DEPARTMENT OF HOUSING by jolinmilioncherie

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									DEPARTMENT OF HOUSING
            VOTE: 29

BRIEFING TO THE SELECT COMMITTEE ON
           PUBLIC SERVICES
             09 APRIL 2003


  STRATEGIC PLAN AND BUDGET
       2003/04 TO 2005/06
               Presentation Index
1.   Aim, Vision and Mission of the Department
2.   Our Values,Our Mandate and Policy Framework
3.   Housing Legislation and Regulations
4.   Strategic overview and policy shifts
5.   Budget overview
6.   Conditional Grants
7.   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 freedoms;
  – Non-racialism and non-sexism;
  – Supremacy of the constitution and the rule of law;
  – Accountability, responsiveness and openness.
    OUR MANDATE AND POLICY
         FRAMEWORK
• SA CONSTITUTION
  – Section 26: Access to adequate housing a basic human
    right; Govt. to ensure environment conducive to the
    progressive realisation of the right
  – Schedule 4: Housing is a concurrent national and
    provincial legislative function
• Policy Framework
  – Botshabelo Housing Accord (1994)
  – (RDP) – set out framework and principles for sustainable
    development
  – Policy framework as 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
• Currently in process
   – Community Reinvestment (Housing) Bill.
   – Housing Amendment Bill
   – Social Housing Bill
 REGULATIONS AND GUIDELINES
• National Housing Code
• National Norms And Standards For Permanent
  Residential Structures
• Guidelines For Human Settlement Planning And
  Design (“Red Book”)
• Guidelines For Environmentally Efficient Low Cost
  Housing
  REGULATIONS AND GUIDELINES
• Regulations under the Housing Consumers
  Protection Measures Act, 1998 relating to the
  subsidy only sector have been drafted;
• Regulations under the Home Loan and Mortgage
  Disclosure Act. 2000 should be finalized shortly;
• Regulations under the yet to be promulgated
  Community Reinvestment Act: to be developed
  during the current MTEF.
        STRATEGIC OVERVIEW
• Housing environment since 1994 white paper
  – More than 1,47m houses have been built or under
    construction and 1,8m subsidies approved benefiting
    more than 5,6m 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
• Current  challenges             facing     the     housing
  programme
  –   Lack of private sector investment and resource constrains
  –   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.
        STRATEGIC OVERVIEW
• Current policy trends in housing programmes.
  – Housing Finance Challenges - Contributions required
    from Government, the financial sector, the NGO sector
    and ultimate beneficiaries
  – Extension of the Housing Warranty Scheme through the
    NHBRC to beneficiaries
  – More emphasis on monitoring of policy impact,
    expenditure and delivery
  – More emphasis of oversight on housing institutions
  – Promoting new and innovative building technologies
     STRATEGIC POLICY SHIFTS
• New policy approaches
  – Having achieved the target of 1 million houses the
    housing programme now has to reflect on the outcomes
    and how these can be improved – a Consolidation Phase
  – A shift in focus from “numbers of units” to quality of
    products and environments –
     • Medium density integrated housing programme and emphasis
       on PHP
     • Social housing policy and legislation
     • Rental housing
     • NHBRC warranty
     STRATEGIC POLICY SHIFTS

• Promotion of social responsibility through:
  – Own contribution to access housing subsidies and the
    NHBRC warranty scheme
  – Savings linked housing subsidy to promote a culture of
    savings
• Improving access to housing credit:
  – Community Reinvestment Legislation (CRA)
  – Home Loan Mortgage Disclosure Act, 2000
     STRATEGIC POLICY SHIFTS

• 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 and emergency housing)
     STRATEGIC POLICY SHIFTS

• 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
  – New demand led procurement regime
  – Capacity building programmes for stakeholders,
    including government and industry
      STRATEGIC POLICY SHIFTS

