Upgrading of Informal Settlements Programme; Human Settlements Policies & Processes Working Session

Human Settlements (WCPP)

11 September 2018
Chairperson: Ms M Maseko (DA)
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Meeting Summary

The Committee was briefed by the City of Cape Town on the R850 million set aside for the Upgrading of Informal Settlements Programme, the R2.5 million Adjustment Appropriations Emergency Funds received from the Department of Human Settlements and the Expenditure of the Urban Settlements and improvement of services. The South African Local Government Association (SALGA) also gave a presentation. 

The City is experiencing pressures from a slowing national economy and growing populations in informal settlements. The City is currently experiencing an in-migration rate of 16 000 households per annum and a large portion of these households earn below the R3500 mark. Most informal settlements are located in the Eastern and Southern parts of the City. The City tries to maintain certain standards of services provided in informal settlements such as the provision of one tap to 25 families within a range of 100m and one toilet to a ratio of five families which is hygienic, safe and reliable. Chemical, container and portable flush toilets are cleaned three times a week while full flush toilets and ablution blocks are cleaned seven times via an Extended Public Works Program (EPWP) janitorial programme. The City is experiencing challenges in servicing informal settlements. These include the density of informal settlements and the accessibility for repairs and maintenance. Some informal settlements are also located in areas that are flood prone and under power lines. The City also struggles with accessing private land and land owned by state-owned entities.

The City’s backyarder programme is specifically for those backyard settlements located on Council owned properties. The City tries to provide flush toilets, a tap stand and wash basin, electricity and refuse collection to backyarders. There are challenges with installing these challenges including tenants not always willing to allow the City to install services to backyarders. For the City to upgrade informal settlements conditions need to be in alignment including the land being owned by the City, the land must be suitable for development, there has to be land for de-densification and the community needs to be ready for the upgrading. The City has R 198 463 851 worth of projects for this year, R 220 843 213 for 2019-2020, and R 289 117 528 for 2020-2021. The City spent 96% of its budget for the 2017/18 year. The City has to maintain 10 509 taps and 47 475 toilets on a daily and weekly basis. The City has a target of 700 additional water points and 2600 additional toilets for this year. The operating and maintenance cost which comes from the City’s own funds is in the region of R 372 million per annum.

For the 2017/18 year, 27% of the USDG was spent on in situ upgrading, 44% on integrated development projects, 4% for relocation, and 6% for social services. For the 2018/19 year in situ upgrades have increased to 32% of the approved budget, so has the integrated developmental projects to 45% and relocation to 7%.  The City was unable to spend the R 2.5 million from the Provision for Natural Disasters. The City was unable to spend due to a pending court case but a rollover request has been approved by the Western Cape Government.

SALGA conveyed a number of requested recommendations and reviews from municipalities. These include the provincial housing selections policy beneficiaries, section 10A and 10B of the Housing Act of 2001, the national housing  code for the allocation of UISP, and a review of the R 3500 maximum income ceiling.

Members asked about the City’s janitorial programme for the cleaning of toilets in informal settlements. They also wanted to know about an informal settlement next to the N2 which has not had any proper toilet system for a number of years. They asked about the reported R271 million of USDG money which was returned by the City and other money which was returned from the City do to underperformance.They wanted a list of those informal settlements located on state-owned entity land, sought clarity on the City’s plans to deal with informal settlements located in flood prone areas, asked about land invasions and about the service provider contract to maintain toilets in informal settlements.

Meeting report

Opening remarks

The Chairperson welcomed the delegates from the City of Cape, the South African Local Government Association (SALGA) and the Western Cape Department of Human Settlements. The Committee received an apology from the MEC for Human Settlement in the Western Cape, Mr Bonginkosi Madikizela.

