Shelter and Services: Rapporteur Report
Marie Huchzermeyer
Postgraduate Housing Programme, Wits University
Tel: 011-7177688, huchzermeyerm@archplan.wits.ac.za
Gauteng Department of Housing Conference “Urbanisation and Housing Challenges: Cities in Africa,” 6-8
October 2003
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1. Changes in programme
Programme was adhered to.
2.
Summary of papers, followed by responses and comments on suitability for the proposed book
2.1 Good government: Lessons learned from self-help housing programmes in Zambia, Botswana
and Zimbabwe – Richard Martin (Sigodi Marah Martin)
Summary
Martin avoids the word“good governance,” as he believes that there is a very important role for
government, particularly local government, in housing. The concept of “governance” in turn grew out of a
strong movement against a role for government.
The characteristics of good policy for self-help housing are simplicity, transparency, support and
enablement (as opposed to being bureaucratic, obscure, oppressive and controlling). Such a policy must
target those wishing or motivated to build their own houses (not everyone), but who are poor, and are likely
to have little time. In terms of access to serviced plots, the policy must enable choice (size and locations),
so that trade-offs can be made by the household. It must also enable access to information relating to the
building process – much may be learnt here from the way potential middle income clients interact with
private sector developers. But the policy must be targeted to the poor. It must make the use of public funds
possible, though preventing exploitation by those that have their own resources, and by ruthless builders.
Thus one can conceive of a policy triangle: freedom, support, control.
On the theme of support for self-help housing, Zambia is considered a pioneer, followed by Botswana and
Zimbabwe. Friendly and helpful site offices are important. They should also enable application for loans.
Contact must be maintained with the applicants. A series of meetings must be held with successful
applicants, in groups of up to 25 people from the same area. Technical advisors play an important role and
must be available on site at convenient times, also approving and coordinating the builders.
On the theme of control, beneficiaries should be requested to move onto site. This would require
construction of a pit latrine and a temporary shelter, using the roofing material of the future house. Size of
the initial house must be restricted, to ensure completion. Technical advisors ensure that minimum building
regulations are adhered to. Control also serves to ensure safety, and protection of the wider good.
On the theme of freedom, first of all beneficiary responsibility must be emphasised. All unnecessary
building regulations must be done away with. People should have the opportunity to design their own plan,
sketched out on site, with input from the technical advisor, and to build themselves if they choose so.
The presenter then expanded on the concept of good government, emphasising that efficient
implementation is important. Implementation agencies need to be responsive bottom-up organisations. This
should be handled as in the case of Lusaka: each site had a field team consisting of staff, and assisting the
beneficiary families. Their working hours included week-ends, and some evenings. This team dealt with
grievances brought to them through local committees. The community monitored the team (this led to high
standards of responsibility), and performance standards applied. A head office was responsible for material
supply.
The concept of service to the community must be central in government. In South Africa, the funding
system must make provision for local government to be brought back into housing delivery. Self-help
housing, in this suggested form, has the chance of accelerating housing delivery in South Africa.
Discussion:
Was the Zambian experience replicable, and did the houses become tangible assets? Here the reply was that
the PHP in South Africa is being reassessed, with regards to better facilitation by government. In Zambia
funds dried up in the 1980s, due to economic stress. In Zimbabwe 40 000 units were constructed, but there
are no more public resources flowing into this. Inflation in that country means people are not able to lend.
Therefore housing finance no longer exists. At the time, though, the output was very good. The presenter
has been back to Zambia 20 years after his work there, and it appears that the houses are now definitely an
asset. The houses have been expanded subsequently. He also made the important point that the flexibility
and responsiveness in the Zambian programme was due to a flexible funding mechanism. Although World
Bank funding was used, this was not yet tied to strict project cycle and target requirements. This might be
the main obstacle to effective enablement of self-help housing.
