1. DEPARTMENT OF HOUSING PRESENTATION TO THE PORTFOLIO COMMITTEE FOR HOUSING - 2005 BUDGET 2005/06 TO 2007/08

2. STRUCTURE OF THE PRESENTATION 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 Comprehensive Plan Key Challenges and Trends Linkages to Government Policy Priorities Strategic Policy: Shifts 7.Budget overview and Key activities per Programme 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 freedoms; –Non-racialism and non-sexism; –Supremacy of the constitution and the rule of law; –Accountability, responsiveness and openness

5. SA CONSTITUTION –Section 26: Access to adequate housing a basic human right; Govt. to ensure environment conducive to the progressive realisation of the right –Schedule 4: Housing is a concurrent national and provincial legislative function –Botshabelo Housing Accord (1994) Signed by all housing stakeholders –Reconstruction and Development Programme (RDP) – set out framework and principles for sustainable development OUR MANDATE

6. HOUSING LEGISLATION Housing Act 107 of 1997 (as amended); 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 (not yet in operation); Housing development programme continues to operate in the following legislative framework:

7. HOUSING LEGISLATION (CONT.) Currently in process –Prevention of Illegal Eviction from and Unlawful Occupation of Land Bill; –Housing Amendment Bill ( Being amended to take into account all matters related to the new plan); –Social Housing Bill ( Being amended to take into account all matters related to the new plan); –Rental Housing Act 50 of 1999; –Housing Consumers Protection Measures Act 95 of 1998; –Community Reinvestment (Housing) Bill (Held in abeyance pending negotiations through the Charter); –Less Formal Township Establishment Amendment Bill.

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 –Currently under review/ being overhauled in order to be in line with the “BNG” plan National Norms And Standards For Permanent Residential Structures –Sets guidelines on the amounts to be used from the subsidies for various aspects of housing development (to be reviewed) –Sets the minimum size of houses

9. REGULATIONS AND GUIDELINES Guidelines For Human Settlement Planning And Design (“Red Book”) –Planning – movement networks, transport, open space, subdivision layouts, design to reduce crime –Engineering services - storm water, 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. OUR POLICY FRAMEWORKS Our overall policy framework continues to be as determined by the White paper on a new housing policy and strategy for South Africa, 1994

11. STRATEGIC OVERVIEW Comprehensive Plan for Housing Development To find a new focus for housing policy for the next decade of government, the Department embarked on a comprehensive policy consultation process, which culminated in the National Housing Summit in November 2003. The comprehensive Plan adopted by Cabinet in September 2004 builds on the 1994 White Paper for housing and envisages expanding the mandate of the Department to encompass the entire housing market. The Plan focuses on moving from housing to sustainable human settlements.

12. STRATEGIC OVERVIEW The nature of demand for government-assisted housing in South Africa has changed significantly over the last five years: –A 30% increase in the absolute number of households over the period 1996 - 2001, where only a 10% increase was expected and household size has also decline. –One fifth of urban residents are relative newcomers to urban areas (i.e. first generation residents) and urban areas are expected to continue to grow at a rate of 2.7% per annum. –Population growth trends however reveal significant regional differences and increasing spatial concentration in metros & secondary cities.

13. STRATEGIC OVERVIEW –Unemployment, on the official definition, leapt from 16% in 1995 to 30% in 2002, placing pressure on household incomes. –Housing and service provision has not kept pace with household formation, and a range of other factors have had negative impact on social coherence and crime, particularly contact crimes (comprising 40% of all crimes). –The size of the backlog has increased. There are over 1.8 million dwellings which can be classified as inadequate housing. The number of households living in shacks in informal settlements and backyards increased by 26%, which is far greater than the 11% increase in population over the same period.

14. STRATEGIC OVERVIEW Key Challenges and Trends. –Over the last 10 years, state-assisted housing investment of some R29.5bn has provided 1.6 million housing opportunities, often on the urban periphery and achieving limited integration. –Transforming the extremely complicated bureaucratic, administrative, financial and institutional framework inherited from the previous government and building capacity of all spheres of government. –The 1.6 million subsidy-houses that have been built have not in most cases become “valuable assets” in the hands of the poor. –Housing subsidy grants increased from R2,692bn in 1996/97 to some R4,5bn in 2004/2005 and will increase to R5,3bn in 2006/07. These increases in housing development funding have largely gone towards funding the increases in the quantum of the housing subsidy, which is now adjusted annually for inflation.

