Club Hotel Catering School, Granger Bay, Cape Town
30 August 2007
The Chairman, Donwald Pressly
Vice Chairs, Anthony Johnson and Kim Cloete
Members of the Committee
Invited guests
Ladies and gentlemen
Let me thank you for having extended the invitation to my office to be
present here with you today. What you have asked me to discuss with yourselves
is, as you yourselves realise, a matter of some importance to the country.
This, in any case, is how we, politicians, see the role of housing in our
evolving democracy. Against considerations of existing need we see it as a
guarantor of our societal stability and peace, a vital component of social
cohesion. However and perhaps more importantly, we also see it as a lynchpin to
greater and equitable economic development - shared growth � we call it. It is
an important part of creating the kind of society that has been denied us � a
society that has a common identity moulded around our communities and, around
those things that make up our daily lives.
For most countries, housing counts as a very important index of the health
of the economy. Our country however seems to be a notable exception to this,
where the value of property excludes property in the second economy. Thus, our
belief that we have to change.
We have two distinct and unrelated property markets in our country. It is in
our interest to create a link between these two first; there is value in the
second economy market which we ignore at our own peril. The estimate; for
example, that the Township Residential Markets research provided us with in
2005 was that the value of R68,3 billion worth of property is not being
realised in the secondary market. I am made to believe that the estimate now
points to the figure of R600 billion, a figure not to be trifled with. Second,
the primary market has to work and be functional for the secondary market to
realise its full potential. We are doing ourselves a serious disservice when we
do not realise this.
It is in this context that we must understand the emphasis government is
placing on the creation of integrated communities through integrated human
settlements. We want to create a normal society out of a society that presently
is characterised by an overwhelming presence of abnormality standing alongside
seeming normality. For us to want to end the abnormality is only logical. And
in that regard we want to normalise our spatial patterns.
If, for example, you consider that as per the 2001 Census 50 percent of the
population is under the age of 25 and only 10 percent is over the age of 55
then you would realise that we have a young and a growing population and that
the present housing challenge will be with us for a while. It therefore only
makes sense to normalise the housing market within the shortest possible time
for us to cater for the growing demand. We cannot lose and our economy can only
grow, because it has to grow. However, it will only do so if we create a
seamless property market that will be beneficial to all.
In our mind there is no doubt that housing or home ownership is an important
tool against poverty. Properly conceptualised, it has potential for wealth
creation and accumulation. But importantly, as government we have since 1994
injected into housing more than R44,1 billion that delivered security of tenure
and built 2,4 million houses. It would therefore be a catastrophic waste of
this investment if we do not finally see a normalised housing market.
This is fundamentally the context within which we approach the normalisation
of our physical and living space. It is a context within which the definition
of 'dead equity' needs to take place. For it asserts the logic which says that
that which is static and moribund does not grow.
But we would start off this important discussion which, we hope will provide
more insight into our belief that housing for the poor is not merely a means to
shelter but is also of immense economic value, by focusing on the inclusionary
housing policy. This is one of the key policy instruments that will end spatial
segregationist patterns and thereby help create a single housing market. It
will end the dysfunctionalities and inefficiencies of our urban system and make
planning more responsive to what we envisage for the urban environment.
We believe that inclusionary housing is an important step towards clearing
'dead equity.' At the next session therefore we would be able to properly
locate the debate on 'dead equity' and the relevance of the partnerships we
have built to tackle that challenge. For this will allow the creation of
spatial patterns of settlements that speak to us as a nation whose values are
grounded in non-racialism and economic logic.
The inclusionary housing policy is based on the experience of other
countries and we have taken the better part of two years investigating it,
lobbying around it and refining it. We would want to present it to you today
because it forms part of the physical environment that helps us get to the
third segment, unlocking the dead assets that lie in predominantly black
townships. Ultimately, it is our aim to create functioning housing markets.
It is against the background of such a partnership that I am confident that
we would overcome the challenges we face with regard to the secondary housing
market. For we have the necessary policies and programmes in place including
the partnerships that would make these work. Of note to mention with regard to
partnerships is the working relationship we have developed with the South
African Property Owners' Association, the body that facilitated agreement on
the inclusionary housing policy.
Finally, let me once again emphasise that our view of a single integrated
housing market and the steps needed to realise that comes logically from both
the experience and the huge financial investment we have made in housing since
1994. De Soto, unfortunately, has no intellectual claim over what we have
developed and continue to fine-tune!
I thank you.
Issued by: Department of Housing
30 August 2007
