Human Settlements Budget Vote Speech

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

Madam Speaker or Deputy Speaker 

Madam Premier 

Leader of the Official Opposition                                                                                   

Cabinet Colleagues 

Honourable Members 

Mayors, Deputy Mayors, Human Settlements MMC’s, Executive Councillors, Chairpersons and CEOs of our Human Settlements entities, all the service providers, NGOs and all our partners, stakeholders in Human Settlements, ladies and gentlemen.

It’s been a privilege to serve you and to serve with you since Premier Zille appointed me as the Minister of Human Settlements ten years ago. It’s been a very challenging but yet a fulfilling journey with many lessons learnt. 

Madam Speaker, the mandate of this Department is derived from Chapter 2 of our Constitution, The Bill of Rights. 

Section 26, subsection 1 and 2 of The Constitution states that “everyone has the right  to have access to adequate housing” and that the “state must take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of this right”.

In Government of the Republic of South Africa v Grootboom the Constitutional Court interpreted the right to have access to adequate housing as follows:

“Housing entails more than bricks and mortar. It requires available land, appropriate services such as the provision of water and the removal of sewage and the financing of all these, including the building of the house itself. For a person to have access to adequate housing all of these conditions need to be met: there must be land, there must be services, and there must be a dwelling. The right of access to adequate housing also suggests that it is not only the State that is responsible for the provision of houses, but that other agents within society, including individuals themselves, must be enabled by legislative and other measures to provide housing”. 

Madam Speaker, in 1994, the housing backlog in South Africa stood at an estimated 1.5 million households. Since then, almost 5 million houses have been built, but the current backlog is estimated at 2.2 million households. This clearly indicates that our current approach and criteria to provide homes is not making an impact in reducing the housing backlog but perpetuating the old apartheid spatial planning. 

Paradigm shift 

In order to make an impact in housing delivery, we need a paradigm shift:

1. We need to accelerate the provision of land - we need to go back to basics by investing in infrastructure like bulk services, subdivide the land and transfer it to people. This will galvanize people to come together and save towards the construction of their own houses. We have a very strong saving culture in South Africa, generating more than R45 billion in the informal sector. Area’s like Makhaza in Khayelitsha and KwaZakhele in Port Elizabeth were built using this approach. 

1. A full subsidy must prioritise elderly and disabled people - we need to finalise the institutional arrangements with the Department of Social Development and Heath in order to ensure that these vulnerable people of our society are provided with the necessary care after the construction of shelter.

1. We need to accelerate the upgrading of informal settlements - many people who live in informal settlements come from decent homes and not necessarily in need of free houses. They build these shacks closer to economic opportunities or decided to move out from overcrowded family homes. We need to provide basic services like roads, water, sanitation and electricity in order to improve their living conditions. 

1. We need to unlock the housing economy - since 1994 we’ve always looked at housing provision by government as some kind of social intervention, that mindset needs to change. We must also look at housing as an economic lever that contributes massively to the property market in South Africa which is currently worth R6 trillion. Instead of discouraging people from selling or letting their houses, we need to educate them how to do it properly. It is very clear that the preemptive right clause that prohibits people from selling their houses before eight years is not working, and quite frankly, I don’t agree with it because it locks people into perpetual poverty and the intended consequences are costly. 

1. We need to accelerate the use of alternative building technologies - climate change is a reality that requires us, as government, to think and do things differently. The recent drought was a huge wake up call, the weather pattern is changing. We need to build resilient houses that will be cooler in summer and warmer in winter without relying on electricity because energy security is in serious jeopardy due Eskom’s inability to provide electricity. 

1. Densification – the Western Cape is currently experiencing a massive population growth. According to Community Survey conducted by Stats SA, our population grew by about 2 million in just 15 years, between 2002 and 2017. We therefore need to use well located land wisely and optimally. There are people who still believe that they have a choice between a free standing house with a big plot, and a unit in a five story development, we don’t have that luxury anymore. People can only exercise that choice if they decide to buy their own homes, but with limited resources like land we have no choice but to densify. 

