish social housing institutions that will develop and manage quality, well located, largely rental housing stock on a sustainable basis. • A policy and programme to provide primary social and economic infrastructure in low income housing developments will contribute towards enhancing the quality of the living environments by providing for community needs.

16. STRATEGIC POLICY SHIFTS • Improving international cooperation on human settlement development: • Lead Ministry for UN Habitat (Habitat Agenda) – World Urban Forum, WSSD; • Cities Alliance – “cities without slums” initiative; • Supporting NEPAD regarding sustainable human settlement development in the African region is concerned; • Bi-lateral and multi-lateral cooperation programmes with donor countries.

17. LINKAGES TO GOVERNMENT PRIORITIES • The Strategic vision of the Departmental Strategic plan is informed by the following national policies, programs and initiatives: • The White Paper on a New Housing Policy and Strategy which remains the basis for housing policy and program; • The Urban Renewal Program; • The Integrated Sustainable Rural Development Strategy; • The Expanded Public Works Program; • The program to develop entrepreneurship among previously disadvantaged communities; • The Presidency’s National Spatial Development Perspective; • The Strategic Development Initiatives (SDIs); • Provincial development frameworks; • Integrated Development Plans (particularly at the municipal sphere); and • National and provincial multi-year housing development plans; and • The Presidential Job Summit project.

18. LINKAGES TO GOVERNMENT PRIORITIES The following objectives have been defined by the national Department of Housing in line with the State of the Nation Address, the budget speech by the Minister of Finance and the Strategic Vision of the Department: • Accelerating the delivery of housing as a key strategy for poverty alleviation • Utilizing provision of housing as a major job creation strategy • Ensuring property can be accessed by all as an asset for wealth creation and empowerment. • Leveraging growth in the economy • Promoting social cohesion and improving quality of life for the poor. • Support the functioning of the entire single residential property market to reduce duality within the sector by breaking the barriers between the first economy residential property boom and the second economy slump. • Utilizing housing as an instrument for the development of sustainable human settlements in support to spatial re-structuring.

19. LINKAGES TO CLUSTER PRIORITIES • The National Department and the Provincial Departments of Housing have integrated their activities with the following Cluster priorities: • Job Creation and Expanded Public Works Programme. • Integrated Sustainable Rural Development and Urban Renewal • Entrepreneur Development Programme and BEE • Promotion of Women Entrepreneurs • Internships • The employment of Community Development Workers (CDW) and their interface within Multipurpose Community Centres (MPCC’s).

20. BUDGET OVERVIEW: ENE 2005

21. BUDGET OVERVIEW: ENE 2005

22. BUDGET OVERVIEW: ENE 2005 • Additional funding: • R50 million in 2005/06 for institutional reform , capacity building and accreditation activities • Decrease of R28,8m as a result of transfer of Loans for the previous Housing Boards • R600 million in 2006/07 (R500 million for various aspects of the new plan, R50 million for institutional reform and capacity building and R50 million for finalising the portfolio of Servcon Housing Solutions) • R1,6 billion 2007/08 (R1,5 billion for various aspects of the new plan, R80 million for institutional reform , capacity building and accreditation activities, and R60 million for Servcon).

23. Variances: Allocation 2004/05 vs. 2005/06

24. BUDGET OVERVIEW

25. BUDGET OVERVIEW

26. Allocation of funds in respect of Strategic Priorities / Measurable objectives • Programme 2: Policy Planning and Research - (R24,634,000) • Adequate housing for all South Africans by 2024, through policy, legislation and research that enables housing delivery in sustainable human settlements. • Programme 3: Programme Management - (R95,061,000) • Increase access to and improve the delivery of adequate housing in sustainable human settlements by effectively providing officials with systems, knowledge, skills, guidance and funding. • Programme 4: Housing Sector Performance - (R130,607,000) • Effective monitoring of policy implementation by using an effective data bank and housing and human settlement information systems that provide accurate, strategic and statistically sound data to allow for regular evaluation of the impact of housing policy, and to support decision-making on improvements to housing policy and programmes.

27. Allocation of funds in respect of Strategic Priorities / Measurable objectives • Programme 5: Housing Equity - (R5,949,000) • Increase the level of private sector finance for affordable housing by R20 billion by 2010, 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. • Programme 6: Housing Development Funding - (R4,509,640,000) • Disburse and monitor funds for housing delivery in compliance with the Public Finance Management Act (1999) and Division of Revenue Act requirements, to ensure that expenditure matches annual delivery commitments.

28. Trends in the budget allocation : 2004/05 vs. 2005/06 • The allocation of several of the programmes fluctuates due to the project-based activities in these programmes, as well as reprioritisation to accommodate the implementation of the comprehensive plan. • In the 2005 Budget, additional allocations were made of R50 million for 2005/06, R600 million for 2006/07 and R1,6 billion for 2007/08, most of these funds will go towards implementing the comprehensive plan for the development of sustainable human settlements • Programme 1: Administrationallocation increases to support the expansion of administrative capacity to accommodate new functions and the incorporation of the communications function into the Corporate Services; • Programme 2: Policy Planning and Research increase is related to inflationary adjustment.

