PROGRESS: OUTCOME 8 OF THE PROGRAMME OF ACTION PRESENTATION TO SELECT COMMITTEE ON PUBLIC SERVICES: 5 NOVEMBER 2013

CONTENT OF PRESENTATION OBJECTIVE OF OUTCOME 8 OUTPUTS AND TARGETS SET PROGRESS: Upgrading of Informal Settlements National Support Programme (NUSP) Well-located rental accommodation Accreditation of Municipalities Efficient utilisation of land for Human Settlements development Improved property market

CONTENT OF PRESENTATION OBJECTIVE OF OUTCOME 8: TO CREATE SUSTAINABLE HUMAN SETTLEMENTS AND IMPROVED QUALITY OF LIFE THROUGH: Upgrading of 400 000 households in informal settlements with access to secure tenure rights and basic services; Implementation of a National Support Programme (NUSP) Delivery of 80 000 well-located and affordable rental accommodation; Declaration of Restructuring Zones Accreditation of 27 municipalities to undertake human settlements functions; Efficient utilisation of state land for human settlements development; Improved Property Market (Mortgage Default Insurance Scheme, Finance Linked Individual Subsidy, Loans granted by Finance Development Institutions

UPGRADING OF INFORMAL SETTLEMENTS The Delivery Agreement makes provision for each Province to deliver a specific portion of the 400 000 households targeted; Targets and budget amounts for each financial year are contained in the provincial business plans en municipal built environment plans; Various human settlements programmes utilised for this purpose such as the Upgrading of Informal Settlements (UISP), Integrated Residential Development Programme(IRDP), People’s Housing Process (PHP), Rural Housing Programme and Emergency Housing Programme; Various funding streams are utilised for this purpose such as the Human Settlements Development Grant (HSDG), Urban Settlements Development Grant (USDG), Municipal Infrastructure Grant (MIG), Rural Housing Development Grant (RHIG) and Municipal/ Metropolitan own funding;

UPGRADING OF INFORMAL SETTLEMENTS Performance comprises all forms of assistance that improve the lives of residents in informal settlements through access to basic services such as water, sanitation, electricity, refuse removal and access roads; Access to at least two of the main services (water and sanitation), both individual and shared access to households that are residing in informal settlements either through in-situ upgrading or relocation – also other variations such as a top structure (shelter) and sanitation – both urban and rural areas; Security of tenure – represents various stages of security of tenure such as a title deed, permission to occupy as well as other forms of tenure that recognises the right of an individual household to a specific piece of land;

UPGRADING OF INFORMAL SETTLEMENTS Number of households provided with upgraded services as on 30 September 2013: 263 989 households. Represents 65.9% of 2014 target Over same period Provinces delivered 205 239 formal housing units to households in informal settlements – estimated that 123 143 constructed on newly serviced sites; Therefore total number of households provided with upgraded services: 382 915 Representing 95.7% of 2014 target

OUTCOME 8 : UPGRADING OF INFORMAL SETTLEMENTS (INCLUDING USDG) PROVINCE 2014 TARGET TOTAL DELIVERY (30 SEPTEMBER 2013) % OF TARGET INCLUDING TOP STRUCTURES ON NEW SITES EC 59 440 38 222 64.3 51 821 87.2 FS 26 400 24 475 92.7 36 948 139.9 GT 96 760 63 810 65.9 102 277 105.7 KZN 78 200 39 279 50.2 59 247 75.8 LP 31 200 20 709 66.4 23 083 74.0 MP 26 480 17 389 65.7 24 984 94.4 NC 9 320 11 819 126.8 15 659 168.0 NW 28 840 13 900 48.2 25 316 87.8 WC 45 360 34 159 75.3 47 519 104.8 TOTAL 400 000 263 989 66.0 387 132 96.8

NATIONAL UPGRADING SUPPORT PROGRAMME Need identified in Provinces and Municipalities to categorise informal settlements (determine number of households, suitability of location, in-situ upgrading or re-location) and to develop upgrading strategies and specific informal settlement upgrading plans; Therefore the National Department of Human Settlements introduced the National Upgrading Support Programme; Technical assistance for upgrading of informal settlements in place in 43 Municipalities to date: EC: Buffalo City (26 settlements): SLA being concluded with service provider; TOR submitted to Bid Specification Committee for Amahlathi, Elundini, Mhlonto and Mquma Municipalities; NMM: Negotiations in advanced stage ; FS: Categorisation and mapping under way in six NUSP Municipalities; GT: Categorisation underway in 21 settlements in City of Johannesburg, 66 settlements in Mogale City and 18 settlements in Ekurhuleni, SLA ‘s being concluded with service provider for City of Tshwane (30 settlements and Emfuleni (24 settlements);

