Scottsdene challenges: briefing by City of Cape Town

Meeting report

Opening Remarks by Chairperson and others
The Chairperson remarked that the Committee had undertaken an oversight visit in the Western Cape at which point a community meeting (with the Scottsdene community) had been held. Since then it had been agreed that a meeting be held involving all stakeholders – including the National Department of Human Settlements (NDHS), the Western Cape Department of Human Settlements (WCDHS), the City of Cape Town – so relevant matters could be discussed and a way forward found. It had been the Committee’s intention for this meeting to take place during 2011 but unfortunately the local government elections in May 2011 had gotten in the way. The Committee had decided not to pursue the matter because it had wanted to give the City of Cape Town some time to settle so that when it came to meet with the Committee they would be sufficiently familiar with the issues on the table. The City of Cape Town and the Committee would be working closely together and either party should be able to approach the other.

Ms Jacqui Simpson, Chief Director: Human Settlements Planning, in the Western Cape’s Department of Human Settlements, said that when the WCDHS and the CoCT were invited to present, it had been agreed that the City would lead the presentation. This was because the City was the developer and administrator of the project, as the funding went straight to the City. The WCDHS was pleased that representatives from the community were present so that the Committee could liaise directly with them. There were a number of projects running in the Kraaifontein area, of which Scottsdene was one. The City was best placed to give the presentation but there was collaboration between the City and the WCDHS.

Mr Ernest Sonnenberg, Councillor, Mayoral Committee Member: Human Settlements, City of Cape Town, thanked the Committee for giving the City the opportunity to present to it. The Committee had asked the City to brief it on Scottsdene but the presentation would also include developments in other areas of Kraaifontein including Wallacedene and Bloekombos. The City would provide an overview of everything. It was very excited to be coming to the Committee to present its integrated housing development programme which it thought to be breaking new ground. The City wanted to bring the Breaking New Ground (BNG) houses into the fold with ‘gap’ market houses and open market houses in one development. The City was excited about this type of development because it wanted to get rid of racially separated houses and apartheid’s spatial planning. Hopefully the Committee would be able to see the City’s sentiment and excitement.

Briefing by the City of Cape Town on Scottsdene
Mr Seth Magetuka, Director: Strategic Urbanisation, City of Cape Town, said that Scottsdene and Wallacedene were in the eastern region of Cape Town. There had been a lot of development in this region over the last few years. Wallacedene, where 9 000 housing opportunities had been created, was one of the City’s biggest housing projects. The City had seen a lot of delivery in this area, which was not to say that it would be coming to an end. There was currently a very big project underway in the area which was part of the Community Residential Unit (CRU) where the City was doing some refurbishment on flats. The City was also looking into innovative projects in the future which aimed towards a “compact city”. The project that would be implemented in Scottsdene was the Scottsdene Infill project and it was very integrated. It aimed for a strong partnership between the City and the private sector. The project was not just about “housing” – the City was looking at creating an integrated development.

Mr Jens Kuhn, Manager: Land and Planning, City of Cape Town, said the presentation would respond to the Committee’s request for a detailed background of the Scottsdene project “including who the project was targeting, the number of beneficiaries, the area and the duration of the project, policy under which this project was implemented, as well as the way forward, seeing that it was not fully completed”. Mr Kuhn was pleased that the Kraaifontein Community and Economic Development Forum was present at the meeting as he would be pointing out some of the benefits of the project towards economic development in the area. Relative to the rest of Cape Town, there had been a lot of public investment in this area

By way of background, the estimated population of the greater Scottsdene area in 2006 was 65 000 persons. Most families living in the area were poor. There were currently about 2 800 applicants on the waiting list for housing. The majority of the current housing funding in the area was by the State – very little private investment had been made in Scottsdene.

Mr Kuhn gave an overview of six housing projects that had taken place in Scottsdene since the 1980s. The first had been the “self-help” scheme which was started in the late 1980s and focused on delivering serviced sites for sale. The second was in Bloekombos and was started in 1991 in response to a new informal settlement and was driven by the provincial government. The product of this project was roughly 4 400 RDP houses (during the Rural Development Project era). The Wallacedene project, which was now coming to an end, began in 1998, and had produced 9 672 housing opportunities.

