There was no additional funding that would be provided to the three provinces affected by the April disasters, because the Department of Human Settlements (DHS) had only R500m for the whole country to respond to the disaster, and if the whole R500m was transferred to KwaZulu-Natal (KZN), it would not be able to support any municipality or province when a disaster struck again. This came out of the discussion between the Committee and the DHS when it presented its progress report in a virtual meeting on its response to the April flood disaster. It reported that extensive rains in April had severely affected households in KwaZulu-Natal, the Eastern Cape and North West provinces. Informal settlements were among the most affected, especially those located on poor terrain. Mud houses were also badly affected. Assessment of damage was ongoing, as some areas continued to be inaccessible due to damage to roads and bridges. Reconstruction and redevelopment work had begun in all three provinces.
On funding reprioritisation, the Department indicated R922m had been provided to KZN and R115 to the Eastern Cape (EC). The affected provinces had been requested to reprioritise the disaster in their business plans. The payment schedules had been revised to accommodate emergency housing requirements. Funds had been transferred to both KZN and the EC. Both provinces were being assisted to complete emergency housing grant applications. The entities of the Department have been mobilised to use retain surpluses and corporate social investment allocations for some relief intervention.
Manufacturers of temporary residential units (TRUs) had been requested to increase capacity in KZN. The Housing Development Agency had been appointed by the EC to manage the construction of TRUs in affected districts. Building material suppliers had been requested to increase capacity. Land needed to relocate the people had been identified, but more was still required. Technical capacity support had been provided to provinces to conduct technical assessments to determine the extent of structural damage to homes. Replacement of mud houses was happening through the Rural Housing Programme. There were directives on expediting responses for the repair of housing units damaged during natural disasters.
The Department also briefed the Committee on the District Development Model and the alignment of plans to priority human settlements development areas. The Committee heard the country had remained with a spatial legacy, and despite the massive increase in housing delivery, state investments were still uncoordinated and housing delivery had been relegated to the periphery of towns and cities. Existing spatial planning instruments had not entirely succeeded in effectively guiding public sector investments.
The Department, in its current collaboration with CoGTA, was in the process of further segmenting all relevant grant allocations per district and metropolitan municipality. In conjunction with the provinces, it was currently ensuring that over a period of time the HSDG allocation into the Priority Human Settlements and Housing Development Areas (PHSHDAs) in a district and/or metropolitan reached the optimum. The relevant data and information were provided to CoGTA, which was currently managing the process to coordinate the production of the “One District, One Plan”.
The Committee was also given details of the revised Financed Linked Individual Subsidy Programme (FLISP), which was now called Help Me Buy A Home Programme. There had been policy reforms introduced which focused on non-mortgage finance options like rent-to-buy agreements, pension and provident funds, and employer-based schemes, and were supported by permission to occupy (PTO) rights and unsecured loans. The Department indicated it was currently finalising the implementation guidelines of the programme in partnership with the National Housing Finance Corporation (NHFC) and provinces for the rolling out of non-mortgage finance options to sketch out, amongst other things, an executable business process flow for the effective implementation of the Help Me Buy a Home policy programme, and to design a step-by-step business process for each product offering and option outlined in the approved policy.
Members wanted to know if the developments mentioned in the District Development Model presentation were on the edges of urban areas of town and cities that had been identified, because if they were on the urban edges, they could not address spatial transformation; how the Department was going to make sure these developments happened, because there were priority projects that had been identified before and none of them had happened as planned. even though they were not part of the District Development Model; described the situation on the ground in KZN as dreadful and the state of informal settlements as awful; asked the Department to provide an update on commitments to design disaster relief efforts in KZN, including the R13m subject to approval by National Treasury; wanted to understand why the municipal infrastructure grant (MIG) budget in Gauteng was lower than that of Limpopo and Mpumalanga, yet it was known there was a backlog in housing development in Gauteng; and wanted to find out what the Department was doing to meet people halfway so that they did not get into debt because of the existing culture of the banks in assessing clients, especially those in the middle class.
DHS on revised Finance Linked Individual Subsidy Programme (FLISP)
Ms Nonhlanhla Buthelezi, Acting Deputy Director-General: Human Settlement Delivery Frameworks, Department of Human Settlements (DHS), enlightened the Committee with details of the revised Finance Linked Individual Subsidy Programme (FLISP), which was now called Help Me Buy A Home Programme.
She said the main challenge was that banks were lending money to those earning above R15 000. Those who could not be lent money were those who lacked affordability because 30% of their income was used; they had an impaired credit record because of defaulted or missed payments; high levels of indebtedness because of too many accounts with clothing and furniture shops; unacceptable collateral security because the majority of South Africans did not save, and a poor credit track record because of being not seen to be consistent in servicing debts.
