DEPARTMENT OF HOUSING VOTE: 29 PRESENTATION TO THE AD HOC COMMITTEE ON HOUSING 02 JUNE 2004 STRATEGIC PLAN & BUDGET 2004/05 TO 2006/07.

DEPARTMENT OF HOUSING VOTE: 29

PRESENTATION TO THE AD HOC COMMITTEE ON HOUSING

02 JUNE 2004

STRATEGIC PLAN & BUDGET 2004/05 TO 2006/07

Presentation Index1. Aim, Vision and Mission of the Department2. Our Values3. Our Mandates 4. Housing Legislation and Regulations5. Our Policy Framework6. Strategic overview and policy shifts

– Housing environment since 1994 white paper– Challenges facing Housing– Linkages to Government Policy Priorities– Strategic Policy: Shifts

7. Budget overview8. 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 freedom;– Non-racialism and non-sexism;– Supremacy of the constitution and the rule of law;– Accountability, responsiveness and openness.

Our Mandate

• SA CONSTITUTION– Section 26: Access to adequate housing a basic

human right; Govt. to ensure environment conducive to the progressive realization of the right

– Schedule 4: Housing is a concurrent national and provincial legislative function

• Botshabelo Housing Accord (1994) Signed by all housing stakeholders

• UN Habitat Agenda

Our Policy Frameworks

• Our overall policy framework is 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

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

• National Norms And Standards For Permanent Residential Structures– Sets amount of the subsidy which may be used for

infrastructure and top structure– Sets the minimum size of houses

Regulations and Guidelines continued

• Guidelines For Human Settlement Planning And Design (“Red Book”)– Planning – movement networks, transport, open

space, subdivision layouts, design to reduce crime– Engineering services -stormwater, 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

Regulations and Guidelines continued

• Regulations under the Housing Consumers Protection Measures Act, 1998

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

Strategic Overview• Housing environment since 1994 white

paper– More than 1,6m houses have been built or under

construction and 2,4m subsidies approved benefiting more than 6,1m 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 continued

• Current challenges facing the housing programme – Lack of private sector investment and resource constraints– Moving towards medium density housing as a priority and

integrated development– 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.

– Growth in number and size of informal settlements– Building capacity of municipalities to implement and

manage housing projects

Strategic Overview continued

• Current policy developments– Housing Finance - Contributions required from

Government, the financial sector, and ultimate beneficiaries

– Extension of the NHBRC Housing Warranty Scheme to all subsidy instruments

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

– More emphasis on oversight of housing institutions – Promoting of alternative and traditional/indigenous

building technologies

Strategic Policy Shifts

• Policy emphasis– Increased focus on quality and environments

• Medium density integrated housing programme• Increased emphasis on PHP;• Social and rental housing;• Informal settlements upgrading;

Strategic Policy Shifts continued

• Promotion of social responsibility, beneficiary participation and a culture of savings through:– Own contribution to access housing subsidies and

the NHBRC warranty scheme– Increased emphasis on community participation and

compacts

• Improving access to housing credit:– Engagement in the Financial Services Charter

proces;– Operationalization of Office of Disclosure


• 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)

– Emergency housing programme


• 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

– Addressing social amenities


• Improving service delivery:– New demand led procurement regime;– Capacity building programmes for stakeholders,

including government and industry;– Framework for the accreditation of municipalities.


• 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.

Government Priorities• Housing activities are focused in the following

broad Government priorities areas– Urban renewal (informal settlements upgrading, Medium

Density, Social Housing)– Integrated Sustainable Rural Development - through Rural

Housing policy and provision of Rural housing credit through RHLF

– Black Economic Empowerment – Creation of a cadre of Housing Entrepreneurs

– Engendering a culture of saving– Fast tracking delivery;– Reducing social crime and improving security;– Capacity building of all stakeholders;– Dealing with corruption and maladministration – Appointment

of Investigative Task team and establishment of increased and dedicated capacity to deal with corruption

Priorities of incoming government

• Accelerated Service delivery;

• Capacity building;

• Fraud, Corruption and Mal administration

• Social crime prevention

• Medium Density Housing

Budget OverviewProgramme 2004/05 2005/06 2006/07

1 Administration 66,833 76,737 84,896

2 Policy Planning and Research

22,139 24,634 26,112

3 Programme Management 152,477 160,437 170,063

4 Housing Sector Performance

92,240 121,878 128,923

5 Housing Equity 5,612 5,949 6,306

6 Housing Development Funding

4,509,640 4,782,448 5,067,628

Total 4,848,941 5,172,083 5,483,928

Change to baseline 277,850 323,142 311,845

Growth % 6% 7% 6%

Programme overview

Programme 1: Administration

Programme Strategic Overview

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

administrative and management support services to the Department

• The key strategic objectives include the following– Provision of strategic 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.