In 2007, the Council undertook the “Show Village” project which invited developers to come in and demonstrate their innovative building technologies. The idea was to put aside a number of sites for this. The “rules of the game” were that the developers had to build a “top structure” (i.e. a house) for R200 000 or less. The land price had been effectively discounted to zero to make the project more feasible. The idea was that once the project was running, the developers would find buyers with bonds who were not getting state subsidies. The project targeted the ‘gap’ market (households earning between R3 500 and R10 000 per month). The Show Village ran for a few weeks and the developers in which people had shown the most interest were contracted to build on other sites. It was interesting to see how the community reacted to the different products. Another project currently underway in Scottsdene was the CRU Upgrades which targeted 645 Council Units for refurbishing. The amount of money going into this project was R94.1 million. The upgrading and refurbishing of the Units was very important as there had been little to no maintenance on these buildings in the last fifteen years. If you did not look after your assets, you would not have happy tenants who would therefore not want to pay rent, resulting in a vicious cycle.

The latest project, which had just begun, was the Scottsdene Infill Development project. Some of the worst “teething problems” had just been overcome. The bidders to build on the identified vacant land had been asked to come up with an optimal way of making use of the land for integrated housing (including bonded housing). The idea was for the value put on the land to be protected. The completed contract would deliver 350 new council units, 1100 ‘gap’ market units, 220 open market units and 550 BNG units (units financed by the State). The price for the ‘gap’ houses should be between R350 000 and R450 000. The total number of housing opportunities that would be created was 2 200. There was currently a debate about whether some of the ‘gap’ units should be converted to social housing. It was important to the Council to build up a “rateable area”. Property rates were important to Council and therefore it did not just want to build areas where households fell below the rateable level leaving the Council with no revenue and endless expenditure. Council was just the administrator in this project.

Mr Kuhn said the City had stated in the contract that it would like an audit trail of the employment opportunities created by the contract which the City would filter into its Expanded Public Works Programme “score card”.

Input from the Kraaifontein Community and Economic Development Forum
Mr Wilson Daniels from the Kraaifontein Community and Economic Development Forum, said that Scottsdene was a very big and complicated issue. A lot of the current rental stock was not meant to still be rental stock. In 1994, all the rental stock built before 1980 was given to the people. The Council was supposed to have transferred the houses to the community. This never took place because Council claimed that some people were in arrears. Government had given the Council a grant so that it could write-off all of the arrears so that the house transfers could take place. The community does not know what happened to this grant, but it did know that transfers did not take place. Some of the tenants bought their units and even in some of those instances transfers did not take place. In some cases, elderly people who had bought houses passed away and Council came in to claim those houses as their own. The Forum was saying that not all of the units in Scottsdene were Council property. In 2005, there were 55000 subsidies to go towards the self-help project. The community had waited for the self-help project to go through. The Show Village was phase three of the self-help project. All of these plots were given to people who were waiting for funding to come through from the City as the City said it did not have money and was waiting for money to come from the province. After a couple of years, the City re-subdivided those plots that belonged to the people. Each and every one of those plots had been linked to a name and an identification number and address. Mr Daniels was one of these people. All of these people in Scottsdene had been disowned by the Council who had brought in a civil engineering company to re-subdivide the plots into an “A” and a “B”. The community did not know how much this had cost and who funded it because a lot of money was spent on servicing land that had already been serviced. That money could have been used to service unserviced land and build houses for the people. Mr Kuhn had said that these houses were being sold for R200 000, however, this land was meant to have been for the people of Scottsdene. If one went to the Show Village now, one would find only two to three people who were actually from Scottsdene. The people of Scottsdene had not benefited from this project – the land had been given to people from outside of Scottsdene. People in Bloekombos and Wallacedene had received free houses of better quality than those built in the Show Village.

Mr Daniels said that there was a major housing backlog in Scottsdene that went back to 1977. The last house that was built for the poorest of the poor in Scottsdene was built in 1977. Since then, no houses had been built for poor people. When the community tried to engage with Council, Council did not talk to it. Council held unilateral meetings where it took decisions that it told to the people. The people of Scottsdene were the poorest of the poor – most of them were unemployed or living on grants. If rental stock was to be built in Scottsdene, none of the Scottsdene people would actually benefit. If the Chairperson went to Scottsdene, she would see that the whole area was like a squatter camp. The community had pleaded for the last remaining vacant land in Scottsdene to be used to build houses for the poorest of the poor. This was not what it was seeing happen. Instead, most of the houses being built were for the middle class yet the middle class could buy houses anywhere while the poor Scottsdene people could not.

