PRESENTATION TO THE PORTFOLIO COMMITTEE FOR HOUSING DEPARTMENT OF HOUSING PRESENTATION TO THE PORTFOLIO COMMITTEE FOR HOUSING 25 March 2003 BUDGET 2003/04 TO 2005/06

Presentation Index Aim, Vision and Mission of the Department Our Values Our Mandates Housing Legislation and Regulations Our Policy Framework Strategic overview and policy shifts Housing environment since 1994 white paper Challenges facing Housing Linkages to Government Policy Priorities Strategic Policy: Shifts Budget overview Conclusion

DEPARTMENT OF HOUSING AIM: The aim of the Department of Housing is to determine, finance, promote, coordinate, communicate and monitor policy in respect of housing and human settlement. Vision: A nation housed in sustainable human settlements Mission: To establish and facilitate a sustainable process that provides equitable access to adequate housing within the context of affordability of housing, services, and access to amenities and economic opportunities

OUR VALUES Our values, based on the constitution, are: Human dignity,equality, advancement of human rights and freedoms; Non-racialism and non-sexism; Supremacy of the constitution and the rule of law; Accountability, responsiveness and openness.

OUR MANDATE SA CONSTITUTION Section 26: Access to adequate housing a basic human right; Govt. to ensure environment conducive to the progressive realisation of the right Schedule 4: Housing is a concurrent national and provincial legislative function Botshabelo Housing Accord (1994) Signed by all housing stakeholders Reconstruction and Development Programme (RDP) – set out framework and principles for sustainable development

HOUSING LEGISLATION Housing development programme continues to operate in the following legislative framework. Housing Act 107 of 1997 Prevention of Illegal Eviction from and Unlawful Occupation of Land Act No. 19 of 1998 Housing Consumers Protection Measures Act 95 of 1998 Rental Housing Act 50 of 1999 Home Loan Mortgage Disclosure Act 63 of 2000 Disestablishment of South African Housing Trust Limited Act 26 of 2002

HOUSING LEGISLATION CONT. Currently in process Community Reinvestment (Housing) Bill. Housing Amendment Bill Social Housing Bill

REGULATIONS AND GUIDELINES National Housing Code Sets out National Housing Policy in detail including a user friendly guide Contains the detail prescripts pertaining to the Housing Subsidy Scheme National Norms And Standards For Permanent Residential Structures Sets amount of the subsidy which may be used for infrastructure Sets the minimum size of houses

REGULATIONS AND GUIDELINES Guidelines For Human Settlement Planning And Design (“Red Book”) Planning – movement networks, transport, open space, subdivision layouts, design to reduce crime Engineering services -stormwater, roads, water supply, sanitation, solid waste, energy Guidelines For Environmentally Efficient Low Cost Housing Energy and water efficient planning and design for low cost housing; and Urban greening guidelines

REGULATIONS AND GUIDELINES Regulations under the Housing Consumers Protection Measures Act, 1998 relating to the subsidy only sector have been drafted; Regulations under the Home Loan and Mortgage Disclosure Act. 2000 have been outsourced and should be finalized shortly; and Regulations under the yet to be promulgated Community Reinvestment Act

OUR POLICY FRAMEWORKS Policy framework as determined by the White paper on a new housing policy and strategy for South Africa, 1994

STRATEGIC OVERVIEW Housing environment since 1994 white paper More than 1,47m houses have been built or under construction and 1,8m subsidies approved benefiting more than 5,6m people Early focus was on quantity, rather than quality housing to address housing needs and backlogs Focus was on development of policies and legislative instruments Introduction of the Housing subsidy scheme consisting of seven subsidy instruments Special subsidy dispensation for the disabled Procurement regime compliant to constitution

STRATEGIC OVERVIEW Current challenges facing the housing programme Lack of private sector investment and resource constrains Moving towards medium density housing as a priority and integrated development Creating higher quality housing and living environments Reducing dependency and promoting a culture of savings Need for interventions to deal with emergency situations resulting from natural disasters and other incidents - Grootboom case.

