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This is
one of three briefing papers prepared for delegation organized Shared Interest
visiting South Africa from April 22 through May 2, 2004. Shared Interest is a U.S. not-for-profit social investment
fund guaranteeing loans to community development financial institutions
engaged in South Africa’s reconstruction process including affordable credit
for small businesses and social housing in South Africa’s lowest income
communities. To see other paper click links below. |
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Shared
Interest South Africa Delegation Briefing Paper April 22 – May 2, 2004 A Decade of Democracy: Housing, Services and Land in South
Africa By Richard Knight, March 19, 2004
It has
been ten years since the African National Congress won the first democratic
election on a program of meeting the basic needs of the people including
land, housing, water, electricity, telecommunications, transport, a clean and
healthy environment, nutrition, health care and social welfare. One and a half million houses have been
built and services have been extended to millions of people since 1994. Despite
this progress millions of people still live in shacks in squatter camps and
back yards; an additional 2 to 3 million homes are required to meet their
needs. This backlog is exacerbated by
high chronic unemployment leaving millions of people unable to afford basic
necessities. Many of those who do work
are employed in the informal sector and their incomes are low. The HIV/AIDS
pandemic, with 4.74 million South Africans infected, is adding to the development
problem. Access to land and security of tenure in both urban and rural areas
remain critical issues. Apartheid's Legacy Under apartheid, segregation was
mandated by law. Blacks could not live
in “white” areas but had to live in townships, on white farms (often as labor
tenants) or in impoverished rural areas in the former homelands or
Bantustans. Land dispossession under colonialism and apartheid resulted in
whites owning the best land and millions of blacks being forcibly removed
from their land and homes.[*]
From the 1960s very little new housing
was built for urban Africans. As the Gauteng Department of Housing notes:
“Africans were temporarily in the cities to serve in the mines and in
industries and services located in white parts of town. Once their working
life was over they were supposed to go ‘home’ to the rural areas.”[2]
(See Appendix I for more on government housing policy under apartheid.) Blacks
in urban areas lived in segregated townships in houses owned by that state. The struggle against apartheid increased
dramatically in townships across the country following the Soweto uprising in
1976. In 1983 the United Democratic Front was formed. As part of this
struggle in the 1980s township residents organized rent and services payment
boycotts. In July 1985 the government declared a State of Emergency. In 1986 influx control and the legal restrictions on a black person’s right to own property in
black urban areas were repealed. The change did not allow blacks to purchase
homes outside the townships in areas designated for whites. But few township residents were able to
exercise this new right because of technical problems and by the lack of
commitment by white government officials.[3] Political resistance at the local level
continued leading to an important victory in September 1990 when government
agreed to the Greater Soweto Accord that resulted in the writing off of rent
and service arrears and committed the government to the “transfer of houses
to the people.”[4] In 1990 South Africa entered in a period
of struggle mixed with negotiation. Nelson Mandela and many other political
prisoners were released and the African National Congress (ANC) and other
political organizations were unbanned. In 1991 the
Population Registration Act, Group Areas Act and Land Acts were repealed. In
1992 the National Housing Forum, a multi-party non-governmental negotiating
body comprising 19 members from business, the community, government,
development organizations and political parties outside the government at the
time, was formed to negotiate a new housing policy. It was agreed in the National
Housing Forum that a sustainable housing process was needed that would
“enable all people to secure housing with secure tenure within a safe and
healthy environment.”[5] When the ANC led government came to
power in 1994 there was only one formal brick house for every 43 Africans
compared to one for every 3.5 whites.
The urban backlog alone was estimated as at least 1.3 million units in
1994. Between 7.5 and 10 million
people lived in informal housing such as shacks in squatter camps and back
yards of black township houses. Housing Policy In
the lead up to the 1994 election the African National Congress adopted the
Reconstruction and Development Programme (RDP), an
integrated socio-economic policy framework which is now the policy if the
government. The RDP set a goal of
300,000 houses to be built a year with a minimum of one million low-cost
houses to be constructed within five years.
In December 1994 government issued a Housing White Paper that set out
the framework of the national housing policy.
Adequate
Housing - Law of the Land The
1996 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.” Provincial legislatures and local
government share responsibility with the national government for delivery of
adequate housing. The Constitution also states “No one may be evicted from
their home, or have their home demolished, without an order of court made
after considering all the relevant circumstances. No legislation may permit arbitrary
evictions.” In
October 2000, the Constitutional Court made an important ruling in Government
of RSA and others v Grootboom and others
on the government's constitutional obligation to provide adequate housing
for all and shelter for children. The
case involved 510 children and 390
adults living in appalling circumstances in an informal settlement. The
Court ruled that although they were not entitled to immediate shelter, the
program of the Cape Metropolitan Council was constitutionally deficient
because it failed to provide for any
form of temporary relief to those in desperate need, with no roof over their
heads, or living in crisis conditions The “Grootboom”
case has set a precedent for the defense of other social and economic rights.