Policy reforms had been introduced which focused on non-mortgage finance options like rent-to-buy agreements, pension and provident funds, and employer-based schemes, and were supported by permission to occupy (PTO) rights and unsecured loans. The key arrangement was that FLISP should be administered by the National Implementing Agent (NIA), and provinces implement it in the Integrated Residential Development Programme (IRDP), and that the FLISP funding allocation to the Integrated Residential Development Programme (NHFC) be divided into capital and operational funding.
She reported the responsibilities of the Department were to maintain the FLISP policy and develop implementation guidelines; allocate funds to the NIA and provincial departments (PDs) for the implementation of FLISP; monitor and evaluate FLISP implementation; conclude an implementation agreement with the NIA that would regulate the roles and responsibilities of the two parties; evaluate reconciliation reports received from the NIA for correctness and, in collaboration with the NIA, address any deviations recorded; monitor the FLISP subsidy funds received and disbursed; ensure that FLISP beneficiaries were recorded on the National Housing Subsidy Database (NHSDB); and address policy deviations - retrospective applications.
On FLISP implementation guidelines, she indicated the Department was currently finalising the implementation guidelines of the programme in partnership with NHFC and provinces for the rollout of non-mortgage finance options, mainly to sketch out an executable business process flow for the effective implementation of the Help Me Buy a Home policy programme; to design a step-by-step business process for each product offering and option as outlined in the approved Help Me Buy a Home policy; to create clear implementation modalities supporting the new policy framework and programme; to ensure that the applied business process model was properly aligned and consistent with the approved policy principles; to ensure that the business process flow was in line with the recommendation of the internal audit; and to make recommendations regarding the needed changes on the CRM to support the processing of applications for the new products.
(Graphs were shown to illustrate digitalisation of FLISP and funding arrangements and subsidies as from April 2022)
Mr Neville Chainee, Deputy Director-General (DDG): (Human Settlements, Planning and Strategy, DHS, presented the District Development Model (DDM) and alignment of plans to priority human settlements development areas. He said they had remained with a spatial legacy and that despite the massive increase in housing delivery, state investments were still uncoordinated and housing delivery had been relegated to the periphery of towns and cities. Existing spatial planning instruments had not entirely succeeded in effectively guiding public sector investments. The human settlements framework for spatial transformation and consolidation advanced housing delivery to promote spatial restructuring and consolidation, and facilitated inclusive residential property markets and asset creation within priority spaces.
The declaration of 136 Priority Human Settlement and Housing Development Areas (PHSHDA) was aligned with the principles of the national development plan (NDP), the National Spatial Development Framework (NSDF) and the objectives of the Integrated Urban Development Framework IUDF and the Spatial Planning and Land Use Management Act (SPLUMA), which includes:
-Spatial justice: reversing segregated development and creation of poverty pockets in the peripheral areas, integrating previously excluded groups, resuscitating declining areas;
-Spatial efficiency: consolidating spaces and promoting densification, and efficient commuting patterns;
-Access to connectivity, economic and social infrastructure: intended to ensure the attainment of basic services, job opportunities, transport networks, education, recreation, health and welfare etc. to facilitate and catalyse increased investment and productivity;
-Access to adequate accommodation: emphasis was on provision of affordable and fiscally sustainable shelter in areas of high needs;
-Provision of quality housing options: ensure that different housing typologies were delivered to attract different market segments at appropriate quality and innovation.
Mr Chainee said the Department, in its current collaboration with Cooperative Governance and Traditional Affairs (CoGTA), was in the process of further segmenting all relevant grant allocations per district and metropolitan municipality. The Department, currently in conjunction with the provinces, was ensuring that over a period of time the Human Settlements Development Grant (HSDG) allocation into the PHSDA in a district and/or metropolitan reached the optimum. The relevant data and information were provided to CoGTA, which was currently managing the process to coordinate the production of the “One District, One Plan”. With the support of the Housing Development Agency (HDA), a detailed mapping exercise was underway to assist with the monitoring and oversight of targets aligned to the MTSF, the DDM and all human settlements grant allocations. The relevant allocations per programme per district and metropolitan municipality were available.
(Tables and graphs were shown to illustrate PHSHDA alignment to the District Development Model; the HSDG Business Plan Housing Delivery Landscape 2022/23 within the PHSHDA; Human Settlements Development Grants in the PHSHDA within district and metropolitan municipalities per province; Work-in-progress on alignment of investments of other sectors to PHDAs per province; Municipal Infrastructure Grant Allocations in PHDAs; and other sector grant allocations in the PHSHDAs 2021/2023).
DHS response to April floods disaster
Dr Zoleka Sokopo, DDG: Informal Settlements Upgrading (ISU) and Emergency Housing, DHS, took the Committee through the progress report on the response of Human Settlements to the April disaster. She reported extensive rains in April severely affected households in KwaZulu-Natal (KZN), the Eastern Cape (EC) and North West provinces. Informal settlements were among the most affected, especially those located in poor terrain. Mud houses were also badly affected. Assessment of damage was ongoing, as some areas continued to be inaccessible due to damage to roads and bridges. Reconstruction and redevelopment work had begun in all three provinces.
