Honourable Speaker
Honourable Premier of the Western Cape
Honourable leader of the official opposition
Provincial Cabinet colleagues
Members of the Provincial Legislature
Executive Mayors and Mayors
Heads of department and senior managers
Municipal managers
Partners in Local Government and Housing,
Invited guests
Friends
Ladies and gentlemen
Honourable speaker, when the Premier gave her State of the Province Address last month, she reported on the resolution reached at the Provincial Lekgotla a week previously. This is worth repeating today for it will shape our strategy for housing in the province. At the Lekgotla, we resolved to, “Align our work to our overriding objective of combating poverty and promoting opportunities for all, through policies that encourage sustained economic growth; that attract, develop and retain skills and capital and that drive infrastructure development.”
We recognise that housing, in itself, does not eradicate poverty. It is however, a crucial pre-condition for poverty alleviation. A serviced formal dwelling can provide the impetus for asset creation and accumulation, better health outcomes through reduced vulnerability to communicable diseases, reduced fire risk, access to schools, public libraries, community halls and other civic amenities.
We must be ever mindful that we are not just in the business of providing houses. We must create and develop sustainable human settlements. This means providing people with housing opportunities that restore dignity and offer access to the formal economy.
Before elaborating on the department's programme for the coming year, it is important to begin with an assessment of where we are and the challenges that lie ahead. I think it is fair to say this department has done some good work in the last five years. Despite capacity constraints, there are many skilled and competent officials in this department who are committed to the project of building sustainable human settlements.
I am confident that with this team behind me, we can work to overcome the numerous challenges that face us. And I would like to assure this house, which we will not try and fix things that are not broken.
By the same token, we will embark on an ongoing situational analysis of the department to identify policies and programmes that have not lived up to their initial promise or were doomed from the start. We shall find ways of streamlining the administration and cutting the red tape that hampers fast and efficient delivery. We will develop and enhance anti-corruption strategies to ensure that every cent we spend benefits the intended recipients.
In other words, we will build on the foundations that have been laid by our predecessors and work steadily and surely to mend what is broken.
At the outset, we must be honest about the scale of the housing shortage in the Western Cape and we must be realistic about what we can achieve with the resources available to us. It would be irresponsible to raise unrealistic expectations. We did not do that in the run-up to the election and we will not do it now that we are in government.
The facts are as follows: Official estimates of the housing backlog, based on a 2006 study, put the shortage at around 410,000. With the R1,58 billion the province will receive from the national government this year in terms of the Division of Revenue Act we can build in the region of 16,000 housing units and 18,000 serviced sites. At this rate and if the housing shortage remained static, it will take us up to 28 years to eradicate the backlog.
Of course, in reality, the backlog is not static; it is a moving target. Between 2001 and 2007, the population of the Western Cape grew by 17 percent spurred largely by high rates of in migration to the province. If we continue on a high growth trajectory, by 2040 the housing backlog in the Western Cape will have nearly doubled to 804,000.
Clearly, a radical re-think of the way that we deliver housing is required.
One way is to increase the share of the funding we receive from national government. Throughout my term of office, I will use every intergovernmental forum to lobby for more money for housing in the Western Cape. I will do all I can, in the spirit of co-operative governance envisaged in our Constitution, to ensure that this province never receives short-shrift.
But whatever increase in funding we might be able to secure, we must recognise that it will not solve our housing shortage overnight. We do not need reminding, speaker, that we are now officially in a recession the effects of which are likely to be felt, especially amongst the poor, in years to come. As unemployment rises, so too will the demand for subsidised housing.
Without wishing to paint too gloomy a picture, it is clear, speaker, that the challenges before us are immense. Overcoming them will take time and patience. This is a bitter pill we must swallow. No amount of sugar-coating will change this reality.
I can assure the people of the Western Cape that we will not collapse under the weight of expectation upon our collective shoulders. On the contrary, we will work even harder to find innovative ways to reduce the housing backlog and create sustainable, integrated communities. I am confident that with perseverance, innovation and a willingness to make some tough choices, we can improve the lives of the people in this province, step-by-step.