(For a summary of this case see Appendix II.)
To
implement its Constitutional mandate for housing development Parliament adopted
the Housing Act of 1997. The Act legislated and extended the provisions set
out in the Housing White Paper, clarified the responsibilities of national,
provincial and municipal government and requires all three levels of
government to give priority to the needs of the poor. Housing development is
based on integrated development planning and provides as wide a choice of
housing and tenure as possible.
As required by the Act, in 2002 the Minister of Housing
issued the National Housing Code outlining national policy. Under the Act and
Housing Code each level of government – national, provincial and municipal –
has some responsibility for housing delivery. The national government
determines national housing policy which must be adhered to by provincial and
local governments. The national government also establishes and facilitates a
sustainable national housing development process. Provincial governments have
a responsibility to create an enabling environment within the province within
the framework of national policy. Municipalities seek to ensure the right to
adequate housing is realized by the development of housing, addressing the
issue of land, services and infrastructure and creating an enabling
environment for housing development within their area of jurisdiction.[6]
The government's goal, as set out in the Housing Code, is the provision of
350,000 houses per annum until the housing backlog is overcome. Broad principles of housing policy include
people centered delivery and partnerships; skills transfer and economic
empowerment; fairness and equity; choice; quality and affordability;
innovation; transparency, accountability and monitoring; and sustainability
and fiscal affordability. (For excerpts of the National Housing Code see
Appendix III.) The initial focus was on quantity not quality. Some houses
were so small and badly built that people joke that they are “so small you
need to go outside to change your mind.”
The Housing Consumer Protection
Measurers Act of 1998 protects
homeowners from inferior workmanship.
Builders are responsible for design and material defects for three
months, roof leaks for a year and structural defects for five years. In some
areas emerging contractors are developing ways to build quality housing, and
beginning to experiment with environmentally friendly and cost effective
technology. Housing Delivery A considerable amount of housing has
been delivered – by September 2003 more
than 1.5 million houses were built or under construction and some R 26,426
billion has been allocated for housing delivery. Minister of Housing Brigitte Sylvia Mabandla noted
recently: “To date the most commonly constructed housing
projects have been single unit houses located largely on the urban periphery
on sites provided by large developers. The majority of the houses built have
been in urban or peri-urban areas where rates of
urbanisation have been highest and the need for housing has been greatest.”[7] This represents an addition of 15.6%
to the total national housing stock and that government-supported low income
housing accounted for more than half of national housing production. Secure
tenure and safe homes have been provided to between 7 and 8.5 million poor
people.[8]
More than half of all subsidies approved have gone to women.[9]
The Housing
Code notes “High levels of unemployment and relatively low average wage
levels contribute to a major affordability problem in South Africa, and the
ability to pay for housing is severely limited among most families in the
country. Consequently, government has adopted a strategy to provide subsidy
assistance to households who are unable to satisfy their housing needs
independently.” The delivery
of 1.5 million houses has been achieved by the Housing Subsidy Scheme
that provides a state grant to qualifying beneficiaries, with a combined
household income less than R 3,500 per month, to acquire secure tenure, basic
services and a top structure. Some the 2.3 million subsides have been
approved.[10]
As of April 1, 2002 all beneficiaries of housing subsidies, except the
indigent, must contribute financially or in kind (sweat equity). Indigent
beneficiaries, those who are aged, disabled and health stricken, receive a
100% subsidy. When a beneficiary elects to have a contractor-built house the
minimum contribution is R 2,479 which must be paid upfront.[11]
The minimum cost for a subsidized house is R 25,579 ($3,666) including R 10,579
($1,515) for the cost of a stand and R 15,000 ($2,147) for a 30m2
(323 square feet) house. The rate of the subsidies varies according to
income.
There are a
number of different types of subsidies including: ·
Individual subsidies to enable beneficiaries to acquire
ownership of serviced stands and enter into house building contracts, or to
purchase existing improved residential properties which are not part of
approved housing subsidy projects. ·
Project linked subsidies to enable a qualifying
household to access a complete residential unit, which is developed within an
approved project linked housing subsidy project for ownership by the
beneficiary. ·
Institutional subsidies for qualified institutions
to enable them
to create affordable housing stock for persons who qualify for housing
subsidies. The subsidy is paid to approved institutions
to provide subsidized housing on deed of sale, rental or rent to buy options,
on condition that the beneficiaries may not be compelled to pay the full
purchase price and take transfer within the first four years of receipt of
the subsidy. ·
Rural subsidies for beneficiaries who have
uncontested informal tenure rights on state-owned land governed by traditional
authorities. ·
People’s Housing
Process subsidies enable
beneficiaries build or organize the building of their own homes and their
contribution is sweat equity as opposed to hiring a contractor. ·
Consolidation to afford previous beneficiaries of
serviced stands, financed by the previous housing dispensation, the
opportunity to acquire houses. The 2005-2006
People’s Budget, drawn up by COSATU, SANGOCO and SACC, recognizes these
achievements but notes a number of problems with the housing subsidy program.