Mr Daniels asked for everyone to please reconsider the project so that the people of Scottsdene did not end up without housing once again.

Discussion
The Chairperson asked for the City to respond to the community. The City could not be introducing new projects until it addressed the old problems raised by Mr Daniels.

In reply to Mr Sonnenberg asking if he was referring to the flats when he spoke about rental stock, Mr Daniels said that he was.

Mr Kuhn said he was not sure what the community was referring to but there certainly were cottages or “row houses” in Scottsdene that had been sold. The majority however were blocks of flats. The blocks of flats had not been transferred because the City needed to maintain them and if it transferred the flats to the community then the community would have to take responsibility for maintaining them. The whole CRU programme would not have been possible if the flats had been transferred.

Mr Magetuka added that the City had Estate Housing Officers in all of its estates. There were about fifteen in the City. These were officials on the ground and they were in contact with the people on the ground. If a unit could not be transferred for whatever reason, then these officers communicated with these people. This was not to say that the City’s communications were perfect but a structure did exist.

The Chairperson asked what the “self-help” project was about. Was it the same as the People’s Housing Project (PHP)?

Mr Kuhn replied that the term “self-help” had been used so as to distinguish the project from PHP. They were not the same thing. Self-help was a scheme from pre-1994 whereby the state built serviced sites that people could apply for and pay for (even if it was a nominal fee) and then carry on building their own homes with micro financing. This was different to the PHP after 1994. PHP used state funds to build top structures through a managed process. There was much more assistance from a contractor’s point of view in the case of the PHP.

Mr Chainee said that the land referred to in terms of the Show Village was where the problem was. Perhaps there could be some clarity on this for everyone to get a better picture of where they were at.

Mr Sonnenberg clarified some of the terminology used and thought it important to distinguish the self-help project from the allocations made in terms of land. He hoped that the institutional knowledge of officials in the room would carry the City through when it gave answers. For the City to know everything that had happened from 1980 would be a bit of a challenge and so it might need to come back to the Committee with answers. There had also been a change of staff in the City.

The Chairperson replied that the meeting today was an initial meeting and was meant to pave the way forward. There would be further engagement with the City.

Mr Kuhn referred everyone to the colour-coded map which outlined where in the Scottsdene area, particular projects had taken place. The pink lines were where the self-help project was. The brown line was where the Show Village project was. There were 190 stands on the Show Village. The areas outside of the blue lines but within the pink lines were successful self-help scheme projects.

Mr Kuhn said that the City’s doors were open for the community to come and talk to it. If the community had any queries about commitments made in the past that were not kept by the City then the City would remedy these. There was no question about this. The City asked for the community to bring paper work as evidence when they came to the City. Otherwise, it was difficult for the City to respond.

Mr Rob Johnston, Regional Head: New Settlements, City of Cape Town, said there had been two processes of public participation. One of these had been in the run up to the tendering process for which public meetings had been held. Secondly, the City was putting in a steering committee as it did with all processes. The ward councillor, representatives from the community called through the media, and the official in charge of the project sat on this committee. This committee would meet for the first time in January 2012 and would come up with allocations in terms of ratios. Allocation proposals would be taken to the sub-council for further discussion.

The Chairperson asked if the City knew of the Kraaifontein Community and Economic Development Forum and if it had had any meetings with them.

Mr Johnston replied that there had not been one-on-one engagement with this community but that they had been present at the engagement with the wider Scottsdene community.

The Chairperson said that in this case the City had not directly met with this community.

Mr Sonnenberg said that there had been confusion with expectations relating to the self-help project which took place before and after 1994. Legislative changes had been made, but past expectations still existed. This was not to say that the community was not at fault but that it should bear in mind that things changed during the transition and it was difficult to follow through on promises made in the past.

The Chairperson said that the changing of government was not an excuse. The people that changed were the politicians but the records of their decisions were archived and did exist. Politicians left records behind.