Madam Speaker, these are bold steps that we need to take to change the way we do things in housing if we are to succeed. Let me turn to our successes in the last 10 years and also report on current and future projects:

Madam Speaker, between 2014-2019 we focused on three strategic goals, namely;

1. Prioritisation of the most deserving people in the allocation of BNG houses 

2. Upgrading of Informal Settlements 

3. Acceleration of housing opportunities for GAP housing beneficiaries 

1. BNG houses or housing opportunities 

Since 2009, almost 213 000 housing opportunities were created. Whilst this achievement is not enough, it is by no means a mean feat. It is an achievement worth noting and celebrating as it translates into approximately 850 000 households’ lives having been changed for the better. 

Madam Speaker, since 1994 we’ve been dotting the landscape building a string of houses without an emphasis on property ownership. Since 2009, we have changed that in the Western Cape. Over 103 000 title deeds were delivered and we continue to do that on a regular basis as part of our contribution to land reform. Title deeds restoration is now part of the National Department’s strategic goals and the Department of Human Settlements in the Western Cape has outperformed all other provinces sitting at 72%.

Madam Speaker, my Department has since 2009 made an investment of almost R20 billion into the construction and real estate sector. This investment has gone a long way in achieving our three main goals: to house people, to create jobs and empower previously disadvantaged individuals as emerging contractors. We have created 11 500 jobs and over 60% of my budget goes to emerging contractors. 

1. Upgrading of informal settlements

Despite our success in housing delivery, the rate of informal settlements has been increasing as well - there are currently over 503 informal settlements in the Western Cape. There’s a huge misperception about informal settlements in South Africa and why they exist. It is not true that all informal settlements are an indication of housing need or poverty, in fact in some cases mushrooming of informal settlements is an indication of work opportunities in that particular area. 

There are three main drivers of informal settlements: 

1. Young people who are tired of living with their parents and therefore need their independence.

1. Many people who are employed but do not qualify for a free house and also do not qualify for a full mortgage from the bank.

1. Some people leave their decent homes and build make-shift structures in order to be closer to employment opportunities, or else referred to as urbanization, which is a big challenge in Gauteng and Western Cape. 

That’s why it’s a pipe dream to think that Government on its own can ever eradicate informal settlements, our job is to make sure that people have the necessary and required services like water, sanitation, electricity, refuse removal and access roads. Guided by the Informal Settlement Support Plan approved by the department, and taking into account the dynamics and the distinctiveness of individual informal settlements, pro-active measures have been embarked upon to ensure that the challenges encountered are fully mitigated. Amongst such measures is the assignment and appointment of NGOs and Professional Service Providers to each identified informal settlement. 

These NGOs are to serve as the intermediaries in the communities and support the department to plan and execute the upgrading of the informal settlement. These NGOs are providing assistance to the informal settlement dwellers with regard to participatory planning, social facilitation and mobilisation.

1. Acceleration of opportunities for GAP Housing beneficiaries 

Madam Speaker, there’s a huge gap in our housing policy, many hard working South Africans who are contributing to the fiscus in order for us to be able to provide free services like houses to those who qualify are getting a raw deal. Under our Financed Linked Individual Subsidy Program (FLISP), people are struggling to qualify because of a prerequisite to get approval from the bank. This must change because many of the people I’m talking about are heavily indebted. We need to change the policy under this program so that people can be assisted before getting approval from the bank. 

Furthermore, Honourable Speaker, the Department introduced a Housing Consumer Credit Readiness Initiative. The intention of this Initiative is to effectively rehabilitate those consumers who are unable to access bank finance due to impaired credit records.

Consumer education on homeownership and housing finance are thus critical components of the initiative. More interactions and community dialogues are planned in the year ahead to engage and educate potential beneficiaries on responsible homeownership, home maintenance and housing programmes. We are also rolling out the provision of serviced sites so that they can save towards building their own homes.