• 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
    LINKAGES TO GOVERNMENT
          PRIORITIES
• Housing activities are focused in the following
  Government priorities areas
  – Urban renewal
  – Integrated Sustainable Rural
    Development
  – The eradication of poverty
  – Transformation
  – Black Economic Empowerment
  – Engendering a culture of saving
                   BUDGET OVERVIEW
Programme                         2003/04 2004/05     2005/06
1 Administration                  44 850     59 063      67 128
2 Housing Policy Planning and     16 448     22 139      24 634
Research
3 Programme Management           122 104    152 477    165 437
4 Housing Sector Performance     304 871    286 252    296 446
5 Communication                   10 177     11 768      12 388
6 Housing Development Funding   4 275 039 4 502 397 4 774 204
7 Housing Equity                   5 347      5 612       5 949
Total                           4 778 836 5 039 708 5 346 186
% Change year on year               10%         5%          6%
   PRELIMANARY EXPENDITURE
           RESULT
                                                          Saving
                      Adjusted                Amount               Possible
Programmme                       Expenditure           /Underspend
                       Budget                Suspended             Rollover
                                                           ing
                        R`000      R`000       R`000          R`000         R`000
                         (1)         (2)        (3)       (4)=(1)-(2)-(3)    (5)
1: Administration       49,733      39,796                       9,937      4,000
2: Policy Planning      13,165       8,222                       4,943
3: Programme
Management             212,565     192,906                     19,659       4,000
4: Housing Sector
performance            184,469     137,935      26,677         19,857       12,500
5: Communication        10,075       5,319                      4,756
6:Housing
Development Funding   3,829,474 3,828,769                         705
Thefts and Losses            -          8                           -8
Total                  4,299,481 4,212,955       26,677         59,849      20,500
            BUDGET OVERVIEW
• Programme 1: Administration
• Purpose of this Programme is to provide
  administrative and management support services to
  the Department
• Changes in the MTEF
  – A real average increase over the MTEF at 7 %
  – Decrease from 2002/03 to 2003/04 at 16 % mainly as a
    result of the of reduction in Prof. and Special services
     • Reduced development costs of the Debtors system
     • Completion of the preparation of the Housing Funds statements
       and the transformation tenders
     • Completion of auditing and related costs for the Housing Funds
       statements for past years
 THE KEY ACTIVITIES OVER MTEF
• Provision of Strategic Financial Management
  Services
• Provision of Human Resources Management
  Services
• Provision of General Corporate Services to ensure
  corporate efficiently
• Provision of strategic support services for the
  Minister and Accounting Officer
• Implementation of toll free number to address public
  enquiries and as anti-corruption initiative
• Implementation of the transformation imperatives
            BUDGET OVERVIEW
• Programme 2: Policy Planning and Research
• Purpose of this Programme is to ensure a sound
  national housing policy framework
• Changes in the MTEF
  – Effect of restructuring, function shift and reprioritization
    resulted in increase of 20 % between 2002/03 and
    2003/04
  – Addition of the Research Chief Directorate and
    Framework Legislation projects
    KEY ACTIVITIES OVER MTEF