STRATEGIC OVERVIEW Current policy trends in housing programmes. Housing Finance Challenges - Contributions required from Government, the financial sector, the NGO sector and ultimate beneficiaries Extension of the Housing Warranty Scheme through the NHBRC to beneficiaries More emphasis on monitoring of policy impact, expenditure and delivery More emphasis of oversight on housing institutions Promoting new and innovative building technologies

STRATEGIC POLICY SHIFTS New policy approaches Having achieved the target of 1 million houses the housing programme now has to reflect on the outcomes and how these can be improved – a Consolidation Phase A shift in focus from “numbers of units” to quality of products and environments – Medium density integrated housing programme and emphasis on PHP Social housing policy and legislation Rental housing NHBRC warranty

STRATEGIC POLICY SHIFTS Promotion of social responsibility through: Own contribution to access housing subsidies and the NHBRC warranty scheme Savings linked housing subsidy to promote a culture of savings Improving access to housing credit: Community Reinvestment Legislation (CRA) Home Loan Mortgage Disclosure Act, 2000

STRATEGIC POLICY SHIFTS Improving human settlement environments: Programme to main stream environmentally efficient housing Disemmination of good practice Measures to cater for needs of special groups (eg. Differently-abled, people living with HIV, elderly,youth and children, farm worker and emergency housing)

STRATEGIC POLICY SHIFTS Improving integration in service delivery: Multi-year national and provincial housing development plans linked to Integrated Development Plans (IDPs) Identification of and access to centrally located land for integrated medium density housing developments Contributions to Urban Renewal and Integrated Rural Development Programmes

STRATEGIC POLICY SHIFTS Improving service delivery: New demand led procurement regime Capacity building programmes for stakeholders, including government and industry

STRATEGIC POLICY SHIFTS Improving international cooperation on human settlement development: Lead Ministry for UN Habitat (Habitat Agenda) – World Urban Forum, WSSD Cities Alliance – “cities without slums” initiative Supporting NEPAD regarding sustainable human settlement development in the African region is concerned. Bi-lateral and multi-lateral cooperation programmes with donor countries

LINKAGES TO GOVERNMENT PRIORITIES Housing activities are focused in the following Government priorities areas Urban renewal Integrated Sustainable Rural Development The eradication of poverty Transformation Black Economic Empowerment Engendering a culture of saving

BUDGET OVERVIEW Programme 2003/04 2004/05 2005/06 1 Administration 44 850 59 063 67 128 2 Housing Policy Planning and Research 16 448 22 139 24 634 3 Programme Management 122 104 152 477 165 437 4 Housing Sector Performance 304 871 286 252 296 446 5 Communication 10 177 11 768 12 388 6 Housing Development Funding 4 275 039 4 502 397 4 774 204 7 Housing Equity 5 347 5 612 5 949 Total 4 778 836 5 039 708 5 346 186 Change to baseline 479 355 260 872 306 478

BUDGET OVERVIEW Programme 1: Administration Purpose of this Programme is to provide administrative and management support services to the Department Changes in the MTEF A real average increase over the MTEF at 7 % Decrease from 2002/03 to 2003/04 at 16 % mainly as a result of the of reduction in Prof. and Special services Reduced development costs of the Debtors system Completion of the preparation of the Housing Funds statements and the transformation tenders Completion of auditing and related costs for the Housing Funds statements for past years Housing Debtors Management system maintenance Reprioritization within the department

KEY ACTIVITIES OVER MTEF Provision of Strategic Financial Management Services Provision of Human Resources Management Services Provision of General Corporate Services to ensure corporate efficiently Provision of strategic support services for the Minister and Accounting Officer Implementation of toll free number to address public enquiries and as anti-corruption initiative Implementation of the transformation imperatives

BUDGET OVERVIEW Programme 2: Policy Planning Purpose of this Programme is to ensure a sound national housing policy framework Changes in the MTEF Effect of restructuring, function shift and reprioritization resulted in increase of 20 % between 2002/03 and 2003/04 2003/04 and 2004/05 increase mainly for framework legislation projects Fairly stable over the MTEF period

KEY ACTIVITIES OVER MTEF Drafting of new legislation Community Reinvestment Bill Social Housing Bill Amendments to current legislation Rental Housing Amendment Bill Housing Consumers Protection Measures Prevention of Illegal Eviction from and unlawful Occupation of Land Amendment Bill (PIE) Drafting of Regulation under HLAMDA, CRA, and Social Housing Act