Manufacturers of Temporary Residential Units (TRUs) had been requested to increase capacity in KZN. The HDA had been appointed by the EC to manage the construction of TRUs in affected districts. Building material suppliers had been requested to increase capacity. Land needed to relocate the people had been identified, but more was still required. Technical capacity support had been provided to provinces in conducting technical assessments to determine the extent of structural damage to homes. Replacement of mud houses was happening through the Rural Housing Programme. There were directives on expediting responses for the repair of housing units damaged during natural disasters.
On funding reprioritisation, Dr Sokopo reported that R922m had been provided to KZN and R115 provided to the EC. The affected provinces had been requested to reprioritise the disaster in their business plans. The payment schedules were revised to accommodate emergency housing requirements. Funds had been transferred to both KwaZulu-Natal and the Eastern Cape. Both provinces were being assisted to complete emergency housing grant applications. The entities of the Department had been mobilised to use retained surpluses and corporate social investment (CSI) allocations for some relief intervention.
Dr Sokopo said the responses and interventions to the disaster would have an impact on the programmes of the Department. There would be downward revision of medium terms strategic framework (MTSF) and annual performance plan (APP) targets, project performance targets for Integrated Sustainable Rural Development Programme (ISRDP) sites, ISRDP units and rural housing subsidy units, Upgrading of Informal Settlements Programme (UISP), etc., to make provision for more TRUs and material supply vouchers. The exact revised performance figures had not yet been finalised.
About the KZN disaster, she said a Joint Coordinating Committee (JOC) had been established to manage the interventions. The HDA was acting as secretariat. Work completed through work streams was focusing on housing and land, infrastructure and services, and governance. Phase 1 of procurement had been finalised for the construction of TRUs in all affected districts. Construction of 1 000 units had started in eThekwini, uGu and the iLembe districts. Work in other districts commenced from 3 May 2022. Beneficiary profiling and assessments had commenced in all districts.
The National Housing Finance Corporation (NHFC) and the National Home Builders Registration Council (NHBRC) had been refining and operationalising the voucher system to repair partially damaged units. The NHBRC had completed the development of an assessment tool for damaged houses in order to ensure uniformity in assessment. Vouchers would be categorised according to the severity of damage and work orders would be issued to contractors on the database. The NHFC would manage the payments for completed work.
Dr Sokopo reported the national Department had transferred R115 million to the Eastern Cape to assist with its response to the disaster. A contractor had been appointed to erect 435 TRUs or temporary shelters in Alfred Nzo, and 565 TRUs in the OR Tambo district. On 3 May, the Eastern Cape provincial Department appointed the HDA to erect 1 141 TRUs in OR Tambo, Chris Hani, Joe Gqabi and Amathole District Municipalities. The HDA was on site conducting the assessment of partially damaged houses to determine the need for permanent solutions and remedial works. The province was exploring the voucher system for the repair or rebuilding of houses. The beneficiary administration had engaged the Department of Home Affairs (DHA) to assist those families that had lost their identity documents.
When it came to the North West disaster, there were 250 households that had become homeless. Heavy rains in April had affected the communities residing in Deelpan and several adjacent villages such as Witpan 1 and 2, which were within the Tswaing Local Municipality. The HSDG funding had been reprioritised for the disaster. There had been a provision of TRUs for destitute communities and a need for securing land for relocation. The province had requested the utilisation of the HSDG towards the emergency housing programme to assist affected households. The Department had approved an amount of R54 928 000 to address emergency housing needs of the community of Deelpan Village. The local tribal authority had identified a parcel of land where people could be relocated. The provincial Department and NHBRC had finalised specifications for the temporary structure in line with the prescribed norms and standard of the emergency housing programme. A procurement process to appoint service providers had already started to provide about 250 temporary structures.
(Tables and graphs were shown to illustrate details of affected households per district/local municipality, financial implications, and emergency assistance programmes)
Ms E Powell (DA) remarked the situation on the ground in KZN was dreadful, and the state of informal settlements was awful. She had not done any media interviews to attack any person, but had tried to get information about the situation. She had visited the affected areas as a Member of Parliament, but not representing her party. People said there was no coordinated response or war room, and there had been no information from councillors. The eThekwini municipality Exco had not set up a "war room" to meet everyone like in Cape Town when there had been a drought crisis. The tragedy in Umlazi was unprecedented. There was a lack of leadership, and she was not blaming the Department. But there was a need for a coordinated response. She wanted to know what assistance the Department was providing in terms of a coordinated response, and how often was it meeting with officials from the eThekwini municipality, because people in Yellowwood Park did not know what would happen to them. She asked what the estimated date for reimbursing the KZN disaster was; who was going to do oversight of the municipal grant if it was paid to the municipality?