To get the full subsidy a household must have an income of R1,500 or less. “Government has failed to raise the minimum income
to be eligible for a housing subsidy, despite inflation,” notes the People’s Budget. “Since this amount
was first set in the mid-1990s, the real value of this income has fallen by
half.” [12] Still, a large number
of people qualify. Some 63% of all those employed earn R2500 a month or less,
including 89% of those employed in the informal sector.
Financing for those who get a partial
subsidy or get no subsidy because they earn more than R3,500
per month is a problem. Commenting on the problem the People’s Budget says: “Families earning R1500 to R3500 a month
get only a partial subsidy, since they were expected to get housing bonds as
well. Banks are reluctant to lend to families earning less than R6000 a month.
Anyone buying a house in a township is also likely to be denied a bond
[mortgage].”[†] The 1994 White Paper
estimated that at least 70% of South Africa’s population is unable to afford
finance and a further 10 % to 15% is only able to afford limited finance,
most likely from nontraditional lenders. Nontraditional lenders include loan
sharks who charge up to 600% interest on an annualized basis. Moreover, even those black South Africans
who are able to afford loans are frequently denied credit as a result of
enduring discriminatory practices inherited from South Africa’s apartheid
past.
The Home Loan and Mortgage Disclosure Act of 2000, similar to the Home Mortgage
Disclosure Act in the U.S., encourages banks to grant home loans and requires
banks disclose annual financial statements so that their lending practices
can be monitored. The government is working with
financial institutions to address this problem the Department of Housing is currently
drafting the Community Reinvestment Bill aimed at increasing access to
finance by poor communities. This initiative has been delayed as the industry
moves to implement the Financial Services Charter. It is official
policy that houses should be built in a way that also builds communities. As
stated in the Housing Code the government seeks “the
establishment and maintenance of habitable, stable and sustainable public and
private residential environments to ensure viable households and communities
in areas allowing convenient access to economic opportunities, and to health,
educational and social amenities.” Houses built should have “secure tenure,
ensuring internal and external privacy and providing adequate protection against
the elements.” But the People’s Budget notes that “the amount
of subsidy for each family is too low to provide decent housing near economic
centres, where residents could more easily find
work.” In addition to
the building of houses the government has undertaken several other steps to
improve housing. This includes:
·
Public Sector Hostels
Redevelopment Program: Under apartheid hostel were built to provide temporary accommodation
migrant workers in urban centers. These “temporary” workers were supposed to
return to their homes in the Bantustans. Some hotels were built by the
private sector, for example on the mines; others were “built by government
and managed by municipalities to provide communal, dormitory-type
accommodation, often along ethnic or language lines. They were often located
on isolated parcels of land, usually adjacent to existing black townships or
close to industrial and mining areas.” The hostels are being redeveloped into
accommodation for a mix of single people and families. The National Housing
Code estimated 182 hotels were eligible for upgrading under this program.[13]
·
Discount Benefit
Scheme to promote home ownership: This program had its origins in the Greater Soweto Accord. Under
apartheid, Africans were not allowed to own their homes in urban areas but
lived in state-owned houses. This scheme transfers state-owned properties in
former black townships and former Group Areas to their rightful owners, many
of whom have lived in these properties for many years. It also includes 622,000 serviced sites
(excluding sites delivered with the Independent Development Trust capital
subsidy financing) delivered in terms of the pre-1994 administration. More
than 480,000 households have had housing assets transferred to them under
this scheme.[14] ·
Promotion of Rental
Housing: Rental
housing outside of the former black townships is a relatively new option for
the historically disadvantaged.[‡]
To ensure
that more houses are provided for rental purposes and to regulate the
behavior of unscrupulous landlord to they do not charge exorbitant rents the Rental Housing Act of 1999. The Act
provides for dispute mediation between landlord and tenants and outlaws the
evicting of long-standing tenants from their homes with mediation. A Moving Target Despite this impressive record, the
housing backlog has not been eliminated. Population growth and rapid
urbanization have combined to increase the need for housing and the growth of
squatter camps. Between 1996 and 2001 South Africa population grew from 40.5
million to 44.8 million, a 10.4% increase. In 1996, 53.7% of the population
was urbanized; by 2001 it was 57.5%. Urbanization has resulted in the decline
in number of people per household from 4.5 in 1996 to 3.8 in 2001. As a
result the number of households increased 23.7% from 9.1 million to 11.2
million.[§]
Thus the government finds itself having to provide far more houses that it
originally projected.[15]
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