A further comment had to do with the local government functions in South Africa, and in the absence of
accreditation, People’s Housing Process still have to happen through the provinces. It was therefore
questioned whether the Zambian experience could be applied in South Africa.
A comment from Alioune Badiane was that it seems that in order for a system to be user-friendly, it has to
break the rules.
Suitability for book:
This presentation is very suitable, particularly as it draws on experience in three countries. It certainly has a
practical turn, and one should request the author to include a section giving some background to the
projects he participated in Zambia, Zimbabwe and Botswana, also contextualising them briefly in their
particular period. Also his critique of good governance (as opposed to good government) should be
deepened, as this has considerable significance for housing delivery in Africa.
2.2 Invasions, evictions and the law in South Africa – Marie Huchzermeyer (Co-ordinator:
Postgraduate Housing Programme, University of the Witwatersrand)
On the theme of housing rights in South Africa: the South African Constitution (1996) rejects the status
quo, sets out to transform society into one that has less inequality. Yet it also protects existing rights,
making transformation very difficult. In relation to housing, the rights to equality, the qualified right to the
progressive realisation of housing, children’s unqualified right to shelter, the right to protection of property,
and the qualified right to progressive realisation of land reform need to be considered.
Legislation after 1996 has given meaning to the Constitution. The act that applies to the case studies in this
paper is the PIE Act of 1998 (note the emphasis on “prevention of illegal eviction”, as opposed to the
“prevention of illegal squatting, as per the 1951 act it replaced; note also the correct legal term for informal
settlements: “unlawful occupation”). This act requires eviction procedures to be followed, and if occupation
has extended 6 months, then the rights increase. The act gives differential rights to special needs groups
(elderly, etc.). Urgent eviction orders can be granted on the grounds of health or other risks (the right to
appeal still applies). In two of the case studies in this paper (Alex and Bredell), urgent eviction orders were
granted.
It is important to note that interpretations vary in judgements. As yet, there has been no radical
interpretation of the housing right, in a way that would lead to permanent rights to the unlawfully occupied
land. Grootboom was a liberal judgement, for temporary rights. Most mainstream judgements are
conservative. A further category is the tough judgements, of which the Bredell case is an example. This
judgement was heavily weighted in favour of existing property rights and investor confidence.
In the Grootboom case a landmark high court ruling was made on the child’s right to shelter, ruling that
temporary shelter be provided for some 900 people including children. This was appealed by the municipal
and provincial government in Constitutional court, with the argument that this would dilute the limited
resources for the housing delivery programme. The Constitutional court ruled that the government’s
housing programme should not only provide for medium to long term housing delivery, but also fulfilment
of immediate needs, and the management of crises. However, it was not prescribe how and by when. Three
years later, a policy adjustment deals with emergency circumstances. However the need for an appropriate
response to Grootboom remains a concern.
In the Alexandra Urban Renewal Programme evictions and relocation from the banks of the Jukskei River,
a landmark appeal for compensation was made (Mrs Mqokomiso). The eviction in June was based on an
urgent eviction order granted three months earlier. The risks to which the urgent eviction related (flooding
and cholera), did not exist at the time. The relocation was to unserviced land at a distance of 30km. The
appeal to high court was for compensation for loss of property as well as inconvenience. This was settled
out of court. However, under pressure from the Human Rights Commission, a relocation package was
introduced by the Alex Renewal Programme.
The Bredell case (July 2001) began with the gradual invasion of land, some occupying for longer than 6
months. This was followed by a rapid increase of invasion, up to 10 000 people. At the time there was
international media attention on invasions in Zimbabwe, and what South Africa’s position was regarding
the rule of law in the neighbouring country. When the first arrests were made at Bredell (using the
Tresspass Act of 1959, not repealed since 1996 Constitution), the value of the rand dropped against the
US$ considerably. Government’s perception was that South Africa needed to demonstrate the rule of law.