City of Cape Town presentation on Informal Settlements upgrading

Ms Riana Pretorius, Director: Informal Settlements and Backyarders, City of Cape Town, took the Committee through a presentation on informal settlement upgrading. Chapter 2 of the Constitution, 1996, declares that everyone has the right to have access to adequate housing, sufficient water and sanitation. The state must take reasonable legislative and other measures within its available resources, to achieve the progressive realisation of these rights. No one may be evicted from their home, or have their home demolished, without an order of court after considering all the relevant circumstances. No legislation may permit arbitrary evictions. On a national scale there are experiences of a slowing economy, joblessness, declining revenues and a shrinking tax base which is limiting government spending. From the bottom up the City of Cape Town is experiencing rapid population growth, increase in informal settlements, increased demand for services, increased dependency on state and increased cost for delivering services. In between the pressures from the top and the bottom the City needs to find a way to cope with these pressures.

A number of challenges were foreseen in the near future. By 2030 the City’s population will have grown to 4.7 million people. There is densification of informal settlements taking place. The City is also experiencing a high in-migration rate and a lot of the time people coming to the City are people earning below the R 3 500 bracket. This puts greater pressure on the City which causes urban decay and more poverty. On characteristics of informal settlements, the current model of formal housing was no coping with the demand and the backlog. In situ upgrading of informal settlements is an important part of addressing these challenges. In discussions about upgrading the following needed to be considered: land use planning requirements, infrastructure of civil services, top structure in the case of emergency housing (EHP) and most importantly community involvement. In situ upgrading could not be done if the community is not 100% on board with the City. The City had identified all the informal settlements, mapped and assessed them and they have undertaken a programmatic level of understanding informal settlements. The City has broad developmental responses for all the informal settlements. It is not yet a detailed feasibility project planning work but it gives them a starting point.

An Informal Settlement Dataset was being used to get a clearer picture of the location of informal settlements, the land they use, the sizes densities, the number of taps and toilets in use. The City had also looked at the human input as to what could be done with the informal settlement. Management information also translated as political directive as to what is high political priority and where they need to pay attention. This informs the City’s demand plan and the City’s project pipelines. The City has taken its informal settlements and divided the areas of informality into five types of settlements. The first type is small farmer settlements and this has usually still rural or subsistence farming characteristics in those areas. Then there are traditional informal settlements similar to what the City knows they are in individual informal sites. There is also Back yarder settlement. Then there are informal settlements where the City has engaged in their IDA/TRA and rental stock settlements. The City was busy doing a new calculation for the 2017/18 information but at last count there was 178 663 informal structures in the City. The East is the area with the highest number of informality followed by the South area. 75% of the City’s informality is in traditional informal settlements. There are smaller percentages of rental stock, small farmers, back yarder and IDA/TRA settlements.

Ms Pretorius said the land needed for de-densification translated to roughly 833 Ha and 97 394 structures would need to be relocated during in situ upgrading- which is 55% of informal structures- in order to bring in services. The land requirement was excluding land requirements for schools, parks and community facilities. The 833 Ha is purely for housing demands. The City is also looking for access well located land central and appropriate for human settlements. They do not want to develop people on the outskirts of the City because this is not the City’s planning methodology. There were standards in terms of proving basic services. In terms of water, the City strives to have one tap provision to a maximum of 25 families within a range of 100m. The National standard is one tap to 25 families within a range of 200m. In terms of sanitation, the City tries to provide one toilet for every five households and also adhere to the National standards of being safe, reliable, private, hygienic and maintained. In terms of roads, the City does road upgrading in informal settlements when they do a formal in situ upgrading project. In terms of storm water management, this is still a challenge for the City especially when it comes to grey water management at water points. As a rule the City likes to electrify all informal settlements, they have also got an Eskom supply area in the City and they are partly responsible for the City’s electrification programme. It is also important to understand that there are areas the City cannot electrify such as areas that are water-locked on power lines, storm water detention pumps and unstable land. So there are informal settlements located on area which the City cannot legally electrify. In terms of waste management, the City does blue bag door to door services on a weekly basis for all informal structures. In terms of the service ratio, the City tries to maintain a ratio of 1:5 for sanitation and a 1:25 for water and they are just on the border in some areas. Chemical, container and portable flush toilets are cleaned three times a week. The full flush toilets are being run by the EPWP janitorial programme for seven days a week. For the last few months the City has had constraints with the janitorial programme due to inoculations for the workers. The City is addressing this constraint.