KEY ACTIVITIES OVER MTEF Audit of all legislation impacting on housing Outreach programme to provincial departments and local authorities for training and monitoring of implementation of legislation Development of emergency relief housing Development of Medium Density Housing policy Development of CR Policy Produce policy paper on Environmentally sound and efficient Housing Produce report on child headed households and housing

BUDGET OVERVIEW Programme 3: Programme Management Purpose of this Programme is to manage national housing programmes Changes in the MTEF Mainly dominated by transfer payments: 90% Major Reduction from 2002/03 to 200304 on the Job Summit Project no more funding after 2002/03 Major increase conditional grant Human Settlement Redevelopment Programme From 2003/04 :R109m; 2004/05: R116m and 2005/06: R122m Fairly stable over the MTEF period Experiencing staffing capacity problems

KEY ACTIVITIES OVER MTEF Implementation of the Human Settlement Redev. Programme and the Presidential Pilot programme Promotion of Improved Traditional Building methods and technology Management of the Phasing Out programme Produce guidelines and report on the possible extension of the Warranty cover to PHP Produce report on outcome and lessons from implementation of the Presidential Pilot programme Development of housing education and training programme and professionalisation of the Housing sector

PROVINCIAL ALLOCATION (HSRDP)

BUDGET OVERVIEW Programme 4: Housing Sector Performance Programme is to monitor and assess the impact of housing delivery, manage housing information, and support housing institutions Changes in the MTEF Mainly transfer payments: 92% Increase from 2002/03 to 2003/04 by 42% Mainly as a result of increases in SAHT liabilities allocation to be transferred to National Treasury upon of finalization of the disestablishment of the SAHT Fairly stable over MTEF period

KEY ACTIVITIES OVER MTEF Monitoring the implementation of housing policy & programmes Monitoring the performance of Housing Support Institutions Impact assessment of Implemented Policy and programmes Monitor identified economic and financial variables as well as Construction Industry trends & reciprocal impacts Maintenance of Housing information systems.

BUDGET OVERVIEW Programme 5: Communication Purpose of this Programme is to facilitate and promote the free flow of information between the Department and its stakeholders Changes in the MTEF Currently experiencing major staffing capacity constraints and it is planned to increase staffing levels to reach 85 % by the end of the first quarter of 2003/04 Increases by an average of 7% over the MTEF period Various ministerial programmes National Housing Awards Rand show Exhitions Staffing problems being resolved

KEY ACTIVITIES OVER MTEF Dissemination of information to stakeholder and facilitate feedback Development and maintenance of a communication strategy in support of housing programme Production of publications on targeted basis Consumer awareness campaigns

BUDGET OVERVIEW Programme 6: Housing Development Funding Purpose of this Programme is to manage the funding of national housing programmes Consist mainly of Transfer payments to provinces in terms of DORA as conditional grants Allocation of funds to provinces is based on a new formula which introduces urban bias and will be phased in throughout the MTEF. Need of each province as measured by the housing backlog takes into account factors such as homelessness, shack dwelling, caravan dwelling, tents, backrooms, rooms in flats. A poverty indicator measured by households earning less than R3,500 in each province. Population share: Indicator as measured by each province’s share of total population.

PROVINCIAL ALLOCATIONS (SAHF)

BUDGET OVERVIEW Programme 7:Housing Equity To promote fair lending practices by banking institutions, and provide for setting and enforcing specific minimum targets by financial institutions in lending to the low and medium income level households for housing purposes. Take responsibility for implementing the Home Loans and Mortgage Disclosure Act (63 of 2000) (HLAMDA), its regulations and the Community Reinvestment Bill when the latter comes into operation. Funding provides for setup costs

BUDGET OVERVIEW

Conclusion Need to improve access to housing credit by the low income group Need to address dysfunctional secondary low cost housing market Improve governance – non-adherence to prescripts – Corruption Investigating capacity Improvement in information to beneficiaries – lack of adequate communication

Conclusion Addressing unresolved housing land issues Implementation of new policy regimes eg. Procurement regime, own contribution, phasing out programme. Housing backlog Improvement in delivery capacity

Thank You