BEYOND BORDERS HOUSING ISSUES : SOUTH AFRICA CHRA ACHRU CONGRESS Ismail Khatib May 2013

1. BEYOND BORDERS HOUSING ISSUES : SOUTH AFRICA CHRA ACHRU CONGRESS Ismail Khatib May 2013

2. BACKGROUND • Pre 1994 • Housing segregated along racial lines • Apartheid SA declared areas based on racial category • Residents (mainly black) cleared of land • Relocated to townships – distance • Commute to work - costly

3. RACIAL CONCENTRATION

4. BACKGROUND • Townships • Very basic shelter • One room shack • No services • No policing • Hostels • Communal, males only • Families remain in rural areas

5. POST 1994 • Housing backlog estimated at 1.2m • Explosive growth – shacks • Near urban areas • Late 1990’s – 250 000 units required pa • ±1000 units per day • Actual 25 000 units pa • Serious housing shortage

6. POST 1994 • Housing is a Human Right • Most critical factor for quality of life – adequate housing • Major policy shifts • Housing, sanitation, electrification, basic services • Urban sprawl

7. POST 1994 • Reconstruction & Development Program • 10 million access to clean water • 1.75 million homes electrification • 3 million sanitation • 2.4 million RDP homes

8. GOVERNMENT PROGRAMS • Eradication of shacks • RDP • Community Residential Units (CRU) • Social Housing • Hostel Upgrade • GAP Housing • Other

9. MEDIUM TERM PLAN • Major service delivery challenges • 12 point plan • Outcome 8 – Housing • Sustainable human settlements • Improved quality of life • Short to medium term – 4 years

10. MEDIUM TERM PLAN • Upgrade 400 000 informal settlement units • Improve access to basic services • 80 000 affordable social and rental housing units • Housing finance for 600 000 household with GAP market for purchase • Releasing public land for housing

11. SOCIAL HOUSING • Started 1995 • Institutional Subsidy • Only for income < $440/mo • Development cost low allowed for projects in earlier years • Period of stagnation – policy vacuum • 2007 – New Social Housing Policy • Formation of Regulatory Authority (SHRA)

12. SH BACKGROUND • Provision well located rental housing stock: • Affordable income R1500 – R7500 per month • To spatially restructure ‘apartheid’ cities • Restructuring Zones within Municipalities • Providing low and moderate income households with access to socio economic resources of the city • Governed by Social Housing Act 2008, linked regulations and SH policy

13. KEY ELEMENTS OF SH ACT • Social Housing Regulatory Authority (SHRA) • Accredit and regulate SHI and regulate the sector • Allocate the Restructuring Capital Grant (RCG) • Restructuring Capital Grant • Capital subsidy on development of SH – National allocation • Linked with Institutional subsidy (capital subsidy from Province) • Only awarded to projects in RZs that meet the social housing criteria • Social Housing Institutions – SHI • Non profit companies to facilitate the development and manage stock • Often also have strong community development component

14. KEY ELEMENTS OF SH ACT • Accredited projects • Projects that are approved for RCG financing meeting regulatory requirements • Usually part of SHI programme • Can be allocated to non SHIs • Example of Financial structuring: • Average cost of 42m2 unit ± $42,500 • Restructuring Capital Grant ± $15,700 • Institutional Subsidy around ± $11,250 • Loan finance and or equity ± $15,550

15. KEY RESPONSIBILITIES OF SHIs • Land and development • Own or lease land or buildings • Facilitate development or act as developer • Raise and mange the capital finance • Management • Allocation • Rent setting, collection and arrears management • Tenancy management • Maintenance • Reactive and planned • Community and neighbourhood development (some SHIs)

16. GOVERNMENT FUNDING • Outcome 8 – 24 000 units 2011 - 2014 • MTEF Commitments • Grant increased • $112,5m 2013 – Est. 6700 units • R150.0m 2014 - Est. 8100 units

17. STATE OF SECTOR • Presently estimated 33,000 units • 80% in 4 metros (Jhb, Ethekweni, Cape Town and Buffalo City) • Estimated 132,000 people housed • Replacement value estimated $1.20bn • Estimated 32 functioning SHIs • 8 Fully accredited • 14 conditionally accredited • Remainder Pre Accredited

18. STATE OF SECTOR • 30% of tenants below $440/mo income • 70% between $440 to $940/mo income • Rental range $100/mo to $275/mo • Mean $200/mo • Rental collection average 80% • 6 SHIs with 95%+ collections • Rental boycotts – some SHI’s • Reasonable reactive repairs but poor record on planned and preventive maintenance

19. KEY SECTOR ISSUES • Growing Government Commitment • Increased capital investment • Funding for SH from $15 million in 2006/7 to over $120 million in 2013/4 • Insufficient management capacity within the sector • Required caps development strategy • Financing of caps development • Danger of spatial drift of projects • lack of affordable well located land and buildings • Issue of government land for SH • Need to increase municipal engagement with SHIs

20. KEY SECTOR ISSUES • Greater flexibility in financing mechanisms • Not only single project based • Not only capital subsidy grant but other alternatives • Rapid increase in Municipal and Utility charges affecting affordability • Lack of well priced loan finance • Strategy and approach to ‘Greening of Social Housing’ • Upward creep in beneficiary income • Ownership aspirations

21. NASHO • National Association of SH Organisations • Founded in 2003 • Support resource to SHI’s • Lobbying • Capacity Building • Strengthen SH sector

22. FIRST METRO • SH Company, PBO • Established 1998 • 1200 units under management • 1600 units under construction • 2300 units under acquisition • GAP Housing • Assistance to outlying municipalities

23. Lakehaven Estate FM PROJECTS Hawaii

24. SH PROJECTS Emerald Sky, East London

25. SH PROJECTS Walmer Link, Port Elizabeth

26. SH PROJECTS Steenberg, Cape Town Carr Gardens Johannesburg

27. CHALLENGES • Housing Shortage – 2.1m • 30% live in informal dwellings (Urban) • Delivery challenges • Capacity limitations • Socio economic climate • Non payment / rental Boycotts • HIV / Aids, Child headed households

28. CHALLENGES • Illegal immigrants (between 5.0m to 8.0m) • Construction CPI 11% • Policy lag • Limited Debt funding • Banks conservative to funding • Cost of Municipal Services

29. Thank You