She asked for clarity on the presentation, because it appeared to be confusing. How much money would go to the provincial Department and the eThekwini municipality in terms of the emergency grant? How the Committee was going to fit into the ad hoc committee that was going to be set up by Parliament? Was the Department going to provide a grant or assistance to homeowners whose houses had been destroyed as a result of a lack of, or poor, municipal infrastructure maintenance? Further, she wanted to establish how people were going to get their vouchers from the R143m that had been allocated, as announced by the Minister. Who was managing the awarding of the TRU contracts, because business forums were eyeing the contracts? What was the impact going to be on reprioritisation, because the province had been asked to reprioritise? How much money was coming from the entities? Was it possible in the interim to provide for people who were homeless with starter kits so that they could rebuild where they had their homes? Could the Department assist with some funds to clear the land in affected informal settlements?
Dr Sokopo stated it had been noted that the Department needed to coordinate its responses. What had been presented was a coordinated response by human settlements, but not the entire government, because this was the responsibility of COGTA. She said the first part of the presentation had dealt with what had been done so far, and ended up with the subsidy quantum. The second part dealt with the overview of the disaster in KZN. It provided the breakdown in numbers and responses or interventions to the disaster. This included the targets as well. The totality of the plan would be forwarded to the Committee. The other parts dealt with an overview of the disaster in the Eastern Cape and North West. Some slides of the presentation had been skipped due to time constraints, and it was assumed the Members had familiarised themselves with the presentation because they had received it in time.
On whether the TRUs would be electrified, she said it all depended on whether the destroyed structure had had electricity before. If it had, the engineers would connect the electricity to the TRU. If there had been no electricity connection in the village or area, unfortunately, the TRU would have no electricity and would just be an empty house.
She indicated the Department had not sent any money from the emergency housing grant to eThekwini. No province or municipality had received any emergency housing grant so far, and had been encouraged to use their current budgets. About the voucher system, she said not a single voucher had been issued by KZN. It was still working with the NHRC to ensure there was reliability in the issuing of the voucher system, that there was no fraud, and to know who they were going to be issued to – whether to the home-owner or contractor -- and it had been decided the voucher system would be issued once the work had been inspected by the NHRC. Nothing had been finalised yet on the voucher system. Regarding private sector homes, she said the Department would assist only those individuals whose earnings were less than the government threshold of R3 500, but there were other alternatives that people could use other than this grant, which had limitations.
Mr Chainee added that through the National Disaster Management Committee (NDMC) there were claims that were processed through the South African Special Risk Insurance Association (SASRIA) because the current law did not allow the Department to spend money on private property.
Ms Lucy Bele, Acting CFO, DHS, said it was correct that the Department had allocations for the provincial and municipal emergency housing grants. Both grants were released upon receiving applications. It could be confirmed no transfers had been made to either the KZN province or eThekwini municipality. The Department had received an application from the eThekwini municipality. The Department had over R300m for the provincial emergency housing grant, while there was R100m for the municipal emergency housing grant. The Department felt it would be fine to have one application, and the Act allowed for fund conversion from one grant to another grant. National Treasury (NT) had issued a circular to all the municipalities to alert them that according to the Division of Revenue Act (DORA), metros were allowed to reprioritise their own grants to attend to the disaster. The financial year of the metros had not yet ended. The Department had alerted the eThekwini municipality about this. EThekwini had indicated it had committed all its grants.
The R922m was money that was redirected for the informal settlements discretionary grant. Because of reprioritisation, the Department had requested eThekwini to reprioritise its grant so that it could attend to the emergency. On money from public entities, the monies were pledged but they had not been paid to the Department. The Department had written to NT to request approval. Treasury had indicated those funds formed part of the surplus retention because the financial year of the entities ended in March. To have access to the funds, NT indicated the Department had to wait for audited financial statements, and that process was at the end of August. Up until now, there had been no funds transferred from the entities.
Ms Buthelezi referred to the use of allocation for clearing the land, and said that in terms of the programmes of the Department, there was an item or provision dealing with this matter, and municipalities and provinces could use that provision for clearing the rubble in communities affected by the disasters. She indicated the Department should be able to provide starter kits. The recommendation would be considered by the Department. The practice had been there in some provinces, and it gave the beneficiaries a chance to be able to kick-start their lives under emergency situations.
Ms Bele further made her point clear there had been no additional money the Department had received to respond to the disasters. The metro and the province had been asked to reprioritise within the current grants. The Department had six grants. During April, being the first month of the financial year for 2022/23, allocations for the USDG and HSDG had been made. The HSDG and the Informal Settlement Upgrading Partnership Grant were transferred to provinces. The Department had informed the provinces the current budget for the HSDG was R2bn for this financial year, while the current allocation for the Informal Settlement Upgrading Partnership Grant was R776m. Now that there was a disaster, section 19 of the DORA stated the Department needed to reprioritise within the current budget. The provinces were asked to relook at their business plans and come up with plans that responded to the current disasters.
