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SOUTHERN AFRICAN HOUSING FOUNDATION INTERNATIONAL CONFERENCE 2014
CLOSING ADDRESS –MINISTER BONGINKOSI MADIKIZELA
1st October 2014
Presentation Overview
Legislative and Strategic
Environment
Previous Delivery Record
and Affordable Housing and Affordable Housing
Challenges
Skewed Lending Patterns
Culture of Saving amongst g g
the Poor in South Africa
The Change in Approach
© Western Cape Government 2012 |
The Change in Approach
Introduction
The Constitution and the Bill of Rights is a cornerstone of democracy in Southg y
Africa. It enshrines the rights of all people in our country and affirms the
democratic values of human dignity, equality and freedom
South African Constitution. Chapter 2 : Bill of Rights
“… 26. Housing.-
1) Everyone has the right to have access to adequate housing.
2) The state must take reasonable legislative and other measures, within its
available resources, to achieve the progressive realisation of this right. ..”
© Western Cape Government 2012 |
3 Pillars of the National Development Plan (NDP)
1 The responsibility of 1. The responsibility of
leadership across
society to work society to work
together to solve
problemsp
2. A capable and
developmental statedevelopmental state
3. Active citizenry
© Western Cape Government 2012 |
NDP Chapter 8 : Transforming Human Settlements
Objectives: Objectives:
Strong and efficient spatial planning system, well integrated across the spheres
of government
Upgrade all informal settlements on suitable, well located land by 2030
More people living closer to their places of work
© Western Cape Government 2012 |Source: SOHCO
Our 2040 Challenge
Creating a resilient, inclusive and
competitive Western Cape with
higher rates of employment
producing growing incomes, greater
equality and an improved quality of
life
© Western Cape Government 2012 |
One Cape 2040
FOCUS SUMMARYEducating Cape • Ever/ person will be appropriately educated for
opportunity • Centres of ecological, creative, science and social
i ti innovation
Enterprising Cape • Anyone who wants to be economically active is able to work
• Entrepreneurial destinations of choice • Entrepreneurial destinations of choice
Green Cape • Water, energy and waste services delivered sustainably
• Leader in Green Economy Leader in Green Economy
Connecting Cape • Welcoming, inclusive and integrated communities • Global meeting place and connector with new
markets markets
Living Cape • Welcoming, inclusive and integrated communities • Global meeting place and connector with new
markets
© Western Cape Government 2012 |
Leading Cape • Ambitious socially responsible leadership at all levels • World-class institutions
Housing Delivery in SA since 1994
1994 target of 1 million houses in 5 years (RDP)1994 target of 1 million houses in 5 years (RDP)
1 million target met by 2001
Urban divide remained as these units were built Urban divide remained as these units were built
on the fringe of cities
By 2010, deficit grew to 2,1mil. householdsy 0 0, de c g e o , . ouse o ds
The number of informal settlements grew to more than 2,600
This delivery model re-enforced the urban spatial divide and proved to be y p p
unsustainable
The Breaking New Ground Policy (2004) was developed which spoke of
sustainable, integrated development, emphasizing partnerships and
community participation
© Western Cape Government 2012 |
Major Infrastructure Challenges
Poorly located and inadequate infrastructure limits social inclusion and Poorly located and inadequate infrastructure limits social inclusion and
economic growth. Infrastructure provision and service delivery in rural areas are
particularly challengingp y g g
Historic underinvestment in maintenance and rehabilitation of infrastructure
Transport services are inefficient, inaccessible, unsafe, unaffordable and
fragmented
© Western Cape Government 2012 | Future Cape Contextual Report (2012)
Resource Inefficiencies
spatial and resource inefficiencies have serious negative consequences for …spatial and resource inefficiencies have serious negative consequences for the environment, but also for government finances (particularly municipal finances) and for household livelihoods.
Increasing Municipal Funding Gap
R 24 billion additional capital required over 10 years
Municipalities battling to service their increasing debts
Increasing Municipal Funding Gapwith major funding shortfalls
Additional rates & tariff increases of up to 4% p aincreases of up to 4% p.a.