A journalist however suggested that investor sentiment was affected by the human rights abuses presented
in the media, not necessarily the unlawful occupation as such. On the day of the tough ruling, the rand
dropped again. Bredell too was an urgent eviction order, but taking no consideration of the cold weather
that evictees were to suffer from. The ruling did not differentiate between those with special needs, and
those that had occupied for more than 6 months. With very limited analysis at the time, the otherwise
radical National Land Committee, and the National Council of Churches, agreed with the ruling.
Through the intense media coverage of the Bredell case, a message was brought to all (post-Grootboom)
that the courts are not the route to access to urban land for the poor. In conclusion, there is a need for
greater civil society mobilisation around the right to housing. Interesting comparisons can be drawn with
the subsequent Constitutional court case of the Treatment Action Campaign.
Discussion
What would have been a radical judgement? Here the reply was that its interesting to compare the situation
in Brazil, where after a five year period of peaceful occupation of privately owned land, the land ownership
rights accrue to the occupiers. A radical judgement would grant permanent rights to the land, therefore
allowing the households to consolidate its urban base without further interruptions. Subject to a land
regularisation (formal plot pegging) process the household could begin constructing a permanent dwelling.
Clearly this could not happen on land that is not suitable for occupation, without the risk first being
reduced. In some cases a radical judgement might involve the right to be rehoused nearby.
A comment from the Western Cape Provincial Government was that the Province and the Oostenberg
Municipality learnt a lot out of the Grootboom case. They are now much more aware of these issues. There
is hardly a meeting without Grootboom being referred to. However, there is frequently the problem that
when subsidised housing estates are being developed, the word gets around and the houses are invaded, a
form of queue-jumping. The reply to this comment was that such invasions are organised. Many people in
need of housing are organised (civics etc.), but cannot access land and housing resources collectively (other
than by invasion). There is a problem that the policy focuses on the individual demand, rather than catering
also for collective demand (again the Brazilian experience is instructive).
A question from Alioune Badiane was whether the courts are the right way to pursue access to land, and
whether the general low-income population did not see Grootboom as positive. Here the response was that
during late apartheid the courts played an important role in the process of accessing land by the poor. The
message of Grootboom is not strongly popularised. In terms of the affected community represented by Mr
Irene Grootboom, the benefits were not very tangible. Mrs Irene Grootboom in fact left the group out of
frustration, and sought to find shelter elsewhere.
A further comment from Alioune Badiane was that the Melon Foundation, in collaboration with the Human
Rights Commission of the UN are monitoring evictions around the world. He would like to see us in South
Africa connect with this initiative. In Ghana, the residents of the Sodom and Ghomorra settlement, where
30 000 people invaded land some 10 years ago, are now being evicted to make space for a renovation
project. This needs to be monitored. The reply from the presenter was, that one needs to look into what the
UWC Community Law Centre is already doing in this direction. Badiane’s response was that one definitely
needs a reporting system in South Africa. The UN is monitoring in 11 countries – in relation to the Cities
without Slums campaign. We need to connect with the expert in the World Bank Office (and this should be
reported back to plenary).
A comment from Uitenhage local government was that they are faced with the problem of elderly man,
who was part of an invasion many years ago, now refusing to move to the plots that the municipality has
provided. He claims the land is his, and is unhappy that the site he’ll be moved to is not big enough for him
to have his cattle there. How should the local government proceed? The presenter acknowledged that these
are complicated cases, and that she did not have sufficient information to comment constructively.
A last comment related to the Modderklip case, and how this compared with the cases in the paper. The
presenter was not familiar enough with the Modderklip case to be able to answer this, but noted the need
for ongoing research to monitor new cases.
Suitability for book:
There was quite a lot of interest in this presentation, many people asking for copies of the paper. It has been
published in full length in Urban Forum earlier this year (Urban Forum gives authors the right to publish
the material elsewhere). I would suggest a shorter version, also up-dated to include the Modderklip case
(some research would be required), and the significance of the TAC ruling. Given a little time, the author
could contextualise the chapter within housing rights provisions in other African countries, in order to
establish the regional significance of the SA Constitution and the Grootboom case.