The R922m that had been allocated was broken down for the HSDG and Informal Settlement Upgrading Partnership Grant. There was no additional allocation. The Department agreed with NT that KZN should respond to the disaster and also bring forward the tranche. It had been given R733m from the HSDG and further received R189m -- a total of R922m. That money was not inclusive of the pledges from the entities. The Department had then approached the metro and indicated that since its financial year had not ended and it was still working on the 2021/22 financial period, it would not make an allocation. It would make it only on 1 July 2022 when the new financial year for the metros began.
The Department told eThekwini that NT had issued a circular about reprioritising within the current budget. The 2021/22 grant had been transferred to eThekwini. By 25 March 2022, R582m was not spent. The Department had asked eThekwini to reprioritise the unspent money. The Department told eThekwini since it had the Informal Settlement Upgrading Partnership Grant, it had received an additional allocation because during the year there was an allocation to the Informal Settlement Upgrading Partnership Grant of R143m, and the metro was asked to reprioritise within the current budget that had not been spent up to 31 March 2022. The metro had stated it could not reprioritise because it had committed all the funds. The province agreed to reprioritise within the HSDG and Informal Settlement Upgrading Partnership Grant. The metro indicated it could not reprioritise within its unspent funds, so there was no additional funding.
For the emergency housing conditional grant, the Department had R500m in total. This money was released upon receiving an application when there was a disaster or housing emergency. The circular from NT talked of transferring the conditional grant before the enaction of DORA. Because the DORA had not yet been enacted, the Department could not transfer more than 45%. Whatever KZN wanted from the Provincial Emergency Housing Grant and whatever eThekwini requested from the Municipal Emergency Housing Grant, the Department could not transfer more than 45% because the DORA had not been enacted. What the Department would do was to determine how much it had in its budget and then decide how much to give to both the province and eThekwini.
She made it clear the R500m was for the whole country. If the whole R500m was transferred to KZN, the Department would not be able to support any municipality or province when a disaster struck. That was why NT had published a circular on reprioritisation. The Department was aware that other recovery grants might come during the year, but for now, it was using its current budget. Therefore, there was no additional funding. The R922m the Minister had announced was a reprioritisation for the province from the HSDG and Informal Settlement Upgrading Partnership Grant allocations. There was no reprioritisation from the metro, but the Department would see what could be done because it had received an application from the metro. The North West and Eastern Cape had requested to reprioritise within the HSDG. However, it should be remembered the Department had only R500m for the whole country to respond to the disaster.
Mr B Herron (GOOD) wanted to know if the developments mentioned in the District Development Model presentation were on the edges of urban areas of towns and cities that had been identified, because if they were on the urban edges, they could not address spatial transformation. How were they going to make sure these developments happened, because there were priority projects that had been identified before and none of them had happened as planned, even though they were not part of the DDM. They had been part of the Covid-19 response. He wanted to understand why eThekwini had spent zero of the 30% added on the HSDG for priority areas in the previous financial year, while Tshwane had spent R1m; enquired about what happened to the Built Environmental Development Plan that metros had to prepare annually, and asked if it was no longer on the plans of the metropolitan municipalities to receive grant funding because there had been a conglomeration of grants that had been spent on priorities; asked if the Department could indicate the duration of stay of residents in TRUs, because it appeared the TRUs were becoming permanent structures; and enquired if the mud houses were going to be replaced by breaking new ground (BNG), because there had been a commitment to replace them with 40 square metre houses.
Ms Pam Tshwete, Deputy Minister of Human Settlements, said the mud houses had been reprioritised. They would be replaced by permanent structures in a form of houses. The policy of the Department stated the lifespan of the TRU should be six months and be demolished thereafter, but now it had been indicated the material used for a TRU could last for ten years, even though it was not a comfortable structure. The Department had realised it needed to embark on an education awareness campaign about climate change so that people could understand where and where not to build their houses. In many cases, people refused to move from a bad place to a better place for housing for various reasons, and this led to delays in the building of houses for them.
Dr Sokopo added the TRUs lasted longer, but in terms of the Department’s policy and programmes the TRUs could be there for only six months, and had to be replaced by a permanent solution. It had to be demolished and be replaced by a brick and mortar stand, or BNG house. For beneficiaries, the Department was using the criteria that were in the housing code. There were qualification criteria in terms of income threshold. Not everyone was going to benefit. The majority of the people to be assisted by the government were those in mud houses, because they had an income that was less than R3 000 per month. They would receive a TRU, and their mud houses would be replaced.
