Gauteng and Limpopo Housing Departments on poor performance: Urban Settlements Development Grant; Informal Settlements upgrading; Title Deeds backlog; Affordable rental housing

Meeting report

Briefings by provincial Departments dealing with human settlements issues: Performance, Urban Settlements Development Grant, Informal Settlements upgrading, Title Deeds backlog, Affordable rental housing updates

Gauteng Provincial Department of Human Settlements briefing
Mr Ngoako Molokomme, Acting Head of Department, Gauteng Provincial Department of Human Settlements, said that the evaluation criteria used by his Department for the allocation of sites for housing included demand, the potential growth of the town, proximity of public transport, municipal planning and land assessment. The 2015-2016 target for Social and Rental Housing is 910, and the provincial Department exceeded this target with a delivery of 973. Community Residential Units (CRU) upgrades had a target of 518, but only achieved 271 unit upgrades, and the CRU construction had a target of 201 but only 35 units were constructed. Overall, the provincial Department only over achieved on one of its targets, by 106%. A total of 1001 social and rental houses were completed for the 2015-2016 year. These completed houses were located in Johannesburg CBD, Roodepoort, Springs, Pretoria and Kempton Park, with Johannesburg CBD and Roodeport having the most delivered units, at 457 and 161 respectively. Although the units were completed, the province had not yet issued occupational certificates for Johannesburg, Pretoria and Kempton Park.

A total of 4 321 units had been planned for delivery during the 2016/2017 financial year. These units included institutional subsidies, social housing, CRUs that had to be upgraded and CRUs that must be constructed. The budget for the upgrades and construction for all three categories is R697  472  250. The breakdown was then given. The institutional subsidies makes up R226  811  733 of the budget, social housing makes up R145  281  509, CRU upgrades make up R125  160  740 and CRU constructions make up R200  218  268. Social and Rental Housing’s business plan for 2017 has a total annual budget of R739  559  205, with a planned target of delivering 4 486 units between 2017/2018. The budget allocation for institutional subsidies is R270  044  998, social housing has been allocated R75  186  735, CRU upgrades are allocated R60  946  000 and CRU constructions are allocated R333  363  471.

The future budget allocations for the 2017/2018 year are R734  857  794, with a planned target of 4  980 units delivered. The 2019/2020 year has been allocated with R785  465  058 and the planned target is to deliver 5 328 units.

Social and Rental Housing’s Medium Term Strategic Framework (MTSF) analysis consists of a planned target of 9 905 for social housing and 2 800 for both the CRU upgrades and constructions. The provincial Department had only achieved delivery of 1 802 units for social housing and 325 units for CRU. An increase of the social housing units is expected from Mega Projects Ready for Implementation. Collaboration with the Gauteng Partnership Fund (GPF), Social Housing Regulatory Authority (SHRA), municipalities, the private sector and the injection of potential social housing projects will enable the provincial Department to deliver more than what is required in the MTSF target.

The Johannesburg Social and Rental Housing (SRH) programme consists of 13 projects, which are all funded by the National Department of Human Settlements (NDHS). Johannesburg has a planned target of 764 units for the 2016/2017 year and the budget allocation for the project is R111  997  409. The projects are mostly situated in Alexandra, Dobsonville, Tsutsumani Village and Devland. The CRU construction programme has 18 projects, a total of 717 planned targets for 2016/2017 and a budget of R294  861 572. The projects are allocated in Diepkloof, Meadowlands, Jabulani and Dube, Rethabile Hostels and Orlando West. The Tswane SRH programme consist of seven housing projects under their institutional subsidies. The target for these housing units is 630 and it has a budget allocation of R104  180  710. The Sedibeng and West Rand CRU upgrades and constructed programme consists of 10 projects located in Mohlakeng Hostels, Sharpeville hostel, Kwama-Siza and Ratanda, respectively. The target for delivery is for all the projects is 216 and the total budget for both areas is R62  766  261. The Ekurhuleni institutional subsidies and CRU upgrades programme consist of seven projects with a target of 465 units. The total annual budget allocation for the projects is R99  309  844.