• Drafting of new legislation
  – Community Reinvestment Bill
  – Social Housing Bill
• Amendments to current legislation
  – Rental Housing Amendment Bill
  – Housing Consumers Protection Measures
  – Prevention of Illegal Eviction from and unlawful
    Occupation of Land Amendment Bill (PIE)
• Drafting of Regulation under HLAMDA, CRA, and
  Social Housing Act
    KEY ACTIVITIES OVER MTEF
• Audit of all legislation impacting on housing
• Outreach programme to provincial departments and
  local authorities for training and monitoring of
  implementation of legislation
• Development of emergency relief housing
• Development of Medium Density Housing policy
• Development of CR Policy
• Produce policy paper on Environmentally sound and
  efficient Housing
• Produce report on child headed households and
  housing
           BUDGET OVERVIEW
• Programme 3: Programme Management
• Purpose of this Programme is to manage national
  housing programmes
• Changes in the MTEF
  – Mainly dominated by transfer payments: 90%
  – Major Reduction from 2002/03 to 200304 on the Job
    Summit Project no more funding after 2002/03
  – Major increase conditional grant Human Settlement
    Redevelopment Programme
     • From 2003/04 :R109m; 2004/05: R116m and 2005/06: R122m
  – Fairly stable over the MTEF period
  – Experiencing staffing capacity problems
    KEY ACTIVITIES OVER MTEF
• Implementation of the Human Settlement Redev.
  Programme and the Presidential Pilot programme
• Promotion of Improved Traditional Building
  methods and technology
• Management of the Phasing Out programme
• Produce guidelines and report on the possible
  extension of the Warranty cover to PHP
• Produce report on outcome and lessons from
  implementation of the Presidential Pilot programme
• Development of housing education and training
  programme and professionalisation of the Housing
  sector
             BUDGET OVERVIEW
• Programme 4: Housing Sector Performance
• Programme is to monitor and assess the impact of
  housing delivery, manage housing information, and
  support housing institutions
• Changes in the MTEF
  – Mainly transfer payments: 92%
  – Increase from 2002/03 to 2003/04 by 42%
     • Mainly as a result of increases in SAHT liabilities allocation to
       be transferred to National Treasury upon of finalization of the
       disestablishment of the SAHT
    KEY ACTIVITIES OVER MTEF
• Monitoring the implementation of housing policy &
  programmes
• Monitoring the performance of Housing Support
  Institutions
• Impact assessment of implemented policy and
  programmes
• Monitor identified economic and financial variables
  as well as Construction Industry trends & reciprocal
  impacts
• Maintenance of Housing information systems.
               BUDGET OVERVIEW
• Programme 5: Communication
• Purpose of this Programme is to facilitate and promote the
  free flow of information between the Department and its
  stakeholders
• Changes in the MTEF
   – Currently experiencing major staffing capacity constraints and it is
     planned to increase staffing levels to reach 85 % by the end of the
     first quarter of 2003/04
   – Increases by an average of 7% over the MTEF period
   – Various ministerial programmes
       • National Housing Awards
       • Rand show Exhibitions
   – Staffing problems being resolved
    KEY ACTIVITIES OVER MTEF
• Dissemination of information to stakeholder and
  facilitate feedback
• Development and maintenance of a communication
  strategy in support of housing programme
• Production of publications on targeted basis
• Consumer awareness campaigns
           BUDGET OVERVIEW
• Programme 6: Housing Development Funding
  – Purpose of this Programme is to manage the funding of
    national housing programmes
  – Consist mainly of Transfer payments to provinces in
    terms of DORA as conditional grants and repayment of
    loans raised by the old Housing Boards.
• Key Activities Over MTEF
  – Management of the grants transfer to provinces
  – Monitoring of financial performance for compliance with
    DORA & PFM Act.
  – Reporting of grants performance to NT, AO and Minister
    (MINMEC)
             BUDGET OVERVIEW
• Programme 7:Housing Equity
• To promote fair lending practices by banking institutions,
  and provide for setting and enforcing specific minimum
  targets by financial institutions in lending to the low and
  medium income level households for housing purposes.
• Take responsibility for implementing the Home Loans and
  Mortgage Disclosure Act (63 of 2000) (HLAMDA), its
  regulations and the Community Reinvestment Bill when the
  latter comes into operation.
• Funding provides for setup costs
           CONDITIONAL GRANTS

Housing administers two conditional grants:

     Housing Subsidy Grant [included in Programme
      6]
     Human Settlement redevelopment Grant
      [included in Programme 3]
         PURPOSE OF GRANTS
• Housing Subsidy grant: is to finance housing
  subsidies under the national housing
  programme
• Human Settlement Redevelopment Grant:
 is to fund projects which are meant to improve the
 quality of urban environment by addressing the
 legacy of dysfunctionality
          HOUSING SUBSIDY GRANT
   Past performance
       Since 1994 – more than 1,47m houses have been built or
        under construction and 1,8m subsidies approved
        benefiting more than 5,6m (8m people by the end of the
        MTEF)
       Subsidies approved in the last 3 years average 235 540
        p.a.
       Housing units delivered last 3 years average 197 520 p.a.
       It is estimated that the programme has maintained
        average of 350 000 Direct jobs and 325 000 indirect jobs
  HOUSING SUBSIDY GRANT ( CONT.)

