department of housing vote: 29 briefing to the select committee on public services 09 april 2003...

DEPARTMENT OF HOUSING

VOTE: 29

BRIEFING TO THE SELECT COMMITTEE ON PUBLIC SERVICES

09 APRIL 2003

STRATEGIC PLAN AND BUDGET

2003/04 TO 2005/06

Presentation Index

• Aim, Vision and Mission of the Department

• Our Values,Our Mandate and Policy Framework

• Housing Legislation and Regulations

• Strategic overview and policy shifts

• Budget overview

• Conditional Grants

• Conclusion

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

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.

OUR MANDATE AND POLICY FRAMEWORK

• 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

• Policy Framework– Botshabelo Housing Accord (1994) – (RDP) – set out framework and principles for sustainable

development– Policy framework as determined by the White paper on a

new housing policy and strategy for South Africa, 1994

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

• Currently in process – Community Reinvestment (Housing) Bill.

– Housing Amendment Bill

– Social Housing Bill

REGULATIONS AND GUIDELINES

• National Housing Code

• National Norms And Standards For Permanent Residential Structures

• Guidelines For Human Settlement Planning And Design (“Red Book”)

• Guidelines For Environmentally Efficient Low Cost Housing

REGULATIONS AND GUIDELINES

• Regulations under the Housing Consumers Protection Measures Act, 1998 relating to the subsidy only sector have been drafted;

• Regulations under the Home Loan and Mortgage Disclosure Act. 2000 should be finalized shortly;

• Regulations under the yet to be promulgated Community Reinvestment Act: to be developed during the current MTEF.

STRATEGIC OVERVIEW• Housing environment since 1994 white paper

– More than 1,47m houses have been built or under construction and 1,8m subsidies approved benefiting more than 5,6m 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

STRATEGIC OVERVIEW• Current challenges facing the housing

programme – Lack of private sector investment and resource constrains– 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.

STRATEGIC OVERVIEW

• Current policy trends in housing programmes.– Housing Finance Challenges - Contributions required

from Government, the financial sector, the NGO sector and ultimate beneficiaries

– Extension of the Housing Warranty Scheme through the NHBRC to beneficiaries

– More emphasis on monitoring of policy impact, expenditure and delivery

– More emphasis of oversight on housing institutions – Promoting new and innovative building technologies

STRATEGIC POLICY SHIFTS

• New policy approaches– Having achieved the target of 1 million houses the

housing programme now has to reflect on the outcomes and how these can be improved – a Consolidation Phase

– A shift in focus from “numbers of units” to quality of products and environments –

• Medium density integrated housing programme and emphasis on PHP

• Social housing policy and legislation

• Rental housing

• NHBRC warranty


• Promotion of social responsibility through:– Own contribution to access housing subsidies and the

NHBRC warranty scheme– Savings linked housing subsidy to promote a culture of

savings

• Improving access to housing credit:– Community Reinvestment Legislation (CRA)– Home Loan Mortgage Disclosure Act, 2000


• 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 and emergency housing)


• 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– New demand led procurement regime– Capacity building programmes for stakeholders,

including government and industry


• 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

LINKAGES TO GOVERNMENT PRIORITIES

• Housing activities are focused in the following Government priorities areas– Urban renewal– Integrated Sustainable Rural

Development– The eradication of poverty– Transformation– Black Economic Empowerment– Engendering a culture of saving

BUDGET OVERVIEWProgramme 2003/04 2004/05 2005/06

1 Administration 44 850 59 063 67 128

2 Housing Policy Planning and Research

16 448 22 139 24 634

3 Programme Management 122 104 152 477 165 437

4 Housing Sector Performance 304 871 286 252 296 446

5 Communication 10 177 11 768 12 388

6 Housing Development Funding 4 275 039 4 502 397 4 774 204

7 Housing Equity 5 347 5 612 5 949

Total 4 778 836 5 039 708 5 346 186

% Change year on year 10% 5% 6%

PRELIMANARY EXPENDITURE RESULT

ProgrammmeAdjusted Budget

ExpenditureAmount

Suspended

Saving /Underspend

ing

Possible Rollover

R`000 R`000 R`000 R`000 R`000

(1) (2) (3) (4)=(1)-(2)-(3) (5)

1: Administration 49,733 39,796 9,937 4,000 2: Policy Planning 13,165 8,222 4,943 3: Programme Management 212,565 192,906 19,659 4,000