Madam Speaker, the audit outcome is an indication of how well you are spending taxpayers’ money, and is very important if you want to attract investors and create jobs. Since 2009, my Department received five unqualified audits and four clean audits - which means we can account for every cent spent in the last ten years. The Western Cape Housing Development Fund received clean audits for two consecutive years, and we are now de-establishing it.

Delivery to date

 Madam Speaker, we are on track to achieve the targets we set ourselves for this financial year. We committed ourselves to deliver 18 160 housing opportunities.

Current and future projects 

Delivering Catalytic and Provincial Priority Projects

Honourable Speaker, in my previous budget speech I indicated that our delivery approach now includes mega projects of integrated housing, catering for different incomes and needs. Through these initiatives, (i.e. Catalytic and Provincial Priority Projects) with a potential to yield 144 798 housing opportunities, we are contributing to urban regeneration and even developing new towns. These mixed development projects include houses for the indigent, gap housing, rental units, social housing and serviced stands. This will ensure integration of different income groups. Madam Speaker, I am pleased to report that these projects are at different stages of construction and planning. 

To date, the Southern Corridor Integrated Human Settlement Programme: -  a joint initiative with the City of Cape Town, to upgrade informal settlements near the airport along the N2, which includes Barcelona, Gxa Gxa, Vukuzenzela, Kanana, Kosovo, Thabo Mbeki, Tsunami, Lusaka, and Europe, all of which are in the Gugulethu, Nyanga and Philippi areas, is to provide 51 540 housing opportunities, with priority backyarders in these areas also benefitting, is making good progress,  as are the infill sites of the Airport Precinct and Kosovo infill sites such as Luyolo, Gxa Gxa, Tambo Square, New Rest  and Lusaka, Penhill, Ithemba and New Woodlands are commencing with construction as contracts have been awarded.

Belhar CBD: an initiative in the City of Cape Town to provide mixed use high density and different income level residences, which will yield 4 188 housing opportunities, is currently at different stages of construction. This project has 1000 FLISP units, of which 755 units are 60% complete, and the remainder of 245 are complete.

Greater Retreat: - a project aimed at catering for the residents in the areas of Plumstead (Ward 62), Ottery and Ferness Estate (Ward 63), Lotus River (Ward 65), Parkwood and Ottery East (Ward 66), Seawinds and Vrygrond (Ward 67), Lavender Hill and Steenberg (Ward 68), Retreat (Ward 72), Grassy Park and Cafda (Ward 110). To this effect, pockets of land of approximately 279 hectares has been identified for purposes of development and implementation of the project. The Department has commenced with planning and designs on the properties owned by the department and provincial government. When completed the project will yield 7 500 opportunities.

Dunoon: Killarney Gardens: - this project is to cater for residents in the area of Du Noon and adjacent areas.  Land of approximately 17 hectares has been identified and purchased in Killarney Gardens for the development and implementation of this project which will be mixed income, mixed use and different tenure. Planning and designs are currently in progress and, when completed, this project will yield approximately 11 000 opportunities.

Hout Bay: - this project is to cater for residents in the Hout Bay area of Imizamo Yethu. Land of approximately 7.9 hectares has been identified and secured in this regard. When completed the project will yield 1 400 opportunities and will be mixed income, mixed use and different tenure. Planning and designs are currently in progress.

Bokaap, Oranjezicht and Inner-City infills: this project is to cater for residents in the areas of Bo-Kaap, Oranjezicht, Tamboerskloof and Central Business. Various pockets of land of approximately 8.4 hectares have been identified and secured in this regard. When completed the project will yield 10 000 opportunities, which will be for mixed income, mixed use and different tenure and will be of extra ordinary high density.

Leonsdale: a project aimed at catering for residents in the Leonsdale/Goodwood area. Land of approximately 10.8 hectares has been identified and secured in this regard. A professional team has been appointed and planning and designs are underway. When completed the project will yield approximately 2 000 opportunities.