In fact, speaker, there are a number of interventions we can make to accelerate the delivery of housing opportunities within current budget constraints and economic realities. I intend to outline some of these today. Currently, the bulk of projects approved by the department utilise a project linked subsidy system which covers contractor-led projects on Greenfield sites. These account for 45 percent or R711 million of our housing grants budget and remain the mainstay of the Department's Housing programme.
I believe that the emphasis on Greenfield projects and contractor built houses has to shift if we are to make a serious dent in the housing backlog. In situ upgrading, for example, tends to be more cost effective and less disruptive. This is why this administration intends to focus more on this type of project going forward.
The Upgrading of Informal Settlements Programme (UISP) already in place aims to upgrade and provide basic services to communities in well located informal settlements. The upgrading of informal settlements must not be seen, as some critics suggest, as a means to perpetuate apartheid era town planning. If implemented correctly, it can be a cost-effective way to create a dignified environment for shack dwellers without uprooting families and communities. In this financial year, the department will spend 26 percent of its budget or R411 million on this programme. This is something, I believe, we need to re-evaluate and increase in the years ahead.
To assist with selecting sites for future upgrade, the department recently completed work on a vulnerability index that will inform the prioritisation of funding for informal settlements. This will allow us to objectively measure which informal settlements should be prioritised, based on the greatest need.
The department is also currently in the early stages of developing a masterplan for in-situ upgrading based on a province wide assessment of informal settlements. This will allow us to develop time bound targets to progressively provide informal settlement households with opportunities for improved infrastructure, services and tenure as well as support to improve their housing options over time.
We are also mindful, speaker, of the fact that many beneficiaries sell on or rent out their houses and move back into shacks. Those that they sell to are often people who are not eligible for a subsidised house, which has the effect of increasing the backlog further.
In some cases this behaviour is understandable. Many of our beneficiaries are the poorest of the poor. They are in survivalist mode; they are not in a position to consider the long term benefits of owning an appreciating asset. They need to put food in their children's stomachs today. Speaker, we must consider ways to ensure that the people who live in subsidised houses are the intended beneficiaries. One way of doing this is to increase the number of People's Housing Projects or PHPs relative to project linked subsidies.
Unlike projects where beneficiaries are passive recipients, PHPs encourage people to get involved in the design of their house plans, to build or monitor the construction of their house and ensure that their houses are built to the requisite standard. The close involvement in the construction process confers a sense of ownership that is often not felt by recipients of other types of government subsidised housing.
PHPs also enhance consumer choice. A beneficiary can choose to design and build a house bigger than the subsidy allows, provided that she or he can finance the shortfall. A sweat equity contribution can result in a cut in labour costs which means more value for money for the beneficiary.
We are currently spending 11 percent of our total budget or R174 million on building housing structures through PHP methods. This is something I would like to increase over time providing that we can iron out some of the problems we have experienced with PHPs. In this regard, I am encouraged that the National Department of Housing recently completed its enhanced PHP policy to improve the way that these projects are managed.
It is apparent that PHP projects despite their potential are beset with challenges. These include corruption, insufficient capacity of support organisations, lack of adherence to the PHP model in practice and insufficient capacity within the department to deal with these challenges. The quality of some of the housing units built has sometimes been poor because PHP projects are not required to be registered with the National Home Builders Registration Council.
I have requested the department to develop a plan to improve our capacity to deal with PHP projects. We are also looking at ways in consultation with the Special Investigating Unit (SIU) to stamp out the corruption that has riddled some of these projects, resulting in blockages. Furthermore, I plan to investigate ways to ensure that the houses built under the PHP programme are of the required quality.
Besides the plight of those that suffer the indignity of living in unserviced informal settlements, I am deeply concerned about the fact that people who live in backyards have not been prioritised. Many backyarders have waited patiently for years for a house. They have as much right as anyone else to dignified housing.
We aim to oblige municipalities to strike the right balance between informal settlement dwellers and backyarders in the selection of beneficiaries for new housing projects. It cannot be right that people as young as 21 years old get preference over people who have been waiting for a house for three decades.