4: Housing Sector performance 184,469 137,935 26,677 19,857 12,500 5: Communication 10,075 5,319 4,756 6:Housing Development Funding 3,829,474 3,828,769 705 Thefts and Losses - 8 -8 Total 4,299,481 4,212,955 26,677 59,849 20,500

BUDGET OVERVIEW

• Programme 1: Administration• Purpose of this Programme is to provide

administrative and management support services to the Department

• Changes in the MTEF– A real average increase over the MTEF at 7 %– Decrease from 2002/03 to 2003/04 at 16 % mainly as a

result of the of reduction in Prof. and Special services• Reduced development costs of the Debtors system• Completion of the preparation of the Housing Funds statements

and the transformation tenders• Completion of auditing and related costs for the Housing Funds

statements for past years

THE KEY ACTIVITIES OVER MTEF

• Provision of Strategic Financial Management Services

• Provision of Human Resources Management Services

• Provision of General Corporate Services to ensure corporate efficiently

• Provision of strategic support services for the Minister and Accounting Officer

• Implementation of toll free number to address public enquiries and as anti-corruption initiative

• Implementation of the transformation imperatives

BUDGET OVERVIEW• Programme 2: Policy Planning and Research

• Purpose of this Programme is to ensure a sound national housing policy framework

• Changes in the MTEF– Effect of restructuring, function shift and reprioritization

resulted in increase of 20 % between 2002/03 and 2003/04

– Addition of the Research Chief Directorate and Framework Legislation projects

KEY ACTIVITIES OVER MTEF

• Drafting of new legislation– Community Reinvestment Bill– Social Housing Bill

• Amendments to current legislation– Rental Housing Amendment Bill– Housing Consumers Protection Measures– Prevention of Illegal Eviction from and unlawful

Occupation of Land Amendment Bill (PIE)

• Drafting of Regulation under HLAMDA, CRA, 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

• Development of emergency relief housing• Development of Medium Density Housing policy• Development of CR Policy• Produce policy paper on Environmentally sound and

efficient Housing• Produce report on child headed households and

housing

BUDGET OVERVIEW• Programme 3: Programme Management• Purpose of this Programme is to manage national

housing programmes• Changes in the MTEF

– Mainly dominated by transfer payments: 90%– Major Reduction from 2002/03 to 200304 on the Job

Summit Project no more funding after 2002/03– Major increase conditional grant Human Settlement

Redevelopment Programme• From 2003/04 :R109m; 2004/05: R116m and 2005/06: R122m

– Fairly stable over the MTEF period– Experiencing staffing capacity problems


• Implementation of the Human Settlement Redev. Programme and the Presidential Pilot programme

• Promotion of Improved Traditional Building methods and technology

• Management of the Phasing Out programme• Produce guidelines and report on the possible

extension of the Warranty cover to PHP• Produce report on outcome and lessons from

implementation of the Presidential Pilot programme• Development of housing education and training

programme and professionalisation of the Housing sector

BUDGET OVERVIEW

• Programme 4: Housing Sector Performance

• Programme is to monitor and assess the impact of housing delivery, manage housing information, and support housing institutions

• Changes in the MTEF – Mainly transfer payments: 92%– Increase from 2002/03 to 2003/04 by 42%

• Mainly as a result of increases in SAHT liabilities allocation to be transferred to National Treasury upon of finalization of the disestablishment of the SAHT


• Monitoring the implementation of housing policy & programmes

• Monitoring the performance of Housing Support Institutions

• Impact assessment of implemented policy and programmes

• Monitor identified economic and financial variables as well as Construction Industry trends & reciprocal impacts

• Maintenance of Housing information systems.

BUDGET OVERVIEW

• Programme 5: Communication• Purpose of this Programme is to facilitate and promote the

free flow of information between the Department and its stakeholders

• Changes in the MTEF– Currently experiencing major staffing capacity constraints and it is

planned to increase staffing levels to reach 85 % by the end of the first quarter of 2003/04

– Increases by an average of 7% over the MTEF period– Various ministerial programmes

• National Housing Awards• Rand show Exhibitions

– Staffing problems being resolved


• Dissemination of information to stakeholder and facilitate feedback

• Development and maintenance of a communication strategy in support of housing programme

• Production of publications on targeted basis

• Consumer awareness campaigns

BUDGET OVERVIEW

• Programme 6: Housing Development Funding– Purpose of this Programme is to manage the funding of

national housing programmes– Consist mainly of Transfer payments to provinces in

terms of DORA as conditional grants and repayment of loans raised by the old Housing Boards.