On challenges and constraints in the servicing of informal settlements, the City finds unplanned, dense settlements makes it very difficult to install services. The topography or location of these informal settlements is problematic and sometimes people reject certain typologies that can be made available especially in the sanitation front. There is also a challenge with the accessibility for repairs and maintenance on networks. It is very difficult to access where the City is not the landowner. People locating in transport corridors as in the case of Du Noon which is actually sitting on the rail reserve makes it inaccessible from the road or any other way to provide services. In the dry season people tend to construct structures in areas that are not suitable. When the rainy season comes the area becomes like a wetland as is the case in Masiphumelele. The City cannot roll out services in wetlands like in these cases.

Land invasions had recently taken place in Greenpoint and Khayelitsha. This is a floodplain area and these people were sitting on water underneath power lines and this makes it very challenging from a service delivery point of view. Some of the informal settlements are located in storm water drainage areas. The City is also seeing people using the infrastructure provided for other means beside for what it is intended. The City tries to build wash areas and improved screen areas in informal settlements. The City has also constructed new wash houses in the areas fitted with toilets and shower facilities in informal settlements. The City is using a new water dispensing unit for shared water facilities in informal settlements. With the new units the City is trying to solve the grey water problem around taps.

Backyarders Programme: Current Situation

Ms Pretorius said this programme is for backyarders located specifically on council owned property. The City finds that backyarders struggle to access water and sanitation. The tenants in the main building would sometimes lock a facility on a Friday afternoon and would only open it on a Monday again. The City has commenced with the rolling out of a concrete unit which is a toilet and a tap provided to backyarders on council owned properties. The City tries to have 3 structures to every unit that they install. As part of the backyarder programme the City also provides electricity to backyarders, a wheelie bin and a water dispensing unit for the people using that specific unit. On challenges and delays, at times there are difficulty accessing the network. Concrete pavement areas need to be uplifted to access the networks. There is very limited access to backyards as tenants are not always willing for the City to install these services because it is a source of revenue from people living in the backyard. The issue of gangsterism in these areas is real and the City’s staff sometimes needs to evacuate the areas very quickly. Vandalism and theft of the City’s installations is an ongoing problem.

Upgrading of Informal Settlements

Ms Pretorius said that at a National context the conventional upgrading is very costly in terms of time, budget and capacity. They also find that in informal settlements there are many non-qualifying households. The 2016 White Paper for Human Settlements indicated that there is a priority on infrastructure, basic services, community facilities and other public realm investment. The City has various typologies of upgrading informal settlements. The first one is in situ upgrading, the normal UIP programme funded from Government. Then the City also undertakes re-blocking or enhanced re-blocking where the conditions allow. There are also the superblock and some GIS engagements.

Project Pipeline & Capital Budget: Phases in Project Pipeline

Ms Pretorius said that when the City starts with a project they need to look at the pre-feasibility concept, in other words look at if there are any environmental issues that needs to be addressed and to see exactly what can be done with the land. If it is a smaller settlement the City tends to do all the detailed planning in-house or if it is a bigger development the City would appoint consultants via Supply Chain Process. In that the City will then achieve the land use planning application approvals, appoint a contractor for the services and it is only when the City has concluded that process that the City accesses a budget from their Capital budget and then get the contractor on site. As a general rule everyone has access to basic services and the City tries to have improving ratios. The City is working from both ends of the spectrum.

On conditions for upgrading, the City could only develop land if they own that land. The land must be suitable for development and there must be alternative land for de-densification. The City must have achieved land use rights. There also needs to be community readiness and cooperation. The City also needs to have the Capital budget for the entire project and they must have completed a supply chain process. There has to be 100% alignment with all these conditions for the City to get a project going. The City has a project pipeline where they are working on projects. Projects under construction amount to about R 708 million over the MTREF for construction. The City has about R 2.66 billion in planning getting ready for capital budgets.