This administration will take the plight of backyarders very seriously indeed, particularly with regards to the allocation of housing. We are starting the process of reviewing the way in which municipal so-called housing waiting lists are used to allocate housing. We will re-examine the allocation ratio of 70:30 which discriminates against backyarders and change it to 50:50.
Part of the reason for unfair allocations is because the data used is of poor quality: geographic coverage is limited; data is incomplete, out of date or simply inaccurate. Because poor data leads to unfair selection decisions, the Department is putting in place a programme to assist municipalities to improve their housing demand data collection, management and procedures.
We will also develop ways to simplify, standardise and demystify the manner in which houses are allocated. The department's research shows that approaches to allocation differ across municipalities and are complicated for residents to understand and follow. We aim to make the process transparent and easy for everyone to understand. Without transparency, the perception will persist that some groups receive preferential treatment over others. As we begin the process of evaluating housing allocation, we will ensure that the rights of backyard dwellers are recognised and that they are protected from arbitrary eviction.
In this regard, speaker, I intend to pay special attention to the rights of all tenants in rental accommodation. Tenants will be encouraged to report any unlawful practices by their landlords to the rental housing tribunal, a quasi-judicial body with the status of a magistrate's court situated in the department.
Because many people remain unaware of their rights, I will launch a public awareness campaign later in the year to publicise the existence of the Rental housing tribunal and the service it offers to marginalised tenants. It is also important that, with the recession now upon us, we look at ways to soften the blow for private mortgage holders who face eviction as a result of defaulting on their loan repayments. The department has established a task team to explore the magnitude of this problem in the Western Cape and how best we can work with the banks to manage the situation.
Speaker, a housing option that has remained largely untapped is the low-income rental market. The department currently spends 6 percent of its housing grant budget on the social housing and community residential units programmes. These programmes seek to provide rental or co-operative housing options for low income persons. Through these programmes, we intend to provide in the region of 5,000 rental housing opportunities over the next five years. To further explore the benefits of rental housing, we are partnering with the social housing fund to formulate a provincial housing rental strategy and operational plan. Where possible, we must give tenants the option of buying the homes they rent. Currently, the enhanced extended discount benefit scheme facilitates the sale of rental units to eligible tenants to empower people through asset creation and home ownership.
In this financial year, the department aims to transfer houses to over 2,000 households through this scheme. Earlier, Mr Speaker, I mentioned the problem of beneficiaries selling on their houses and the lack of awareness of the long-term benefits of home ownership. One factor acting as a disincentive to home ownership is the space in the property market that has opened up between those receiving subsidies and those who can afford to access private mortgages. This is what is referred to as the gap market, defined as those earning between R3 500 and R12 000 per month.
This gap means that a number of rungs in the property ladder are missing. A complete ladder is critical for our vision of housing as a path to asset accumulation and poverty eradication. The provision of affordable stock acts as an incentive to households to improve their assets so that they realise capital gains and trade up to the next level.
The challenge of stimulating the gap market has increased with the advent of recession, the stringent lending criteria set out in the National Credit Act and, until recently, high interest rates.
But there are some signs that conditions are now changing in favour of the gap market and market analysts have suggested that the gap market is relatively less indebted than middle and upper segments, interest rates are declining and building costs have begun falling.
In this context, the department will renew its efforts to support and stimulate this market. Over the next year, we will study the performance of the gap market in the Western Cape in some depth, to assess how the province can best provide an enabling environment for it to expand.
Another way to accelerate housing delivery is to grant those municipalities with sufficient capacity the accreditation to become fully-fledged housing developers. We are in the process of granting accreditation to the City of Cape Town, a process that we hope to have completed by the end of this financial year.
Through housing accreditation, municipalities are delegated to carry out functions currently undertaken by Provincial Housing Departments, such as subsidy budget planning and allocation as well as the management and administration of priority programmes. Municipalities will ultimately gain the full assignment of these functions, as well as full financial administration of housing in their jurisdiction. In other words, with full accreditation, the municipality will be responsible for the entire chain of housing functions in their area with the province assuming the responsibility of monitoring and evaluation.