NATIONAL UPGRADING SUPPORT PROGRAMME KZN: Service providers on site to conduct classification in Ladysmith: Newcastle (10 settlements) and Mzundusi (72 settlements); TOR approved by Bid Specification Committee for 20 settlements in Ethekwini; TOR for Umhlatuzi (7 settlements) was advertised on 18 October 2013 and further engagements are planned for KwaDukuza ; LP: Developing of specific upgrading plans underway and additional 10 Municipalities identified for the same exercise; MP: Service provider finalising classification in Govan Mbeki (43 settlements); TOR for Emalahleni (29 settlements) submitted to Bid Specification Committee; Agreement with TOR awaited from Thembisile (9 settlements), Steve Tshwete and Lekoa; NC: Service provider busy with categorisation and detailed upgrading plans in Gamagara (2 settlements), Phokwane (7 settlements), Sol Plaatje (28 settlements) and Tsantsabane (5 settlements); List of settlements to be confirmed in //Kara Hais and Ga-Segonyana, :

NATIONAL UPGRADING SUPPORT PROGRAMME NUSP: NW: Rustenburg: SLA’s to be concluded with service provider for categorisation and detailed settlement plans in Rustenburg (10 settlements), Madibeng (30 settlements); TOR advertised for another 8 settlements, : TOR submitted to Bid Specification Committee for Tlokwe, Kgetlengrivier and Maquassi Hills – will form one contract; and WC: Drakenstein: Service provider appointed to produce development frameworks for 25 informal settlements in the COCT; 32 settlements in Drakenstein; SLA’s in the process of concluding in George (12 settlements) and Mossel Bay to produce development frameworkd and update master plan; TOR submitted to Bid Specification Committee in Stellenbosch (Nkanini and Langrug) while confirmation is awaited for the confirmation of the list of settlements in the Theewaterskloof

INCREASED PROVISION OF WELL-LOCATED RENTAL ACCOMMODATION Number of Rental Units delivered through HSDG up to 30 September 2013: 33 020 units; Programmes utilised: Social Housing Programme, Community Residential Unit Programme (CRU) and the Institutional Housing Subsidy Programme; Represents 41.3% of 2014 target Including USDG: Increased to 37 189 units Represents 46.5% of 2014 target Over same period private rental units delivered: 10 368 units Total number delivered: 47 557 units representing 59.4% of 2014 target SHRA: Completed Projects: 2143 units Running Projects: 11 005 units Approved pipeline and in various planning stages: 21 445 units

INCREASED PROVISION OF WELL-LOCATED RENTAL ACCOMMODATION PROVINCE TOTAL DELIVERY % OF 2014 TARGET EC 3 065 25.8 FS 3 519 66.6 GT 10 678 55.5 KZN 8 677 56.9 LP 197 3.2 MP 739 14.0 NC 101 5.4 NW 2 868 49.7 WC 8 688 95.8 Total 37 189 46.5

WELL-LOCATED AFFORDABLE RENTAL ACCOMMODATION Revision of CRU, Social and Institutional Policies currently receiving attention as well as Low-income Rental Policy (Backyard) is being developed in consultation with SALGA; Restructuring Zones: 75 approved and 55 still under discussion- a number of smaller towns have been identified as restructuring zones for expansion of the social housing programme; Agreements signed with all Provinces and provincial Steering Committees in place to ensure increased geographical spread of Social Housing Institutions including Limpopo which was under represented Establishment of rental tribunals in Provinces and advisory offices within municipalities will be investigated to enhance institutional and regulatory capacity. In order to respond to the funding challenges a social housing programme budget review will be undertaken

ACCREDITATION OF MUNICIPALITIES Performance to date: Level 1: 8 District Municipality/Municipalities; Level 2: 8 Metros, 12 District Municipalities/Local Municipalities Implementation Protocols concluded: 24 Municipalities Assignment (Level 3 accreditation) of Metros: FFC response identified a number of operational issues that are currently receiving attention. The target date for signing the Executive Assignment Agreement is still being negotiated

