beyond borders housing issues : south africa chra achru congress ismail khatib may 2013
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BEYOND BORDERS
HOUSING ISSUES : SOUTH AFRICA
CHRA ACHRU CONGRESS
Ismail Khatib
May 2013
BACKGROUND
Pre 1994
Housing segregated along racial lines
Apartheid SA declared areas based on racial category
Residents (mainly black) cleared of land
Relocated to townships – distance
Commute to work - costly
RACIAL CONCENTRATION
BACKGROUND
TownshipsVery basic shelterOne room shackNo servicesNo policingHostels Communal, males onlyFamilies remain in rural areas
POST 1994
Housing backlog estimated at 1.2mExplosive growth – shacksNear urban areasLate 1990’s – 250 000 units required pa±1000 units per dayActual 25 000 units paSerious housing shortage
POST 1994
Housing is a Human RightMost critical factor for quality of life – adequate housingMajor policy shiftsHousing, sanitation, electrification, basic servicesUrban sprawl
POST 1994
Reconstruction & Development
Program
10 million access to clean water
1.75 million homes electrification
3 million sanitation
2.4 million RDP homes
GOVERNMENT PROGRAMS
Eradication of shacksRDPCommunity Residential Units (CRU)Social HousingHostel UpgradeGAP HousingOther
MEDIUM TERM PLAN
Major service delivery challenges12 point planOutcome 8 – HousingSustainable human settlementsImproved quality of lifeShort to medium term – 4 years
MEDIUM TERM PLAN
Upgrade 400 000 informal settlement unitsImprove access to basic services80 000 affordable social and rental housing unitsHousing finance for 600 000 household with GAP market for purchaseReleasing public land for housing
SOCIAL HOUSING
Started 1995Institutional SubsidyOnly for income < $440/moDevelopment cost low allowed for projects in earlier yearsPeriod of stagnation – policy vacuum2007 – New Social Housing PolicyFormation of Regulatory Authority (SHRA)
SH BACKGROUNDProvision well located rental housing stock:• Affordable income R1500 – R7500 per month
To spatially restructure ‘apartheid’ cities • Restructuring Zones within Municipalities• Providing low and moderate income
households with access to socio economic resources of the city
Governed by Social Housing Act 2008, linked regulations and SH policy
KEY ELEMENTS OF SH ACTSocial Housing Regulatory Authority (SHRA)• Accredit and regulate SHI and regulate the sector• Allocate the Restructuring Capital Grant (RCG)
Restructuring Capital Grant• Capital subsidy on development of SH – National allocation• Linked with Institutional subsidy (capital subsidy from Province)• Only awarded to projects in RZs that meet the social housing
criteria
Social Housing Institutions – SHI• Non profit companies to facilitate the development and manage
stock• Often also have strong community development component
KEY ELEMENTS OF SH ACT
Accredited projects• Projects that are approved for RCG financing meeting
regulatory requirements• Usually part of SHI programme• Can be allocated to non SHIs
Example of Financial structuring:• Average cost of 42m2 unit ± $42,500 • Restructuring Capital Grant ± $15,700• Institutional Subsidy around ± $11,250• Loan finance and or equity ± $15,550
KEY RESPONSIBILITIES OF SHIs
Land and development• Own or lease land or buildings• Facilitate development or act as developer• Raise and mange the capital finance
Management • Allocation• Rent setting, collection and arrears management• Tenancy management• Maintenance• Reactive and planned
Community and neighbourhood development (some SHIs)
GOVERNMENT FUNDING
Outcome 8 – 24 000 units 2011 - 2014
MTEF Commitments
Grant increased• $112,5m 2013 – Est. 6700 units• R150.0m 2014 - Est. 8100 units
$ m 2013 2014 2015 2016 2017 Total
Grant 73.0 85.0 89.0 94.0 99.0 440.0
STATE OF SECTOR
Presently estimated 33,000 units• 80% in 4 metros (Jhb, Ethekweni, Cape Town and Buffalo City)
Estimated 132,000 people housed
Replacement value estimated $1.20bn
Estimated 32 functioning SHIs• 8 Fully accredited• 14 conditionally accredited • Remainder Pre Accredited
STATE OF SECTOR
30% of tenants below $440/mo income70% between $440 to $940/mo income
Rental range $100/mo to $275/mo • Mean $200/mo
Rental collection average 80%• 6 SHIs with 95%+ collections
Rental boycotts – some SHI’sReasonable reactive repairs but poor record on planned and preventive maintenance
KEY SECTOR ISSUES
Growing Government Commitment • Increased capital investment• Funding for SH from $15 million in 2006/7 to over
$120 million in 2013/4
Insufficient management capacity within the sector• Required caps development strategy• Financing of caps development
Danger of spatial drift of projects • lack of affordable well located land and buildings• Issue of government land for SH
Need to increase municipal engagement with SHIs
KEY SECTOR ISSUES
Greater flexibility in financing mechanisms • Not only single project based• Not only capital subsidy grant but other alternatives
Rapid increase in Municipal and Utility charges affecting affordabilityLack of well priced loan financeStrategy and approach to ‘Greening of Social Housing’ Upward creep in beneficiary incomeOwnership aspirations
NASHO
National Association of SH OrganisationsFounded in 2003Support resource to SHI’sLobbyingCapacity BuildingStrengthen SH sector
FIRST METRO
SH Company, PBO Established 19981200 units under management1600 units under construction2300 units under acquisitionGAP HousingAssistance to outlying municipalities
FM PROJECTSLakehaven Estate
Hawaii
SH PROJECTSEmerald Sky, East London
SH PROJECTSWalmer Link, Port Elizabeth
SH PROJECTS
Steenberg, Cape TownCarr Gardens Johannesburg
CHALLENGESHousing Shortage – 2.1m30% live in informal dwellings (Urban)Delivery challengesCapacity limitationsSocio economic climateNon payment / rental BoycottsHIV / Aids, Child headed households
CHALLENGES
Illegal immigrants (between 5.0m to 8.0m)
Construction CPI 11%Policy lagLimited Debt fundingBanks conservative to fundingCost of Municipal Services
Thank You
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