The GPF will be allocated to 16 projects under the institutional subsidies programme. The fund is meant to help the provincial Department deliver 1 229 units in the Johannesburg, Benoni, Kempton Park, Germiston and Pretoria areas. The grand total of the funding from GPF is R136  353 963.

There are numerous challenges for social housing. There is a shortage of well-located land, the provincial department is unable to make provision for the bulk of the infrastructure taking place and the unit cost for high rise development is high, hence an additional funding mechanism is required. The provincial department planned to engage with the Department of Infrastructure Development for potential investment base for social and rental intervention programme, for both the land and buildings. The department also wanted to improve its working relationships with its stakeholders. The intervention from the GPF will aid in the realisation of social housing linked to mega projects.

Informal settlements has an incremental housing sub-programme that consists of two phases; planning and services and top structure construction for informal settlements. The target for the sites is 6 175 for planning and services. The top structure construction only has a target for 18  260 units for the 2016/2017 financial year. The budget allocation for planning and services is R227  805  345 and R389  126  405 respectively, while the budgets for the top structure construction is R546  840  079 and R1  356  474  127. The incremental housing programmes for 2017/2018 has a planned target of 13  888 for its sites and a target of 22  426 for its units. The budget allocations for both the targets is R3  509  896  658.

The targeted units and sites for the 2018/2019 year, including the priority projects and provincial specific programmes, is 24  623 and 20  488, respectively. The budget for the year is R3  863  486  575.

The informal settlement upgrading programme helps facilitate the structured upgrading of informal settlements. It also applies to institutional upgrading of informal settlements where communities are to be relocated for a variety of reasons. The programme entails extensive community consultation and participation. The challenges related to the informal settlements programme are that some beneficiaries are untraceable, some beneficiaries do not qualify for subsidies and there is no alignment of financial years between the province and municipalities.

The issuing of title deeds had been a problem for the Gauteng provincial department. The issuing of title deeds from pre-1994 had been allocated R13  429  800 budget and the post 1994 title deeds are allocated R48  570  200 budget, to eradicate the backlog for 2016/17. The backlog of deeds currently is  34  444, and the cost of the title deeds for each unit is R1 800. However, there is a total backlog of 244  000 in number, in the province. The provincial department allocated R330 million to issue 183  333 title deeds over and above the 2016-217 year. The provincial department is in the process of appointing project management capacity that will segment conveyancers per region who will be allocated the backlog within the region, starting from the second quarter of the current financial year. It will also appoint service providers that will help to fast track the proclamation of townships, namely Johannesburg, Tswane, Sedibeng, West Rand and Ekurhuleni.

Another challenge is the incomplete establishments of townships. The department has tried to identify all townships that are not yet registered and where possible negotiations can take place with respective role players. In addition, there are also properties that have been invaded. Where there is a beneficiary who has been approved and holds a title deed, a court order to effect cancellation of ownership must be obtained. The department also faced challenges around the illegal sale of properties, and the title deeds facilitation. The provincial department will enforce the pre-emptive clause and it will adopt an approach linked to mega projects that in turn are linked to subsidy approval, which entails proactive allocation of houses and immediate application for title deeds.

Critical success factors were then outlined as including:
- The release of sufficient funds from both the Human Settlement Development Grant (HSDG) and Urban Settlements Development Grant (USDG) for the eradication of the title deeds
- A municipality steering committee was established, policies and regulations pertaining to conveyancing are being reviewed
- An adherence matrix to avoid another backlog has also been established.

Discussion
Ms T Gqada (DA) said she had expected Gauteng province to report on the entire progress it had made with its housing matters. She expressed her dissatisfaction with the late submission of the final report to Members, also asking why Members had been given drafts instead of the final report prior to the meeting. She had been expecting to see the province's targets and actual achievements on the HSDG. She also complained that the report did not contain any information about the upgrades on the houses belonging to mine workers.

