1. DEPARTMENT OF HOUSING VOTE: 29 PRESENTATION TO THE AD HOC COMMITTEE ON HOUSING 02 JUNE 2004 STRATEGIC PLAN & BUDGET 2004/05 TO 2006/07

2. Presentation Index 1.Aim, Vision and Mission of the Department 2.Our Values 3.Our Mandates 4.Housing Legislation and Regulations 5.Our Policy Framework 6.Strategic overview and policy shifts –Housing environment since 1994 white paper –Challenges facing Housing –Linkages to Government Policy Priorities –Strategic Policy: Shifts 7.Budget overview 8.Conclusion

3. Department Of Housing AIM: The aim of the Department of Housing is to determine, finance, promote, coordinate, communicate and monitor policy in respect of housing and human settlement. Vision: A nation housed in sustainable human settlements Mission: To establish and facilitate a sustainable process that provides equitable access to adequate housing within the context of affordability of housing, services, and access to amenities and economic opportunities

4. Our Values Our values, based on the constitution, are: –Human dignity,equality, advancement of human rights and freedom; –Non-racialism and non-sexism; –Supremacy of the constitution and the rule of law; –Accountability, responsiveness and openness.

5. Our Mandate SA CONSTITUTION –Section 26: Access to adequate housing a basic human right; Govt. to ensure environment conducive to the progressive realization of the right –Schedule 4: Housing is a concurrent national and provincial legislative function Botshabelo Housing Accord (1994) Signed by all housing stakeholders UN Habitat Agenda

6. Our Policy Frameworks Our overall policy framework is determined by the White Paper on a new Housing Policy and Strategy for South Africa, 1994

7. Housing Legislation Housing development programme continues to operate in the following legislative framework. –Housing Act 107 of 1997 –Prevention of Illegal Eviction from and Unlawful Occupation of Land Act No. 19 of 1998 –Housing Consumers Protection Measures Act 95 of 1998 –Rental Housing Act 50 of 1999 –Home Loan Mortgage Disclosure Act 63 of 2000

8. Regulations and Guidelines National Housing Code –Sets out National Housing Policy in detail including a user friendly guide –Contains the detail prescripts pertaining to the Housing Subsidy Scheme National Norms And Standards For Permanent Residential Structures –Sets amount of the subsidy which may be used for infrastructure and top structure –Sets the minimum size of houses

9. Regulations and Guidelines continued Guidelines For Human Settlement Planning And Design (“Red Book”) –Planning – movement networks, transport, open space, subdivision layouts, design to reduce crime –Engineering services -stormwater, roads, water supply, sanitation, solid waste, energy Guidelines For Environmentally Efficient Low Cost Housing –Energy and water efficient planning and design for low cost housing; and –Urban greening guidelines

10. Regulations and Guidelines continued Regulations under the Housing Consumers Protection Measures Act, 1998 Regulations under the Home Loan and Mortgage Disclosure Act. 2000 will be finalized shortly

11. Strategic Overview Housing environment since 1994 white paper –More than 1,6m houses have been built or under construction and 2,4m subsidies approved benefiting more than 6,1m people –Early focus was on quantity, rather than quality housing to address housing needs and backlogs –Focus was on development of policies and legislative instruments – Introduction of the Housing subsidy scheme consisting of seven subsidy instruments –Special subsidy dispensation for the disabled –Procurement regime compliant to constitution

12. Strategic Overview continued Current challenges facing the housing programme –Lack of private sector investment and resource constraints –Moving towards medium density housing as a priority and integrated development –Creating higher quality housing and living environments –Reducing dependency and promoting a culture of savings –Need for interventions to deal with emergency situations resulting from natural disasters and other incidents - Grootboom case. –Growth in number and size of informal settlements –Building capacity of municipalities to implement and manage housing projects

13. Strategic Overview continued Current policy developments –Housing Finance - Contributions required from Government, the financial sector, and ultimate beneficiaries –Extension of the NHBRC Housing Warranty Scheme to all subsidy instruments –More emphasis on monitoring of policy impact, expenditure and delivery –More emphasis on oversight of housing institutions –Promoting of alternative and traditional/indigenous building technologies

14. Strategic Policy Shifts Policy emphasis –Increased focus on quality and environments Medium density integrated housing programme Increased emphasis on PHP; Social and rental housing; Informal settlements upgrading;

