social housing policy - the implementation process kobus ......

SOCIAL HOUSING SOCIAL HOUSING –– ““ THE WAY FORWARDTHE WAY FORWARD””

Social Housing Policy - The implementation process

Kobus van Wyk, NMMUCONTENTS1.BACKGROUND AND INTRODUCTION2.WHAT THE POLICY SET OUT TO ACHIEVE3.HOW IT HAD TO BE ACHIEVED AND BY WHO4.IMPLEMENTING PROCESS(ES)5.FEEDBACK ON THE IMPLEMENTING PROCESS6.‘FAMILY’ TYPE INTROSOPECTIVE REFLECTION7.THE WAY FORWARD8.ACKNOWLEDGEMENTS


WHAT SOCIAL HOUSING IS?• “A rental or co-operative housing

option for low income persons at a level of scale and built form which

• requires institutionalized management and which is provided by accredited social housing institutions or in

• accredited social housing projects in designated restructuring zones”(SHP).


BACKGROUND AND INTRODUCTION

• Involvement in rental housing demand surveys in two towns and observed others

• Impression of a cumbersome process• Will we achieve our goals and objectives

and meet the demand?• Can the implementation process be

streamline / improved?• If so, how, by who and when?• Will we remain “among the best in the

World in terms of housing delivery”?


WHAT THE POLICY SET OUT TO ACHIEVE

• IMPROVE SITUATION:o By 2005: 30,000 social housing units managed by 60

operational SHIs (facing financial and management difficulties)

o Delivery rate was 2500 p.a. over 10 years.o By 2010, 42 000 rental units developed using Instit Sub.

• QUANTITATIVE GOAL: “National Rental Housing Strategy set out to deliver 100 000 units in the period 2007/08 –2011/12 (75 000 SH and 25 000 CRU (municipal and provincial stock)” (SHP)


WHAT THE POLICY SET OUT TO ACHIEVE

• THE TARGET ‘MARKET’: o ‘The rental sector = 17%-20% of (+-11

million) households in South Africa (expected +-2,2 million in 2011).

o Roughly 55% have an income of less than R3,500 per month while a further 22% earn between R3,500 and R7,500.

o Over 40% of renter households live in slum conditions; hence needing improved housing (SHF Supply and Demand).


WHAT THE POLICY SET OUT TO ACHIEVE• OTHER DRIVERS FOR THE SHP:

o Regeneration of inner cities and urban efficiencyo Well located land for human settlemento Need to broaden housing assistanceo Higher density developmento Increasing demand for rental housing o Integrated spatial patterns (racial restructuring)o Sustainable human settlement developmento Social cohesion and improved quality of lifeo Economic growth and job creationo Enhanced flexibility and mobility


HOW AND BY WHO?• Legislative and Regulatory Frameworko Social Housing Policy and Social Housing Acto Housing Act and Rental Housing Acto Other relevant policies and acts, such as the Housing Act,

DFA, PIE Act.• Institutional frameworko NDHS, Municipalities and Provincial DHSso Accr SHIs, PPPs, Implementing Agents, Facilitatorso SHF, SALGA & NASHOo SHRAo NHFC, TUHF, Banks and international funding agencieso NURCHA, HDA, NGOs, CBOs, Professionals & others


HOW AND BY WHO?• Financingo Housing Subsidy Scheme and Human Settlement

Redevelopment Program – Institutional Subsidyo Social Housing Capital Grant o Restructuring Capital Grant for Restructuring Zoneso Capacity Building Granto Top-up by Province and Municipalityo Loan funding from NHFC and Private Lenderso Other sources such as Integrated Residential Development (50 000 units = R2,75 billion in grant funding with a grant to

debt ratio of 45 % to 55% in 2005. Now ratio is 70% grant : 30% private(?))

NB: Tax incentives (exempts from VAT) and risk mitigation.


IMPLEMENTATION • Challenge: Provide quality public sector

subsidized rental accommodation at a rent of R600-R2400 per household and sustain it.

• See Public Sector Rental Housing Implementation Toolkit (Feb 2010):

1. PROGRAMME LEVEL1.1 Capacity Development:o Create awareness of rental housing programmeo Institutional structuringo Implementing skills


IMPLEMENTATION (Program)2. Rental Housing Policy and Strategyo Demand, supply, gaps, stakeholders,

resources, costing3. Land identification, packaging and

transfer4. Project identification and assessment5. Partnership formation6. Annual rental housing program budget7. Monitoring and evaluation


IMPLEMENTATION (Project)• Project Identification• Project Planning and assessment• Project approval and financial allocation• Implementing contracting and contract

management• Stock and tenancy management• Project monitoring and evaluation• See also CRU Toolkit and many other

documents and templates…


IMPLEMENTING A SOCIAL HOUSING PROJECT (TOOLKIT)

STAGE 1: Proposal and initiationo Identify target market & generate ideas re needso Appoint development managero Identify and pre-assess land and propertieso Conduct a market survey to establish demando Idea, Land and demand match?o Initiate land procuremento Initiate funding procuremento Appoint professional team