Ms Gqada thought that there was a problem with the scope of the briefing to the provinces for this meeting. However, in a previous meeting, the Minister of Human Settlements, Ms Lindiwe Sisulu, had said that her target is to build 1.5 million houses. She did not think that Gauteng provincial department was serious about delivery and was actively trying to help achieve this target. She concluded by asking what type of interventions the Gauteng province would take to improve its service delivery, and said that she had not found this presentation acceptable.

Mr K Sithole (IFP) said he felt that the presentation was empty. The report did not contain information on the number of houses that were built, how the provincial department planned to upgrade houses, or develop houses in the mining towns, and how far it had gone in eradicating the backlog of the title deeds. He asked the provincial department to elaborate what it meant by beneficiaries being untraceable.

Mr S Gana (DA) asked why the Gauteng province had failed to spend the R264 million that was allocated to the department. The report does not indicate what the money was used for, but the department had succeeded in spending the money. One slide, not added to the final report, stated that millions of rands were allocated for the upgrading of hostels, but that the provincial department failed to deliver these upgrades. The province had submitted “a fancy report” that does not contain any useful or relevant information.

Ms L Mnganga-Gcabashe (ANC) welcomed the presentation, although she found it unacceptable that the provincial department did not include its targets in the report. It is very important for the province to set targets for each of its objectives because targets are useful for measuring the success and actual performance. The provincial department had spent a lot of money, but it was difficult to assess whether the spending was on track without seeing targets. She asked how does the provincial department plan on covering its shortfall of 500 154 houses. She asked that the National Department (NDHS) should help the province to improve its hierarchy, and find a better way of reporting, and better delivery of houses. The report does not include any detail of the title deeds backlog for both pre-1994 and post 1994. She would have liked to see a detailed report of who is responsible for the issuing of title deeds, whether it is done internally or externally, and a report on the municipalities or conveyancers responsible.

Mr L Khoarai (ANC) asked that a breakdown be given of the targets.

Mr H Memezi (ANC) said it is important that the provincial department improves on its service delivery because the influx of people to Gauteng is increasing every year, as they go search for employment and houses. The hostels in the informal settlements seem to have been upgraded but the department had to plan to eradicate them, because they are not conducive to good health and living. He asked for the provincial department to give the Committee a detailed breakdown of the contractors responsible for building and upgrading houses; how much they are being paid and how many contractors each municipality had hired. Gauteng province has more informal settlements than any other province in the country, and radical changes had to be made to address the backlog of title deeds.

Mr H Chauke (ANC) asked what type of interventions the provincial department had planned, to address the upgrading and new building in mining towns.

The Chairperson said although the provincial department was given a brief as to what should be covered today in its report, it had not in fact reported on the information specifically requested. The opportunity to present the figures was not to be seen as an opportunity to impress the Committee with numbers. Much of the crucial information was not reported, such as how many title deeds were issued, what type of systems had been put in place to eradicate the title deeds backlog and how the department planned specifically to resolve its shortcomings in relation to the title deeds.

The Chairperson asked about the provincial department’s working relationship with the Project Management Office (PMO) and whether the PMO was any way helping the province to eradicate the backlog of title deeds. The NDHS mentioned that a Task Team had been established in the Gauteng province and she requested who served on that. Finally she noted that the Committee was expecting a more detailed report because the outputs did not bear sufficient correlation with the amount of money that had been spent.

Mr Molokomme replied that the Gauteng provincial department will supply the Committee with two detailed documents, which will include a report with a summary of their 200 projects. The department now understood that the Committee wanted a breakdown of the information, as well as a detailed explanation of the number of houses that still need to be built in the townships, and the title deeds backlog for each township. The problem with the empty hostels, which had not been occupied, lay with the izinDuna  (headmen), who were refusing to hand the hostels over to the rightful owners. The department did not have enough internal capacity to prepare the deeds in house and therefore was using private conveyancers. The PMO had helped the provincial department greatly in providing feedback on the 200 projects implemented by the province. The PMO was also helping with tracking the performance of each project. Finally, he said that with hindsight, he realised that the department had not provided a report exactly along the outline that was given by the Committee, but promised to improve in the next report. There are plans to upgrade the mining towns; the plans will be emailed to the Chairperson. Lastly he realised that the department had not followed the outline when preparing the report, but did plan to improve with the next report.