Budget Overview

2004/05 2005/06 2006/07 791 831 872 4,522 5,622 5,959 61,520 70,284 78,065 66,833 76,737 84,896 17,006 9,904 8,159

34% 15% 11%Growth % Change to baseline Total Corporate Services Management Minister R thousand

Subprogramme Medium-term expenditure estimate

Budget Overview continued

• MTEF Allocation:– 2004/05 – R66 833 million (Growth at 34%); – 2005/06 – R76 737 million (Growth at 15%); and – 2006/07 – R84 896 million (Growth at 11%).

• Increases in this programme are mainly attributable to:– Transfer of previous Communication programme

into programme 1– Strengthening of capacity of the office of Accounting

Officer and provision of Security

Programme Overview

Programme 2: Policy Planning and Research

Programme Strategic Overview• Programme 2: Policy Planning and

Research– The purpose of this programme is to develop and

manage sound national human settlement and housing policies and legislative frameworks, supported by a responsive research agenda.

– In addition, the programme makes a contribution to the United Nations Habitat Foundation.

Key Activities Over MTEF

• Legislation :

• Drafting of new legislation– Social Housing Bill

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

Occupation of Land Amendment Bill (PIE)


• Legislation :

• Drafting of Regulations under HLAMDA, 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

Key Activities Over MTEF continued

• Policy Development :

• Develop housing policy agenda for the next two decades

• Medium Density policy

• Social Housing policy and guidelines

• Informal Settlement Upgrading Policy

• Farm worker Housing Strategy

• Housing land policy


• Other :– All Africa Housing Minister’s Conference

• Research : – Research projects to support policy and programme

development

Budget overview

2004/05 2005/06 2006/07 5,836 6,789 7,289

3,131 3,306 3,493

8,451 9,544 10,057

4,656 4,926 5,200 65 69 73 22,139 24,634 26,112 5,691 2,495 1,478

35% 11% 6% Change to baseline Growth %

Contributions Total

National Housing Policy and Strategy Housing Framework Legislation Human Settlement Policy and Integration

Research

Subprogramme Medium-term expenditure estimate

R thousand

Budget overview continued

• MTEF allocation– 2004/05 – R22 139 million (Growth at 35%); – 2005/06 – R24 634 million (Growth at 11%); and – 2006/07 – R26 112 million (Growth at 6%).

• 2004/05 and 2005/06 increase mainly due to the creation of capacity for the Research component and restructuring within the programme and for 2006/07 it is a inflation related increase.

• Fairly stable over the MTEF period.

Programme Overview

Programme 3: Programme Management

Programme Strategic Overview• Programme 3: Programme Management

– The purpose of this programme is to manage national housing and human settlement programmes, including managing the national housing subsidy scheme and phasing out the housing subsidy programmes of the previous government, the Human Settlement Redevelopment programme and the presidential Pilot Projects on Rental housing, building capacity in municipalities and provinces and developing professionalism in the housing sector.


• Manage of the implementation of the Human Settlement Redevelopment Programme and the Presidential Pilot Project on Rental Housing;

• Manage of the programme for the phasing out of old business including the First Time Home Buyers Interest Subsidy Scheme;

• Develop of guidelines and report for the extension of the Warranty cover to PHP and other subsidy instruments;

• Produce report on outcome and lessons from implementation of the Presidential Pilot programme;


• Refocus the HSRP to provide for informal settlement upgrading and the provision social amenities;

• Building capacity of housing stakeholders;• Develop an appropriate housing finance course for

housing functionaries;• Develop and implement a framework for the

accreditation of municipalities;• Develop guidelines for the improvement of sub

standard houses;• Develop enhanced/revised guidelines for the Housing

Subsidy Scheme to provide for and support the EPWP;