The Chairperson said this point was up for discussion.

Mr B Steyn (DA) first asked the community a number of questions. There were three issues raised by the community that needed to be answered and if they could not be answered then there should be some indication of the status of them. The first was the allegation that transfers of pre-1994 stock were not completed. Were there still properties that needed to be transferred? Secondly, an allegation about the land on which the Show Village had been built was a serious one. Mr Daniels alleged that this land belonged to community members. The third allegation was that people in Bloekombos and Wallacedene had received free houses of better quality than those built in the Show Village. If the show houses cost R200 000 (excluding infrastructure and the cost of the land), then Mr Steyn could not imagine that houses within the RDP scheme were better. If this was the case, then these developers should be used in the future. This sounded strange to him.

Ms Borman (ANC) said that the beneficiaries were the crux of everything that was done. Allegations of insufficient participation with the community seemed to be arising. The “Infill” project targeted the building of 550 BNG houses, yet the waiting list of people in need of housing in Scottsdene was reported in the presentation to be almost 3 000. How did the City plan to bring the 550 BNG houses and the 3 000 people on the waiting list together? Ms Borman asked if she was missing something. Where would the remaining approximately 2 500 people go?

Mr Sonnenberg replied that the current population of Scottsdene was probably closer to 80 000 to 100 000 people. Out of this number, roughly 2 800 people were on the waiting list. The integrated waiting list was for people earning below R3 500. Realistically, the City could not just build subsidy houses. The ‘gap’ market also needed to be catered for. The City was also in discussion with its social housing partners in relation to the ‘gap’ market housing units. The 350 new council units to be built as part of the Infill project were also marketed at the poor. If one quarter of the ‘gap’ market units were to be taken up by social housing then roughly 1 100 units out of the 2 200 units would be going to the poor. Realistically the City needed to have integrated housing. The ‘gap’ market housing and open market housing ensured that the BNG units were of a better quality and gave beneficiaries of the BNG better value. Ideally poor people should be able to use their houses as an asset for collateral and participate in the economy.

Mr Kuhn said that housing was not a “science project” whereby 3 000 houses could be built and matched up to 3 000 people. This was not how it worked as there was a finite amount of vacant land in Scottsdene which had been put into a pool. Bidders had been asked to come back to the City with proposals. The City could have decided to just build BNG housing in which case it might have come close to 3 000 but then the developments would not have been integrated. Building integrated housing developments was therefore a balancing act. Furthermore, the 3 000 people on the waiting list noted in the presentation “was not a real number”. The 3 000 was rather a total of how many people had applied for housing over a number of years. Some of these people might have left Scottsdene or might have been deceased.

Ms Borman asked what the plans for the people earning less than R3 500 per month were. Even taking into account Mr Sonnenberg’s explanation, where was the balance of people on the waiting list going and did the community know what was happening?

Mr Sonnenberg said the reality was that Cape Town was very big and that the City of Cape Town could not just address the backlog in one area exclusively. The City was trying to achieve equitable housing delivery across the whole of Cape Town. The City had to meet the needs across the whole of Cape Town within the funding it received. This was not to say that the City should not have a plan going forward.

Mr Steyn asked if the people on the waiting list were on lists to receive housing in other parts of the City of Cape Town. This related to Ms Borman’s question.

Mr Magetuka replied that the City’s integrated housing waiting list did not confine applicants within a particular area. If an applicant was next up on the waiting list and was also willing to move to another area then that applicant would be offered that opportunity to get a house in the other area.

Ms J Sosibo (ANC) asked for clarity on the 1100 ‘gap’ market units. Were the units for people who had been rejected by government? Were these people meant to go to the banks on their own to get money?

Mr Johnston replied that the contract stated that the developer was responsible for soliciting people who wanted to take up bonds. Taking buyers to the bank to get them credit worthy so that the bond was approved was the developer’s responsibility. There was no reason why some of the 3 000 people on the list could not be potential bond candidates.

Ms Sosibo asked if the taxi drivers or taxi associations would be contributing towards the building of a taxi rank in Scottsdene.

