presentation to the portfolio committee on human settlements

Presentation to the Portfolio Committee

on Human Settlements

March 24, 2010--------------------------------------

Submission to the Division of Revenue with respect to housing from 2005 - 2009

Financial and Fiscal Commission


Outline of Submission

Introduction and context of FFC recommendationsIntroduction and context of FFC recommendations Recommendations and government’s responseRecommendations and government’s response

PolicyPolicy Funding; andFunding; and InstitutionalInstitutional

Question for the CommitteeQuestion for the Committee


Introduction and context of FFC’s recommendations

The delivery of housing should be done in an integrated approach and in a sustainable manner Housing delivery in SA is predominantly through RDP

housingFFC is of the view that this kind of housing delivery in not

sustainable in its current form as it does not consider issues such densification

Without an integrated approach the delivery of housing can give rise to a number of problems including the issue of unfunded mandate for municipalities

This requires the delivery of human settlements to be looked at within the broader context of the built environmentThere is a need to look beyond housing, to also consider issues such as

densification as well as transport issues


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These issues are more important given the increasing demand for housing, scarcity of suitable land and limited funding especially in metros and other major cities

Important question to ask – on the current system including the current institutional arrangements, funding and policy framework

The FFC’s previous work has revealed that the current institutional arrangements, funding and some of the policy issues relating to the delivery of housing have to be reviewed

As a result, the FFC has made a number of recommendations pertaining to policy (especially accreditation of municipalities based on their capacities to administer housing programmes), funding and institutional issues over the past years


Policy recommendations and Government response

Recommendation Government response FFC views

Accreditation of municipalities where capacity exists

Accepted There are some positive developments

Government should consider the funding implications of any further policy changes, for example higher building standards

Accepted

Delivery of housing should not result in communities living in areas where there is neither supporting infrastructure nor economic opportunities

Accepted


Continue…Recommendation Government response FFC views

The FFC reiterates its previous The FFC reiterates its previous recommendation that the recommendation that the accreditation of municipalities accreditation of municipalities with adequate capacity should be with adequate capacity should be accelerated. This is in line with:accelerated. This is in line with:The framework provision of the The framework provision of the IHHSD grant contained in the IHHSD grant contained in the DoRA for 2008; andDoRA for 2008; andThe Housing Act of 1997The Housing Act of 1997

No indicationThe government is reviewing the powers and functions of provinces and local government.

The government did not respond at all.

However, the has been an accreditation panel established by the NDoHS last year and with this panel progress is expected.

Funding gap should be avoided, particularly in municipalities with weaker fiscal capacity

Accepted


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Recommendation Government Response FFC views

Monitoring compliance to minimum quality standards should be enhanced as poor quality implies additional costs in the future

Accepted

Relaxation and flexibility onEligibility criteria for accessing SHRCG to allow projects falling outside the zones to access funding;Number of DRZs to respond to excess demand for rental housing;Minimum unit size for redevelopments of existing buildings

No direct response


Recommendations and responses on funding issues

Recommendation Government Response

FFC views

Funding gap should be avoided, particularly in municipalities with weaker fiscal capacity

Accepted

A sustainable financial framework for rental housing should be developed

Accepted Rental housing has been again reviewed in 2009


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Considerations should be given to link new housing subsidies with MIG and local equitable share (LES) formula to ensure that the LES allocations keep pace with the installation of new housing infrastructure among other things

Accepted with something to note:MIG does not only target new housing; and MIG and equitable share are pro-poor, linking them in new subsidies would have a regressive element especially on poor municipalities with lesser housing demand

At least this must be done for new housing developments.


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The housing subsidy formula should, as much as possible, use variables that take into account provincial disabilities and peculiarities. Factors like traditional housing, delivery capacity should be taken into account

Not accepted. Reason:Factoring delivery capacity in the formula would have unintended consequences for equity.

While the FFC agrees with what the government has raised. The government should also make sure the NDoHS and Provincial Departments are capacitating municipalities as per requirements of the Housing Act


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Differential costs of meeting minimum housing standards across provinces should be recognized

Not accepted. Reason:It would be difficult to accurately determine variations, since costs vary between and within provinces.

It is true that the costs between and within provinces may differ but such differences within the province cannot vary too much.

The FFC recommended that a process for collection of data on homelessness be initiated and be included as part of the indicators in the housing formula.

Accepted


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The qualifying income The qualifying income bands should be bands should be reviewed to ensure that reviewed to ensure that individuals are not individuals are not unfairly excluded from unfairly excluded from benefiting from the benefiting from the subsidysubsidyDue to increases in the cost Due to increases in the cost of livingof living

No Response


Recommendations – Institutional issues

Recommendation Government Response FFC views

Government should address housing bottlenecks to reduce under spending in provinces

Accepted

The process of disbursing funds be made shorter, to minimise time lags

No response

The Social Housing Regulatory authority should improve coordination between various government departments responsible for integrated human settlements

National government should ensure that national departments are aligned to enable development of rental housing

FFC believes that the SHRA itself could represent government in the sector


Question

Which areas would this committee highlight as key areas within the sector where FFC could add value.


Thank you Thank you

presentation to the portfolio committee on human settlements

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