• STAGE 2: Preliminary design and feasibility

o Define project and prepare prelim designso Feasibility studies (market analysis)o Secure land and propertyo Obtain development rights and service

lando If feasible, appoint professionals for further

work



• STAGE 3: Implementation planning (design and development)

o Develop project implementation plan & approve

o Finalize design, cost estimates & feasibility studies & approve

o Prepare technical documentation and submit building plans for approval

o Obtain approval and secure funding


IMPLEMENTING A SOCIALHOUSING PROJECT (TOOLKIT)

• STAGE 4: Implementation planning (Tendering)

• Procurement options and type of tendering

• Consider contract options and decide• Prepare tenders, call for tenders,

adjudicate, select and appoint• Market units and allocate to tenants



STAGE 5: Implementation and control• Sign contracts and hand over site• Supervise and administer contract• Contract completion and unit handover• Project close out• Letting and occupation starts• Stock management and maintenance


FEEDBACK ON THE IMPLEMENTING PROCESS

Specific feedback was obtained from some practitioners, and a SHP author re ‘long, difficult implementation process’ e.g. survey, zoning, priority list, co-ordination.

• Should it take eight (8) years to get to the project tender stage? (3 years investment for long term use is in order).

• Important to provide enough and suitable land / property earmarked in good time to serve demand.

• Inform role players on the processes and be inclusive.• The process is over-regulated(?).• Appropriate knowledge and operating budget assistance

are required (capacity grant?).



• Are municipalities ready for initiating and facilitating the implementation processes?

• Efficiency re administration, zoning, land release, registration, approvals, infrastructure provision, financing?

• Can the funding mechanisms be rationalized?

• Interference of provincial - local power tensions.



• Do the existing SHIs have sufficient capacity to meet the demand or must private investors be drawn in on a ROI basis?

• Will SHIs enjoy the same incentives as private investors and be allowed to ‘convert’ to private?

• Can this be done without interfering (too much) in the private rental market?

• The budgets of SHIs are tight and volumes (20k units) are required to make them sustainable.

• SA need estate (housing stock) managers (education?).



• Is the NHBRC relevant re protecting tenants while the SHI is the owner?

• Release SHIs of some municipal fees.• Ensure that all the appropriate units in

municipalities function efficiently.• Provision in the limited market is currently

fantastic and provides community wellness• Mentorship from experienced countries

add to the success of SHIs



• Locality is of critical importance (close to work, limited travelling time and costs).

• Tenants expect benefits in place of tenure. (It must compete with ownership re affordability, location, mobility, communal living, quality of life, security, etc).


‘FAMILY’ TYPE INTROSPECTIVE REFLECTION

1. The Government is not the only role player: The success of the sector is dependent on all the role players.

2. Regulation, accreditation and monitoring are critical features of the SH Policy – tough but necessary:

o For quality, viability, accountability, sustainability;o to guard over the capital investment (R9bn by 2014); o to achieve the other goals and objectives of Policy.3. “The rental sector* is possibly the second most

efficient housing market (after the high income market)” (SHF, 2010). (*6 types backyard-private).

4. “Anecdotal evidence suggests unmet demand in key urban centers” (SHF, 2010).



• SHIs and rental landlords report low vacancy rates.• Private landlords describe the market as insatiable.• “…supply does not meet the demand (in terms of

household growth) and does not support affordability thresholds of sub-markets”

• Distribution of managed social housing units is: 46% in Gauteng; 25% in Western Cape; 12% in KZN; 7% in EC; 0-5% in all the other provinces. Demand?

• While new developments are of good quality, there is a concentration of low-income earners living in informal structures (inadequate housing).

• SHRA endeavoring to attract private investors are laudable. Business function on ROI – and SHIs?



• Is the demand concentrated in (inner) cities or also in rural towns?

• In comparison with other countries, the rental market in SA (+-20 of total) is low and has scope for expansion (50%?).

• The policy and its implementation have challenging facets, but they are justifiable.

• Recognize SH as a specific segment of the market for income earning households and do not see it as the solution for all.


THE WAY FORWARD• Grow the economy and create jobs so that people

can afford their accommodation!• Increase the subsidy categories?• Balance public subsidized and private rental

accommodation?• Release more suitable land close to needs?• Establish more SHIs and capacitate them?• More incentives for facilitators? • More delivery agents and how to entice them?• More capacity to manage processes, projects and

completed stock (see lessons from public stock?)


THE WAY FORWARD• Provide financing to private landlords to

improve their (low rent) rental units?• Do proper risk assessment and tenant

selection – and apply the rules.• Recognize that it is a ‘young’ policy, meant

to serve only a part of the housing market.• Believe in it, JOIN FORCES, implement

and ACHIEVE (TOGETHER)!• Nkosi Sikilela iAfrika!


ACKNOWLEDGEMENTS• Contributors to the presentation are

acknowledged, including:o Managers of SHIso An Implementing Agento A Dutch Support Agencyo A former DoHS and SHF Managero Authors of sources from which data was

extracted, especially SHF publications.o The NMMU and the SAHF

social housing policy - the implementation process kobus ......

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