1Confidential and Not for Publication PROGRESS ON DELIVERY AGREEMENT FOR OUTCOME 8: SUSTAINABLE HUMAN SETTLEMENTS AND IMPROVED QUALITY OF HOUSEHOLD LIFE Presentation to the Portfolio Committee on Human Settlements 1 st June 2011

2. ACCESS TO BASIC SERVICES 3. MORE EFFICIENT LAND UTILISATION 1. ACCELERATED DELIVERY OF HOUSING OPPORTUNITIES 4. IMPROVED PROPERTY MARKET Upgrading of households in Informal Settlements Affordable Rental Housing Stock units Affordable Rental Housing Stock units National Bulk Infrastructure Programme and Increased Access to Basic Services Acquisition of 6250 ha (net) state owned land Supply of Affordable Housing Finance to households Supply of Affordable Housing Finance to households Outputs Sub outputs 2Confidential and Not for Publication

Delivery Agreements for Outcome 8 The key implementation partners are different for each output: OUTPUTSSIGNATORY Output 1: Accelerated Delivery of Housing Opportunities - Informal settlements upgrading and rental housing Between the Minister and each of the nine provincial MEC’s as per the IGR Act. Output 2: Access to basic servicesBetween Minister of Human Settlements and the Minister of Cooperative Governance Output 3: Release of public owned land Between the Minister of Human Settlements and the Ministers of Public Works, Public Enterprises and Rural Development and Land Reform Output 4: Improved Property MarketBetween the Minister of Human Settlements and the Minister of the National Treasury

1. PROGRESS ON IMPLEMENTATION OF OUTCOME 8 up to 31 December 2010

Output 1: Accelerated delivery of housing opportunities 1.1Upgrading households in informal settlements serviced sites were planned for the 2010/11 financial year. A total of serviced sites were delivered up to 31 December 2010 A Project Management Unit is being established with a direct link to the project implementation process by Provincial Human Settlements Departments.

1.2Implementation of National Upgrading Support Programme 81% of Municipalities targeted have been briefed Three out of four IT platforms are already functional and the resource kit is in the final stage of drafting 1.3Increased provision of well located rental accommodation rental units delivered up to 31 December 2010 against target of The Social Housing Regulatory Authority (SHRA) established responsible for channelling funding, defining new norms and standards, supporting and stimulating social rental housing projects

1.4Accreditation of Municipalities Accreditation certificates for Level 1 and Level 2 were signed by the Minister of Human settlements Level 1 refers to the responsibility for housing subsidy administration and identification of projects;. Level 2 refers to increased responsibility of Programme management for housing; and Level 3 refers to full function for housing including programme management and financial reconciliation with a direct allocation from the Treasury in terms of DORA Next steps: Sign-off by MECs for Human Settlements of accreditation certificates Accreditation Compliance and Capacity Assessment Panel established and functioning. 7

Output Two: Access to Basic Services (Water, sanitation, refuse removal and electricity) Percentage of Households with access to: Water – 95 % achieved Sanitation – 81 % achieved Refuse removal – 71.3% achieved Electricity – 83.7% achieved Next steps: Implementation of Joint Work Programme for the Sustainable Human Settlements and Basic Services Task Team established by COGTA and Department of Human Settlements, and includes other sector departments - focusing on alignment of planning funding and implementation. Agreement on norms and standards for service delivery on sanitation, water, electricity and refuse removal. Project lists shared with DCOG/ Joint HS and DCOG MinMEC/ Implementation Forum 8

Output 3: Efficient Utilisation of Land for Human Settlement Development 3.1 Release of land vested nationally and provincially for human settlement development 33,000 ha identified and prioritised by the HDA and KZN reported 75ha private land purchased. HDA compiling a second register of prioritised state-owned land for human settlements. However the framework for compensation for land owned by state-owned enterprises still needs to be finalised with Departments of Public Works and Public Enterprises.

3.2Increased urban densities Policy framework for density pre-conditions for land release is yet to be developed. 3.3Land Use Management Framework This sub output has not progressed as planned and will be informed by the finalisation of the Spatial and Land Use Management Bill to be promulgated by the National Planning Commission.

Output 4: Improved Property Market 4.1 Mortgage Insurance Guarantee Scheme R1 billion Guarantee Fund to be established to provide support to the gap market. Approval for Mortgage Default Insurance Programme (MDIP) was obtained from MINMEC, and the National Housing Finance Corporation Limited (NHFC) Board of Directors has approved the MDIP business case. Next Steps: Further consultation with National Treasury and relevant stakeholders including the banking sector, organised labour and public, private and community organisations.

4.2Revised Financed–linked Individual subsidy scheme The Financed–linked Individual Subsidy Scheme (FLISP) is currently under review and the 1st draft report is completed. Subsidy scheme targets those income earners who earn between R3 500 and an upper limit of R Next Steps: The NHFC and Department of Human Settlements will start engagement processes with the Provinces

4.3Policy position regarding the introduction of a long-term fixed interest rate instrument A proposed market intervention planned for launching in 2014 and will be premised on the success of the Mortgage Default Insurance Programme (MDIP). 4.4 Mortgage and non-mortgage loans delivered to the target market The mortgages, incremental loans and wholesale funding provided by NHFC and Rural Housing Loan Fund (RHLF), constitute the targets for this output. A process to review the existing human settlements Development Finance Institutions is in progress. It is envisaged that the outcome of this process will improve the overall impact and extent of this output.

4.5 Loans to facilitate construction finance within the targeted income / Gap Market R 350 million earmarked for the Medium Term Expenditure Framework period to re-capitalise the National Urban Reconstruction and Housing Agency 4.6 Housing Finance opportunities contributed by sector stakeholders A process of engagement with public, private, social, community, and labour stakeholders is still to be arranged, to ensure that relevant housing finance opportunities are collated and factored in to the achievement of this output. A revamp of both departmental systems and reporting by sector stakeholders on housing finance opportunities and access is required

Significant Process Developments post 31 December 2011 First POA Report not formally considered by a sitting of the Implementation Forum First official Implementation Forum scheduled for June Joint MinMEC between Departments of Human Settlements, Cooperative Governance and Traditional Affairs, and Water Affairs convened Joint MinMEC approved establishment of the Sustainable Human Settlements and Basic Services Task Team (SHS&BSTT) Next steps: Formalisation of the establishment of Municipal Human Settlement Committees in the Metros, whose operational programme will inform the joint work programme of the SHS&BS Task Team. 15

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