Inner City Housing: briefing

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Meeting report

HOUSING PORTFOLIO COMMITTEE
19 October 1999
INNER CITY HOUSING: BRIEFING

Documents handed out:
The Inner City Paradigm briefing

MINUTES
The Director-General, Ms Nxumalo-Nhlapo, presented the briefing to the committee on Inner City Paradigm. (See appendix 1).

Questions from members
Member: Much focus is given to the city. Will this not have affect in the immigration of people to the cities?

D-G: The Department wants to balance inner city building strategy with the rural building strategy. The Department cannot develop inner cities without making sure that there are pull factors which will make people remain in rural areas.

Ms R Southgate (ACDP): What are you intending to bring to the inner city? Do you intend to bring hostels to the inner city?

D-G: It is not our intention to bring hostels to the inner city. City development presents an opportunity to create different types of cities. In the past nobody lived in the inner city, only security guards were to be found there. There is change in the use of a city in that it is used as both a residential and business area.

Chairperson: It seems that such housing activities are happening in Gauteng.
D-G: Gauteng is ahead of other provinces. But there are initiatives that are taking place in Durban Metro, Port Elizabeth and in Western Cape.

Ms M Ramakaba-Lesiea (ANC): Most of the houses in Gugulethu, Nyanga and so on are old now. What assistance can those communities get from the government?

D-G: The Special Presidential Project on Urban Renewal is dealing with that as well as the Human Settlement Redevelopment Pilot Programme. The Western Cape Housing Board should be encouraged to apply to part of this project.

Mr de Vos (DP): The D-G told us that new houses will be built in the inner city. What type of land will be utilised. Is it reclaimed land or greenfield?

D-G: The Department is going to use both land reclaimed from demolished buildings and vacant land, for example, land once reserved for sport fields but never used.

Mr Schneemann (ANC): What is being done to ensure that businesses stay in the cities.
D-G: There needs to be mechanisms in place which will discourage business from moving from the inner city. For example, businesses in the inner city could pay less rates. But we cannot prevent them from moving.

The meeting was adjourned.

Appendix 1
THE INNER CITY PARADIGM

Introduction
Inner city decline and decay are universal phenomena, Mostly it is part of the normal cycle of the socio-economic development of cities. In some cases it is hastened and exacerbated by inappropriate policies.

Throughout the western world people have tended to migrate from inner city areas to suburban environments commensurate with their ascent of thc socio-economic ladder. In recent years a reversal of the trend has been discernible, owing mainly to the unacceptably high demands of commuter travel in certain countries.

From a housing perspective, suburbanisation frequently meant moving from rental to ownership.

The void created by suburbanisation was in turn filled, often by an influx of less affluent residents for whom the vacated older housing stock was still attractive and who were bound to the less skilled office and industrial jobs traditionally located in the older inner city areas. A major consideration for these residents was also the cost of travel from more remote low income suburbs. The influx of poorer residents was often accompanied by a rapid decline in the environment due to overcrowding, lack of proper maintenance of the older housing stock and an overloading of services.

The change in income profile of residents meant that many local businesses and service industries followed their clientele and an exodus of even major enterprises to decentralised business nodes occurred, once the tipping point had been reached.

Before reaching the tipping point the pattern of population movement is slow. Urban decline often advances unnoticed or is ignored, as being of little consequence, until it is too late.

In the sixties and seventies governments, without adequate research into the root causes of urban blight, employed a sledgehammer- approach in dealing with the problem. Large depressed inner city areas were cleared by demolishing all buildings and relocating the inhabitants to mass housing estates at the urban periphery, far from employment opportunities. The affected inner city areas either became barren wastelands or were redeveloped for more lucrative uses. This development model only displaced the poor to other locations which in many cases quickly turned into slums, some of which have since had to be demolished.

On account of the costliness, wastefulness, un-viability, inequity and, most often, the outright failure of urban redevelopment, as applied, a universal reappraisal of the situation occurred and most countries have abandoned their previous approach in favour of rehabilitation. During the eighties a new approach to urban renewal, predicated on the principle of conserving the existing urban and community fabric, was developed. This approach lead to the upgrading of existing housing stock with full community involvement and the conservation and re-use of historical land marks. It also attempted to redevelop inner city areas with the minimum of disruption to the community and has proven to be more sustainable than previous approaches. Often new partners, such as universities were brought into the area, to draw in a new population element to augment the existing population.

There is therefore a realisation that closer attention still needs to be paid to economic viability and sustain ability and to identifying the underlying causes of dysfunctionality, because merely treating the symptoms of inner city decline does not provide a cure.

Causes of inner city depression
It would be dangerous to generalise about the causes of inner city depression because circumstances are many and varied and often very complex. Causes and consequences are inevitably so intertwined that it is difficult to differentiate between them.

However, a number of indicators have been identified that collectively frequently describe the profile of a depressed area. Besides the physical indicators of a rundown environment evidenced by dilapidated buildings, collapsed municipal services and inadequate infrastructure, there are various other socio-economic indicators that depressed areas have in common, viz:

- poverty and overcrowding.
- social disorder, crime and violence.
- institutional and societal discrimination.
- disinvestment and "redlining", and
- exploitation and other unfair rental practices.