• Key Activities Over MTEF– Management of the grants transfer to provinces – Monitoring of financial performance for compliance with

DORA & PFM Act.– Reporting of grants performance to NT, AO and Minister

(MINMEC)

BUDGET OVERVIEW• Programme 7:Housing Equity • To promote fair lending practices by banking institutions,

and provide for setting and enforcing specific minimum targets by financial institutions in lending to the low and medium income level households for housing purposes.

• 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.

• Funding provides for setup costs

CONDITIONAL GRANTS

Housing administers two conditional grants:

Housing Subsidy Grant [included in Programme 6]

Human Settlement redevelopment Grant [included in Programme 3]

PURPOSE OF GRANTS

• Housing Subsidy grant: is to finance housing subsidies under the national housing programme

• Human Settlement Redevelopment Grant: is to fund projects which are meant to improve the quality of urban environment by addressing the legacy of dysfunctionality

HOUSING SUBSIDY GRANT

Past performance Since 1994 – more than 1,47m houses have been built or

under construction and 1,8m subsidies approved benefiting more than 5,6m (8m people by the end of the MTEF)

Subsidies approved in the last 3 years average 235 540 p.a.

Housing units delivered last 3 years average 197 520 p.a. It is estimated that the programme has maintained

average of 350 000 Direct jobs and 325 000 indirect jobs

HOUSING SUBSIDY GRANT ( CONT.)

• To date the programme has achieved a 61 % to 39 % split in allocation between male and female headed households

• Since 1994 the programme represents an investment R21,309bn by December 2002 into low income communities

HOUSING SUBSIDY GRANT ( CONT.)

– Experiencing slowdown in delivery in the past 2 years resulting in average of 15% under spending due to the following reasons:

• Transformation/restructuring since 2000 elections and capacity of some Local Authorities

• Delaying effects of the Environmental Impact Assessment processes

• Land transfer issues

• Local Government: Municipal Systems Act, No. 32 of 2000 which has been resolved

• Delayed finalization of outstanding issues relating to Job Summit Projects – which has since also been resolved

• Deposits to be made by beneficiary towards the warranty of their properties

HOUSING SUBSIDY GRANT(CONT.)

• Currently the Department is undertaking a Capacity requirement analysis for a new strategy for capacity building processes to address the capacity problems at local governments for housing delivery

• The grant provides for funding of emergency housing in accordance with the Grootboom Case Constitutional Court Judgment at 0.5% to 0.75% of allocations

PROVINCIAL ALLOCATIONS (SAHF)

2003/04 2004/05 2005/06R'000 R'000 R'000

Eastern Cape 641,757 598,900 635,288

Free State 325,403 385,641 409,072

Gauteng 923,892 1,117,463 1,185,358

Kwazulu-Natal 796,390 748,462 793,937

Mpumalanga 275,408 296,457 314,470

Northern Cape 85,973 89,442 94,877

Limpopo 426,160 369,818 392,287

North West 347,974 421,378 446,981

Western Cape 423,282 446,035 473,136

TOTALS 4,246,239 4,473,596 4,745,406

ProvinceMTEF


ProvinceOriginal Voted

Amount

In Year Allocations

Total Available

Provincial Spending

Possible Rollovers

R'000 R'000 R'000 R'000 R'000(1) (2) (3)=(1)+(2) (4) (5)= (3)-(4)

Eastern Cape 571,485 356,573 928,058 465,040 463,018 Free State 283,097 185,484 468,581 191,497 277,084 Gauteng 801,940 261,078 1,063,018 1,037,901 25,117 KwaZulu-Natal 708,759 153,653 862,412 754,672 107,740 Mpumalanga 242,038 105,508 347,546 269,241 78,305 Northern Cape 75,809 1,288 77,097 69,325 7,772 Limpopo Province 381,767 6,228 387,995 404,024 -16,029 North West 302,001 17,287 319,288 221,682 97,606 Western Cape 372,778 6,082 378,860 348,182 30,678 Unallocated - - - - - Total 3,739,674 1,093,181 4,832,855 3,761,564 1,071,291

Conditional Grant: Housing Subsidy Grant

HOUSING ALLOCATION FORMULA

Background information to the formula used 2002/03 allocates funds as a combination of the

old formula that was rural/urban neutral and the current formula that is urban biased in order to phase in the new formula by 2004/05