The Chairperson understood that the Committee Members were not happy with the responses given, but said that the Committee would be given another chance to ask more questions at the next meeting.

Mr Sithole said the izinDuna's actions needed to be reported.

Mr Gana complained that Mr Molokomme did not answer his questions regarding the R265 million that was allocated to the provincial department. He asked for Mr Molokomme to respond immediately to his questions. The lack of action was unfair to the people of the West Rand who had been waiting for houses for years.

The Chairperson interrupted Mr Gana, reminding him that she is the Chairperson of the Committee and he should allow her to lead the meeting. She repeated that the Gauteng provincial department will be asked to come back and report on the missing information.

Mr Neville Chainee, Deputy Director General, NDHS, said the national Department is committed to working with the provincial departments on developing remedial interventions to eradicate backlogs and improve on service delivery.

Limpopo Provincial Department on Cooperative Governance, Human Settlements and Traditional Affairs (CoGHSTA) briefing
Mr Phillip Chauke, Chief Director: Monitoring and Evaluation, NDHS, said the Limpopo CoGHSTA is expected to contribute within the Medium Term Expenditure Framework (MTEF) towards outcomes 8 targets. It had particular targets for 55  251 houses, 28  161 sites, 2 290 Finance Linked Individual Subsidy Programme (FLISP), 1 000 CRU, 1 050 rental housing units and 379 houses for military veterans. In 2011 the housing demand was 155  375 and approximately 56  946 households live in informal settlements. Most of the informal settlements are concentrated in the Special Economic Zones (SEZs) and economically viable towns such as Polokwane, Mogalakwena, Tubatse and Musina. The number of households qualifying for subsidised housing support has increased by 192% between 1996 and 2011.

196  129 houses had been completed between 1994 and 2015/16. The allocation of competed houses took place in the Capricorn, Vhembe, Mopani, Waterberg and Sekhukhune areas. The housing demand still sits at 154  502. Between 1994 and 2016 the numbers were : 73  289 houses have been completed in Capricorn, 26  243 houses have been completed in Waterberg, 26  892 houses were completed in Sekhukhune, 28  858 houses have been completed in the Vhembe district and 40  452 houses have been completed in Mopani. The housing demands of Mopani is 29  920, 45  002 in Vhembe, 35  796 in Sekhukhune, 26  385 in Waterberg and 17  399 in Capricorn.

The HSDG budget allocation for 2016/17 is R1  208  370  400. The expenditure to date is R421  151  025 64, which translates to 35% of the budget allocation. An amount of R201  006  517 has been captured on the Housing Subsidy (HSS) and Basic Accounting System (BAS) as payables, therefore,  total expenditure to date amounted to R622  157  542, or 51,5% by 31 August 2016. The target for housing units for 2016/17 is 8 998 and 4 850 services sites are targeted.

The business plan for the 2016/17 financial year is to roll out ten projects; consisting of rental housing, FLISP, blocked projects, CRU, Military Veterans' houses, accreditation and title deeds, amongst others. The total planned target units numbered 8 998, with a budget of R830  873 million. The upgrading of informal settlements target is 2 326 for units and planning was ongoing in the areas of Waterberg, Polokwane and Sekhukhune. An additional 600 sites has been rolled-over into 2016/17, 1 302 projects are already under construction, 651 sites have been reserved by 31 August 2016 and a scope of seven contractors are being extended to produce 3 548 sites in growth and mining towns. 480 Grade A serviced sites are being procured at Ephraim Mogale,  to provide immediate accommodation of FLISP and Breaking New Ground (BNG) beneficiaries. Social rental units are being planned for integrated developments at Polokwane, Makhado, Musina, Tubatse and Lephalale.