15. Strategic Policy Shifts continued Promotion of social responsibility, beneficiary participation and a culture of savings through: –Own contribution to access housing subsidies and the NHBRC warranty scheme –Increased emphasis on community participation and compacts Improving access to housing credit: –Engagement in the Financial Services Charter proces; –Operationalization of Office of Disclosure

16. Strategic Policy Shifts continued Improving human settlement environments: –Programme to main stream environmentally efficient housing; –Dissemination of good practice; –Measures to cater for needs of special groups (eg. Differently-abled, people living with HIV, elderly,youth and children, farm worker) –Emergency housing programme

17. Strategic Policy Shifts continued Improving integration in service delivery: –Multi-year national and provincial housing development plans linked to Integrated Development Plans (IDPs) –Identification of and access to centrally located land for integrated medium density housing developments –Contributions to Urban Renewal and Integrated Rural Development Programmes –Addressing social amenities

18. Strategic Policy Shifts continued Improving service delivery: –New demand led procurement regime; –Capacity building programmes for stakeholders, including government and industry; –Framework for the accreditation of municipalities.

19. Strategic Policy Shifts continued Improving international cooperation on human settlement development: –Lead Ministry for UN Habitat (Habitat Agenda) – World Urban Forum, WSSD; –Cities Alliance – “cities without slums” initiative; –Supporting NEPAD regarding sustainable human settlement development in the African region is concerned; –Bi-lateral and multi-lateral cooperation programmes with donor countries.

20. Government Priorities Housing activities are focused in the following broad Government priorities areas –Urban renewal (informal settlements upgrading, Medium Density, Social Housing) –Integrated Sustainable Rural Development - through Rural Housing policy and provision of Rural housing credit through RHLF –Black Economic Empowerment – Creation of a cadre of Housing Entrepreneurs –Engendering a culture of saving –Fast tracking delivery; –Reducing social crime and improving security; –Capacity building of all stakeholders; –Dealing with corruption and maladministration – Appointment of Investigative Task team and establishment of increased and dedicated capacity to deal with corruption

21. Priorities of incoming government Accelerated Service delivery; Capacity building; Fraud, Corruption and Mal administration Social crime prevention Medium Density Housing

22. Budget Overview Programme2004/052005/062006/07 1 Administration 66,833 76,737 84,896 2 Policy Planning and Research 22,13924,63426,112 3 Programme Management 152,477 160,437 170,063 4 Housing Sector Performance 92,240 121,878 128,923 5 Housing Equity 5,612 5,949 6,306 6 Housing Development Funding 4,509,640 4,782,448 5,067,628 Total 4,848,941 5,172,083 5,483,928 Change to baseline 277,850 323,142 311,845 Growth % 6%7%6%

23. Programme overview Programme 1: Administration

24. Programme Strategic Overview Programme 1: Administration Purpose of this Programme is to provide strategic administrative and management support services to the Department The key strategic objectives include the following –Provision of strategic communication services to all stakeholders; –Provision of Strategic Financial Management Services; –Provision of Corporate Services (such as HRM, Transport, Security and IT) to ensure corporate efficiently; –Provision of strategic support services for the Minister and Accounting Officer; –Implementation of the department's anti corruption initiative and investigative programme.

25. Budget Overview

26. Budget Overview continued MTEF Allocation: –2004/05 – R66 833 million (Growth at 34%); –2005/06 – R76 737 million (Growth at 15%); and –2006/07 – R84 896 million (Growth at 11%). Increases in this programme are mainly attributable to: –Transfer of previous Communication programme into programme 1 –Strengthening of capacity of the office of Accounting Officer and provision of Security

27. Programme Overview Programme 2: Policy Planning and Research

28. Programme Strategic Overview Programme 2: Policy Planning and Research –The purpose of this programme is to develop and manage sound national human settlement and housing policies and legislative frameworks, supported by a responsive research agenda. –In addition, the programme makes a contribution to the United Nations Habitat Foundation.