• To date the programme has achieved a 61 % to
  39 % split in allocation between male and
  female headed households

• Since 1994 the programme represents an
  investment R21,309bn by December 2002 into
  low income communities
HOUSING SUBSIDY GRANT ( CONT.)
– Experiencing slowdown in delivery in the past 2
  years resulting in average of 15% under spending
  due to the following reasons:
  • Transformation/restructuring since 2000 elections and capacity
    of some Local Authorities
  • Delaying effects of the Environmental Impact Assessment
    processes
  • Land transfer issues
  • Local Government: Municipal Systems Act, No. 32 of 2000
    which has been resolved
  • Delayed finalization of outstanding issues relating to Job
    Summit Projects – which has since also been resolved
  • Deposits to be made by beneficiary towards the warranty of
    their properties
 HOUSING SUBSIDY GRANT(CONT.)
• Currently the Department is undertaking a
  Capacity requirement analysis for a new
  strategy for capacity building processes to
  address the capacity problems at local
  governments for housing delivery
• The grant provides for funding of emergency
  housing in accordance with the Grootboom
  Case Constitutional Court Judgment at 0.5%
  to 0.75% of allocations
PROVINCIAL ALLOCATIONS (SAHF)
                           MTEF
    Province    2003/04   2004/05    2005/06
                 R'000     R'000      R'000
Eastern Cape     641,757   598,900     635,288
Free State       325,403   385,641     409,072
Gauteng          923,892 1,117,463   1,185,358
Kwazulu-Natal    796,390   748,462     793,937
Mpumalanga       275,408   296,457     314,470
Northern Cape     85,973    89,442      94,877
Limpopo          426,160   369,818     392,287
North West       347,974   421,378     446,981
Western Cape     423,282   446,035     473,136
TOTALS          4,246,239 4,473,596 4,745,406
PRELIMANARY EXPENDITURE RESULT

Conditional Grant: Housing Subsidy Grant
                    Original
                                   In Year     Total   Provincial Possible
      Province       Voted
                                 Allocations Available Spending Rollovers
                    Amount
                     R'000         R'000       R'000       R'000     R'000
                       (1)           (2)     (3)=(1)+(2)    (4)    (5)= (3)-(4)
 Eastern Cape         571,485       356,573   928,058   465,040   463,018
 Free State           283,097       185,484   468,581   191,497   277,084
 Gauteng              801,940       261,078 1,063,018 1,037,901     25,117
 KwaZulu-Natal        708,759       153,653   862,412   754,672   107,740
 Mpumalanga           242,038       105,508   347,546   269,241     78,305
 Northern Cape         75,809         1,288    77,097    69,325      7,772
 Limpopo Province     381,767         6,228   387,995   404,024    -16,029
 North West           302,001        17,287   319,288   221,682     97,606
 Western Cape         372,778         6,082   378,860   348,182     30,678
 Unallocated                 -            -         -         -          -
Total               3,739,674     1,093,181 4,832,855 3,761,564 1,071,291
HOUSING ALLOCATION FORMULA

   Background information to the formula used
       2002/03 allocates funds as a combination of the
        old formula that was rural/urban neutral and the
        current formula that is urban biased in order to
        phase in the new formula by 2004/05
       As from 2004/05 the new formula is expected
        to have been phased in completely
       Use is made of the statistics from Stats-SA as
        updated by the October survey
  HOUSING ALLOCATION FORMULA