Scottsdene: of which 336 are FLISP units which are 80% complete, will yield 668 opportunities when completed.

The Conradie Better Living Model project has been awarded to the developer who will commence with full construction during the course of this calendar year. When completed the project will yield 3000 housing opportunities.

In Taiwan and YB Section: a full professional team has been appointed and has commenced with the planning and design phase. The first major deliverable is the conceptual development framework which will be presented to the department in April 2019. The project will yield approximately 5 000 housing opportunities and will also cater for a range of beneficiaries in line with the different housing programmes. Social Development Facilitators have been appointed as part of the Project Steering Committee (PSC) and will complete the enumeration study.

Vlakkeland: an initiative in the Drakenstein Municipality, which will yield 2 653 housing opportunities, is now in full construction and near completion. Dal Josafat in Paarl which, when completed, will yield 2 078 opportunities. Ceres’ Vredebest/Bella Vista project will yield 3 417 opportunities when completed. Honourable members, we are also well on course as we are in the planning phase with regard to De Novo which will yield 300 opportunities.

Honourable members, equally, Grabouw which will yield 8 000 opportunities is in full construction.

Transhex: - This is an initiative in the Breede Valley Municipality, which will yield 8 873 housing opportunities. Currently underway is the construction of bulk and internal services, with construction of top structures to commence soon as the tender has been awarded to a service provider that will incorporate alternative building technology. 

Thembalethu, Syferfontein and Wilderness Heights: - initiatives in George in the Garden Route region will yield 10 281 housing opportunities and are currently at different stages of planning and construction.

In Louis Fourie, which will yield 4 000 opportunities, tenders have been awarded and construction is to commence soon.

With regard to Vredenburg Urban Regeneration, we have concluded the process of purchasing the land and the municipality has been provided with the necessary finances to commence with the designs. When completed it will yield 1 400 opportunities

Greater Hermanus: - a project aimed at catering for residents in the Overstrand Municipality, which includes the areas of Hermanus, Mount Pleasant, Thembelihle, Zwelihle, Hawston, Sea Farms, Paradise Park, Sandbaai Commonage, Westcliff, Fernkloof and Schulphoek to name a few. To this effect land of approximately 40 hectares has been identified and in the process of being secured. When completed the project will yield 7 500 opportunities and planning is in progress.

All these programmes and projects are a clear commitment of our government to restore the dignity by providing shelter, creating jobs and land reform in South Africa. Our track record speaks for itself. Judge us on what we have achieved not what we are promising to do. 

I want to take this opportunity to thank the team of my dedicated staff first in the Ministry, under the leadership of Elizabeth Cloete my Head of Ministry, Ntomboxolo Makoba-Somdaka my Spokesperson, Zimkhitha Ngoma my Private Secretary, Wiseman Masindwa my Stakeholder Relations person, Vuyokazi Ludidi my receptionist, Olga van Zyl my Registry Clerk, Keith Dennis my Messenger, Maurizia Louw my office’s personal assistant and Nam Daki, my parliamentary officer. 

My Department’s team under the leadership of Thando Mguli my HOD, my Chief Directors; Jacqueline Samson, Phila Mayisela and Francois de Wet. All my Directors and all my officials who made me shine the entire period I’ve been part of this Department. It’s been a roller coaster ride but looking back, it was all worth it. I’m grateful for all your passion and dedication. Let’s continue to fly the flag of this Department.

To Premier Zille and my party, the Democratic Alliance, I’m really grateful for the opportunity to serve the people of my Province. 

I thank you. 

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Media Enquiries: 

Mrs Ntomboxolo Makoba-Somdaka Spokesperson for Minister Bonginkosi Madikizela Tel: 021 483 4798 Cell: 082 953 0026

Mr Nathan Adriaanse Director: Communication and Stakeholder Relations Tel: 021 483 2868 Cell: 083 263 1720