15. STRATEGIC POLICY SHIFTS The key policy developments embedded in the Comprehensive Plan include: –A policy to upgrade informal settlements progressively based on an integrated community development approach and involving the community as a whole. –A housing land policy will serve to prioritise the release of public land and the acquisition of private land for low cost housing projects. –A social housing and medium density policy and programme aims to establish social housing institutions that will develop and manage quality, well located, largely rental housing stock on a sustainable basis. –A policy and programme to provide primary social and economic infrastructure in low income housing developments will contribute towards enhancing the quality of the living environments by providing for community needs.

16. STRATEGIC POLICY SHIFTS 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.

17. LINKAGES TO GOVERNMENT PRIORITIES The following objectives have been defined by the national Department of Housing: –Accelerating the delivery of housing as a key strategy for poverty alleviation –Utilizing provision of housing as a major job creation strategy –Ensuring property can be accessed by all as an asset for wealth creation and empowerment. –Leveraging growth in the economy –Promoting social cohesion and improving quality of life for the poor. –Support the functioning of the entire single residential property market to reduce duality within the sector by breaking the barriers between the first economy residential property boom and the second economy slump. –Utilizing housing as an instrument for the development of sustainable human settlements in support to spatial re-structuring.

18. LINKAGES TO CLUSTER PRIORITIES The National Department and the Provincial Departments of Housing have integrated their activities with the following Cluster priorities: –Job Creation and Expanded Public Works Programme. –Integrated Sustainable Rural Development and Urban Renewal –Entrepreneur Development Programme and BEE –Promotion of Women Entrepreneurs –Internships –The employment of Community Development Workers (CDW) and their interface within Multipurpose Community Centres (MPCC’s).

19. BUDGET OVERVIEW Programme2005/062006/072007/08 1 Administration83,73792,24697,948 2 Policy Planning and Research 24,63426,11227,418 3 Programme Management95,06169,89396,887 4 Housing Sector Performance 130,607190,258211,620 5 Housing Equity5,9496,3066,621 6 Housing Development Funding 4,851,7245,668,6486,927,081 Total 5,191,7126,053,4637,367,575 Net Increase to baseline 19,629569,5351,609,451

20. BUDGET OVERVIEW Additional funding: –R50 million in 2005/06 for institutional reform, capacity building and accreditation activities –Decrease of R28,8m as a result of transfer of Loans for the previous Housing Boards –R600 million in 2006/07 (R500 million for various aspects of the new plan, R50 million for institutional reform and capacity building and R50 million for finalising the portfolio of Servcon Housing Solutions) –R1,6 billion 2007/08 (R1,5 billion for various aspects of the new plan, R80 million for institutional reform, capacity building and accreditation activities, and R60 million for Servcon).

21. BUDGET OVERVIEW

22. PROG 1: ADMINISTRATION Presenter: Mr M Dlabantu

23. BUDGET SUMMARY

24. PROG 1: ADMINISTRATION Purpose is to provide strategic leadership and administrative and management support services to the department. Promote and facilitate the flow of information between the department and its stakeholders. The key strategic objectives include the following –Provision of strategic corporate 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 MTEF Allocation: –2005/06 – R83,737,000; –2006/07 – R92,246,000; and –2007/08 – R97,948,000. A real average increase over the MTEF at 7,3 % Increase over MTEF mainly as a result of the increase in staff component for enhanced service delivery and aligning of functions to strategic objectives. This include the expansion of the Director-General office and the creation of security function.

26. PROG 2: POLICY PLANNING AND RESEARCH Presenter: Mr D von Broembsen

27. BUDGET SUMMARY

28. PROG 2: POLICY PLANNING AND RESEARCH The purpose is to develop and manage sound national human settlement and housing policies and legislative frameworks, supported by a responsive research agenda. There are five subprogrammes: –National Housing Policy and Strategy undertakes analysis and develops housing policy. –Housing Framework Legislation drafts the legislation required to implement approved housing policy and strategies and monitors compliance with housing legislation. –Human Settlement Policy and Integration focuses on sustainable urban and rural human settlement development policy. –Research initiates, undertakes and manages research on housing and human settlements. –The contributions paid to the Habitat Foundation, to support the work of the UN Human Settlements Programme, is reflected under Contributions.

29. KEY ACTIVITIES OVER MTEF NATIONAL HOUSING POLICY AND STRATEGY: –Special Housing needs assistance policy –Medium density housing policy investigation –Developing guidelines for sustainable housing development by revising the National Housing Code –Revisit rural subsidy programme –Back yard rental policy intervention –New housing typologies and designs

30. KEY ACTIVITIES OVER MTEF FRAMEWORK LEGISLATION –Social Housing Act –Regulations to the Social Housing Act –Amendments to various acts administered by the Department in accordance with need. –Review of national, provincial and local legislation impacting on the Comprehensive Plan

31. KEY ACTIVITIES OVER MTEF HUMAN SETTLEMENT POLICY AND INTEGRATION: –Housing land policy –Guide lines for farm worker housing –Densification, integration and inner city renewal programme –Aligning IDPs and housing sector plans

32. KEY ACTIVITIES OVER MTEF RESEARCH –Research on informal settlement upgrading and support –Promoting alternative technologies and improved housing design –Level of socio-economic and ethnic integration in SA –International experience in densification and integration

33. BUDGET OVERVIEW MTEF allocation –2005/06 – R24,634,000; –2006/07 – R26,112,000; and –2007/08 – R27,418,000. Effect of restructuring and inflation resulted in increase of 7,4 % over the MTEF period. Stable over the MTEF period.