• The formula format is weighting in order of
  priority of the elements as defined above
• A = HN(50%) + HH (30%) + P (20%), where
        A= ALLOCATION
        HN= HOUSING NEED
        HH= HOUSEHOLDS EARNING LESS
          THAN R3 500 PER MONTH
        P = POPULATION
  HOUSING ALLOCATION FORMULA
• HOUSING NEED USED IN THE FORMULA IS
  DEFINED ON A WEIGHTED FORMULA THAT
  TAKE INTO ACCOUNT THE FOLLOWING :
  HN = HL(1.25) + SE(1.2) + SBY(1.0) + TC( 1.0)
    +FR(0.5) WHERE
  HN = HOUSING NEED
  HL = HOMELESS PEOPLE
  SE = SHACKS ELSEWHERE
  SBY= SHACKS IN BACKYARDS
  TC = TENTS AND CARAVANS
  FR = FLAT/ROOMS ON SHARED PROPERTY
       HUMAN SETTLEMENT REDEV.
             PROGRAMME
• Introduced in 1999/2000 as pilot programme started very
  slowly at R20m p.a. and grew to current levels of over
  R100m.
• Addresses dysfunctionalities in Human Settlements
• Expected to accelerate delivery as guidelines are developed
  taking into account experiences learnt in the last two years.
• Currently there are 123 projects approved throughout 9
  provinces on a multi year basis with a gross commitment
  value of R302m
• 29 projects targeted to the Presidential Urban Renewal and
  Integrated Sustainable Rural Development Nodes.
• Current allocations are 2003/04 – R109m; 2004/05 –
  R116m; 2005/06 – R122m .
PROVINCIAL ALLOCATION (HSRDP)
                            MTEF
    Province    2003/04    2004/05    2005/06
                 R'000      R'000      R'000
Eastern Cape      11,000     11,660     16,396
Free State         8,500      9,010     10,558
Gauteng           21,000     22,260     30,592
Kwazulu-Natal     26,000     27,560     20,490
Mpumalanga         7,000      7,420      8,116
Northern Cape      3,000      3,180      2,449
Limpopo           11,000     11,660     10,124
North West         8,000      8,480     11,536
Western Cape      13,500     14,310     12,211
TOTALS          109,000    115,540    122,472
PRELIMANARY EXPENDITURE RESULT
 Conditional Grant: Human Settlement Redevelopment
 Programme (HSRDP)
                     Original
                                   In Year     Total   Provincial Possible
       Province       Voted
                                 Allocations Available Spending Rollovers
                     Amount
                      R'000        R'000        R'000       R'000       R'000
                        (1)          (2)      (3)=(1)+(2)    (4)      (5)= (3)-(4)
  Eastern Cape         10,000           198      10,198      10,198             -
  Free State            7,500           114       7,614       7,614             -
  Gauteng              23,000           448      23,448      23,448             -
  KwaZulu-Natal        25,000           486      25,486      25,486             -
  Mpumalanga            6,000           120       6,120       6,120             -
  Northern Cape         2,500            47       2,547       2,547             -
  Limpopo Province     11,000           217      11,217      11,217             -
  North West            6,000           120       6,120       6,120             -
  Western Cape         13,000           250      13,250      13,250             -
  Unallocated                -            -           -           -             -
 Total                104,000         2,000     106,000     106,000             -
   MONITORING MECHANISMS
• Monitoring is performed in accordance with requirements of
  the DORA on a monthly basis
• The Department has developed specific and targeted
  monitoring frameworks for monitoring the grants
• Project performance reports are used to determine project
  that are stalling and underlying reasons
• Department has installed a Transversal Information
  Management system which is being rolled out to provinces
  (HSS)
• Provincial reports are presented to MinMec, H.O.D
  meetings on a quarterly basis
• Structured Quarterly Provincial visits take place targeting
  especially provinces that show low expenditure
                   Conclusion

• Need to improve access to housing credit by the low
  income group
• Need to address dysfunctional secondary low cost
  housing market
• Improve governance – non-adherence to prescripts –
  Corruption Investigating capacity
• Improvement in information to beneficiaries – lack
  of adequate communication
                   Conclusion

• Addressing unresolved housing land issues
• Implementation of new policy regimes eg.
  Procurement regime, own contribution, phasing out
  programme.
• Housing backlog
• Improvement in delivery capacity
Thank You

								
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