Adv T Masutha (ANC) remarked that it was better when one spoke of spatial planning to refer to spatial equality vs spatial inequality, especially when one focused on the rural-urban divide and the allocation of the budget between the two. The establishment of the Department of Rural Development had been a response to this inequality. There had to be a clear policy drive to really tackle the issue. When it came to spatial planning and development, people in rural areas built state-of-the-art houses, but in the locations, there were houses in areas where they were not supposed to be. Rural communities had reached a point where they were not going to wait for the rollout of programmes around town planning and some level of organisation. With all these complexities, he was not sure what the Department’s approach should be, especially when there was co-governance between the municipalities and traditional authorities in rural areas. He did not know how the principle of the 13% set-aside of bulk infrastructure to municipalities would be applied when programmes like FLISP were extended to rural areas.
He asked to what extent the budget allocation extended to rural development as a focus area in its own right. He further indicated when one dealt with rural areas, there was a matter of land tenure which he said he was unsure if it had ever been resolved, especially where municipalities and traditional authorities co-governed. Financiers and other programmes supporting human settlements were reluctant to invest in areas where no title deeds applied. How did one ensure that rural communities were taking it upon themselves to build quality houses that one would not even find in peri-urban and urban areas?
It had been noted that in some rural areas, some of the infrastructure was not applicable because of their nature. Communities that were refusing to move out of areas prone to floods and disasters had been complaining there had not been an interest in investing in this type of infrastructure. Some communities in areas prone to floods and disasters, because of investment in well-developed infrastructure, experienced less harm to their properties and lives. This now went back to the question of spatial equality vs spatial inequality. This was a constitutional question with which they needed to reflect on short, medium to long term plans for an integrated response across all government levels, including the allocation of land.
Lastly, on the issue of developing an integrated information system, different components had been identified under FLISP, but there was no mention of the systems of the South African Social Security Agency (SASSA), social development and the South African Revenue Service (SARS). One way of addressing double dipping was to have integrated government information systems so as to target beneficiaries correctly, and to have an integrated government response to economic rights and other issues. In the 90s, there was a concept termed "redlining," where a bank would not finance the building of a house if the area was not suitable for it in both peri-urban and rural areas, or where there had been an influx of black people. There was a tendency to redline the whole area without taking into account the peoples' ability to pay back loans. He asked if this aspect was the one making the banks shy away from certain areas. There was also a practice in semi-urban areas where there was flat-rating when it came to evaluations -- a flat rating of, for example, R249 for a property in order to avoid costly administration fees with the deeds office. The downside of that was that property to the value of R5m in an urban area was reduced to R250 000 because of flat-rating. To what extent did this play into the rural space in terms of accessing financing in order to be able to benefit from quality housing?
Deputy Minister Tshwete said she agreed with the idea of a database from SASSA, Social Development, etc, to assist in relocation. The proposal would be considered and implemented.
Ms Buthelezi stated that the red-lining challenge was no longer there. The problem they were facing was that of not being able to lend and have sufficient stock. During red lining, they had come up with relocation subsidies which had now been phased out, and it was hoped that during the lekgotla that would be held with the banks, the Department would be able to come up with instruments that would enable affordable housing. The Department required partnerships not only with the banks, but with the private sector on this matter.
She added that there was a law that dealt with policy conundrums which needed to be addressed. They were a Department of human settlements, but when they defined human settlements, it was broader than the Department. The matters of urban and rural areas needed the attention of the Department. The DHS did engage the Department of Rural Development when it tackled these matters, and these would be discussed at a summit and in workshops that would be hosted by the Department. Some of the matters he raised would have to include amendments to the grant framework, which came out as a result of identifying challenges on the ground in terms of implementing the bulk infrastructure grant. The Department was also trying to ensure that FLISP went to people in rural areas who had stands.
Regarding the provisions in the revised FLISP Policy, she explained the Department was engaging with traditional authorities governing rural areas to confirm to the Department the areas that were needed by people for housing development. The Department needed these letters or applications from the traditional authorities so that it could use builders residing in those areas for construction, and these applications would resolve the problems.
Mr Chainee said given the current spatial framework they worked within, the whole compliance, regulatory, standards, and policies they had, tensions did exist. As the Department, they tried to align what the sector, municipal and provincial priorities are. He noted there were areas of success. In many metropolitan areas, especially in relation to projects that had to do with social housing, priority projects, and urban renewal programmes, there had been good progress. The Department could do better. The Department would come back to report to the Committee on PHDAs, particularly in relation to investment. Through its own investments and others with the provinces and other departments, the DHS had managed to attract an additional 50 000 units in both the private and public sector in the cities and around Johannesburg.
Ms N Tafeni (EFF) asked the Department to provide an update on commitments to design disaster relief efforts in KwaZulu-Natal, including the R13m subject to approval by NT. Also, it should provide an update on the challenges it was facing on the rollout of these subsidies.