29. Trends in the budget allocation: 2004/05 vs. 2005/06 • Programme 3: Programme Management, allocation declines between 2004/05 and 2005/06 as a result of the consolidation of the human settlement redevelopment grant with the housing subsidy grantin Programme 6: Housing Development Funding; • Programme 4: Housing Sector Performance consist mainly of transfer payments, largely to public entities, and it is the year-on-year changes in these that determine overall allocation. Servcon Housing Solutions, a joint venture between government and the banking industry to manage the disposal of properties owned by banks, allocation for 2004/05 amounts to R38,6 million and increased to R55,9 million in 2005/06. In 2005/06, a small transfer to the Peoples’ Housing Partnership Trust is introduced to fund administrative and personnel costs associated with supporting self-build housing projects. • Programme 5: Housing Equity allocation increase is for goods and services, for the IT system required to monitor reporting from banks,

30. KEY ACTIVITIES PER PROGRAMME AND BUDGET OVERVIEW OVER THE MTEF (2005/08)

31. PROG 1: ADMINISTRATION

32. PROG 1: ADMINISTRATION • Purpose is to provide strategic leadership and administrative and management support services to the department. Promote and facilitate the flow of information between the department and its stakeholders. • The key strategic objectives include the following • Provision of strategic corporate communication services to all stakeholders; • Provision of Strategic Financial Management Services; • Provision of Corporate Services (such as HRM, Transport, Security and IT) to ensure corporate efficiently; • Provision of strategic support services for the Minister and Accounting Officer; • Implementation of the department's anti corruption initiative and investigative programme.

33. BUDGET OVERVIEW • MTEF Allocation: • 2005/06 – R83,737,000; • 2006/07 – R92,246,000; and • 2007/08 – R97,948,000. • A real average increase over the MTEF at 7,3 % • Increase over MTEF mainly as a result of the increase in staff component for enhanced service delivery and aligning of functions to strategic objectives • This include the expansion of the Director-General office and the creation of security function.

34. BUDGET SUMMARY

35. BUDGET SUMMARY

36. PROG 2: POLICY PLANNING AND RESEARCH

37. 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

38. OBJECTIVESPOLICY PLANNING • Develop and manage sustainable human settlement policy and promote and maintain human settlement integration • Establish effective national housing policy and strategy • Develop, coordinate and monitor the implementation of housing framework legislation

39. STRUCTURE • Human Settlement Policy and Integration focuses on sustainable urban and rural human settlement development policy and is responsible for international cooperation on human settlement policy. • National Housing Policy and Strategy develops national housing policy and strategies. It also maintains the national housing code, manages the integrated multi-year housing development plans, and guides the design of appropriate institutional frameworks for implementing housing policy and strategy.

40. STRUCTURE • Housing Framework Legislation drafts housing legislation required to implement approved policy and strategies monitors the implementation of housing legislation and assesses the impact of other legislation on the housing function. BUDGET 2005/2006: R 24,6 M

41. KEY ACTIVITIES OVER MTEF HUMAN SETTLEMENT POLICY AND INTEGRATION: • Housing land policy • Guide lines for farm worker housing • Densification, integration and inner city renewal programme • Aligning IDPs and housing sector plans • Energy efficient housing • Substantive inputs to multi-lateral processes

42. KEY ACTIVITIES OVER MTEF NATIONAL HOUSING POLICY AND STRATEGY: • Special Housing needs assistance policy • Medium density housing policy investigation • Developing guidelines for sustainable housing development – by revising the National Housing Code • Revisit rural subsidy programme • Back yard rental policy intervention • Guidelines for informal settlement pilot projects • New housing typologies and designs

43. KEY ACTIVITIES OVER MTEF FRAMEWORK LEGISLATION : • Social Housing Act • Regulations to the Social Housing Act • Housing Development Act (New) • Review of national, provincial and local legislation impacting on the Comprehensive Plan

44. KEY ACTIVITIES OVER MTEF • Amendments to various acts administered by the Department in accordance with need Including:- - An efficient and implementable Housing Act that complies with DORA and PFMA- An equitable PIE Act that is constitutional and unambiguous and allows for the orderly eviction of unlawful occupiers- An efficient Housing Consumers Protection Measures Act that is unambiguous and serves the interests of housing consumers- An efficient and implementable Rental Housing Act that gives Rental Housing Tribunals the power to enforce their rulings

45. CHIEF DIRECTORATE RESEARCH The Chief Directorate Research initiates, undertakes and manages research on human settlements and housing.

46. STRATEGIC OBJECTIVE RESEARCH • To establish internal and external research networks and foster a research culture within the Department to progressively improve the relevance, alignment, quality, and usefulness of research activities so that the Department is able to maintain a leading role in national, and international, debates around human settlements and influence practice to more efficiently and effectively fulfil the housing mandate.

47. KEY ACTIVITIES OVER MTEF RESEARCH • Research on informal settlement upgrading and support • Promoting alternative technologies and improved housing design • Level of socio-economic and ethnic integration in SA • International experience in densification and integration • Study on housing ex servicemen • International research seminar

48. BUDGET SUMMARY

49. BUDGET SUMMARY

50. PROG 3: PROGRAMME MANAGEMENT