Human Settlements Budget Vote Speech 2017/18

SPEECH BY BONGINKOSI MADIKIZELA
WESTERN CAPE HUMAN SETTLEMENTS MINISTER
BUDGET VOTE SPEECH

31 March 2017

Note to Editors: The following speech was delivered today, by Minister Bonginkosi Madikizela during his Departmental Budget Vote in the Western Cape Provincial Parliament.

The Honourable Speaker and the Deputy Speaker

The Honourable Premier of the Western Cape

Cabinet Colleagues

Honourable Members of the Provincial Parliament

Mayors, Deputy Mayors and all Councillors 

Our Human Settlements entities 

Our service providers and all our partners in Human Settlements

Distinguished Guests

Ladies and Gentlemen

Madam Speaker, five years ago South Africa adopted a blue print for development, The NDP. Our strategic goals as this government are informed by that plan. Chapter 8 of the NDP is on Housing/Human Settlements.

I would like to start my speech by reflecting on this Chapter, particularly on how to deal with housing challenges in South Africa. 

The housing issue is complex and needs to be addressed through a cumulative process of reform. There is tension between the need to address housing backlogs quickly and affordably, and the need to provide housing to create well-functioning, high-quality human settlements that will offer greater opportunities for income generation and human development. It is the Commission’s view that a long-term perspective on spatial transformation must be kept in mind at all times while addressing short-term needs.

There is a need to find the correct balance between protecting property rights of vulnerable individuals, protecting state investment, allowing integration of state-provided housing into the property market to stimulate the secondary housing market and ensuring locational flexibility for housing beneficiaries.

To achieve this, there is a need to debate the appropriate role for government and other actors in realising the constitutional right to housing and developmental goals, such as improving income through job creation, providing livelihood support and creating environments that facilitate human development. Large amounts of money have been spent on the housing sector but major problems remain. The system of state-provided housing has benefited many poor households but may have undermined the incentive for people to upgrade their own housing circumstances and may have increased a dependency on the state for the supply of private goods. A national discussion is required on the future funding of housing in South Africa, and on the respective roles of the state, the private sector and individual households in providing housing and creating integrated and sustainable human settlements.

Madam Speaker, our country is faced with many challenges due to weak political leadership, unstable government and policy uncertainty. This has far reaching implications on service delivery. Currently there are:

a) 9 million unemployed South Africans 

b) Higher population growth than economic growth 

c) 6 million tax payers 

d) 17 million grant recipients 

e) Low investor confidence 

All these have resulted in a shrinking fiscus which makes it difficult to meet our social commitment, that's why we started a fresh debate long time ago about the role of the State in housing delivery because the current approach is not sustainable. According to the Community Survey released by Statistics SA last year, the province of the Western Cape grew by about 1.7 million people in 13 years (2002-2015). This meant that our housing demand has been growing steadily, and is now at just over 526 000 families.

Our current budget is just over R2.2 billion currently and we can only assist around 20 000 families a year. That means we need about R80 billion to service the current backlog.

Madam Speaker, during her State of the Province Address, Premier Zille said, "Our Human Settlements Department has listed affordable housing as a strategic priority". This was a reference to one of our three Strategic Goals aimed at responding to our challenges; she also spoke at length about our planned affordable housing projects which I will touch on later. I will now turn to our strategic priorities.

a) Upgrading of Informal Settlements Program

Madam Speaker, if you look at the picture I've painted above with regards to inadequate budget, the rate of in migration and many people who do not qualify for free subsidized houses - it is an undeniable fact that many people will remain in informal settlements. Through our Upgrading of Informal Settlements Program – which is one of the National priorities which we are required to report on by the Presidency. I'm happy to say that my department is one of only two departments nationally that has performed well. We have to ensure that people living in informal settlements have infrastructure like roads, water, refuse removal and electricity. Madam Speaker, lets pause here and once again send our heartfelt condolences to all the families who have lost their loved ones in shack fires across the province during the past year. Imizamo Yethu in Hout Bay is the most recent devastating incident where 15 000 families were displaced after the fire destroyed their homes. 