Ms Pretorius highlighted the Capital Budget for 2018/2019 to 2020/2021. For the 2017/18 year the City had 96% expenditure for the budget allocated to the City for in situ upgrading. For MTREF Budget 2017/2018 – 2020/2021, the City has R198 463 851 worth of projects for this year, R 220 843 213 for 2019-2020, and R289 117 528 for 2020-2021.

On basic services – water and sanitation, the City has to currently maintain 10 509 taps and 47 475 toilets on a daily and weekly basis. The City has a target of 700 additional water points and 2600 additional toilets for this year. The operating and maintenance cost which comes from the City’s own funds is in the region of R 372 million per annum.

Ms Pretorius said the City does have challenges with implementation. The availability of land for de-densification is always an issue. Access to services, sometimes the community is not in favour of development or there are other issues the City has to deal with. Environmental offsets the City has to comply with. Projects are also quite expensive because the City has to provide additional security for gang areas and the contractors are not always willing to work in some of these informal settlements. The timelines for the land use planning approvals is quite lengthy.

City of Cape Town presentation on Urban Settlements Development Grant (USDG) AND Emergency Funds

Ms Rushaan Brenner, Grant Manager, City of Cape Town, took the Committee through a presentation on the Urban Settlements Development Grant (USDG) and Emergency Funds. The main focus on the Urban Settlement Development Grant (USDG) is on poor households. At least 50% of the grant must be used to fund the upgrading of informal settlements relating to in situ upgrading, relocation and integrated human settlements. For informal settlements upgrades, the approved 2017/18 budget 27% was spent on in situ upgrading, 44% integrated development projects, 4% relocation, and 6% for social services. The social services competent also include informal settlements. For the 2018/19 year the in situ upgrades have increased to 32% of the approved budget, so has the integrated developmental projects to 45% and relocation to 7%. The City received a R2.5 million disaster grant from the Provision for Natural Disasters. The City was unable to spend due to a pending court case but a rollover request has been approved by the Western Cape Government.


Ms S Davids (ANC) wanted to know where the City got the data to say that the East and the South has the highest number of informal structures. The City says it needs 833ha of land for relocation and de-densification, how does the City do its planning if it does not take the social needs of people like hospitals, police stations, crèches and schools within the land the City needs? She asked for clarity on the City standard of one toilet for every five households and the national norms and standards of being safe, reliable and private. What was the City’s plan for people living in informal settlements where they are under power lines, water-logged areas and informal settlements close to rail reserves? Chemical toilets are a higher risk for disease than flush toilets yet they were only cleaned three times a week, why? Does the City have any plans for overcoming the challenges of servicing informal settlements? Does the City have an educational programme where it informs people moving into informal settlements of the risks of building structures in wet lands and other dangerous areas? She referred to an informal settlement next to the N2 where access to this informal settlement was a big problem. It has been a number of years and the situation remained the same. This particular informal settlement also does not have proper toilets. Why does this report not address this?

Mr T Simmers (DA) asked if the 16 000 households for in-migration is an estimation? Has the City made provision for possible changes to the in-migration rate? What measures does the City use to make sure that service providers are doing their work with respect to the servicing and cleaning of toilets? He said in the last financial year the City had to return approximately R 250 million of their USDG back to National Government, what is the reason for this given what this grant is supposed to be used for? How does the City rank against other Metros in the country with respect to the expenditure of its USDG and what percentage of its USDG has the City spent?

Ms Pretorius, in response, said that they do have a dataset of all the City’s informal settlements. On an annual basis the City does a door to door solid waste count. Between December and February the City does Ariel photography of the entire city and they count the structures in the Ariel photography. On an annual basis the City updates it dataset to keep track of informal settlements.

