1. PRESENTATION ON THE EASTERN CAPE HOUSING CO-OPERATIVES 1

2. 2 STRUCTURE OF THE PRESENTATION PURPOSE INTRODUCTION BACKGROUND CHALLENGES POSSIBLE SOLUTIONS

3. Purpose The purpose of this submission is to respond to the question of the Portfolio Committee on the challenges facing the Eastern Cape Housing Co-operatives, specifically Amalinda.

4. Introduction Co-operatives have housed 8900 families in urban housing and 1100 in rural housing. A housing co-op is a legal association formed for the purpose of providing homes to its members on a continuing basis. A co-op is different from other housing associations in its ownership structure and its commitment to co-operative principles. Co-op housing offers a home, not an investment. There is a fundamental role that is being played by these co- operatives in housing delivery, however, a number of challenges at various scales are being experienced and mostly issues of governance and management are to an extent a cause.

5. Background There is one secondary housing co-operatives in the Eastern Cape,namely the East London Housing management Co- operative(ELHMC) which was launched by Afesis Corplan in 1998. There are about 10 primary housing co-operative which are attached to ELHMC, including Amalinda, with 1000 members in total. Amalinda Co-operative is one of the first housing cooperative to be brought to the country in East London when Afesis- Corplan, East London Savings and Credit Cooperative and East London Housing Management Cooperative accepted an invitation to pursue the co-operative housing model

6. Background The Amalinda Cooperative was formally registered 30 June 1999 with a membership of 198 households. The majority of these households were unemployed, or having irregular income. Women represent 80 per cent of household members. The average household income was less than R 1,500 per month. The Savings categories of members were as follows: R 30 / month: 68 per cent, or 135 members R 60 / month: 30 per cent, or 59 members R 120 / month: 2 per cent, or 4 members

7. Background The total savings was R 78,402.30 between 1996 and 1 May 1999. The first project: Amalinda Co-operative Settlement, subsidies application was received in May 1999, and the number of houses in the project was 196. The total subsidy value of first project was R 3,247,720. The Amalinda cooperative settlement project involved 216 housing detached units in East London. It follows the Peoples Housing Process using Institutional housing subsidies.

8. Challenges with Amalinda Housing Co-operative A list of names of beneficiaries was originally approved by government in about 2002 and people where given time to save. About 55 people who did not save the R2070, by the final cut of date for saving in January 2004, where removed from the allocation list by the ELHMC and replaced with other new members who had saved. The ELHMC then asked the Provincial Department of Housing (PDoH) to remove the non savers and replace them with new savers. The department did not do this as they claimed that the original list of approved beneficiaries must get a house. In the mean time about 20 new savers who where not approved by PDoH had moved into some of the houses that were being built.

9. Challenges with Amalinda Housing Co-operative In 2005 the PDoH took these people to court as they were occupying subsidised housing without their names being approved. The legal aid board defended these households. In mid 2006 the court ruled in favour of the new savers and they were allowed to stay in the houses. The subsidies had consequently been approved and the non savers names where removed from the subsidy approved list. The PDoH have now changed their position (there are new people involved in the department) and they want to work with the Co-operative to find a solution to this on going allocation dispute.

10. Challenges with Amalinda Housing Co-operative However, while all this was happening, about 10 of the original ‘ non savers ’ had also moved into some of the houses that were being built. During the second half of 2006 Afesis-corplan and the PDoH attempted to facilitate a process to find a negotiated solution to this dispute with non savers. This process was unsuccessful as the 10 non savers ‘ refused ’ to move out of the houses they had occupied. The ELHMC now want to ‘ evict ’ the non savers.

11. Challenges with Amalinda Housing Co-operative The allocation dispute has lead to a high level of dissatisfaction in the community and effectively no progress can be made with many other aspects of the project like completing the houses; training people in what is a housing cooperative; finalising rates and services payments to municipality, etc. The role-players have not been able to reach agreement on how to address this problem

12. Challenges cont… Lack of funding No proper office space, systems and administrative support / capacity Lack of proper communication Limited understanding of the subsidy, PHP vs Institutional Subsidy Mismanagement of Funds – no trust No proper accounting system Management and maintenance plan in place but limited capacity

13. Possible Solutions The Local municipality (Buffalo City municipality) is prepared to provide additional land nearby to accommodate people affected by the allocation dispute The provincial dept of housing is prepared to provide additional subsidies to build additional houses (over and above the 216) houses on this new land. The problem is that this process will take time. The original non savers say they will save now if they are allowed to stay in the houses. Some cooperative members have resigned and these subsidy spaces can potentially be used to help solve the allocation dispute. However the ELHMC wants to use all these vacancies for new savers.

14. THANK YOU …