I visited the area immediately after the incident to witness the scale of devastation. On my second visit I joined the National Minister of Human Settlements, Lindiwe Sisulu together with the Mayco member Councillor Xanthea Limberg to discuss the City of Cape Town’s plans in terms of the disaster relief efforts and future development. I would like to thank the leadership of Imizamo Yethu and all the officials who sprung into action from day one to salvage the savage situation under very difficult conditions. The City of Cape is currently busy with re-blocking and relocations related to the upgrading of the Imizamo Yethu informal settlement.

Madam Speaker, the Department recently concluded the Western Cape Informal Settlement Support Plan (ISSP). The ISSP provides a clear roadmap on how to address the challenges faced by informal settlement residents in a systematic way and collectively (across departments). As part of the ISSP, various materials have been developed which include: Informal Settlement Strategic Framework; Design & Tenure Options; Prioritization Matrix; Implementation Plan and profiling of 106 non-metro informal settlements. The proposed shift that the ISSP envisioned is geared toward transversal collaboration at all levels to accelerate interventions to informal settlements and partnering with intermediaries.

b) Affordable Housing 

Since 2009, my department has created 5388 opportunities and refurbished 7512 Community Residential Units, before then during the ANC tenure there was nothing. The total value of potential affordable housing projects in the pipeline now stands at over 40 000 units worth R3.2 billion, across three types of subsidies – FLISP, Social Rental Housing and Institutional Housing, which cater for different market segments.

This is what we aim to achieve starting with a gamechanger project in Pinelands – a residential feeder suburb to the inner city of Cape Town, where 22 hectares of land are immediately available. The size of the land is relevant to the project’s viability.

We have called this Game Changer the Better Living Model for mixed-income, mixed-use development, and we are implementing it in partnership with the City of Cape Town. There are about 3 600 residential opportunities can be built on this site. This will include a mix of affordable housing options to be cross-subsidised by open market properties and retail space. 

Besides the provision of much needed well-located affordable housing, this development will upgrade of the surrounding roads infrastructure and public transport, as well as introduce new social services to the neighbouring communities. Together with the City, we are implementing the Better Living Model in other core nodes, with exciting results. 

A total of 3 000 units are planned for the Belhar CBD, where a mixed-use high density residential development will create an urban context around nearby education facilities – the University of the Western Cape, Cape Peninsula University of Technology, Northlink College and the provincial government’s Oasis School for children with barriers to learning.

The development will include a mix of student accommodation, social rental stock, open market GAP, and bonded properties The development includes neighbourhood squares, a promenade, an urban green area and retail centre. We’ve already delivered 627 of these units in Phase 1. By early 2018, we would’ve installed the bulk services, and connected them to the remaining 2 400 units to be implemented in this project.

Madam Speaker, the debate about inner City development was started by my department long time ago, not as a grand standing and political point scoring by people who never did a single inner development. I must also make it very clear that it is essential for this government to address the colonial and apartheid spatial planning legacy. It is a justifiable criticism that this administration could have done more to deal with this legacy given the failures of all the previous ones. 

Madam Speaker, the Cabinet also took a decision to start a process to develop well located pieces of land at the centre of Cape Town. We will be working together with the Department of Premier and Department of Transport & Public Works to develop Helen Bowden in Green Point, Woodstock Hospital site. Over and above that, we've requested 13 pieces of land from Department of Transport & Public Works in Oranjezicht, Ottery, Parow and Bellville. This is a clear indication that we take this issue seriously Madam Speaker. 

c) Prioritising the Most Vulnerable people

Madam Speaker, since 2014 we started to crack the whip on the anomaly of skewed housing allocation patterns in municipalities. There are many old and people living with disability, some on the waiting list for years, who are still waiting for houses up until today while younger people already received houses. This injustice is a serious indictment on us as government and I've come down heavily on municipalities who are responsible for housing allocation. 

This also applies to backyard dwellers, there's an incorrect assumption that this is the department of informal settlements, where backyard dwellers who have been waiting for years are treated like unwanted step children.

Beside various ad hoc interventions made by the department to accommodate people with disabilities, we have now committed to have a structured partnership with department of Social Development, Human Rights Commission and NPOs working with people with disabilities.

After the meeting I had with Human Rights Commission last week, we agreed to formalize our partnership and yesterday we had a press conference to commit to this partnership with the Department of Social Development.   

