BEYOND BORDERS HOUSING ISSUES : SOUTH AFRICA CHRA ACHRU CONGRESS Ismail Khatib May 2013

BACKGROUND Pre 1994 Housing segregated along racial lines Apartheid SA declared areas based on racial category Residents (mainly black) cleared of land Relocated to townships – distance Commute to work - costly

RACIAL CONCENTRATION

BACKGROUND Townships Very basic shelter One room shack No services No policing Hostels Communal, males only Families remain in rural areas

POST 1994 Housing backlog estimated at 1.2m Explosive growth – shacks Near urban areas Late 1990’s – units required pa ± 1000 units per day Actual units pa Serious housing shortage

POST 1994 Housing is a Human Right Most critical factor for quality of life – adequate housing Major policy shifts Housing, sanitation, electrification, basic services Urban sprawl

POST 1994 Reconstruction & Development Program 10 million access to clean water 1.75 million homes electrification 3 million sanitation 2.4 million RDP homes

GOVERNMENT PROGRAMS Eradication of shacks RDP Community Residential Units (CRU) Social Housing Hostel Upgrade GAP Housing Other

MEDIUM TERM PLAN Major service delivery challenges 12 point plan Outcome 8 – Housing Sustainable human settlements Improved quality of life Short to medium term – 4 years

MEDIUM TERM PLAN Upgrade informal settlement units Improve access to basic services affordable social and rental housing units Housing finance for household with GAP market for purchase Releasing public land for housing

SOCIAL HOUSING Started 1995 Institutional Subsidy Only for income < $440/mo Development cost low allowed for projects in earlier years Period of stagnation – policy vacuum 2007 – New Social Housing Policy Formation of Regulatory Authority (SHRA)

SH BACKGROUND Provision well located rental housing stock: Affordable income R1500 – R7500 per month To spatially restructure ‘apartheid’ cities Restructuring Zones within Municipalities Providing low and moderate income households with access to socio economic resources of the city Governed by Social Housing Act 2008, linked regulations and SH policy

KEY ELEMENTS OF SH ACT Social Housing Regulatory Authority (SHRA) Accredit and regulate SHI and regulate the sector Allocate the Restructuring Capital Grant (RCG) Restructuring Capital Grant Capital subsidy on development of SH – National allocation Linked with Institutional subsidy (capital subsidy from Province) Only awarded to projects in RZs that meet the social housing criteria Social Housing Institutions – SHI Non profit companies to facilitate the development and manage stock Often also have strong community development component

KEY ELEMENTS OF SH ACT Accredited projects Projects that are approved for RCG financing meeting regulatory requirements Usually part of SHI programme Can be allocated to non SHIs Example of Financial structuring: Average cost of 42m 2 unit ± $42,500 Restructuring Capital Grant ± $15,700 Institutional Subsidy around ± $11,250 Loan finance and or equity ± $15,550

KEY RESPONSIBILITIES OF SHIs Land and development Own or lease land or buildings Facilitate development or act as developer Raise and mange the capital finance Management Allocation Rent setting, collection and arrears management Tenancy management Maintenance Reactive and planned Community and neighbourhood development (some SHIs)

GOVERNMENT FUNDING Outcome 8 – units MTEF Commitments Grant increased $112,5m 2013 – Est units R150.0m Est units $ m Total Grant

STATE OF SECTOR Presently estimated 33,000 units 80% in 4 metros (Jhb, Ethekweni, Cape Town and Buffalo City) Estimated 132,000 people housed Replacement value estimated $1.20bn Estimated 32 functioning SHIs 8 Fully accredited 14 conditionally accredited Remainder Pre Accredited

STATE OF SECTOR 30% of tenants below $440/mo income 70% between $440 to $940/mo income Rental range $100/mo to $275/mo Mean $200/mo Rental collection average 80% 6 SHIs with 95%+ collections Rental boycotts – some SHI’s Reasonable reactive repairs but poor record on planned and preventive maintenance

KEY SECTOR ISSUES Growing Government Commitment Increased capital investment Funding for SH from $15 million in 2006/7 to over $120 million in 2013/4 Insufficient management capacity within the sector Required caps development strategy Financing of caps development Danger of spatial drift of projects lack of affordable well located land and buildings Issue of government land for SH Need to increase municipal engagement with SHIs

KEY SECTOR ISSUES Greater flexibility in financing mechanisms Not only single project based Not only capital subsidy grant but other alternatives Rapid increase in Municipal and Utility charges affecting affordability Lack of well priced loan finance Strategy and approach to ‘Greening of Social Housing’ Upward creep in beneficiary income Ownership aspirations

NASHO National Association of SH Organisations Founded in 2003 Support resource to SHI’s Lobbying Capacity Building Strengthen SH sector

FIRST METRO SH Company, PBO Established units under management 1600 units under construction 2300 units under acquisition GAP Housing Assistance to outlying municipalities

FM PROJECTS Lakehaven Estate Hawaii

SH PROJECTS Emerald Sky, East London

SH PROJECTS Walmer Link, Port Elizabeth

SH PROJECTS Steenberg, Cape Town Carr Gardens Johannesburg

CHALLENGES Housing Shortage – 2.1m 30% live in informal dwellings (Urban) Delivery challenges Capacity limitations Socio economic climate Non payment / rental Boycotts HIV / Aids, Child headed households

CHALLENGES Illegal immigrants (between 5.0m to 8.0m) Construction CPI 11% Policy lag Limited Debt funding Banks conservative to funding Cost of Municipal Services

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