New housing policy unveiled
3 September 2004
Housing Minister Lindiwe Sisulu on Thursday unveiled a policy that decisively breaks with the housing plan that has delivered 1.6 million houses to the poor since 1994.
Announcing the plan in Pretoria, Sisulu said the policy aims to seeks to deal with a range of housing challenges facing the country, from homelessness to financial assistance.
Called the Comprehensive Housing Plan for the Development of Integrated Sustainable Human Settlements, the policy has identified a wide range of issues to be addressed in the next five years and will be implemented from April 2005.
These include:
Scrapping the old subsidy system
This post-1994 system will be replaced by a three-tier subsidy for different income groups.
Sisulu said those in need of housing would be classified as "hardcore poor", the "poor" or the "affordable", with each group receiving subsidies proportional to what they earned. She said a
key to providing quality housing for all these groups would be the involvement of banks and other financial institutions through the financial services charter.
Sisulu said the government had struck a deal with banks whereby the state would stand surety for 50 percent of the risk of financing of homes to those who would not normally have qualified for a bond.
In terms of the existing policy, households with a monthly income R1 500 or less received a subsidy of R25 800, but those in the next category of R1 501 to R2 500 received R19 000, while those in the R2 501 to R3 500 a month category received R8 000.
Sisulu said experience had shown that in the latter two categories there was "little (one) can do" with that amount of money, so it was decided that the categories should be collapsed and those with income of up to R3 500 a month would also qualify for the "full subsidy" of R25 800.
This subsidy, said Sisulu, would go towards building quality houses in the
R70 000-R170 000 bracket to replace the old low quality "RDP" houses.
She said although those in the R1 501 to R3 500 a month bracket would also get the full subsidy, the household must be committed to pay certain "sweat equity" - in building the house - or to making a down payment as part of the commitment to their housing.
Households in the middle income level of R3 500 to R7 000 would receive a government credit guarantee of 50 percent required for mortgages. "Because of a lack of credit from financial institutions, there are no houses being built for people in this income bracket," said Sisulu.
Providing rental or rent-to-buy housing
Sisulu said the idea was to tap into the "rental stock" which would suit those households and individuals migrating to urban areas from rural districts or from outside the country but did not wish to buy property.
"This will contribute to urban renewal and inner-city regeneration," she
said.
Doing away with informal settlements
Sisulu said the government was committed to to rid the country of squatter camps by 2014, and announced a pilot project to improve housing conditions along the N2 in Cape Town.
"Informal settlements will either be eradicated or upgraded," said Sisulu, adding that the intention was to provide a total package of infrastructure such as clinics, schools, police stations and community facilities.
She said 2.4 million households lived in shacks or "informal structures". Only 800 000 of these households were on the waiting list for government subsidised housing. "This means there are approximately 1.6 million people out there with no option of ever moving into a proper home," she said.
Mpumi Nxumalo, the housing department's director-general, said the plan also reduced the period in which a subsidised house could be sold, from eight to five years, in a move aimed at enabling home owners to
sell their low-cost houses with ease.
"We will draft regulations to ensure that people would only sell houses under specific requirements. One of the regulations would give the province or the municipality the first option to buy the house after five years. This would ensure that the house is taken from that particular individual and given back to the government which would re-allocate it to another poor person on the waiting list," Nxumalo said.
"We are also putting up systems and mechanisms to ensure that any maladministration, corruption and fraud are dealt with effectively," she added.
SouthAfrica.info reporter
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