Ms S Mokgotho (EFF) wanted to know why the municipal infrastructure grant (MIG) budget in Gauteng was lower than that of Limpopo and Mpumalanga, yet it was known there was a backlog in housing development in Gauteng. It had been further mentioned that in KZN, land had been identified for building alternative houses for people affected by the floods, but more land was still required. Why was it difficult for the Department to acquire more suitable land to build houses for the people of KZN? In North West, 250 people had been affected by floods, and she wanted to know why that number was referred to as small. Was that the reason why the construction of TRUs had not started in the North West? When was it planned to start?
Dr Sokopo said the "small number" reference about North West was just a comparison in relation to the disaster that had happened in North West and KwaZulu-Natal. It was not that nothing had been done. The Department had communicated with North West, and it had been allowed to use its housing development grant and apply for the emergency housing grant, which was a limited resource.
Ms N Sihlwayi (ANC) asked what the Department was doing to meet people halfway so that they did not get into debt because of the existing culture of the banks, especially those in the middle class. Banks wanted people with a high income. She further expressed appreciation about the DDM mentioned in the presentation, because there was a silo mentality at government levels when it came to service delivery. She proposed there should be a clear regulatory framework to force the integration of systems. She wanted to know the material that would be used to rebuild the mud houses; and asked for a timeframe for building these emergency houses.
Ms Buthelezi, concerning transformation and the culture of banks, indicated the Department needed to have a broader perspective happening in that space. A lot of research had been done to figure out the model that had been used by the banks in terms of lending. The model was a little bit complicated. There was a general challenge throughout the model itself. One needed a lot of investors operating at different levels. The Department had agreed to hold conversations with the banks. It had been started in the previous financial year with the banks and next time it would also include the Portfolio Committee to see the products banks could offer to lower and medium earners. Currently, nothing was happening, including the reforms that were being proposed, as they would not meet the demand and supply for housing.
Dr Sokopo said the six months period was in the programme of the Department. Two provinces had not provided details to the Department about rebuilding permanent structures. In terms of the policy, after receiving plans, one was expected to start building. That was why it had been indicated this matter would be reported back to the Committee once all the details had been received by the Department.
Mr A Tseki (ANC) wanted to know the difference between the DDM and IGR, and asked for clarification between the individual schemes and FLISP, the MIG and USDG. He also mentioned the presentation had indicated the Department was not sure of the quantum to be used for the disaster and the impact this would have on the current budget. In the previous meeting, it was indicated the current disaster would not affect the current budget, so it was worrisome to hear from the presentation the disaster would have an impact on the current budget. He wanted to know if this would affect programmes or annual performance plans.
Deputy Minister Tshwete said the quantum of building houses had increased. In their stakeholder engagement, the Department realised that the price of building material went up every six months. People had this misperception that all people should be built houses. In Khayelitsha, a new piece of land had been invaded and people had started to demand water and sanitation infrastructure. There was no budget for infrastructure on invaded pieces of land. The human rights groups demanded the Department had to come up with a plan. Sometimes informal settlements were put up in areas earmarked for formal housing. The challenges were mainly in informal settlements where people were refusing to be relocated.
Ms Buthelezi, on FLISP and individual subsidies, said that on the housing code there were about 17 programmes that the DHS had. Two were referred to as individual subsidies. FLISP was an individual subsidy credit scheme linked to the banks, and there was another individual subsidy not credit-linked. The issue was around the income. It was for those with an income of up to R3 000, but the FLISP started from R3 500 to R22 000. These documents would be shared with the Committee.
Dr N Khumalo (DA) asked the Committee to be given details on the DDM projects per region, and wanted to know the reasons and consequences for the unfinished projects in the Alfred Nzo region. She also wanted to know what the collaboration level looked like in KZN between the different levels of the government, and what the timeframes were, seeing that this was an emergency, so that public representatives could manage community expectations and communication. She wanted to find out when the Department was anticipating the completion of evaluations in the communities that had not yet been reached in KZN.
The Chairperson remarked it appears FLISP was not doing well, because most people targeted had been blacklisted. The biggest challenge was that banks still used conservative methods to assess people. The Department needed to approach the banks, because it had a programme that needed to be implemented to assist those in the "missing middle" to get assistance for building their own houses. There was a need to find a way of transforming the system without negatively affecting the programme. Banks were not developmental in nature -- they were there to make profits. Having a housing bank would help to achieve what FLISP aimed to achieve.
On the DDM, she wanted to know why there was still a problem of coordination in areas affected by floods if the programme had really been implemented. She further indicated the country had a Disaster Management Act implemented by COGTA. All departments had to act under the COGTA disaster management. The Committee would continue to interact with COGTA to better understand the progress and what was happening in flood-affected areas.