29. Key Activities Over MTEF Legislation : Drafting of new legislation –Social Housing Bill Amendments to current legislation –Rental Housing Amendment Bill –Housing Amendment Bill –Housing Consumers Protection Measures –Prevention of Illegal Eviction from and unlawful Occupation of Land Amendment Bill (PIE)

30. Key Activities Over MTEF Legislation : Drafting of Regulations under HLAMDA, and Social Housing Act Audit of all legislation impacting on housing Outreach programme to provincial departments and local authorities for training and monitoring of implementation of legislation

31. Key Activities Over MTEF continued Policy Development : Develop housing policy agenda for the next two decades Medium Density policy Social Housing policy and guidelines Informal Settlement Upgrading Policy Farm worker Housing Strategy Housing land policy

32. Key Activities Over MTEF continued Other : –All Africa Housing Minister’s Conference Research : –Research projects to support policy and programme development

33. Budget overview

34. Budget overview continued MTEF allocation –2004/05 – R22 139 million (Growth at 35%); –2005/06 – R24 634 million (Growth at 11%); and –2006/07 – R26 112 million (Growth at 6%). 2004/05 and 2005/06 increase mainly due to the creation of capacity for the Research component and restructuring within the programme and for 2006/07 it is a inflation related increase. Fairly stable over the MTEF period.

35. Programme Overview Programme 3: Programme Management

36. Programme Strategic Overview Programme 3: Programme Management –The purpose of this programme is to manage national housing and human settlement programmes, including managing the national housing subsidy scheme and phasing out the housing subsidy programmes of the previous government, the Human Settlement Redevelopment programme and the presidential Pilot Projects on Rental housing, building capacity in municipalities and provinces and developing professionalism in the housing sector.

37. Key Activities Over MTEF Manage of the implementation of the Human Settlement Redevelopment Programme and the Presidential Pilot Project on Rental Housing; Manage of the programme for the phasing out of old business including the First Time Home Buyers Interest Subsidy Scheme; Develop of guidelines and report for the extension of the Warranty cover to PHP and other subsidy instruments; Produce report on outcome and lessons from implementation of the Presidential Pilot programme;

38. Key Activities Over MTEF continued Refocus the HSRP to provide for informal settlement upgrading and the provision social amenities; Building capacity of housing stakeholders; Develop an appropriate housing finance course for housing functionaries; Develop and implement a framework for the accreditation of municipalities; Develop guidelines for the improvement of sub standard houses; Develop enhanced/revised guidelines for the Housing Subsidy Scheme to provide for and support the EPWP;

39. Budget overview 2004/05 2005/06 2006/07 7,896 7,795 8,563 22,471 26,469 27,907 117,882 125,762 133,593 4,228 411 – 152,477 160,437 170,063 26,018 7,960 9,626 21%5%6%Growth % Medium-term expenditure estimate Special Programmes Support Capacity Building R thousand Subprogramme Total Change to baseline National Housing Subsidy Scheme First Time Home Buyers Interest Subsidy Scheme

40. Budget overview continued MTEF allocation: –2004/05 – R152 477 million (Growth at 21%); –2005/06 – R160 437 million (Growth at 5%); and –2006/07 – R133 593 million (Growth at 6%). Mainly dominated by transfer payments: 90% Major increase conditional grant Human Settlement Redevelopment Programme –From 2004/05 :R116m; 2005/06: R122m and 2006/07: R130m New emphasis on informal settlement upgrading will require substantial additional funds over the coming years

41. Provincial Allocation (HSRDP) PROVINCE 2004/052005/062006/07 R`000 EASTERN CAPE11,66014,69715,578 FREE STATE9,01010,07910,684 GAUTENG22,26033,90035,934 KWAZULU-NATAL27,56020,22021,433 LIMPOPO11,66010,05510,658 MPUMALANGA7,4208,1208,607 NORTHERN CAPE3,1802,0212,142 NORTH WEST WESTERN CAPE 8,48011,83112,541 14,31011,54912,243 TOTAL115,540122,472129,820

42. Programme Overview Programme 4: Housing Sector Performance

43. Programme Strategic Overview Programme 4: Housing Sector Performance –The purpose of this programme is to monitor the performance and assess the impact of housing delivery, manage housing information; monitor and analyse the impact of government’s housing policy and programmes on the construction sector, the financial sector and the economy, and support housing institutions.