Ms Pretorius said that the City needs a considerable amount of land when they deal with informal settlement upgrading. The 833ha required for de-densification just looks at the land required for relocating people when upgrading occurs. The overall land required which includes roads schools etc. can be as much as double. Nationally there is no ratio set as to what is a good sanitation service to be provided. The City has adopted a ratio has adopted a ratio of 1:5. On the question of privacy, some of the City’s informal settlements are extremely dense so the City puts shared services where they can think it up to the City’s networks. They City has tried to make toilets more private by building screens in front of public facilities, but there is also the question of safety so they cannot enclose it so much that people are no longer safe going to these toilets. People are often creative and they would almost on purpose go and settle on fragile land or land that is unsuitable for settlements to try to get ahead in receiving houses. This is not in all cases as some of these informal settlements have been there for quite some time. The City does have in its dataset a list of all the informal settlements that would be required to be relocated in totality. The City does have the janitorial programme that is meant to clean those shared full flush toilets. It must be maintained on a daily basis just to keep it functional and clean. The chemical toilets are quite an expensive programme to roll out and the City is trying to reduce the number of chemical toilets. The City has four regional teams which deal with the management of informal settlements. They work daily in informal settlements doing community surveys. These teams also provide support to informal settlements in the case of natural disasters.

Ms Pretorius said that a lot of informal settlements are located on state-owned enterprise land. These entities are not always as cooperative as the City would like. For many years they have refused the City to provide any services on their land. The best the City can do is to provide services on the periphery. It is only recently where SANRAL has signed a memorandum of understanding (MOU) with the City to give the City permission access its land. She thought the rate of in-migration is much more than 16 000. She does not have the exact figure behind this but there is immense pressure on informal settlements. People coming to City see informal settlements almost as a reception area into the urban area. This is a huge challenge for the City. The City does have a monitoring and evaluation system for the cleaning and maintenance of toilets.

Ms Brenner said for the 2017/18 year the City’s USDG allocation was reduced by R 175 million. No money was returned the City just did not receive as much. The expenditure for 2017/18 was at 88%, the City has applied for rollover funding and they are awaiting confirmation of that approval.

The Chairperson said that Mr Simmers was referring to an incident which made the media, which stated that money was returned to National.

Mr Simmers said that last year it was reported in the media, questions were asked in the house to the Provincial Minister, on the money that was supposed to be for the utilisation of USDG. This money was returned because the City could not spend it. In addition, why was the USDG grant for 2017/18 year reduced? Was it underperformance?

Mr Thando Mguli, Head of Department, WC Provincial Department of Human Settlements, said that the money returned was not R 250 million but R 271 million.

Ms Pretorius asked for some time to check their records for information about that money.

Ms Davids asked what the City is doing about the toilet situation in the informal settlement next to the N2. If there is a monitoring and evaluation programme from the City’s service provider why are they not doing their job?

Ms Pretorius asked for the name of the informal settlement she is referring to. The informal settlements located along the N2 are not on city land. It is land owned by SANRAL. The City is not legally allowed to provide services on land not owned by the City unless the City has power of attorney or permission to do so.

The Chairperson asked what is deterring state-owned public entities from allowing the City to provide service to informal settlements located on their land.

Ms Davids referred to a particular informal settlement and noted that there are services being provided but the people do not have toilets, they use cans. What is the City of Cape Town doing in such a case? Many people in this area have become ill from diarrhoea. It has been four years but the situation remains the same.

Ms Pretorius said if she can get the full details they can go and investigate that specific settlement. The reasons for private entities not giving the City access to their land varies. Sometimes the owners say they still have plans for the land and they do not want to make these settlements permanent. The City then tries to do as much as possible on the periphery. State-owned entities are difficult to deal with as they say their land it for future infrastructure development. They do not want to give permanency to people on their land. This is an issue which needs to be addressed at an intergovernmental level and a political level.

The Chairperson said the Committee would like a list of those informal settlements located on state-owned entity land. She asked for clarification on the City’s plans to deal with informal settlements located in flood prone areas. Does the City have a plan to deal with land which will be vacated for de-densification to stop land invasions from happening? What is the City doing differently with regards to the challenges of servicing and maintaining toilets in informal settlements? She asked for clarification on the expiration of a contract regarding toilets in informal settlements and what the City is going to do in the interim period. 