2.3 People’s Housing Process – Zesuliwe Mkhize (Director: People’s Housing Process, Department
of Housing, Gauteng Provincial Government)
The People’s Housing Process builds on the culture or people helping themselves and of helping one
another. Shacks are understood as resulting from this process, but without access to support. (As in the
Zambian case) support and technical assistance are central to the PHP. Households are the main decision
makers in this process. Special capacity is required in the Province, the support organisations and local
authorities. Key principles are partnerships, a people-driven process, skills transfer, community
empowerment and simple and transparent procedures. The role of national government is in assisting
households to access land and services, in subsidising the house construction, in the issuing of
establishment and facilitation grants, and through technical and logistical assistance. Among other things,
national policy also aims to promote economic upliftment and a culture of savings through the PHP.
For implementation in a given neighbourhood, a legal entity is formed, to serve as the Support
Organisation. Its roles are technical support, account administration and project management. It assists in
the establishment of a Housing Support Centre for this purpose. In Gauteng, support organisation are
CBOs, local government, and communities entering into agreements with legal bodies such as NGOs or
private sector organisations.
Through the PHP the beneficiary saves on labour costs and profit (charged by developers). Trade-offs in
material procurement are optimised, and the beneficiary has choice in terms of house type and construction
process. Gauteng Province Department of Housing has the objective of developing a PHP strategy,
ensuring distribution of resources and capacity, collaboration with other role players, monitoring and
evaluation, alignment with poverty alleviation programmes, and ensuring beneficiary choice.
Challenges relate to capacity (particularly in the Housing Support Centres, and the Support Organisations),
financial management, certification and supervision of the construction process and alignment with job
creation and poverty alleviation programmes. One obstacle appears to be that the government subsidy
system is project focussed, and not process focused. There are policy requirements that do not meet the
PHP principles.
The paper proceeds with a detailed table of the interventions of the Gauteng Shared Services Centre
(ATC?), the Support Organisation (with reference to certain chapters in the Housing Code.) and the
Housing Support Centres. It then refers to the current PHP review process at national level, various new
guidelines, and partnerships that have been created. The verbal presentation included reference to 20
Housing Support Centres and 2 000 houses that had been built in Gauteng to date, and a partnership with
the Department of Trade and Industry for training.
Discussion
What have been the results from shifting from developer to PHP housing? A related comment was that the
PHP has to be marketed, as it is competing with the developer-driven process. The reply was the developers
tend to undermine the PHP, saying it is not working. The outcome must be defined around the process.
A comment was made from Namibia, that in most African countries housing is a local government
competency. It is decentralised, but not accompanied with the necessary resources. In the African context,
very few states provide subsidies. It would be interesting to know what it the underlying motif for subsidies
in South Africa.
Suitability for the book
The paper at the conference was in a power-point format, therefore obviously still needing writing-up for a
chapter. It would be interesting for this to be a chapter that stands in dialogue with the earlier paper by
Richard Martin. It could mention which aspects of the Zambian process have been incorporated in the PHP
in South Africa, and which ideas can still be incorporated (or if they can’t, explain why, with references to
the challenges mentioned in the presentation). To be contextualised in Africa, it should refer to the
uniqueness of the subsidy system, and its roles as well as challenges/limitations. The paper should refer to
the recent review document by Ted Bauman conducted for the PHP Trust, and if possible also discuss
important shifts that are suggested there/in the entire review process, and whether they are likely to be
incorporated into the policy.
2.4 Social housing – Ronalda Fisher (CEO: Greater Germiston Inner City Housing Cooperation)
Social housing is defined as good quality subsidised housing managed by independent institutions, through
participatory approaches, with a range of tenure approaches excluding immediate individual ownership. In
South Africa 30 000 social housing units have been delivered to date. 59 Housing Associations have been
established, although some of these do not yet have housing stock.
