Strategic Planning for Housing Delivery: hearings

Meeting report

HOUSING PORTFOLIO COMMITTEE
2 November 2004
STRATEGIC PLANNING FOR HOUSING DELIVERY: HEARINGS

Chairperson: Ms Z Kota (ANC)

Documents handed out:
Thubelisha Homes submission
National Urban Reconstruction Housing Agency submission
People's Housing Partnership Trust submission
Servcon submission
South African Human Rights Council submission
Annual Report 2003/2004: CEO's Report
Centre for Land and Natural Resource Policy Studies in South Africa submission
Mbangi Maki Development Housing Project submission
Contact details of Housing Institutions

SUMMARY
The Committee was briefed by six housing support institutions on their role in the strategic planning of housing delivery. Most of them felt that there could be improvement in terms of getting more funding, producing good quality houses and encouraging government to get more involved with housing institutions.

Members felt that more scope should be given to women contractors, and welcomed initiatives that were taken to make land available to build houses. They were also interested in getting progress reports, and finding out about the municipalities' level of involvement in housing provision.

MINUTES
Thubelisha Homes submission
According to Chief Executive Officer, Mr Kevin Duncan, Thubelisha's goal was to promote Government's vision of a non-racial, integrated society and sustainable human settlements through a comprehensive housing programme. Thubelisha was seen as a national development agency and wanted to form partnerships with other housing foundations.

Its medium term strategy was to establish a government agency to implement specific affordable housing projects. The short-term strategy was to upgrade informal settlements and it would be involved in the overall project management for municipalities and Provinces.

About 19 housing programmes were contained in the new housing programme. It would also ensure an increase in the utilisation of female contractors.

Thubelisha was to pursue discussions with the Ministry and the Department around the establishment of a national affordable housing development agency.

National Urban Reconstruction Housing Agency (NURCHA) submission
Mr Cedric de Beer, Chief Executive Officer of Nurcha, said that Nurcha is a joint venture between the Government and the Open Society Institute to bring banks to the party. Its primary focus was on smaller developers and contractors. It had supported 600 projects and 145 000 houses had been built since 1996.

>From the first 27 completed projects, 15 were emerging contractors of which six were women. Nurcha's contribution to the new housing plan was to finance a career path from small emerging contractors to large empowered companies. The Minister had proposed setting up an emerging contractors bank and Nurcha needed to make sure that contractors were profitable.

People's Housing Partnership Trust (PHPT) submission
Mr Mango Tshabangu, acting Chief Executive Officer of Nurcha, said that its emphasis was on the new housing plan and its mission was to build the capacity of provincial government, municipalities and Non Governmental Organisations in order that they could support the PHP. It had become the number one choice for housing delivery.

Its operational activities focussed mainly on communication, strategic guidance and support and corporate services. It had been recommended by all stakeholders that the Department needed to embark upon a review of the PHPT policy. PHPT's strategic objective was to improve service delivery to 20% of national assets. By March 2005, a project management scheme would come into operation.

The main impact of PHPT's strategies would be the increased delivery of houses to 20% of the national target in the first year.

Servcon submission
Mr Manye Moroka, Chief Executive Officer of Servcon said that Servcon was a joint venture between government and the banking sector which dealt with repossessed properties which totaled 33 386 in August 1997. Four options were made available to clients. They either had to buy back, rent, relocate or remain insitu for the disabled and aged.

It had achieved its annual targets for the first five years. The organisation's key challenge was when clients would opt for relocation and refusing to move when prompted to do so. As part of its corrective measures, Servcon would suggest an incentive equivalent to eviction cost for relocation acceptance.

Although Servcon assisted clients in ring-fenced properties, more people came and asked for the extension of the cut off date. The Department was still entertaining this proposal. It planned to finalise its ring-fenced portfolio on or before 31 March 2006, and to form a pilot project in the Western Cape.

South African Human Rights Commission (SAHRC) submission
Mr Charles Mphephu, a researcher for the SAHRC, said the Commission saw adequate housing as the following: legal security, affordability, accessibility and cultural adequacy. There was no policy coherence between departments both at local and national level. The fifth report of the SAHRC focussed on people with special needs and reflected that most houses were built far from economic activities.

People did not have information on housing and there was no policy dealing with housing provision for farm workers. Only three protocol responses had been received, and the Department was in the process of empowering local municipalities.

The government had provided a strategic framework and indicated that it would promote rental housing. It was also planning to launch an integrated land development programme. Informal settlements would be eliminated. Private land had been identified for housing and one of the Gauteng Provincial Government's new policies was to give more amenities to rural people.

No protocol response had been received from the Department that made it difficult to assess what had been done in terms of the Commission's recommendations. It had recommended that access to adequate housing should be declared as an enabling right to other socio-economic rights.

Centre for Land and Natural Resource Policy Studies in South Africa
Mr Peter Meakin (Director) said that efforts had been made to provide housing but land had become too expensive. This had been a worldwide problem and made it difficult for people to gain access to land for housing.

During the 1980's in Japan, land prices rose seven times faster than what people earned. South Africa could avoid this scenario because the state was obliged to pass legislation that would reduce land prices so that poor people could gain equal access to land for housing.

A law that would herald cheap land, would charge owners an annual fee or a user charge for their titles. The charge would be what anyone else would pay for exclusive occupation and was calculated like rates and taxes.