Ms Pretorius said that the City cannot expose people to the toilet cleaning programme if they are not properly inoculated. She said the inoculation tender is not something she has for her own department. It is a term tender for the entire City from their Health Department. They have experienced a delay a delay in the procurement of the new term tender of the entire City’s inoculation requirements which has impacted on the janitorial programme. Inoculations last for about five years or more, so the people who were already employed in the EPWP programme who are already inoculated will extend their employment contract until the inoculations are ready for a new round of people. In some settlements people understood and they agreed to have those people’s contracts extended. In other communities they did not agree and they said they want new EPWP workers and this creates a problem because they cannot be inoculated. The City had to send out their Depo staff to do the cleaning and maintenance of toilets which is not as efficient. Toilets are quite a topical issues and a lot can be said about new designs and innovations. It is not sustainable to do the same thing over and over again but there needs to be something to replace what is in place already. Shared toilets are what the City uses to provide for as many toilets as possible. The ideal situation is to have one on one services or one to five. Some of the informal settlements are so dense and deep that the City’s networks cannot reach that far in. Maintenance and servicing of these facilities are often very difficult. The City does have people engaging with communities and educating them about the dangers of not maintaining services and not living in healthy conditions.

Ms Pretorius said the City has been experiencing tremendous land invasions over the last six months. On a normal year the City manages 14 000 land invasions. In this year from January to June there have already been about 74 000 land invasion attempts that the City dealt with. These land invasions happen very deliberately as it happens on mass and it is organised. The City is dealing with that and it is being addressed with the Premier and SAPS. It is very important when people are relocated out of area that there is immediate alternative use for that land. So the City tries to find alternative usage for vacated land as soon as possible before people settle on it again. Some informal settlements were below the flood line. So people below the flood line will have to be relocated. There are projects dealing with this which is in the pipeline but it is does not have a capital budget yet. The R 271 million referred unspent money of the City not returned funds. This includes the R 175 million reduction in the USDG allocation as well as well as the unspent funds for which the City requested roll over funding. The City is still awaiting outcome of that application. The R 175 million reductions from National Treasury were due to underperformance. The City in the 2018/19 financial year has instituted various mechanisms to overcome this, they have their portfolio project management team that is monitoring projects and cash flows against performance per month so that they can reallocate from non-performing to performing projects at an early stage already. The City is also busy with their adjustments budget process now as well as their draft budget and they are ensuring that no project goes on the budget if there is no demand plan for those projects.

Mr Simmers asked how many times in the last five years has the City requested a rollover of funds. How many times has the City been approved for the rolling over of funds? Clearly from the R 175 million reduction the City has not been able to spend the entire USDG in each financial cycle.

Ms Brenner said the City has requested roll over funding each financial year for those committed projects. This has been requested since the inception of the USDG grant, so since 2012.

Mr Simmers asked if there are factors outside of the City’s control which has contributed to the City having to request roll over funding every year.

Ms Pretorius said she would like to give a practical example. She had a project in a formal area where they had a contractor appointed, they had committed between R 144 million and R 200 million for that contract for service delivery, there is gang violence and the contractor’s site get petrol bombed and the contract gets suspended. The City engaged with the Community and there was calm for three or four months, the contractor is back on site and it goes well for a few weeks until the situation flares up again. It is in those cases where the City cannot spend their allocated budget for that year. There are sometimes conditions outside of the City’s control prohibiting the City from fulfilling the conditions of a contract. The evidence is submitted as part of the request for roll over funding so there are quite valid reasons for the request of roll over funding.

The Chairperson said the City has focused a lot on informal settlements. What is the City doing to prioritise back yarder settlements? What are the City’s contingency plans to ensure that the back yarders are not forgotten in the upgrading of informal settlements?

Ms Pretorius said that the City has not forgotten about back yarders. When there are housing unit developments a certain portion of that development is specifically for people residing in back yards. Back yarders are incorporated and they are part of the City’s beneficiary identification process when they do upgrading. Accessing back yarders is still quite as a challenge as the City does not have the legal right to access private property. The City can engage on City rental stock, hostel sites, City flats etc. Even this provides challenges sometimes due to property densities and some of the economic activities happening in these settlements. Landlords and people renting these spaces often reject the City’s attempts to provide services due to economic issues.

The Chairperson told the City to engage with the landlords of backyarders.