OUTPUT 3: EFFICIENT UTILISATION OF LAND FOR HUMAN SETTLEMENTS DEVELOPMENT Actual delivery: 278 497,9 ha of state land identified for assessment and 70 934,8 ha thereof assessed for suitability for release; 7 587,4 ha well located land has been released (FS, GP,KZN,LP+NW) for the extension of existing settlements, land tenure upgrading, integrated development or GAP market while 1 336,4 ha has been acquired; PHSD’s (private land acquired): 10 218,9 ha National Land Assembly Strategy for Human Settlements and accompanying land pipeline is being developed to: Facilitate forward planning; Justify proper funding; ensure focus on national priorities and avoid missed opportunities; 14 implementation protocols concluded with various organs of State;

Actual delivery: continues…… OUTPUT 3: EFFICIENT UTILISATION OF LAND FOR HUMAN SETTLEMENTS DEVELOPMENT Actual delivery: continues…… 3 Medium term Operational Plans signed with Limpopo, Free State and Northern Cape setting out the support the Agency will provided over a three year period; 4 implementation protocols are currently pending (Gauteng PHSD, KwaDukuza Local Municipality, Buffalo City Metro and Free State PHSD including Mangaung Metro) Challenges experienced: Capital funding for acquisition; Land release turn-around time; Company interest on land; Land claims on some prioritised properties; Lack of planning and preparation for acquisition and release of land

OUTPUT 4: IMPROVED PROPERTY MARKET Target is to provide 600 000 housing finance opportunities to households in the GAP market; Contributors: Development Finance Institutions (NHFC, NURCHA, RHLF), Banks, Credit-linked subsidies, Financed Individual Housing Subsidy Programme (FLISP) and Employer Assisted Housing Programmes; Other interventions initiated to assist with reaching this objective: Mortgage Default Insurance Scheme: Concurrence from the National Treasury for MDI is still outstanding;

OUTPUT 4: IMPROVED PROPERTY MARKET Revised FLISP Policy implemented on 1 April 2012; MOUs between NHFC and four banks signed to actively support the implementation of the programme. Programme rolled out in EC, NC, GT, NW and FS while KZN, WC and LP started collaboration with NHFC in second quarter of current financial year – 36 FLISP projects approved representing 7 070 units; Total number of units delivered: 338 households assisted – Bank bond finance of R46 million committed against FLISP approvals; Various marketing and communication initiatives (covered 215 municipalities) were launched to promote awareness of FLISP programme – includes 164 employer associations

OUTPUT 4: IMPROVED PROPERTY MARKET An amendment to the revised policy has been proposed to address implementation problems: Scrap maximum value cut-off margin; Increase minimum subsidy quantum payable by R20 000; Increase differential income increment band category; Introduce open market payment subsidy route; Amend claw back mechanism; and introduce mechanism to exclude FLISP form pre-emptive right Long term fixed interest rate instrument Planned for launching in 2014

OUTPUT 4: IMPROVED PROPERTY MARKET Rationalisation of Development Finance Institutions: Feasibility study and business case completed; Service provider appointed to prepare the Legal Due Diligence; Process to appoint service provider for legal drafting of Bill is being finalised Loan funding from Banks: Number of housing finance opportunities contributed by Banks: 2010/11 (28 952), 2011/12 (21 008), 2012/13 (44 812) Total: 94 772 opportunities – remarkable increase in 2012/13 financial year can be attributed to increase of household income ceiling to R15 000; Housing Finance Sector consultative meeting planned for mid-November 2013 with a view to introduce more robust policy instruments

PERFORMANCE : DEVELOPMENT FINANCE INSTITUTIONS: LOANS GRANTED TOTAL DELIVERY % OF 2014 TARGET NHFC (Mortgage Loans) 1 938 100.5 NHFC (Incremental Loans) 12 968 31.9 NHFC (Wholesale funding) 26 841 68.2 NHFC (Leverage) 35 616 277.4 RHLF 150 543 82.8 NURCHA 8 357 75.7

OUTPUT 4: IMPROVED PROPERTY MARKET INSTITUTION NUMBER OF LOANS DFI’s 236 263 Banks 94 772 Employer assisted housing 644 Total 331 679 (Representing 55,3% of 600 000 target)

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