User charges could be introduced over five years and the Minister of Finance would be able to eliminate conventional taxes on work savings and trade.

Discussion
Mr T Dodovu (ANC) had hoped to see an analysis of Thubelisha's Annual Report that would map past achievements and its future role.

Mr Duncan said there had been meetings about Thubelisha's future plans and that a progress report would be made available.

Mr A Steyn (DA) asked if other stakeholders were consulted and who had consulted them. He also enquired about the current staff composition and why the foundation had been more successful than the others.

Mr Duncan responded that they were a small, successful team with competent people, which made the project successful. Stakeholders had been consulted and a human resources consultant was used to assist them. There had been growth in their staff.

Mr B Pule (UCDM) asked what skills transfer meant in this regard.

Mr Duncan replied that Thubelisha's role was not to do skills transfer but to provide capacity building to local authorities in order for them to deliver their projects. It was the Department's responsibility to do skills training.

Mr F Dhlamini (IFP) asked if there had been any training in financial management. Mr Duncan said there was no financial training.

The Chairperson asked what "Women In Housing" was. Mr Duncan responded that Women In Housing was an independent body that had a good relationship with Nurcha.

Mr A Steyn asked where funds for operational costs came from and who their market was. Mr Duncan responded that they had substantial resources and that they were a local provider.

Ms Ramakabe-Lesia (ANC) asked why other housing projects had not received assistance and if something could be done about that. She asked if PHPT could visit some of those projects and integrate them. Mr Duncan responded that some projects were getting assistance, for instance, the Western Cape came up with a programme of action and that they would be funded. Integration was important as PHPT was there to serve everyone in communities.

Mr Dodovu (ANC) commented that some important information had not been included in the report. He asked if it would be possible to get a breakdown of training provided in provinces. He also enquired about the visibility of PHPT.

Mr Duncan said beneficiaries required training mainly in hard skills. The PHPT's policy was that it should be exempted from the National Housing Board Council (NHBC). There had been interaction with all the provinces and they have tried to be accessible.

Ms M Ramakabe-Lesia (ANC) asked from which provinces graduates were recruited and how they were recruited. Mr Duncan said graduates were recruited from various provinces and there were three fresh engineering and housing graduates in each province. They would take responsibility for Support Organisations and get projects operational.

The Chairperson asked about the purpose of the consultation fee, and what mechanism had been used to ensure that funding would be accounted for. Mr Duncan replied that there was an Auditor-General's report that dealt with accountability. All grants were linked to the subsidy. The PHPT was funded by the United Nations Development Programme (UNDP), United States Aid (USAid) and the South African Government.

Mr T Dodovu (ANC) commented that Servcon had been given a difficult mandate.

Mr S Masango (DA) asked if there where people who wanted an extension of cut off dates.

Mr Moroka responded that they had consulted with people who wanted extensions. Provinces submitted these proposals to the Department and a meeting was held where the Department would finalise the decision. The outcome still had to be announced.

The Chairperson commented that the Committee would call Servcon to find out what the Minister's response was.

Mr G Schneeman (ANC) asked the SAHRC what method of information gathering they had used.

Mr C Mphephu responded that the Commission realised the importance of going down to the beneficiaries and gathering information from the beneficiaries themselves. One of the methods was to go to beneficiaries. Government departments had a tendency of not responding in time, and the Commission had to sometimes subpoena the Minister and the Director General in order to get protocols. It had been criticised for sourcing information from Government Departments. Site visits would include going to provinces and checking all areas of activities.

Mr D Mabena (ANC) voiced that he had a problem understanding what the Commission meant by a plan to develop "Gauteng's rural" housing development policy. He was not quite sure if there were rural areas in Gauteng.

Mr Mphephu responded that there were rural areas in Gauteng. There had to be integration of different land use in order to accommodate people and to give them access to business activities.

The Chairperson sought clarity on the term "Cultural Adequate Houses". She also asked the Commission to clearly define the Committee's oversight role in future.

Mr Mphephu responded that Reconstruction and Development Project (RDP) houses were not subdivided and that was against human culture. Cultural Adequate Houses had to be built to accommodate families and to give people, especially the elders, the privacy they needed and to help reduce the child abuse syndrome.

The Chairperson commented that they had raised the issue of RDP houses with the Department and that they were still working on it.

Mr G Schneeman (ANC) asked which other countries had introduced user charges and who their market was.

Mr Meakin responded that one such country was Taiwan. It had adopted a policy of user charges compensation. The East used user charges but did not have levy rates and taxes on people who owned land.

Mr S Masango (DA) asked how user charges were going to operate.

Mr Meakin said that user charges were multiples of tax and charges. If government would require land rentals and stop taxes that would be viewed as compensation.

Mr Z Mkhize (ANC) said normally, if someone bought a house, the value would go up. He asked why people had to pay rates if there were no structures on the land they had bought.

Mr Meakin's Legal Advisor, Mr Mike Pothier, said the meeting was not an ideal forum and that the issue needed a holistic approach. They were not suggesting that people would not be able to buy or sell land. The value of properties was increasing in most cases, but the owner would not get the benefit of that value.

The Chairperson said the Committee would like to have a resolution on the matter. Members welcomed any initiative to make land available for building houses.

The meeting was adjourned.