The South African scenario
South Africa's cities and towns invariably show some form of urban blight or dysfunctionality.

Political engineering has scarred the urban environment leaving a legacy of social disorder and disruption. In particular legislation regulating Group Areas. Community Redevelopment and Rent Control have had a devastating effect on the viability of our inner cities.

Classical examples of failed urban redevelopment projects include District Six in Cape Town, Cato Manor in Durban and Pretoria’s/ Good Hope/ Marabastad area to the west of the city centre.

Towards a solution
Obviously, there cannot be a standard solution to the revitalisation of depressed inner city areas.

Experience indicates that attempts to address only the physical conditions are doomed to failure and that a holistic approach to redevelopment is required. Moreover, the approach must be people-centre because rebuilding the fractured social fabric is key to sustainable success. Equally important is an economic solution to re-establish investor confidence.

The rehabilitation process must be locally driven by a partnership between local government business and the community. Provincial and national spheres of government must be supportive of local initiatives. The latter must establish an enabling regulatory and support environment that provides scope for local initiative to flourish.

In the Gauteng Provincial policy on the regeneration and integration plan of city centres (Vusani Amadalobha) a number of elements for regeneration have been identified. These are:

- Promoting economic regeneration
- Forming partnerships for development
- Identifying the unique advantage of each centre.

In realising the plan special attention will be given to:

- Cleanliness, safety, security and livability
- Optimising existing infrastructure
- Accommodating vibrant trade
- Utilising local partnerships to drive regeneration

In considering economic regeneration, a system of differentiated property taxes could prove to be a useful tool in the revitalisation of depressed areas. Tax holidays and other similar incentives, if applied judiciously to rehabilitation and redevelopment projects, could also make a substantial contribution.

The role of the Department of Housing in inner city revitalisation
Although the Department of Housing is but one of a number of role players, it nevertheless has important functions to fulfil and contributions to make in the revitalisation of inner city and other dysfunctional areas.

The following programmes have already made a substantial contribution to inner city revitalisation:

Special Presidential Projects on Urban Renewal
An amount of R 1,88 billion has be allocated to thirteen urban renewal projects, that benefit no fewer than thirty-one communities, including Cato Manor, Durban.

Housing Subsidy Programme- Institutional Subsidies
In the inner city of Johannesburg, in particular, institutional subsidies have played, and continue to play, an important role in the stabilisation of the community and the revitalisation of the area.

To date twenty-four institutional subsidy projects, comprising 4671 dwelling units, have been approved, as upgrading, in-fill or redevelopment projects.

Hostels Redevelopment Programme
This programme is mentioned for the sake of completeness on account of its contribution to urban renewal in general, as state-owned hostels are seldom found in inner city areas. The programme is currently being reviewed to address shortcomings.

National Presidential Job Summit Project on Housing
This programme envisages the construction of between 50 000 and 150 000 dwelling units of which approximately 75% will be rental housing units. It may include developments that contribute to inner city revitalisation.

Human Settlement Redevelopment Pilot Programme
The intention of this programme is to build on lesson learned from the Special Presidential Projects on Urban Renewal with a view to the possible establishment of a permanent national housing programme once the pilot phase has been completed.

An amount of R 20 million was placed on budget for the first time this year. A supplementary amount of R 50 million from savings has been reserved in the South African Housing Fund and a further amount of R 20 million for this purpose has been included in the Department's draft estimates for the 2 000/ 2 001 financial year.

One of the purposes of this programme is to address the causes of dysfunctionality in inner city areas.

Legislaton Programme
The Housing Act, 1997 (Act 107 of 1997) has been amended to give statutory recognition to the Social Housing Foundation whose purpose is to establish sustainable capacity among institutions in the business of managing housing stock for rental or providing alternative tenure options, such as rent-to buy or sales on instalments. Inner cities are strong areas of focus for the Social Housing Foundation.

Parliament is currently considering the Rental Housing Bill which aims to promote the provision of rental housing, to create mechanisms to ensure the proper functioning of the rental housing market and to repeal the Rent Control Act, 1976. Inner city areas are likely to become a predominant focal point of this legislation, once it has been approved.

'Redlining" will be outlawed, if the Promotion of Equality and Prevention of Unfair Discrimination Bill, as recently approved by Cabinet, is adopted. In a clause dealing with banks and financial services, the Bill prohibits unfair discrimination in the provision of financial services or in the terms and conditions that apply to the granting of loans, credit or finance.

The Department of Housing is in the process of drafting legislation in the form of a home loan and mortgage disclosure bill to enhance transparency and accountability in the provision of housing finance and to ameliorate certain associated risks. It has also studied measures employed in the USA with a view to the possible introduction of Community Re-investment type legislation, if experience and lessons emanating from the proposed disclosure legislation should point in this direction.

The way forward
The Department of Housing will continue to keep a watching brief on developments in inner cities, as part of its broader responsibilities for urban development. Existing programmes will be carefully monitored to evaluate their contribution to, and impact on, the revitalisation of depressed areas.


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