Mr Steyn said he was excited when the presentation began as he and the Committee had recently come back from the Eastern Cape and other parts of the country but were yet to come across a viable integrated development project. Some of the other municipalities were stuck in the mindset of delivering “subsidised housing”. Having said this, looking at the CRU project, City of Cape Town said that R94.1 million would be spent on upgrading approximately 400 units. This equated to approximately R196 000 per unit which was quite expensive for refurbishment of an existing unit. It was the kind of figure that would probably not be regained in the next twenty years.

Mr Sonnenberg replied that the CRU units themselves as well as the surrounds were upgraded. New facilities were also being put in and “greened”. The units were upgraded in their totality and were also fitted with security and a number of other features. Housing the people living in the units during the refurbishment of their units was also very expensive. For 28 days these people were given free water and electricity. The cost took all of this into account and was reasonable taking everything into account.

Ms Borman said the Committee did not mean to minimise the work being done by the City but members were just trying to wrap their minds around what was happening. It seemed to her as if the City was very up to date with its applicants and also very aware of the ‘gap’ market and the numbers needed et cetera.

Mr Sonnenberg apologised if he came across as defensive but he was so passionate about this housing issue and it might come across as if he was fighting whereas he was just very passionate.

Mr Steyn asked if the beneficiaries of the current project had been identified and if they knew who they were or would the identification process take place at a later stage.

Mr Figlan said he also queried what had been done with the government grant given to the municipality for the transfer of houses to the community. This question could be answered in the next meeting. It was not only Scottsdene that was suffering from not having being given houses by government. The community should be given an explanation of what had happened. The R7 500 had been promised to people in Khayelitsha too but not a single person had received this money.

Mr Magetuka replied that according to the Discount Benefit Scheme, a package price was determined per unit. This was where the discount of R7 500 came in to balance out the price. The occupant would either get the house for free which was what happened in most cases. No cash was actually given to beneficiaries.

The Chairperson said that all of the problems would not be solved today.

The Chairperson asked if the waiting list included people who were beneficiaries of the people on the original list. If a person’s mother had been on the list, and had passed away, then her daughter was still a beneficiary and should be eligible for a house in terms of the waiting list.

Mr Daniels replied that he would make copies of this original list for circulation and give it to Ms Mabalane.

Mr Chainee commented that there were a lot of issues that needed to be tightened up. The first issue was sometimes there were unintended consequences of development, especially in the larger cities – Cape Town was not the only one. One of these was “downward rating” – because property prices and land values had increased, the middle and upper income areas “rated” the poorer areas and so lower income communities were continually being displaced. This was unintended but it did sometimes happen. Government needed to guard against this. It was sometimes a curse even with the discount benefit schemes. Sometimes people did not understand the value of the houses being transferred to them or else they underestimated the value of their houses. What happened was that people ended up buying out those areas and the poor were rendered homeless.

Mr Chainee said that government needed to be a little more attentive to and patient with poor people. It was difficult for the poor to travel to meetings and sometimes to keep track of notices published in the media.

Mr Sonnenberg said that the issues raised by the community and the Committee around the self-help scheme were very serious and the City of Cape Town’s doors were open. The City would be giving attention to this. The City had the obligation to properly communicate with the people and if this had been identified as a problem, then the process going forward would be more consultative. The City would have to foster better relations with the communities and looked forward to resolving some of the issues that had been raised in the meeting.

The Chairperson said that the agreed way forward was for the community, the City and the WCDHS to work together with the Committee on the matters discussed in the meeting. The self-help scheme issue must be resolved together. There would be another meeting next year where the City and the province could give the Committee some feedback.

The Chairperson asked if the community was happy with the proposed way forward.

Mr Daniels replied that the community was happy with the agreed plan for the way forward.

The Chairperson said that the Committee had invited the Nelson Mandela Bay Metropolitan Municipality to a meeting the previous day to account for the Urban Settlements Development Grant (USDG). The City of Cape Town would probably be the next to be asked to account to the Committee on the USDG.

The Chairperson thanked everyone for their participation.

Ms Borman thanked the Chairperson and the Committee’s support staff for their very hard work. The Chairperson was a workaholic and should be thanked. Ms Borman also thanked the Chairperson for her leadership and the fairness with which she handled matters. It was a privilege for the members to serve on this Committee.

The meeting was adjourned.