BREAKING NEW GROUND

1. BREAKING NEW GROUND

2. Introduction • Presented departmental budget June 10, 2004 • Budget debate • MPs raised concerns

3. What were these concerns? 1. Demand 3.Funding 2. Supply 4.Institutional

4. 1. DEMAND • Current Demand • Realised Demand • Approximately 2,4m households living in informal structures • Only 800,000 on the approved subsidy list • Unrealised Demand • “Ineligible” beneficiaries • Previously accessed subsidies in another location • Legal requirements of for eligibility (eg dependents not registered legally). • Future Demand • Set to grow disproportionately • Net Population growth, Smaller household sizes & Rapid urbanisation

5. 2. Supply 1.6 million houses built since 1994 but • Major part of the subsidy spent on land & infrastructure • Little money left for house • Little or no community facilities or amenities • Supply too homogenous –“no choice” • Lack of access to rental stock • One house, one plot model • Construction of poor quality • Housing supply slow with little monitoring • Complex and lengthy planning process • Lengthy deeds transfer process • Lack of capacity in public and the private sector • Withdrawal of large construction companies • Absence of subsidy or consumer information • Weak estate agency market in township areas

6. 3.FUNDING Close to R30 billion spent on delivering to 1,6 million households since 1994. Overall challenges – Funding formulae have not kept pace with inflation, income cut-offs too low, lack of flexibility in the funding system Informal market – The low levels of employment and limited subsidy funding combine to ensure that overall funding levels are low to non-existent Incremental and old township markets – Mortgage finance is unavailable Privately developed market – Mortgage finance is limited to this market because of perceived affordability and risk issues Hardest hit are those that earn between the R 3,000 – R 6,000 to 7,000 pm

7. 4. INSTITUTIONAL • Subsidy process - complex, slow and bureaucratic • Suggestions of corrupt local government practices • Title transfer processes slow • Integration with other development processes weak egbasic service infrastructure, social infrastructure. • The NHFC is an “overly bureaucratic institution” • Current Social Housing Association model are costly bureaucracies unable to deliver affordable housing. Need to separate governance roles from operating and managing roles • Illegal occupation of houses • Passionate Leadership at all levels is critical to success

8. AFTER THE BUDGET? • We listened • We consulted the politicians, communities, banks, construction companies and all those who were ready to share their experiences • We understood the issues • We have come with a dynamic plan that will be tested in 18 pilot projects around the country between now & March 2004 • We will evaluate the plan after the pilots are complete & then full steam ahead in April 2005

9. Issues to be resolved after the budget debate What are the real needs and choices facing different communities ? How does Government enable the creation of sustainable communities ?

10. The Evolution of the Plan Policy in 1994 Strengthen Policy Houses Integrated Government Delivery • Policy Integration • Sets playing field • Incentives Sustainable Communities Note: Source:

11. For all South Africans it provides more money for houses and an opportunity to access homes in well designed, serviced and located human settlements; For the hardcore poor ie pensioners and the indigent, the ability to access a home for rental or ownership with no savings requirement; The poor ie those with access to some sort of employment - the ability to access a home for rental or ownership with a cash or ‘sweat equity’ contribution; Those earning above R3,500 – R7,000, a deposit to access credit; All subsidy beneficiaries will get increased access to creditand achoiceof ownership options and top structures; For urban migrants and highly mobile job seekersand seasonal workers, access to a renting in the city while owning a home in the rural area; A decent life for people in the informal settlements with security of tenure, access to services, housing choices and a better life; For the financial sector,commitment to a partnership with Government and a conducive lending environment The construction sector too receives the government’s commitment to a partnership, an enabling environment including incentives to participate actively in housing delivery to the poor. For all South Africans, to participate in a fast tracked delivery mechanism that creates sustainable communities. THE PLAN FOR EVERYONE

12. What are human settlements? Public Transport Provision of Basic Services Safety and Security Funding Housing Public Spaces Community Title Deeds EconomicOpportunities Health & Education Services

13. THE PLAN High Level Details

14. 1. Redefinition of role • Oversee entire residential market. • Housing to sustainable settlements. • Policy, Implement, Monitor & Audit. • Create non-racial integerated societies.

15. 2. SUBSIDIES • For the hardcore poor : Access to R25,800 with no savings requirement. • The poor access a home for rental or ownership valued at R25,800 and a cash or ‘sweat equity’ contribution of R2,479. • Those earning R3,500 – R7,000 per month, contribution to the deposit required for mortgages

16. 3. QUALITY PRODUCTS • Choice & quality non-negotiable. • Work smart. • Multi-departmental approach • Bulk Infra structure • Land • Approach ensures subsidies spent on quality and bigger top structure

17. 4. RENTAL • Rental • Rent to buy • Part of broader urban renewal and inner city regeneration • Housing to be dovetailed with urban development zone tax incentive

18. 5. INFORMAL SETTLEMENTS • Reduce & replace. • Suitability located – upgrade on area wide basis. • Certainty, access to proper services, security, choice and formal top structures.

19. 6. PRIVATE SECTOR • Financial Sector • the government’s commitment to a partnership, an enabling environment including incentives to lend to all households; • negotiate the housing provisions of Financial Services Charter; • Review pre-emptive recovery rights of local authorities. • Construction Sector • Opportunity to partner with government; • Established & BEE (men and women) contractors; • Skills development • Employer Assisted Housing

20. 7. HOUSING: Creating Wealth • Consumer education on housing as an asset. • Encourage linkages between primary & secondary markets. • Limit barriers for re-sale of subsidised house from 8 to 5 years. • Title deeds.

21. 8. Housing Institutions • Evaluate and redefine the mandates of all housing institutions. • Align to the Plan

22. 9. FAST TRACK DELIVERY • Delivery chain timelines. • Strong Project Management. • Responsibility and Accountability. • Role of local government. • Accreditation.

23. 10. IMPLEMENTATION • Current Projects to continue • Next 100days – 18 pilot projects • National Implementation Team • Inter-Ministerial Committee • Evaluation & Assessment • Streamline plan & full speed ahead by April 2005.

24. THE PLAN IN ACTION “N2 Gateway Project” Cape Town

25. Statistics • No. of households 10 000 • Existing densities range from 60-125 / ha • Existing area 124 ha • Developable area estimated 48 ha • Target densities (4 storeys) 150 du/ha • Capacity of N2 land 7 200 du • Deficit 2 800 du • Land identified in Delft & Driftsands

26. Scope of the Project CT Int Airport

27. The Synergies Epping Industria Joe Slovo New Rest, Kanana, Barcelona Airport Industria URN KYA URN MP Scope of N2 Gateway

28. Borcherds Quarry Interchange

29. Barcelona

30. A Vision for Barcelona

31. Airport Approach Road

32. Kanana New Rest NY1