Budget overview

2004/05 2005/06 2006/07 7,896 7,795 8,563

22,471 26,469 27,907 117,882 125,762 133,593

4,228 411 –

152,477 160,437 170,063 26,018 7,960 9,626

21% 5% 6%Growth %

Medium-term expenditure estimate

Special Programmes Support Capacity Building

R thousand

Subprogramme

Total Change to baseline

National Housing Subsidy Scheme

First Time Home Buyers InterestSubsidy Scheme


• MTEF allocation:– 2004/05 – R152 477 million (Growth at 21%); – 2005/06 – R160 437 million (Growth at 5%); and – 2006/07 – R133 593 million (Growth at 6%).

• Mainly dominated by transfer payments: 90%• Major increase conditional grant Human Settlement

Redevelopment Programme– From 2004/05 :R116m; 2005/06: R122m and 2006/07:

R130m

• New emphasis on informal settlement upgrading will require substantial additional funds over the coming years

Provincial Allocation (HSRDP)PROVINCE 2004/05 2005/06 2006/07

R`000 R`000 R`000

EASTERN CAPE 11,660 14,697 15,578

FREE STATE 9,010 10,079 10,684

GAUTENG 22,260 33,900 35,934

KWAZULU-NATAL 27,560 20,220 21,433

LIMPOPO 11,660 10,055 10,658

MPUMALANGA 7,420 8,120 8,607

NORTHERN CAPE 3,180 2,021 2,142

NORTH WESTWESTERN CAPE

8,480 11,831 12,541

14,310 11,549 12,243

TOTAL 115,540 122,472 129,820

Programme Overview

Programme 4: Housing Sector Performance


• Programme 4: Housing Sector Performance– The purpose of this programme is to monitor the

performance and assess the impact of housing delivery, manage housing information; monitor and analyse the impact of government’s housing policy and programmes on the construction sector, the financial sector and the economy, and support housing institutions.


• Monitoring the implementation of housing policy & programmes

• Monitoring the performance of Housing Support Institutions

• assessment of impact of impact of policy and pragrammes

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

• Maintenance of Housing information systems.

Budget overview

2004/05 2005/06 2006/07 5,794 6,577 6,749

24,427 27,031 29,658 4,781 5,681 5,450

1,689 2,020 1,963 55,549 80,569 85,103 92,240 121,878 128,923 69 29,638 7,045

0% 32% 6%


Growth % Change to baseline Total Contributions to Housing institutionsHousing Institutions monitoring

Industry Analysis and Development Finance

Information Management

Policy and Programme Monitoring

Subprogramme

R thousand


• MTEF allocation– 2004/05 – R92 240 million; – 2005/06 – R121 878 million (Growth at 32%); and – 2006/07 – R128 923 million (Growth at 6%).

• Average increase of 13% over the MTEF

• Mainly as a result of increases in allocation to SERVCON in the 2005/06 financial year as a result of SERVCON concluding its work

• 2006/07 increase is mainly inflation related

Programme Overview

Programme 5: Housing Equity

Programme Strategic Overview• Programme 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


• Establishment of a fully functional Office • Receipt, analysis and interpretation of home

loan data disclosed by financial institutions to identify any possible discriminatory lending patterns.

• Utilize legislative framework to ensure achievement of fair lending practices

• Take steps to achieve equitable access of home loans to all


• To support the achievement of an effective housing market

• Management of relationship between the financial institutions and the Department

• Monitor achievements of financial institutions relative to the Financial Sector Charter

• Capacity of all stakeholders

Budget overview

2004/05 2005/06 2006/07 5,612 5,949 6,306

5,612 5,949 6,306 265 337 357

5% 6% 6%


Growth % Change to baseline Total

Office of Disclosure R thousand

Subprogramme



• Average increase of 6% over MTEF

Programme Overview

Programme 6: Housing Development Funding


• Programme 6: Housing Development Funding– The purpose of this programme is to managed the

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

terms of DORA,2004 as conditional grants;– Consist of personnel and admin related costs for

the monitoring of compliance to DORA;– Provides also for payments related to repayment of

loans and interest that were raised by the former Housing Boards;


– Allocation of funds to provinces is based on the Housing Allocation Formula that was approved in 2001;

– The formula takes into account needs of each province as measured by the housing backlog;

– takes into account factors such as homelessness, shack dwelling, caravan dwelling, tents, backrooms, rooms in flats;

– A poverty indicator measured by households earning less than R3,500 in each province;

– Population share factor as measured by each province’s share of total population.