A budget of R21 million in the 2016/17 year has been allocated for land acquisition, with land purchase earmarked for Elias Motsoaledi, to benefit the mountain-landlocked Motetema community. CoGHSTA is servicing purchased land at Greater Tubatse, Greater Tzaneen, Polokwane and Belabela. Town planning is currently under way in Tubatse. The mining towns had received a ring-fenced budget of R66  217  000 for 2016/17, but the department decided to increase this budget to R317  394  000. The target for upgrading and building houses in mining towns was 2240 houses, and the target for sites is 1 544. The department has to date spent R104 million, with 871 completed houses. CoGHSTA will negotiate and conclude implementation with all affected mining houses in Limpopo to ensure they provide their employees with houses in terms of the Social Labour Plans, whilst the department contributes infrastructure and FLISP subsidy.

The backlog of title deeds was then set out as follows: Mopani - 9%, Vhambe -  11%, Waterberg  -  43%, Sekhukhune - 13% and Capricorn - 24%. The total backlog numbered  51  456. A preliminary study was undertaken to identify urban projects and identify outstanding title deeds still required for post 1994 stock. The provincial department planned to obtain Deeds records and compare these to approved beneficiaries, to confirm the final backlog figure per municipality and per district, by 16 September 2016. By 30 September 2016, the department planned to develop a process flow and implementation plan for title transfers for the next three years. In Modimolle, a total of 2 147 title deeds can be issued, whilst 2 063 can be issued in Thabazimbi and 3 687 can be issued in Mogalakwena.

This department then described the factors affecting the issuing of title deeds. These included delays in proclamation and registration of towns, a failure to value municipal properties, late collection of documents, failure to close out projects, beneficiary administration, and dispute resolution mechanism, which involves moving land from one municipality to another.

The provincial department has appointed the external PMU to augment the internal project management capacity. The implementation protocol with Housing Development Association (HDA) would provide capacity on human settlements planning and implementation of selected priority projects. Contractors are defaulting chronically on their delivery schedules, and when this happened they would lose their units, which are immediately reallocated to another contractor on the database. In worst case scenarios, the contractor contracts could be terminated immediately, and they would be  blacklisted for non-performance so that their entire allocation will be reallocated to other contractors in the database to complete the project.

Discussion
Ms Mnganga-Gcabashe said the Limpopo province had improved on its shortcomings, but she was disappointed that it had failed to include the targets for the fourth quarters of 2015/2016 and 2016/2017, and there had been no mention of the outputs from the money that was spent. The slide with the MTSF targets should have been followed by the business plan, and that would have made the report make more sense to the Committee. The business plan on slide 4 also should have been presented in the form of a table, so that the Committee could compare the plans to the progress made.  She would have liked slide 8 to also contain quarterly targets for the remaining 5 540 sites. In respect of page 8, she asked what the targets for the plans are, and how the provincial department will measure its achievements.

Mr Sithole said Limpopo provincial department had definitely improved. However, he asked what challenges this department was facing, whether it was in fact reaching its targets, and whether it was , paying contractors in the 30 day period. He also asked how many contractors it had blacklisted.

Mr Chauke asked what he role of the mining companies had been during the upgrades of mining houses and what the department's achievements were in the Collins Chabane municipality, with regard to service delivery in the area.

Mr Gana noted that in the last financial year the Limpopo provincial department had underspent by 29% and its delivery performance was 39% only. He therefore asked what measures this department had put in place to ensure that the 21  777 houses are delivered in the next financial year.

Mr Memezi said he is impressed with the province's achievements.

Ms Gqada asked whether the houses for military veterans would be the same size and structure as the rest of the houses provided.