Low income households having to pay up to 18% more f t tfor transport
33% average increase in CO2 emissions from transport
© Western Cape Government 2012 |
CO2 emissions from transport
increased costs to households contributing to poverty trapsSource: Western Cape Infrastructure Framework, May 2013
Population increase between 2001 and 2011 (29%)
WCWCWCWC
© Western Cape Government 2012 |
HS Development Grant per Province 2014/15
Human Settlement Development Grant
Estern CapeWestern Cape
Human Settlement Development Grant
13%
Free State6%
North West9%
11%
Mpumalanga7%
Northern Cape2%
Gauteng26%
Limpopo7%
7%
KwaZulu‐Natal19%
© Western Cape Government 2012 |
Source: DORA 2014
Skewed Lending Patterns
An analysis of National Credit Regulator (NCR) data shows that outstanding An analysis of National Credit Regulator (NCR) data shows that outstanding
unsecured credit has increased from R41bn in 2007 to R159bn in December
2012, a compound annual increase of 31% p.a.p p
Credit type Balance Rand Value
% of Total
Year on Year Growth Rand Value
Year on Year Growth %
(Q1 2012)Mortgages 796 329 489 998 60,3% 26 438 075 909 3,4% Secured 255 553 185 573 19,4% 29 205 139 923 12,9% Credit Credit Facilities
147 340 976 725 11,1% 14 309 377 159 10,8%
U d 120 811 141 417 9 1% 39 946 611 269 49 4% Unsecured Credit
120 811 141 417 9,1% 39 946 611 269 49,4%
Short-Term C dit
882 031 713 0,1% 184 549 294 26,5%
© Western Cape Government 2012 |
Credit Total 1 320 916 825 426 100,0% 110 083 753 554 9,1%
Source: Compliance and Risk Resources (NCR), Research into Unsecured Loans, 6 August 2012
Reasons for Home Loan Declines by Banks
Typical reasons given by consumers applying for unsecured loans included housing
(approx. 40%), education (around 26%) and furniture (13%)
Mortgage lending has notably dropped ever since the implementation of the
National Credit Act. According to the Office of Disclosure, reasons provided
include:
Lack of affordabilityLack of affordability
Unacceptable credit track record
Insufficient information / documents having been provided
Unacceptable security
Ineligible applicant
Unacceptable exposure (town)
Adverse credit record
© Western Cape Government 2012 | Source: Rajeen Devpruth (NCR), Collectivity by MBD
Culture of Saving amongst the Poor in South Africa
Research released in May 2014 by African Response indicate that the robusty y p
Stokvel market in the area of traditional collective saving is estimated at
R25 billion. There are
8.6 million stokvel
members in South
Africa which
represents 23% of the
adult population and
an estimated 421 000
stokvels in total.
© Western Cape Government 2012 |
Value of Stokvel Contributions
© Western Cape Government 2012 |
CHANGE IN APPROACH
Policy Principles
A capable state working in partnership with
active, responsible citizens to achieve shared
goals.
Partnerships with other stakeholders outside
the state are central to meeting strategic
objectives.
Policy must be underpinned by:
Open opportunity society for all
Whole-of-society approach
A rights-and-responsibilities-based approach
Evidence-base
© Western Cape Government 2012 |
Sustainability
Strategic Game Changers
Adopting a Whole-of-Society approach with a changed role of Government as condition-
maker, enabler, facilitator & partner. This requires improved partnerships: within maker, enabler, facilitator & partner. This requires improved partnerships: within
Government, with the Private Sector, Civil Society and Communities
Ensuring that the ecological resource-base is maintained and that the economy and
settlements become more resource efficient
Embracing and planning for informality, adopting an incremental approach and improving
security of tenuresecurity of tenure
Inclusive, dignified & sustainable access to basic services (water, sanitation, waste
management, electricity, public transport) and social amenities provided through spatially-
targeted, decentralised & resource-efficient infrastructure provision
© Western Cape Government 2012 |
Partnerships
All 3 spheres are interrelated and interdependent: the private sector and All 3 spheres are interrelated and interdependent: the private sector and
communities must take up the opportunities that an enabling
environment createsenvironment creates
Strong partnerships between the organs of state within each sphere as
well as between the different spheres of government (including the p g ( g
SOEs)
Partnerships with the private sector, civil society, communities,
academia, international partners, etc., is a critical success factor
© Western Cape Government 2012 |
Key Starting Points
Focus on the accelerated delivery of informal settlement upgrading
• limited state resources to be allocated to as large a group of beneficiaries limited state resources to be allocated to as large a group of beneficiaries
as possible
More integrated settlements (providing public and social services and
livelihood opportunities, together with housing) and densification along
transport networks, which make urban settlements more ‘liveable’ and
ffi i tefficient
Importance of refining implementation component (the HOW) – direction is
substantially clearsubstantially clear
• alignment between NDP, One Cape 2040 vision, political agenda
Importance of communication and partnership building going forward
Importance of clearly defining roles and responsibilities in relation to human
settlements
© Western Cape Government 2012 |
Significant HS strategic shifts required by NDP and other strategic frameworksand other strategic frameworks
From ToFrom ToFull subsidised “RDP” house (for few) Incremental product options (for
many)
Single stand-alone units Medium density units
Narrow ownership emphasis Range of rental, rent to buy, hi d t i ht tiownership and tenure right options
Focus on households earning under Broader income range focusFocus on households earning under R 3 500
Broader income range focus
State provision (state as driver) Partnership and co-provision (citizen and private sector as drivers)
Fragmented housing delivery Integrated settlement planning and
© Western Cape Government 2012 |
Fragmented housing delivery Integrated settlement planning and management
Strategic Agenda
Accelerating informal settlement upgrade as core delivery programme with a view Accelerating informal settlement upgrade as core delivery programme with a view
to addressing the service backlog by 2026
Promoting incremental housing through empowering citizens and providing
targeted support with a view to facilitate real improvements in formal settlements
over time
Enabling and facilitating major increase in affordable housing opportunities through Enabling and facilitating major increase in affordable housing opportunities through
partnerships to address the challenge that poor households earning between R 3 500
and R 15 000 experience in being able to access housing opportunities
Improving inter-governmental settlement planning and management in order to
achieve better located higher density settlement patterns and improved service
deliverydelivery
Consolidating an efficient and effective provincial human settlements department
able to lead and manage delivery process
© Western Cape Government 2012 |
Thank youThank you