Madam Speaker, we are also making progress on our catalytic project to upgrade informal settlements near the airport along the N2, known as the Southern Corridor.

The project will have huge transformative potential for the informal settlement communities of Barcelona, Gxa Gxa, Vukuzenzele, Kanana, Kosovo, Thabo Mbeki, Tsunami, Lusaka and Europe all of which are in the Gugulethu, Nyanga and Philippi areas. The backyard dwellers in these areas will also benefit from this project. The installation of bulk and internal services is underway in Forest Village, with development approvals for Ithemba expected this year, and for the remaining areas in 2018.

We have similar catalytic projects in large informal settlements elsewhere in the province namely - George, 15 000 units are planned for the area covering Thembalethu, Syferfontein and Wilderness Heights. Construction of top structures for Thembalethu Phase 1 is underway. Phase 2 is already out for tender, with further phases at various stages of planning.  In Paarl, the appointment of all contractors is underway for the Vlakkeland project, with 2556 units planned.

Planning is also well under-way on the Trans Hex development in the Breede Valley. The development will yield over 8000 housing opportunities to improve the living conditions of informal dwellers and farm workers. In the West Coast, the Vredenburg Project in Saldahna will yield 1200 residential units.

These catalytic projects, and several others totalling 105 201 housing opportunities, are in the pipeline for completion by 2022. Madam Speaker, this is a province that values opportunity for its citizens. There is no greater demonstration of our progress in this regard, than the strides we are making in connecting citizens to each other and the world. 

Madam Speaker, given the picture I've painted above, on demand versus the available resources, it is very clear that Government alone will never be able to deal with Human Settlements challenges. We've embarked on a drive to engage all the partners in the private sector, especially the employers who have shown willingness to partner with us. The response has been overwhelming, with many employers willing to contribute with top structures for their employees if we make land available. 

This engagement was started with farmers and it has now been extended to all other sectors. On the 24th of April we will be having a summit and we will invite all the employers and private sector partners who are willing to partner with us. We have made a significant stride in this regard and I already had a number of meetings with some employers. I'm looking forward to this initiative and would like to thank all those who are willing to come on board.

 A quote from Hernando De Soto: With titles, shares and property laws, people could suddenly go beyond looking at their assets as they are — houses used for shelter — to thinking about what they could be —things like security for credit to start or expand a business.

Madam Speaker, as the Premier said during her State of the Province Address, just like rural land reform, urban land reform can be a very important empowerment tool. We are making steady progress on issuing title deeds to housing beneficiaries. There is a 59% national backlog in the transfer of ownership to housing subsidy beneficiaries. In the Western Cape we’ve brought this down to 28%.  

In total, we’ve delivered over 75 300 title deeds to beneficiaries since 2009. During this financial year, we put R41 million behind addressing the backlog, through the Human Settlements Development Grant.  A title deed represents a direct transfer of land and wealth.  It is a crucial component of land reform.

Madam Speaker, this department does not pay lip service to empowerment, at least 60 % percent of the budget was used to procure emerging contractors to develop human settlement projects throughout the province. This accounts to R1.2 billion. Every tender issued has a condition to empower emerging contractors, particularly previously disadvantaged ones. My department also created about 6000 job opportunities across the province in our Human Settlements projects. 

Madam Speaker, my Department achieved a clean audit outcome  in the last financial year while the Western Cape Housing Development Fund progressed from a qualified audit opinion to an unqualified opinion with some challenges experienced with the asset register. These misstatements/ errors are being addressed through an action plan consulted with AGSA, Provincial Treasury and the Audit Committee under the leadership of the Minister and Accounting Officer. 

My Department is committed to spend its budget of R2,5 billion on frontline services/delivery. R69million will be spent on bulk infrastructure in the non-metro municipalities to augment their MIG allocations. This funding is from excess own revenue in the 2016/17 financial year. This budget will produce about 18 000 housing opportunities. The budget for each region is as follows:

Lastly Madam Speaker,  I would like to take this opportunity to thank my team, under the leadership of Mr Mguli. Your commitment to the course under difficult conditions and abuse from communities at times is commendable, keep up the good work. 

And my office team under the leadership of Mrs Cloete, thank you for tolerating me and my demands. I could not have asked for a better team. 

I thank you.