The Chairperson asked whether the 60% of the houses that were reported as being completed are actually now occupied by the rightful owners. While going through the report, she noticed that the provincial department was using the 2011 figures from Statistics South Africa to determine the level of housing demands, instead of the Housing Demand Database (HDD). She asked whether this meant that the HDD was not seen as reliable, or accurate, or whether there were gaps in the HDD. She was happy to see the improvements and the fact that the provincial department has a good working relationship with Housing Development Agency (HDA). The report also mentioned what the provincial department's targets were, for the eradication of the title deeds backlog, but it had failed to include a statement of how exactly it intended to achieve these targets.

Mr Phillip Chauke replied that the completed houses are occupied as soon as construction is completed. The numbers from StatsSA and HDD are used interchangeably, and the fact that StatsSA data had been included in this report was not intending to be any indication that the HDD figures were unreliable or inaccurate. Over the years, however, the Limpopo department had found that sometimes some of the figures from the HDD were not correct, which was why StatsSA figures were preferred for this report. The provincial department's working relationship with HDA had been a smooth one, and as a matter of fact HDA was a part of the Task Team that had been approved by the department's HOD. The Task Team had been tasked to deal with the Department of Public Works for land requirements purposes, and was dealing with the National Treasury for the approval of land matters,  and it had the power to determine which sites are suitable for building houses. Conveyancers had been appointed by the department, who are working on sites in Belabela and Modimolle to eradicate the title deeds backlog.

The Limpopo department had communicated most of its challenges to the NDHS. Mr Chauke asserted that this department had never had an issue achieving 30 day payments to contractors. Two dates in each month had been set aside for making payments – the 15th and the 30th.  The Department only had late payments during the last quarter, and that was specifically because of late submissions of invoices from the contractors. Blacklisting contractors is usually the departments’ last resort against contractors who fail to deliver on targets, because the department has recognised that some contractors are not used to dealing with multi-million rand contracts. In such cases, the department tries to assist the contractors. A majority of these people are women who are first time contractors. Those contractors who are struggling are linked with project managers, to help them with planning and management. The department is hoping to meet all its targets for the year. The mining companies usually leave the upgrading and building of mining houses to the department, but in recent years Anglo American has funded projects in Thabazimbi. Some companies have also donated land to the department, as well as services relating to housing infrastructure. Recently, especially after the Marikana incident, the government had been strict about pressing the mining companies to donate money to the provincial department. The project located in Thabazimbi is part of the Phakisa Housing project that was being piloted as the first co-funded project between the department and the mining companies.

The provincial department had been working extensively with the Collins Chabane municipality. There were some houses in the Matiame Village that had not been completed with rooves, and when the department had discovered this, it immediately appointed contractors to complete the houses. He agreed with Mr Gana that the department under-performed last year, but it should be noted that it was still not satisfied with the 71% improvement. The challenge is that the department is running two business plans under one financial year. He concluded that the Gauteng province has already set a precedent for how the military veterans’ houses should look.

Mr Chainee, NDHS, said that in fact he did not agree that the Gauteng province had set any precedent. The NDHS allocates minimum funding to provinces as per the HSDG, and any additional funding which has been agreed between the Department of Military Veterans and the provincial department dealing with human settlement will have to be sourced and paid by those departments themselves. In Limpopo there are land ownership issues that have impacted on the issuing of title deeds.

Ms Makoma Makhurupetje, MEC for CoGHSTA; Limpopo Government, said she appreciated the support that the Limpopo provincial department had been receiving from the NDHS. Seven contractors were appointed during the previous financial year, but R500 million was taken from the Limpopo provincial department and this had caused the residents of Limpopo to complain about the slow delivery of services. The MEC is responsible for three different departments; Cooperative Governance, Human Settlements and Traditional Affairs. It had been difficult to incorporate the work of these three departments for the benefit of the people. She agreed that beneficiaries should be dropped out of the system and the only way this can be done is by building more hoses and eradicating the backlog.

The Chairperson said she was happy with the progress that the Limpopo government has made.

The meeting was adjourned.