Challenges for the social housing sector are 1) that it is difficult to find an appropriate financial framework,
2) the problem that the PIE Act has been applied to rental housing, making evictions difficult, and 3) that
legislation is not applied uniformly. Also, there is a low awareness of social housing, and confusion
between social housing, rental housing and low cost housing. On the topic of HIV/AIDS there is no policy
on what happens when a breadwinner in a social housing unit dies and the children are left on their own.
On the management side, besides the challenge of funding people with the right capacity, a challenge is that
off-the-shelf management systems first have to be customised. Another challenge is that social housing
institutions tend to compete, not collaborate. Coordination is also needed between different tiers of
government, and there is a need for public-private partnerships. There is an attempt to bring in the banks.
However, banks perceive social housing to have management problems. There is also an issue of slum
lords taking over social housing institutions.
Lessons have been that social housing is a slow delivery mechanism. It needs to be asked whether the
current approach is still realistic. How does one capture the experience that has been gained? There is a
need for a demand-driven approach, but the demand in this income bracket is for ownership.
Discussion
Mention was made of housing cooperatives in Zimbabwe (more on this in the next presentation).
Another comment was the need to clarify the difference between social housing and low cost housing.
A comment from the Banking Council was appreciation of the insights of practitioners. The reply was that
there is a need for a carrot and stick approach to make the banks lend in this sector. The other problem is
that while the subsidies have increased, the subsidy bands have not, meaning that people that in real terms
would have qualified for social housing a few years ago no longer do, due to inflation.
Suitability for the book
There were technical problems with the power-point, so the speaker possibly did not present the entire
paper. I did not manage to get a copy of the power-point, so my comments are based merely on what was
presented. To stand as a book chapter, this would need quite a lot of deepening, rather than being a list of
challenges. One would want social housing to be contextualised both within housing policy in South
Africa, and in comparison to other African countries. If the chapter number is limited, I would tend not to
include this as a chapter.
2.5 Backyard rental in Soweto – Owen Crankshaw (Professor: Department of Sociology, University
of Cape Town)
Back yard shacks have their origin in the housing shortages of the 1980s, with pressure to rent out back
yard space. In 1997 there were on average 1.5 back yard shacks per stand. 20% of all Soweto residents
lived in back yard shacks. Soweto was given electricity in the late 1980s, and now most back yard shacks
have precarious links to the owners’ electricity connections.
The following policy question emerge: should back yard shacks be seen as a sign of housing shortage,
which should be eradicated; or is it a form of housing that can be improved, as a percentage of the
population will always be wanting to rent, and thus giving some relief to the housing shortage?
In the census figures 1996 versus 2001, there is an increase in formal houses by 300 000, but an increase of
shacks by 100 000. There is some reluctance in official circles to accept the permanence of back yard
shacks. Are they opposed because these units are inferior in construction, or because they are rental?
Why is rental a good thing? There are temporary needs of migrants, possibly owning elsewhere. Return
migration is not unique to South Africa. There are also the recently urbanised, those not eligible for the
subsidy (foreigners and the elderly), and those preferring back yard shacks due to the location. The rent
benefits the owner. In this study, most landowners rented out because they needed the income.
However, there are problems with back yard accommodation, relating to poor construction, scarcity of
floors and windows. This is because the owners don’t construct, and the renters have no incentive to invest.
Financial assistance to landlords might entice them to construct good quality back yard rooms. There are
also dangers related to precarious electricity connections. Here the government could formally connect the
back yard shacks. A further problem is that refuse is collected only from the owner’s dwelling,
necessitating the tenants to dump their refuse. Here the local authorities have to recognise the real demand
for refuse collection.
