2. Briefing to the Joint Budget Committee on 28 October 2008

3. Outline of presentation
Mandate and medium-term policy priorities
Progress on measurable objectives & performance indicators
Budget bids for 2008 MTEF
Approved budget bids
Budgeting challenges

4. Mandate and medium-term policy priorities
Reconstruction and Development Programme (RDP) – sets out framework and principles for sustainable development
Botshabelo Housing Accord (1994) Signed by housing stakeholders
Subsequent white paper on Housing (1994) and the Housing Act (1997)
Millennium Development goals
SA CONSTITUTION
Section 26: Right to access adequate housing
Schedule 4: National and Provincial Governments have concurrent legislative competence

5. Mandate and medium-term policy priorities cont.
The White paper on Housing remains the pillar of housing policy.
The priorities of the Comprehensive Plan are to:
Accelerate housing delivery within the context of sustainable human settlements;
Improve the quality of housing products and environments and turn housing into assets;
Create a single and efficient formal housing market;
Restructure and integrate human settlements;
Utilize the provision of housing as a job creation strategy; and
Ensure access to property to alleviate asset poverty and foster empowerment.

6. Mandate and medium-term policy priorities cont.
Identified priorities:
Housing for veterans of the struggle;
Impact of increasing construction costs;
Intervention of increased informal settlements;
Upscale delivery of affordable rental stock;
Address land bottleneck – establish the HDA; and
Provision of once-off funding injection to upscale delivery

7. Prog 2: Housing Policy Research & Planning
Measurable Objectives
Improve quality and equity in the provision of housing by developing policy and legislation and providing planning frameworks and models over the MTEF period.
Progress
Finalize report on the diversification of tenure options and subsidy programmes.

8. Prog 2: Housing Policy Research & Planning cont.
Measurable Objectives
Improve performance management information and data relating to housing planning and delivery by managing and implementing the following information systems and databases: the housing subsidy system (HSS), the national housing database and the monitoring and evaluation system, increasing the percentage of critical data fields captured in the HSS, for example.
Progress
Provided support/capacity to municipal and provincial officials on HHS.

9. Prog 2: Housing Policy Research & Planning cont.
Measurable Objectives
Improve information on the housing sector by publishing regular research and impact analyses on the performance of the housing programme.
Progress
Completed 3 research papers on policy alternatives for beneficiaries.

10. Prog. 3: Housing Delivery Support
Measurable Objectives
Improve the delivery value chain by providing development support to provinces and municipalities, providing capacity support, and monitoring and facilitating municipal accreditation to decrease the turnaround time from project to units.
Progress
In process of developing a monitoring & evaluation framework to implement capacity building programmes in provinces.

11. Prog. 3: Housing Delivery Support cont.
Measurable Objectives
Implement the social contract to improve collective capacities, create partnerships, and improve consumer education by providing sector support, intergovernmental and stakeholder management and communication to increase number of call centre queries concluded.
Progress
Supported social contract task teams.

12. Prog. 3: Housing Delivery Support cont.
Measurable Objectives
Facilitate rental and social housing uptake and accelerate People’s Housing Process programmes by providing regulatory and implementation support resulting in more rental and social housing and People’s Housing Process units.
Progress
Finalized the social housing policy & developed a rental housing strategy.

13. Prog. 3: Housing Delivery Support cont.
Measurable Objectives
Facilitate integrated mixed income settlements by providing implementation and oversight for priority projects to increase private sector investment in affordable housing.
Progress
Handing over of houses at the Zanemvula project; managing the intervention project of the Eastern Cape.

14. Prog. 4: Housing Development Finance
Measurable Objectives
Improve the expenditure efficiency of provinces on housing delivery, measured by total spending as a percentage of funds transferred, by providing financial and grant management support for the integrated housing and human settlement development grant and business planning and reporting support.
Progress
Monitor monthly expenditure to provinces and completed quarterly reviews to provinces and reported the outcome of expenditure to management.

15. Prog. 4: Housing Development Finance cont.
Measurable Objectives
Oversee entities reporting to the Minister of Housing by ensuring that all entities receive unqualified audit reports from the auditor-general, to engender legal compliance and improve governance and delivery on mandates against financial and performance targets.
Progress
Quarterly review sessions were held with housing institutions.

16. Prog. 4: Housing Development Finance cont.
Measurable Objectives
Improve access to housing finance and facilitate a single housing market by monitoring trends in housing investment and facilitating the approval of credit linked subsidies to decrease complaints relating to the Home Loan and Mortgage Disclosure Act.
Progress
Report prepared on the monitoring & investigation of financial institutions.

17. Performance indicators
Number of houses completed and in process of completion
Number of units completed in rental programme
900
Projects for the planned 900 units between 30% - 60% completion stage.
Number of individual credit linked subsidies approved
700
102 (for five months)
Number of beneficiaries approved in the People’s Housing Process
12 500
6 633 (for five months)
Number of municipalities provided with capacity development to support accreditation 18
Number of sector impact publications 4 2
Turnaround time for projects to units (months)
37-48

18. Performance indicators
Is in line with projection
Only five months available as the department was still in verification process
Rental housing delivery:
currently 900 units across 4 projects are under construction in Gauteng, Eastern Cape and Western Cape.
Progress on various projects varying at between 30% and 60%.
Expected to be completed by the end of the current financial year.

19. Budget bids for 2008 MTEF
The Department’s budget bids is summarised as follows:
Options
2008/09
R’000
2009/10
2010/11
1) Implementation of the new organizational structure and demand database
90 000
2) Meeting the objectives of the Comprehensive Plan on Human Settlements
3) Targeted projects of provinces
4) Capitalization of housing institutions
Total

20. Approved budget bids The following additional funding were provided:
Policy options
2008/09
2009/10
2010/11
R'000
1. Integrated Housing & Human Settlement Development grant
200,000
2,000,000
2. Compensation of personnel: Resolution 1 of 2007
3 015
5 170
5 428
3. Accommodation charges 16 24 33
4. Compensation of personnel: Inflation adjustment
1 059
2 572
60 151
5. Non-personnel inflation adjustment
4 370
5 905
7 014
Total
8 460

21. Inadequate Housing and MDG’s
Estimated 2.2 million households live in inadequate housing
Capacity constraints
Rapid Urbanisation & Migration
Resources
Delivery output
Rising house prices
rising construction cost
complex residential market

22. Budget challenges & financial implications
The allocation for the current financial year is R9,8 billion to finalize/complete current committed multi-year projects
While the grant funding allocation has increased, the Department’s projections indicate that:
if the backlog is to be eradicated by 2014, a funding shortfall of R102,5 bn would exist
if the backlog is to be eradicated by 2016 the funding shortfall would increase to R253 billion.
As a result, the housing backlog must be eradicated within the shortest time possible as the cost projections indicate a doubling of costs for every two years delayed.

23. Budgeting challenges cont.
Housing Development Agency – no allocation to operationalization of agency
Social Housing Regulatory Authority - limited funding to create rental units
Thubelisha Homes & Servcon – Closure costs not provided for
Occupancy audit – no funds to audit approved beneficiaries occupying subsidized houses

24. THANK YOU