34. PROG 3: PROGRAMME MANAGEMENT Presenter: Mr J Wallis

35. BUDGET SUMMARY

36. PROG 3: PROGRAMME MANAGEMENT Programme Management manages national housing and human settlement programmes. It consists of four subprogrammes: –National Housing Subsidy Scheme manages, develops and maintains the National Housing Subsidy Scheme, including ownership, informal land rights, social housing, rental and special needs subsidy programmes and the phasing out of old subsidy schemes. –Capacity Building provides ongoing support and guidance to help build capacity in municipalities and provinces to support delivery through the Housing Subsidy Scheme. –Special Programmes Support is involved in managing special housing and human settlement programmes, and providing funding for special initiatives. –Phasing Out of Subsidy Programmes does the necessary administration for completing the housing subsidy programmes of the previous government so that they can be phased out.

37. KEY ACTIVITIES OVER MTEF National Housing Programmes –Enhanced phasing out programme –First time home buyers interest subsidy scheme –NHBRC warranty cover –Procurement regime –New PHP –Accreditation framework –Rectification of defective houses –Hostels programme

38. KEY ACTIVITIES OVER MTEF Capacity Building –Skills audit – Housing Practitioners –Consumer education –Housing education qualification –Capacity building – New plan –Officials –Accreditation –Facilities, Informal Settlement, Social/Rental –POP, Procurement, etc.

39. KEY ACTIVITIES OVER MTEF Special Programme Support –Human Settlement Programme –Presidential Pilot Projects – rental –Social and Economic facilities –Informal Settlement: Support\Monitoring

40. BUDGET OVERVIEW MTEF allocation: –2005/06 – R95,061,000; –2006/07 – R69,893,000; and –2007/08 – R96,887,000. Reason for fluctuation over MTEF is due to the integration of the Human Settlement Redevelopment Programme grant into the Integrated Housing and Human Settlement Development Grant. Commitments on projects for 2005/06 amounts to R24,395,000 Additional funding for capacity building

41. PROVINCIAL ALLOCATION (HSRDP) PROVINCE 2005/06 R`000 EASTERN CAPE FREE STATE9,475 GAUTENG4,129 KWAZULU-NATAL LIMPOPO1,418 MPUMALANGA NORTHERN CAPE NORTH WEST WESTERN CAPE 9,373 TOTAL24,395

42. PROG 4: HOUSING SECTOR PERFORMANCE Presenter: P Chauke

43. BUDGET SUMMARY

44. PROG 4: HOUSING SECTOR PERFORMANCE Purpose is to monitor the performance and assesses the impact of housing delivery, manages housing information, and monitors and analyses the impact of government’s housing policy and programmes on the construction sector, the financial sector and the economy, and the housing institutions. There are five subprogrammes: –Policy and Programme Monitoring assesses the implementation of national housing policy and programmes, and the impact of these on beneficiaries, the environment and the roles of the three spheres of government. –Information Management maintains national housing databases and information systems. –Industry Analysis and Development Finance monitors and analyses the impact of government’s housing policy and programmes on the construction sector, the financial sector and the economy. –Housing Institutions monitors the performance of the following housing institutions: National Housing Finance Corporation, Servcon Housing Solutions (Pty) Ltd, Peoples’ Housing Partnership Trust, Social Housing Foundation, National Home Builders’ Registration Council, Thubelisha Homes, National Urban reconstruction and Housing Agency, and the Rural Housing Loan Fund. –Contributions administers the transfer payments to these institutions.