Discussion
There was a comment that it seems that in Cape Town the local government is formalising back yard
shacks. This commentator was once a back yard “shacker”. The biggest issue to him was that there was
only one toilet, for which the landlord had the key, and he would go to bed early. He knows situations
where landlords apply for indigence, yet they receive rent. In the light of this kind of exploitation, is it
appropriate to use public resources to create assets for someone who already has an asset? The reply was
that perhaps there are ways of not subsidising, but still supporting. Clearly this would need a level of
control.
Historically people were forced to move into this kind of accommodation. Now this should be a matter of
choice, for the landlord and for the tenant. In the past, it was not really the case of a landlord offering a
service. Another comment was that it seems that there is a new trend emerging of plot owners investing in
rows of well-constructed back yard rooms (e.g Ivory Park). A further comment was that someone knew of a
case of 70 people living on a 200m2 plot. Clearly this called for a level of regulation. What were the rentals
in the study presented? The reply was that in 1997 the back yard rentals in Soweto ranged from R50 to
R100.
A last comment related to the increasing non-availability of land for new housing, meaning that back yard
shacks must be given more and more attention in the future. However, bringing back yard shacks under a
certain level of control might push the poor out of this form of accommodation into something worse. Here
the brief reply was that in Latin America back yard renting is considered a very convenient form of
accommodation.
Suitability for the book
This paper has been published in the International Journal of Urban and Regional Research (2000). As it
stands, the paper is in publishable format, and it would probably be possible for the author to obtain the
rights from the journal to republish. However, the material is from field research conducted in 1997. One
could ask the author whether it would be possible to up-date the paper, depending on whether more surveys
of back yard shacks have been made, and whether the phenomenon of private rental can be contextualised
within Southern Africa. He could also incorporate responses to the comments made.
2.6 Low-income housing rental in Buluwayo – Isiaiha Magagula (Director of Housing and
Community Services Department, Buluwayo)
In the presentation, the speaker made some important comparisons between Zimbabwe and South Africa,
which are not in the written paper. The most important similarity is the emphasis on home-ownership since
the 1980s (post-independence). Existing rental housing was sold to the tenants. Local governments lost
rental income through this policy. Staff had to be laid off, and the local government was therefore not able
to maintain the remaining rental stock. Pre-independence housing had many similarities with apartheid
South Africa – beer taxing for local revenues, hostel and walk-up flats. In the post-independence homeownership schemes, people were expected to use their own resources to build. Houses were designed with
outside access into toilets, in anticipation of back yard rental. Note that Bulawayo has 100% sewer
reticulation.
The written paper begins with a history of low income housing in Bulawayo with quite detailed reference to
different townships/neighbourhoods, and to building materials used.
Many Zimbabwean housing officials (including the presenter) were trained in Eastern Europe. Therefore
the concept of housing cooperatives (for banking and for building) was pursued actively, producing a lot of
housing stock. Mention was made of a revolving fund in Bulawayo (no detail on this in the paper). Also a
Millennium Low Income Rental Housing Scheme was mentioned, to which people from hostels are being
relocated.
A National Housing Fund was set up, from which local governments could borrow at low interest rates.
Subsidies were scrapped when the government started getting conditional loans from the World Bank. With
the withdrawal of lending agencies such as the World Bank from Zimababwe (due to non-payment by the
government), local authorities have resorted to lending in the open market.
Currently, it is difficult to raise capital costs in the open market for the construction of new rental housing.
There are some advantages to the homeownership policy – the tenure is very secure, the owners take over
responsibility for maintenance, some use the property as collateral and some create back yard rental units
(i.e. the burden for providing rental housing is now with the homeowners).
However, one lesson learnt is that there is certainly a need for rental housing to complement
homeownership, particularly for those without initial capital. Inflation makes the self-build process in
homeownership schemes difficult. Subsidies remain necessary, as an integral part of enablement. The
current lesson is that macro-economic policy can break it all.
Discussion
This was before a break and the session was running late – therefore short discussion. MEC Paul Mashatile
expressed particular interest in the housing programme that was targeting hostel residents (the Millennium
Low Income Rental Scheme. He also commented that there were many similarities between the Bulawayo
experience and Gauteng. He expressed interest in visiting the Bulawayo local government.