This idea of granting municipalities housing accreditation, it must be said, is not particularly path breaking. In fact, it is a process envisaged in the Housing Act (No. 107 of 1997), the Municipal Systems Act (No. 32 of 2000) and the Constitution itself.
But for various reasons this has not happened, despite the City of Cape Town being earmarked as a pilot for accreditation by national government in 2006. Accreditation, and specifically the concentration of funds at local level, has the potential to lead to more effective delivery because municipalities are better placed to make decisions on the developmental progress in areas of their jurisdiction. With full accreditation, the city will be able to approve projects quicker than is currently the case.
Over time, we hope to accredit other municipalities, provided they have the capacity to carry out the various housing functions. In this regard, the department has embarked on the Built Environment Support Programme (BESP) in order to build skills in municipalities for spatial planning and the development of human settlement plans.
Linked to accreditation is the release of provincial land to municipalities and particularly the City of Cape Town, for housing development. Since the shortage of suitable land is a major obstacle for housing delivery, this has been a key objective for us since day one.
This is why we have expressed our dismay at the previous government's decision to effectively transfer around 1 400 hectares of provincial land to the Housing Development Agency (HDA) on the eve of the election that saw it lose power. We know that it was intended to frustrate our efforts to deliver. But we remain undeterred. Our legal process to have these deals rescinded and reviewed is ongoing. We are also engaging constructively with the HDA on the way forward. In this regard, I have been greatly encouraged by my interactions with HDA's CEO, Taffy Adler, particularly his commitment to reserve some of the transferred land for victims of flooding.
I am confident that the HDA will do a better job than its predecessor in its management of the N2 Gateway project which has been marred by incompetence virtually from inception. Despite the problems that have plagued the project, we remain committed to fulfilling our responsibilities as a project partner in the interests of co-operative governance.
I intend to do everything in my power to ensure that we forge a strong new partnership to get the N2 Gateway project right, once and for all. In this regard, we welcome the recent Constitutional Court ruling to re-locate people living in Joe Slovo to allow for the commencement of phase two of the project. We will do all we can to ensure that this process takes place with minimal inconvenience to the affected residents.
It is encouraging that one of the core mandates of the HDA is to acquire land, particularly privately-owned land, for housing development. We hope that they will pursue this with gusto and that it will result in the citizens of this province gaining access to housing land in well located areas. Speaker, I have outlined some of the key initiatives that we will take to accelerate housing delivery. As I said at the outset, we will use the coming months to assess more fully what can and cannot be done within the constraints we face, taking all competing priorities into account.
What we also need to get right is the efficiency of our own internal processes. I admit that processes and systems do not sound very exciting, but I know from my experience in the City of Cape Town, that getting the systems right at the top can improve service delivery on the ground.
We are in the process of developing a project management system or dashboard that will enable us to monitor the performance of every project manager and the status of every project through an automated software system. It measures outputs against clear targets, and allows project managers to drill down for more detail against each performance indicator on every project. We hope to have this fully implemented by the end of the year.
To improve the turn-around time of project approvals and to cut red tape, we have set up an intergovernmental task team with the City of Cape Town. This team will review existing project approval procedures and processes with a view to eliminating any unnecessary steps.
These then, speaker, are some of the practical ways that we believe will quicken the pace of housing delivery in the province and restore dignity to those who have been marginalised. We look forward in the coming months to fully operationalising our plans.
The initiatives outlined today are underpinned by some of the core values of this government, namely: opportunity and responsibility. As government, we will provide people with the opportunities to better their lives and be the best they can be. We will work tirelessly to create an environment in which individuals and communities can seize the opportunities offered to them.
But it is up to individuals and communities to be responsible citizens. That is the end of the bargain they must keep. This means holding us to account when we falter, but also assisting us to ensure that projects run smoothly and are not marred by the politicking and infighting that hamper delivery. I am confident that, working together, we will overcome the challenges we face. Let us build a partnership over the next five years that transcends politics and focuses on the job at hand.
For if we can build constructive partnerships, I am certain that we can build sustainable human settlements that will give our children the opportunities denied to their forefathers.
I thank you.
Source: Western Cape Provincial Government