45. STRATEGIC OBJECTIVE To monitor, evaluate and assess: –The implementation, performance and impact of Government’s national housing programmes; –The impact thereof on the construction sector; –The oversight management of the Housing Support Institutions; and –The provision of IT systems and its management in relation to the distribution of housing subsidies

46. Chief Directorate : Information Management Strategic Objective: To provide human settlement information to support Government’s housing provision process Deliverables MTEF: –Develop, manage and maintain housing information systems (HSS, HUIS, NHSDB); –ensure an effective library and resource service; –Manage the provision and maintenance of the Housing Subsidy System to accredited Local Governments; and –Manage the level of quality of data continuously to ensure accurate and reliable data

47. Chief Directorate : Housing Sector Performance Strategic Objective: To monitor, evaluate and assess the implementation, progress and impact of national as well as entrepreneurial development and job creation programmes Deliverables MTEF: –Develop monitoring, evaluation and impact assessment system based on the BNG Housing Plan; –Create and develop publications to advise management and stakeholders; –Establish effective and efficient communication channel between three tiers of Government

48. Chief Directorate : Industry Analysis Strategic Objective : To monitor and evaluate Government’s programmes in the construction sector, accessibility of development finance and impact of economic indicators Deliverables MTEF: –Effective monitoring of the construction sector, quality of houses, alternative building technologies and capacity; –Monitor and evaluate the housing finance sector, effectiveness of housing finance products and the impact of the economy on the housing sector; –Monitor the performance of Housing Support Institutions against the BNG Housing Plan, founding mandates and products offered

49. BUDGET OVERVIEW MTEF allocation –2005/06 – R130,607,000; –2006/07 – R190,258,000; and –2007/08 – R211,620,000 million. Average increase of 22% over the MTEF Mainly as a result of increases in allocation to SERVCON as a result of SERVCON concluding its work. Fairly stable over MTEF period

50. PROG 5: HOUSING EQUITY Presenter: Mr A Osman

51. BUDGET SUMMARY

52. PROG 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. To this end, the Office of Disclosure is being set up. Take responsibility for implementing the Home Loans and Mortgage Disclosure Act (63 of 2000) (HLAMDA), its regulations and the Community Reinvestment Bill when the latter comes into operation

53. KEY ACTIVITIES OVER MTEF Engage with financial institutions to develop affordable housing finance instruments Ensure financial institutions engage in appropriate consumer education programmes Engage with financial institutions to ensure expanding network of points of representation To finalise and gazette regulations To receive, capture and analyse information disclosed by financial institutions. To finalise compliance manual

54. KEY ACTIVITIES OVER MTEF To establish Board of Directors for Office To prepare annual report to Minister in terms of HLAMDA Comparison of actual against annual report on target Develop an appropriate employer assisted housing programme.

55. BUDGET OVERVIEW MTEF allocation: –2005/06 – R5,949,000; –2006/07 – R6,306,000; and –2007/08 – R6,621,000. Average increase of 5% over MTEF

56. PROG 6: HOUSING DEVELOPMENT FUNDING Presenter: Mr M Dlabantu

57. BUDGET SUMMARY

58. PROG 6: HOUSING DEVELOPMENT FUNDING Housing Development Funding manages the funding of national housing programmes. The programme comprises three sub-programmes: –Fund Management administers payments of the conditional grant to provinces. –Integrated Housing and Human Settlement Development Grant reflects the conditional grant allocation that is transferred to provinces –Interest and Redemption on Private Loans administered the interest payments on liabilities held by the National Housing Development Board and the SA Housing Trust, all of which have been transferred to National Treasury.

59. KEY ACTIVITIES OVER MTEF The Integrated Housing and Human Settlement Development Grant is the amalgamation of aspects of the Human Settlement Redevelopment (which previously fell under Programme Management) the previous Housing Subsidy conditional grants, To accommodate the funding required for implementing the new comprehensive plan for the development of sustainable human settlements. Will in the first year fund the current business and new pilot projects across the country; National Department I assisting provinces in finalising plans and targets in line with Comprehensive plan for 31 March 2005 target date for submission of these plans.

60. KEY ACTIVITIES OVER MTEF Transfer of funds according to payment schedule Monitoring of expenditure on provincial & local authority level Amending Housing subsidy grant framework To provide a effective and efficient debtor system

61. BUDGET OVERVIEW MTEF allocation: –2005/06 – R4,851,724,000; –2006/07 – R5,668,648,000; and –2007/08 – R6,927,081,000. Accounts for the bulk of the department’s expenditure Average increase of 15,6% over MTEF

62. PROVINCIAL ALLOCATIONS (SAHF) PROVINCE 2005/062006/072007/08 R`000 EASTERN CAPE581,218679,194 830,154 FREE STATE398,618465,814 569,347 GAUTENG1,340,6761,566,674 1,914,887 KWAZULU-NATAL799,659934,457 1,142,153 LIMPOPO397,650464,682 567,963 MPUMALANGA321,123375,255 458,660 NORTHERN CAPE79,91793,389 114,146 NORTH WEST467,880546,751 668,274 WESTERN CAPE456,740533,733652,362 TOTAL4,843,4815,659,9486,917,946

63. THANK YOU