Suitability for the book
This paper will be an important contribution to the “Cities in Africa” perspective. However, the written
paper would require some editing/re-writing, and a change from point-form to actual text in paragraphs. It
was clear that the presenter has a huge amount of experience to draw on, and would probably not have a
problem in bringing a little more comparison with South Africa and dialogue with the other papers
(particularly that of Richard Martin, which also refers to housing in Zimbabwe).
2.7 Who needs housing finance? – Erastus Hoveka (General Manager: Finance and Administration
at the National Housing Enterprise of Namibia)
This presentation contrasts what formal banks have to offer in terms of housing finance, the language,
concepts, principles they apply (in channelling funds from savers to borrowers), and the reality of a poor
but bankable person who needs a small loan of R15 000 to incrementally improve her house. It makes the
obvious observation that formal housing finance is not suitable for the poor. It then turns to options,
emphasising that the poor are credit worthy (even if the only collateral they can bring to the bank is their
goats), and the need to support incrementalism – financing the house wall-by-wall. In other parts of the
world, financial institutions are servicing this segment of the market/demand profitably. Lessons need to be
applied from the housing finance revolution.
The presentation refers to “CA Shelter Finance.” While its not clear to me what CA is the abbreviation for,
it refers to banks that operate through “networks of practitioners and supporting partners.” Various schemes
from Latin America, India and Kenya are mentioned. Their pricing system, scale and profitability is spelt
out, giving a positive picture. In order for these schemes to reach scale, government needs to play a role in
creating a conducive macro-economic, financial and regulatory environment, government needs to show
confidence in the bankability of the poor and provide the land and infrastructure, including secure tenure.
Funders have the role of selecting partner institutions, designing the instruments, funding in a flexible way
and promoting research and dissemination.
The presentation concludes with observations that the poor, through scarcity of resources, have had to
become good financial managers. Finance policy needs to be closely matched with housing policy, and
financial managers should be people with a big heart.
Discussion
Questions for this paper were shifted to the end of the session, and therefore were not that direct
(overshadowed by subsequent presentations). A clarification was requested about the concept of building
“one wall at a time.” The reply was that this was meant figuratively. If a core structure is provided as one
room, then the household should be able to add room by room.
Suitability for the book
This would make an interesting chapter, particularly if it is written as lively as it was presented. However at
this stage it is merely a power-point presentation, and the question is whether the presenter has the time to
prepare a written and referenced chapter. If so, one could request specifically that the reference to the Latin
American, Asian and African housing finance schemes be expanded.
2.8 Low-income housing finance experience in sub-Saharan Africa – Cas Coovadia (Chairperson:
African Union for Housing Finance)
The African Union for Housing Finance is the only continental housing finance body in Africa. The attempt
is to make housing finance more relevant. This involves lobbying at the broad strategic level. Many African
countries are in conflict, difficult to resolve. Many countries have not even begun to look at priorities,
leadership, resources. Many have a macro-economic problems, fluctuating inflation rates. Many countries
import most of their formal building materials, others have a weak system of tenure security. Also there is a
limited capacity to deliver units. In terms of policy, the perception is that the poor should be left to their
own devices. Within this African context, it must be appreciated what South Africa has achieved – the
banks still cater for 90% of housing finance. In other countries, banks are non-existent, and housing finance
is left to state-owned housing finance institutions, which are now collapsing, or to building societies, now
out-dated.
The low income housing finance debate in Africa is only just starting. The presentation made mention of
Mauritian, Ghanaian and Kenyan programmes. With the World Bank and USAID, the African Union on
Housing Finance are focussing on informal settlements, with the premise that these need to be seen as
assets, to be upgraded. The initiative is creating a data-base in different regions in Africa, of relevant
information to be accessed by governments and financiers. The pilot in Gauteng was presented recently.