Ms Davids asked what the City does with the service upgrades when back yarders get approval and move in a housing development.  Does it become the property of the owner?

Ms Pretorius said that there was no national policy to deal with backyarders. The City is trying to be proactive and develop better tools to engage with back yarders. The City does not provide services to back yarders on privately owned land as the City is not allowed to do that. When a backyarder qualifies for a formal housing opportunity, strictly speaking that structure must be demolished. In some cases there is a new structure in the same place the next day.

The Chairperson said any further questions from Members will be put in writing. She thanked the City for their presentations.

Presentation by the South African Local Government Association (SALGA)

Mr Gillion Bosman, Councillor, City of Cape Town and SALGA representative, said that the engagement involved various stakeholders and not just local government. They asked local authorities to give feedback in writing as well. The briefing document the Committee has in front of it is a very detailed feedback from those engagements. Some of the key issues raised by municipalities included the prioritisation of households headed by middle aged and elderly individuals, and specifically the selection of beneficiaries in Greenfield sites. The issue there was around the applicability of circular 10(c) and one of the key questions was if it is a guideline or is it mandatory. The priority rating criteria in respect of age categories, there is an assumption at municipal level that persons over the age of 35 have been on the housing waiting list the longest. A lot of municipalities feel that this is incorrect. One of the other outcomes when it comes to the housing selection policy for beneficiaries and ownership was the application of quotas on that beneficiary process and the provision of clear and uniformed definition of the quotas. Municipalities feel that the definition of quotas is not clearly defined at the moment. These are recommendations made for possible policy changes at Provincial and National level. One of the key examples which were highlighted was that beneficiaries with disabilities were specifically disadvantaged because the correct application of a particular quota could not be applied in some municipalities. Many municipalities do not have the staffing capacity to implement a lot of these policy directives. The 5% opportunity for farm workers needs to be simplified. A lot of municipalities felt like their challenges are not always taken on board in that regard. There is a lot of confusion from members of the public regarding the quotas. Information available from municipalities is very technical and this information does not always translate into what is available for the public as well. The issues around the housing act of 2001 which includes the new sections 10(a) and 10(b) and with regards to the pre-emptive rights in favour of the particular provincial housing department. One of the outcomes and issues that municipalities have had is the informal selling and leasing of housing units has happened quite steadily because of sections 10(a) and 10(b), and how the housing acts gives specific rights to particular Provincial Human Settlements Departments. The municipality has no remedy to deal with reported cases of people selling structures so there is very little the municipality can do once they have handed over the house. There is also a need for reviewing the particular amendment for a more practical and feasible solution dealing with that specific issue.

With regards to the National Housing Code, this section is categorised into the challenges and then what SALGA has asked municipalities to do. The criteria for the UIFP includes the provision of housing to persons who are not first time home owners. One of the recommendation here is the criteria does not support the local municipalities’ priority for first time home owners. Municipalities are looking for more discretion in deciding because they are the ones setting up IDP strategic plans in terms of how they plan their human settlements.

Mr Bosman said the second challenge was the maximum income of R 3500. This has been unchanged for years resulting in most applicants in need of housing opportunities not qualifying because as people earn more money they become automatically disqualified. A review of this is one of the recommendations that came strongly from municipalities. The third challenge is the lack of clear guidelines for stakeholders and public participation when executing the various programmes especially with the different process in the same catchment area. They need clear and standardised guidelines stakeholders and public participation to happen. The need for land acquisitions for the funding of human settlements projects came through clearly. Municipalities usually receive the minimum from National and Provincial Government and they try to make do with that. There is also a need to design a process that will speed up and provide means to access land owned by other organs of state. Municipalities have a weak way of dealing with these entities and many times these entities do not municipalities seriously.