As from 2004/05 the new formula is expected to have been phased in completely

Use is made of the statistics from Stats-SA as updated by the October survey


• The formula format is weighting in order of priority of the elements as defined above

• A = HN(50%) + HH (30%) + P (20%), where

A= ALLOCATION

HN= HOUSING NEED

HH= HOUSEHOLDS EARNING LESS THAN R3 500 PER MONTH

P = POPULATION


• HOUSING NEED USED IN THE FORMULA IS DEFINED ON A WEIGHTED FORMULA THAT TAKE INTO ACCOUNT THE FOLLOWING :HN = HL(1.25) + SE(1.2) + SBY(1.0) + TC( 1.0)

+FR(0.5) WHERE HN = HOUSING NEEDHL = HOMELESS PEOPLESE = SHACKS ELSEWHERESBY= SHACKS IN BACKYARDSTC = TENTS AND CARAVANSFR = FLAT/ROOMS ON SHARED PROPERTY

HUMAN SETTLEMENT REDEV. PROGRAMME

• Introduced in 1999/2000 as pilot programme started very slowly at R20m p.a. and grew to current levels of over R100m.

• Addresses dysfunctionalities in Human Settlements• Expected to accelerate delivery as guidelines are developed

taking into account experiences learnt in the last two years.• Currently there are 123 projects approved throughout 9

provinces on a multi year basis with a gross commitment value of R302m

• 29 projects targeted to the Presidential Urban Renewal and Integrated Sustainable Rural Development Nodes.

• Current allocations are 2003/04 – R109m; 2004/05 – R116m; 2005/06 – R122m .

PROVINCIAL ALLOCATION (HSRDP)

2003/04 2004/05 2005/06R'000 R'000 R'000

Eastern Cape 11,000 11,660 16,396

Free State 8,500 9,010 10,558

Gauteng 21,000 22,260 30,592

Kwazulu-Natal 26,000 27,560 20,490

Mpumalanga 7,000 7,420 8,116

Northern Cape 3,000 3,180 2,449

Limpopo 11,000 11,660 10,124

North West 8,000 8,480 11,536

Western Cape 13,500 14,310 12,211

TOTALS 109,000 115,540 122,472

ProvinceMTEF


ProvinceOriginal Voted

Amount

In Year Allocations

Total Available

Provincial Spending

Possible Rollovers

R'000 R'000 R'000 R'000 R'000(1) (2) (3)=(1)+(2) (4) (5)= (3)-(4)

Eastern Cape 10,000 198 10,198 10,198 - Free State 7,500 114 7,614 7,614 - Gauteng 23,000 448 23,448 23,448 - KwaZulu-Natal 25,000 486 25,486 25,486 - Mpumalanga 6,000 120 6,120 6,120 - Northern Cape 2,500 47 2,547 2,547 - Limpopo Province 11,000 217 11,217 11,217 - North West 6,000 120 6,120 6,120 - Western Cape 13,000 250 13,250 13,250 - Unallocated - - - - - Total 104,000 2,000 106,000 106,000 -

Conditional Grant: Human Settlement Redevelopment Programme (HSRDP)

MONITORING MECHANISMS

• Monitoring is performed in accordance with requirements of the DORA on a monthly basis

• The Department has developed specific and targeted monitoring frameworks for monitoring the grants

• Project performance reports are used to determine project that are stalling and underlying reasons

• Department has installed a Transversal Information Management system which is being rolled out to provinces (HSS)

• Provincial reports are presented to MinMec, H.O.D meetings on a quarterly basis

• Structured Quarterly Provincial visits take place targeting especially provinces that show low expenditure

Conclusion

• Need to improve access to housing credit by the low income group

• Need to address dysfunctional secondary low cost housing market

• Improve governance – non-adherence to prescripts – Corruption Investigating capacity

• Improvement in information to beneficiaries – lack of adequate communication

Conclusion

• Addressing unresolved housing land issues

• Implementation of new policy regimes eg. Procurement regime, own contribution, phasing out programme.

• Housing backlog

• Improvement in delivery capacity

Thank You

department of housing vote: 29 briefing to the select committee on public services 09 april 2003...

Documents

adequate housing

housing needs

respect of housing

quality housing

rental housing act

new housing policy

housing subsidy scheme

community reinvestment