Budget overview

2004/05 2005/06 2006/07 7,243 8,244 8,700 4,473,597 4,745,404 5,030,128 28,800 28,800 28,800

4,509,640 4,782,448 5,067,628 228,801 272,808 285,180

5% 6% 6%


Growth % Change to baseline Total

Interest and Redemption on Private Loans

Grant to Housing Funds Fund Management R thousand

Subprogramme



• Average increase of 6% over MTEF

Provincial Allocations (SAHF)PROVINCE 2004/05 2005/06 2006/07

R`000 R`000 R`000

EASTERN CAPE 598,900 569,448 603,615

FREE STATE 385,641 390,547 413,980

GAUTENG 1,117,463 1,313,528 1,392,340

KWAZULU-NATAL 748,463 783,466 830,474

LIMPOPO 369,818 389,598 412,974

MPUMALANGA 296,457 314,620 333,497

NORTHERN CAPE 89,442 78,299 82,997

NORTH WESTWESTERN CAPE

421,378 458,406 485,910

446,035 447,492 474,341

TOTAL 4,473,597 4,745,404 5,030,128

Provincial Performance

Spent by Provinces

R'000 R'000 R'000 R'000

EASTERN CAPE 641,757 325,000 966,757 792,623 82% 18%FREE STATE 325,403 277,501 602,904 464,531 77% 23%GAUTENG 923,892 45,860 969,752 968,462 100% 0%KWAZULU-NATAL 796,390 107,125 903,515 884,892 98% 2%LIMPOPO 426,160 - 426,160 426,160 100% 0%MPUMALANGA 275,408 93,102 368,510 355,113 96% 4%NORTHERN CAPE 85,973 18,911 104,884 104,191 99% 1%NORTH WEST 347,974 101,270 449,244 401,959 89% 11%WESTERN CAPE 423,282 30,678 453,960 281,818 62% 38%Total 4,246,239 999,447 5,245,686 4,679,749 89% 11%

2003/04

Total Available

Year to date (1 April 2003 - 31 March 2004)

Voted Spent as % of Total Available

Unspent as % of total Available

ProvincesAdjust-ments

Analysis of Transfer Payments2003/2004 2004/2005 Deviation

R'000 R'000 R'000

Habitat Foundation 61 65 4

First-time home buyer interest subsidy scheme 3 500 4 228 728 Human Settlement Redevelopment Programme 109 000 115 540 6,540

NHFC 1 1 - SERVCON 50 824 37 166 (13,658) Social Housing Foundation 11 000 15 347 4,347 NURCHA 10 176 3 034 (7,142) PHPT 1 1

Interest and redemption of private loans Former Housing boards 28 800 28 800 - SA Housing Fund 4 246 239 4 473 597 227,358

TOTAL 4 459 602 4 677 780 218,178

Programme 4: Housing Performance

Programme 6: Housing Development funding

Programme 3: Programme management

Programme 2: Policy Planning

Conclusion

• Need to improve access to housing credit by the low income group therefore outcomes of the Financial Services Charter on Housing are crucial;

• Need to address dysfunctional secondary low cost housing market;

• Need for more communication with beneficiaries;

Conclusion continued

• Addressing unresolved housing land issues through the policy development process;

• Addressing the Housing backlog – additional financial implications;

• Improvement in delivery capacity;

• New Informal Settlement Upgrading Programme and Social Housing – additional funding.

Thank You

DEPARTMENT OF HOUSING VOTE: 29 PRESENTATION TO THE AD HOC COMMITTEE ON HOUSING 02 JUNE 2004 STRATEGIC PLAN & BUDGET 2004/05 TO 2006/07.

Documents

adequate housing

housing linkages

housing stakeholders

respect of housing

national housing policy

new housing policy

rental housing act

department of housing