She wanted to know what the lifespan of the TRUs were, to avoid seeing people permanently housed in them, and asked if it was possible to keep the TRUs after the ten-year period in a safe place so that they could be used when disaster struck the next time. If a disaster happened and it was declared a national disaster, there was a budget allocated for that. She wondered why the targets would be affected when an allocation had been made already. She also wanted to know if the engineers that would be working on this disaster belonged to the state or if they would be outsourced, and how much money would be spent on consultants. Lastly, she wanted to know about job opportunities that would be created by these disasters.
Mr Chainee admitted the criticism was fair enough and valid, because the Department had enforcement mechanisms, compliance and ability to enforce these things and come back to report through the Minister. It was not that the Department did not have enough tools, but was just about the ability to enforce things.
Dr Sokopo, referring to targets, said the money was not in the coffers of the Department yet. In the meantime, it was using its own budget. The money might come and replace the money spent by the Department, but they might not be able to replace the whole of it because it had to be dispersed to other disasters the government had to respond to. She indicated the presentation was making the Committee aware of this possibility, but there was nothing definite. The Department did not have enough money. That was a serious concern.
The Chairperson remarked she did not understand it when the eThekwini metro said it had committed all its funding and could not respond to the disaster. The money the metro had was for the infrastructure. These were the areas of the metro that were affected. Its response appeared to be arrogant, and she wondered if the Department could not approach NT to force it to use the unspent R500m. She wanted to know if the Department allowed such statements without analysis, because these allocated grants were for the infrastructure.
Ms Bele said she had provided the breakdown on the R922m. R733m was from the Human Settlements Development Grant, while the R89m was from the Informal Settlements Upgrading Partnership Grant. She said the Department had had a meeting with eThekwini metro, which had said all its funds were committed. If the funds were committed, there was nothing the Department could do, because the metro had confirmed its funds were committed. The Department had also approached the National Disaster Management Centre to provide it with an assessment of the situation. It had asked the metro to give it a list of all the projects it was working on in response to the disaster. The metro had provided the list, but could not indicate the source of the funds when this was requested by the Department. The talks with the metro were ongoing on this matter, because NT had issued a circular stating there would be no additional funding and budgets should be reprioritised.
Mr Chainee said given the fact that this was a national disaster and there were accountability mechanisms, there were processes that were followed through, and he did not think there was acceptance at any level that eThekwini had no funds to respond to the disaster or reprioritise its budget. That process of accountability and enforcement would go through the NDMC, the National Disaster Joint Committee and the Provincial Disaster Joint Committee, to hold eThekwini accountable and make funds available.
Ms Mokgotho wanted to know about timeframes for the building of TRUs at Tswaing in the North West.
Dr Sokopo said that on 22 April, the Department had received a request from the Head of the DHS in North West to make use of the Human Settlements Development Grant for the emergency housing for the people of Deelpan. The Department had been given a go-ahead to use the R54m to respond to the plight facing the people of Deelpan. On 6 May, the Department had received information that the municipality would release the list of beneficiaries to the provincial Department, because this was a requirement. The Department further received information the provincial Department would brief the service provider to hand over the site and sign a contract agreement. It was agreed all the activities would happen between 9 May and 12 May, and the project would be completed by the end of May. It was also indicated a land parcel had been identified where these temporary structures would be constructed.
Deputy Minister Tshwete, in her closing remarks, said the Department would request timeframes from the provinces, and they would be forwarded to the Committee. She suggested a joint Portfolio Committee be organised with COGTA, because Minister Nkosazana Dlamini-Zuma might be able to answer some of the questions, more especially on disaster matters. She feared saying the TRUs would be constructed within six months, according to the policy. Sometimes delays were caused by communities themselves refusing to relocate to alternative places. She indicated TRUs were bit of a problem, because they had been against them even before the disaster -- they cost too much money, and it was unacceptable to continue to build shacks when there were so many shacks already. But when disaster came, the TRU became an alternative shelter even though it was not a comfortable place to live in.
The Chairperson said she believed that at the next meetings, the Department would be able to provide some more information on these disaster interventions. Every second week, the Department should update the Committee about the KZN, North West and Eastern Cape disasters, including the disaster of the Western Cape community that had been attacked by fire. This information was important for Members so that they could interact properly with the Department.
Lastly, she asked the Department to pressurise eThekwini, because municipalities had this tendency of thinking they were exploiting the DORA clause that said if money was committed, there should be no reprioritisation. Such responses from eThekwini were not acceptable, because most people had lost their properties, lives and loved ones. The grants had been passed to assist the backlogs in infrastructure. It became a problem when infrastructure collapsed and the Committee was told funds were committed already for responding to the disaster. The conditional grants were meant to help people. It was time the eThekwini metro started to take Parliament seriously. It was not even clearly articulated what these funds had been committed for.
The meeting was adjourned.
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