ceremony to launch the Olievenhoutbosch Housing Project
20 February 2006
Master of Ceremonies
Invited guests
Father Smangaliso Mkhatswa, Councillors, Steve Boosen,
Comrades, friends
Ladies and gentlemen
In April 2005 together with ABSA we signed a Memorandum of Understanding for
a project that will deliver 5480 units in accordance with the Comprehensive
Plan on Sustainable Human Settlements. This Olievenhoutbosch Housing Project is
the result of our attempts to consummate the relationship we had committed
ourselves to. It is a response to my request for pilot projects from the
banks.
I must add at this that ABSA was the first of the banks to respond, the
first to respond, and the first to show commitment. It took lead to sell the
idea of this site to us. We visited the site, and on the very same day we
struck a deal. That, to me, is indicative of ABSAâs enthusiasm for this
partnership.
I have noted with a great deal of appreciation how both the province and
Tshwane were swept up by the mood of the project.
In terms of the agreement for this public-private-partnership ABSA was to
make land available for the development of the project and develop the bonded
houses whilst Tshwane was to develop the low-cost houses. As national
government we committed to do all that was necessary to expedite the project
and to facilitate coordination between the respective government
departments.
The project therefore, in accordance with the plan, is to address integrated
development. It is to be a mixed housing project. Its implementation is to
achieve 70 percent of black ownership and have 30 percent of female
participation. Also, it is to provide opportunities for small, medium and micro
enterprise (SMME) participation in the areas of supply, manufacturing,
contractors, sub-contractors, as well as services of skilled and unskilled
labour.
I am, as you can expect, thrilled, by this partnership. As I have indicated
there was no hesitancy on the part of ABSA to be involved in it.
Our towns and cities are, as a result of rapid urbanisation, growing at an
alarming pace. We know what prevented the development of opportunities such as
we have now. We thus know what precipitated the critical challenge that we face
today of having to deal with a housing backlog of almost three million.
Since 1,9 million of our people currently live in shacks we have made the
vow to eradicate informal settlements by 2014. We made the undertaking informed
by the conviction that there is no issue that is as more urgent and critical to
the masses of our people than adequate shelter and housing.
Their conditions of squalor do not enable them to live a decent life and
take advantage of the myriad of opportunities that are being opened up by the
sterling performance of the economy. Thus, even though democracy has extricate
the whole of society out of the depths of the economic crisis that apartheid
precipitated before 1994, the masses of our people are as yet to fully benefit
from the cusp of our present economic success. Hence, the commitment we have
made to provide adequate housing to all by 2014.
We, however, understand that towards 2014, is a rocky climb. For, already,
some, albeit sitting and watching on the sidelines, make much of the fact of
unemployment that they say is the obstacle towards providing adequate housing.
Yet, all that we as government have intentions about is to through the banks to
house those that are already employed and of whom most are found in the ranks
of the civil service. A 2005 research that has been conducted Finmark Trust
shows that in the category that is our target for housing by the banks are 3.87
million households with a gross monthly income of between R1 600 and R8 000.
This is the challenge towards which we need to mobilise housing and mortgage
finance, specifically.
We need to reverse the situation where backyards and informal settlements
continue to increase at much a faster rate (of 26 percent) than the rate of
increase of 11 percent (between 1996 and 2001) in population growth. In
addition, we collectively need to ensure that housing development does not
continue to be on the periphery of economically active towns and cities. The
Finmark Trust research demonstrates that this manner of development has come to
place at a huge disadvantage over 11 million adults who do not live near
centres of retail economic activity.
We have also made the point that both the demand for housing and the housing
market has changed but, the benefits of a buoyant higher end property market
have not been felt by the poor. The sale of second hand houses is currently
highly profitable for the well-off but, often constitutes a loss for the poor,
particularly those with subsidised housing. Refocusing the housing programme
upmarket from the current target group, while it may make narrow investment
sense (more self-funded housing stock and the inclusion of âbankableâ people),
will probably exacerbate this situation rather than more equitably distributing
benefits. If wealth creation is to be stimulated amongst the current
beneficiaries of the programme, then the housing asset needs to have functional
value (a usable physical asset to create social and human capital) and an
exchange value (an ability to create financial capital), and this depends on
investment in inner city, township and informal settlements so that the
property market works for everyone. Hence, significant public investment and
substantial private sector collaboration are called for.
Since, moreover, there is evidence of households presently managing their
finances much better resulting in much lessened bad debts there is thus
opportunities for increases in bank loans for housing.
Government has emphasised the importance of public-private partnership. This
is in recognition of the fact the private sector has to contribute to the
development we seek to achieve, through especially availing financing.
In todayâs world we know that banks in particular have become far more
efficient in what they do than ever before. But from that very fact is it is
important to realise that financial services are not necessarily an end in
themselves. They cannot exist by themselves without regard to issues of common
growth and development. Hence, the appreciation I have about the role being
played by ABSA in this project.
As concerned I am about this, I am definitely sure that you are all
concerned. For together we share a history and a destiny. So, if I had been too
simplistic in my view I expect you to show me. This is because I expect no
subservience from yourselves but a robust and constructive discussion that
builds all of us.
There is need for investments in our urban areas that foster integration. I
appeal to yourselves to help unleash the potential that each one of us has to
make that possible. I believe that you can. And I believe that you have the
will to do so.
Once again, let me thank and congratulate ABSA for having come to the party
to enable us to launch Olievenhoutbosch. I am therefore very grateful to Dr
Steve Booysen, ABSAâs Chief Executive Officer, and Sipho Mashinini, the
Managing Director for ABSA Development Company. I am also grateful to the Mayor
of Tshwane Father Smangaliso Mkhatshwa for making sure that Tshwane delivers
its part.
I thank you very much.
Issued by: Department of Housing
20 February 2006
