Human Settlements Minister Lindiwe Sisulu announced that government is planning to build 1.5-million houses in the next five years and has put new initiatives in place to improve the relationship between government and the private sector, which she hopes will help fund the construction of the newly launched housing scheme.

The initiatives, which were canvassed with stakeholders at a recent indaba, include coordinated efforts to access funding, faster payments to contractors and the establishment of an ombudsman office.

The indaba sought to rekindle the momentum built in 2005 when the then the Department of Housing entered into a social compact with civil society, which subsequently resulted in setting and achieving the goal of delivering 1.2-million housing units by 2010.

A delivery budget of R29-billion was allocated to the Department of Human Settlements this year and will be increased to R34-billion in the next two years.

Under the plan, 30% of the planned 1.5-million houses would be allocated to indigent citizens, 20% to those earning between R1 500 and R10 000 a month and 20% to rental accommodation.

A further 10% would be allocated to “social housing” – heavily subsidised entry-level rental accommodation – while the remaining 20% will go to serviced sites in informal settlements.

Meeting the 1.5-million target was also vital to addressing a national backlog estimated at about 2.3-million and eradicating the 2 200 informal settlements dotted around South Africa, and which were often the sites of violent service-delivery protests.

“We want to recommit ourselves and mobilise even greater participation, because we know we cannot make it alone,” Sisulu averred.

Megaprojects Push

During the upcoming five-year roll-out phase, emphasis would also be given to megaprojects, comprising at least 10 000 housing units each. Such projects, government argued, had the advantage of scale, which created greater scope for input localisaiton and partnerships between large and emerging contractors.

Sisulu further commented that human settlements developments could potentially be “great job creators”, where the energy and talents of previously unemployed youth could be harnessed.

“We want to test the Cuban model of a youth brigade for every project so that we can deal with unemployment while we skill the youth. With all that we have been through as a country, where a house was used as part of a coercive system to subjugate the masses of our people, we can use that same instrument to provide settled communities, responsible in their obligations as citizens, and give them a stake in the economy,” she said, adding that the aim was to improve the economy of the country and create more jobs.

Human Settlements director- general Thabane Zulu added that the department had not only started to identify the criteria for realising these large-scale projects but had also accepted project proposals from the private sector.

“We have 80 proposals that we are reviewing and, once we have narrowed these projects down, we can be more specific about their size and nature, as well as where they will be implemented. They will, however, be integrated into the department’s Breaking New Ground strategy,” he commented.

The aspiration was to overshoot the delivery target, as had been achieved in the previous five-year roll-out. Under the social contract, one-million houses were planned, with 1.2-million delivered between 2009 and 2014, which translated into 240 000 units a year, 20 000 units a month and 660 units a day.

“These units were delivered despite several impediments of our own making, which included an unresponsive, slow bureaucracy and an increasing backlog,” she admitted.

Sisulu attributed the success largely to the assistance government received from the banking sector, which, through the Banking Association of South Africa, had committed more than R42-billion to the development of low-cost housing.

“For every major project, there was a bank ready to provide support, not only in the financial sense, but the banks, in fact, also geared themselves towards establishing the necessary structures to have joint implementation capacity,” she said.

Banking Association of South Africa head of human settlements Pierre Venter said the banking sector was committed to the social contract if it included all stakeholders, while Democratic Alliance human settlements spokesperson Makashule Gana said the Department of Human Settlements needed to stabilise delivery before accelerating it.

He added that, to meet the target, government would have to triple the number of houses that it completed last year. “It would be a stretch to expect the current budget allocated to human settlements to meet the 1.5-million-home target,” he noted.

Gana added that housing provision was still beset by quality issues and that agreements with contractors needed tightening to close loopholes.

“The private sector has shown an appetite to work with government, but needs to be consistently reassured of the direction government policies are taking,” he said.

Government had a master spatial plan, which would help stakeholders and all parties involved to understand the direction in which the department was going and where its future projects would be. “This will be used to ensure that, by the time we have the approved projects, the necessary bulk infrastructure and electricity have been put in place,” the Minister said.

Key Commitments
Sisulu made several further commitments on behalf of government, informing delegates that the department was creating a central national database of housing beneficiaries, based on records from the Department of Home Affairs and municipalities.

This database would replace municipal housing lists, which she believed were badly managed and susceptible to interference.

Government also committed to assisting struggling contractors in accessing finance, stating that it would restructure the development finance institutions to make them more responsive to emerging entrepreneurs.

The State would further look to access land for low-income housing and ensure that the Housing Development Agency would guide housing applicants and developers through the bureaucratic maze.

Further, Sisulu announced that a dedicated unit in the department, headed by a deputy director-general, would be established to ensure that contractors were paid on time, as the department had seen many frustrated contractors going out of business because of delays in payment.

“Should any contractor not be paid on time and the deputy director-general responsible [for these matters] not deal with it properly, his job will be given to someone else,” she cautioned.

The department will also establish several forums, overseen by members of the executive council, through which contractors and the private sector could engage with stakeholders such as the Depart- ment of Water and Sanitation, State-owned energy utility Eskom, roads agencies and affected communities.

“This is to prevent a situation in which [the contractor] is faced with financial risks prior to the project being allocated electricity or water,” Sisulu noted.

Contentions Exclusion

While Sisulu outlined government’s efforts to narrow the housing gap, she cautioned against the adoption of a sense of entitlement regarding the provision of free housing, emphasising that anyone under the age of 40 would not receive a free house.

This approach was immediately challenged by the youth-heavy Economic Freedom Fighters, which accused the African National Congress of not caring about the poor youth.

The party accused government of “intending to subject a whole generation of black young people to homelessness since they fail to provide them with quality jobs and quality education”.

But Sisulu said the criteria for allocating full-title housing units had been amended to prioritise the elderly and special groups, including military veterans, child-headed families and people with disabilities.

The housing database, or waiting list, is also being audited and adjusted to prioritise possible beneficiaries according to age, starting with the elderly and those with special needs.

The Minister added that a Committee of Ministers and all provincial MECs of Human Settlements (MINMEC) resolved in 2009 that priority had to be given to the elderly and young people, and that those under the age of 40 had to take advantage of other programmes offered by government, such as subsidised rental and social housing, as well as service-site support.

“In my Budget Speech in June 2009, I repeated a decision we took as MINMEC that our priority is the elderly, considering our limited resources, not young people,” she said.

She added that, as a nation, South Africa must be able to say that no one in the country who was older than 60 did not have decent accommodation, a priority that she believed could be achieved by 2019.