Mr Bosman said there was an issue around land security which results in significant delays. If they are not able to secure land it will most likely be invaded or vandalised which adds on to the cost and time. There is a lot of unrest around this in communities. There are also challenges around the Extended Discount Benefit Scheme (EEDBS). One of the key challenges is that tenants in sailable units and purchases of delayed transfer dwellings cannot afford to take ownership of their unit due to their income grant being more than R 3500. SALGA is recommending a review of the R 3500 specifically around the EEDBS. The requirement for the upgrade costs to be added to the selling price of units to be sold in terms of this programme makes it very difficult for these units to become saleable because beneficiaries cannot afford that. A review of the calculation is one of the recommendations and a review of the calculation of the selling price principles which allows municipalities some discretion is a recommendation. The criteria disqualifies current and previous property owners from the programme. This blanket approach which does not consider individual circumstances causes problems in some municipalities. The benefits schemes requirement for the purchaser to fund any shortfall in arrears or purchase price is not covered by the EEDBS. In practice this makes the units unsellable and the purchasers cannot afford the payment of that. Municipalities are recommending that the qualifying criteria be amended. The saleable CRU upgrades as part of the CRU programme of 2006, people are unable to take ownership of as the policy requires such housing stock to remain to remain in public ownership and cannot be sold or transferred to individual residents. It is being recommended that provision should be made for previous property owners to purchase at historical cost or allow the current or previous property owners who benefited from inheritance or has part ownership to access EEDBS programme.


Mr Simmer said two things are missing from the report. The first issue is the beneficiary database management, there was a thought expressed about the possibility of a centralised approach rather than a decentralised approach to ensure that the problems expressed do not happen. The second issue was the possibility of a road show informing municipalities of how GAP housing works.

Ms Davids added to Mr Simmer about the issue of the capacity of different municipalities on housing.

Mr Bosman said this information can be made available to the Committee. He suggested a discussion with the relevant professional staff at SALGA. This might lead to a more detailed discussion. The issues capacity needs to be looked at as a broader issue. The Auditor-General’s report is very clear in terms of the state of local municipalities.

The Chairperson said she thought there would be a discussion around the issue raised that building free housing is not sustainable. The other issue is around the provision of services and the creation of demand for those services which municipalities, especially rural municipalities, cannot fulfil.

The Chairperson thanked SALGA for their presentation. The Chairperson asked Mr Mguli if he would like to make an input.

Mr Mguli said he found the session and the presentations very informative. He said when a person is 35 years of age and lower that person is a youth. People need the opportunity to find their feet between securing a job and the age of 35. It is only when people are unable to find their feet by 35 that the Government should assist people in providing a house. People need to be given a chance to find their feet and the Government should not intervene too early. Earlier than 35 is actually spoon feeding people and perpetuating paralysis into people. The Department of Human Settlements in the Western Cape will engage with SALGA on this at another forum. They strongly feel that the provision of subsidised houses and free houses in particular is not sustainable. They have to revert back to where Government builds houses but people pay a contribution towards it over time. Even he service programme in informal settlements is created larger informal settlements to the point where they can no longer be managed. This is a debate for another day.

Mr Francois De Wet, CFO for the Department of Human Settlements in the Western Cape, said that he believes that municipalities do not know that the EEDBS is a subsidy and municipalities can apply to the Provincial Department for it.

The Chairperson thanked all delegates for their presentations and their inputs.

Adoption of minutes for the 28 August 2018

Mr Simmers moved for the adoption of the minutes.

Ms W Philander (ANC) seconded.

The minutes were adopted without amendments

Adoption of minutes of 21 August 2018

Ms Davids referred to the recommendations. She did not agree with the recommendation in 4.1.1.

The Chairperson said the agreement on that day from the Department of Rural Development and Land Reform was to transfer the budget allocated to Phase 3 of the District Six restitution project to the Provincial Department of Human Settlements.

Ms Davids said the agreement was for a working relationship between the Department of Rural Development and the Department of Human Settlements. It was never said that money will be transferred.

The Chairperson disagreed with Ms Davids.

Mr Simmers agreed with the Chairperson.

Ms Davids disagreed. The decision to hand over the budget and responsibility to the Department of Human Settlements rested on an awaiting business plan. It was not finalised.

Ms Davids asked for it to be noted that the ANC does not support this resolution.

The Chairperson said it is noted.

Mr Simmers proposed the adoption.

Ms Philander seconded the proposal.

The meeting was adjourned.

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