44. Key Activities Over MTEF Monitoring the implementation of housing policy & programmes Monitoring the performance of Housing Support Institutions assessment of impact of impact of policy and pragrammes Monitor identified economic and financial variables as well as Construction Industry trends & reciprocal impacts Maintenance of Housing information systems.

45. Budget overview 2004/05 2005/06 2006/07 5,794 6,577 6,749 24,427 27,031 29,658 4,781 5,681 5,450 1,689 2,020 1,963 55,549 80,569 85,103 92,240 121,878 128,923 69 29,638 7,045 0%32%6% Medium-term expenditure estimate Growth % Change to baseline Total Contributions to Housing institutions Housing Institutions monitoring Industry Analysis and Development Finance Information Management Policy and Programme Monitoring Subprogramme R thousand

46. Budget overview continued MTEF allocation –2004/05 – R92 240 million; –2005/06 – R121 878 million (Growth at 32%); and –2006/07 – R128 923 million (Growth at 6%). Average increase of 13% over the MTEF Mainly as a result of increases in allocation to SERVCON in the 2005/06 financial year as a result of SERVCON concluding its work 2006/07 increase is mainly inflation related

47. Programme Overview Programme 5: Housing Equity

48. Programme Strategic Overview Programme 5: Housing Equity –Housing Equity aims to eradicate discrimination and unfair practices to do with access to housing finance, by implementing and administering the Home Loan and Mortgage Disclosure Act and its regulations

49. Key Activities Over MTEF Establishment of a fully functional Office Receipt, analysis and interpretation of home loan data disclosed by financial institutions to identify any possible discriminatory lending patterns. Utilize legislative framework to ensure achievement of fair lending practices Take steps to achieve equitable access of home loans to all

50. Key Activities Over MTEF continued To support the achievement of an effective housing market Management of relationship between the financial institutions and the Department Monitor achievements of financial institutions relative to the Financial Sector Charter Capacity of all stakeholders

51. Budget overview

52. Budget overview continued MTEF allocation: –2004/05 – R5 612 million (Growth at 5%); –2005/06 – R5 949 million (Growth at 6%); and –2006/07 – R6 306 million (Growth at 6%). Average increase of 6% over MTEF

53. Programme Overview Programme 6: Housing Development Funding

54. Programme Strategic Overview Programme 6: Housing Development Funding –The purpose of this programme is to managed the funding of national housing programmes; –Consist mainly of Transfer payments to provinces in terms of DORA,2004 as conditional grants; –Consist of personnel and admin related costs for the monitoring of compliance to DORA; –Provides also for payments related to repayment of loans and interest that were raised by the former Housing Boards;

55. Programme Strategic Overview –Allocation of funds to provinces is based on the Housing Allocation Formula that was approved in 2001; –The formula takes into account needs of each province as measured by the housing backlog; – takes into account factors such as homelessness, shack dwelling, caravan dwelling, tents, backrooms, rooms in flats; –A poverty indicator measured by households earning less than R3,500 in each province; –Population share factor as measured by each province’s share of total population.

56. Budget overview

57. Budget overview continued MTEF allocation: –2004/05 – R5 612 million (Growth at 5%); –2005/06 – R5 949 million (Growth at 6%); and –2006/07 – R6 306 million (Growth at 6%). Average increase of 6% over MTEF

58. Provincial Allocations (SAHF) PROVINCE 2004/052005/062006/07 R`000 EASTERN CAPE598,900569,448603,615 FREE STATE385,641390,547413,980 GAUTENG1,117,4631,313,5281,392,340 KWAZULU-NATAL748,463783,466830,474 LIMPOPO369,818389,598412,974 MPUMALANGA296,457314,620333,497 NORTHERN CAPE89,44278,29982,997 NORTH WEST WESTERN CAPE 421,378458,406485,910 446,035447,492474,341 TOTAL4,473,5974,745,4045,030,128

59. Provincial Performance

60. Analysis of Transfer Payments

61. Conclusion Need to improve access to housing credit by the low income group therefore outcomes of the Financial Services Charter on Housing are crucial; Need to address dysfunctional secondary low cost housing market; Need for more communication with beneficiaries;

62. Conclusion continued Addressing unresolved housing land issues through the policy development process; Addressing the Housing backlog – additional financial implications; Improvement in delivery capacity; New Informal Settlement Upgrading Programme and Social Housing – additional funding.

63. Thank You