Discussion
Alioune Badiane took great interest in the research effort mentioned, as this coincides with the current
focus of the World Habitat Day (slums). He emphasised the need to share data, and was going to follow
this up. He asked how his programme related to other initiatives such as the Global Shelter Facility and
Shelter Afrique. The reply was that these programmes are interacting, also the African Development Bank.
Suitability for the book
This would be an interesting contribution to the book. But at this stage no paper exists (to my knowledge),
and the presenter may not have the time to prepare a full length chapter.
2.9 Housing finance initiatives, achievements and constraints in Gauteng – Rory Gallogher
(Department of Housing, Gauteng Provincial government)
This presentation took the position that the subsidised housing environment in South Africa skews the
normal lending environment. To create a better quality environment, housing units need to cost at least
R100 000. In the presenter’s view, to normalise, one needs to eventually get rid of the subsidy. Since 1994,
low income housing finance has been mainly RDP subsidies. Risk is categorised as non-consumer risk and
political risk. The debate as to who should carry the risk is continued in the Community Reinvestment Bill
discussions. With reference to de Soto, the presenter argues that a one-dimensional subsidy creates “dead
capital”, as the environment is uncompetitive and sterile. Further, the subsidy creates fiscal drag, chasing
away potential consumers. In summary, the subsidy is an equitable social grant entitlement, not an
instrument for urban renewal and integration.
This is in contrast to other funds, e.g. the Urban Renewal Fund, the Gauteng Partnership Fund (focusing on
people earning less than R7 500). In his view, it is more effective to package finance on a project-byproject basis, rather than making partnerships at organisational level (though acknowledging the
partnership with NURCHA). Another important aspect is the need for integrity of data on defaults,
vacancies, turnover, cost, price of rentals.
The presentation then turned to the Brickfields housing project, detailing how the finance for this was
packaged on a project basis, with Blue IQ and various other investors. This is seen as an example of
moving away from the subsidy-only approach to a multi-dimensional funding approach.
Discussion
It was commented that one should not consider doing away with the subsidy altogether, given the reality of
household crises, particularly linked to HIV/AIDS, with increasing numbers of people being driven in to
absolute poverty. But it needed to be considered how the subsidy could be better structured, to more
effectively achieve integration. The presenter agreed that the subsidy is needed for the poorest, but not onesize-fits-all. His presentation focussed on the challenges of urban integration and on housing finance gaps.
Suitability for the book
This chapter presents an important case study of project-packaged housing finance. If I were to edit though,
I would request some of the statements about the subsidy to be put in context. Also the Brickfields project
was presented in very detailed tables. One would request that instead the essence of the finance partnership
be spelt out, also with some background of the objectives of this project and its evolution. As yet this is
only a power-point presentation (of which I don’t have a copy). Again the question as to whether the
presenter will be in a position to prepare a chapter.
2.10 Payment for Municipal services – Trevor Ngwane (Anti-Privatisation Forum)
This presentation emphasised that basic services in South Africa remain a highly political issue. The AntiPrivatisation Forum was created to assist people to access basic services including shelter. Other new social
movements have emerged – the Soweto Electricity Crisis Committee, the Durban Concerned Citizens, and
in Cape Town the Anti-Eviction Campaign. A victory in October 2001 was that Eskom and government
decided to end electricity cut-offs in Soweto (though still cutting off elsewhere). Research (HSRC and
Wits) shows that up to 10 million people are affected by water cut-offs. In some municipalities, water and
electricity are cut off together. In Johannesburg the intention is to attach properties, if payments are in
arrears. Yet there is a disparity in terms of what the municipality spends in the suburbs as opposed to
Soweto.
In the presenter’s view, the priorities of the South African government have shifted away from equality.
Linking the services question to that of shelter, the presenter noted that housing requires water, waste
removal, electricity, roads, clinics etc. In the history of disparity, non-payment for services led to bringing
down apartheid. The current “culture of non-payment” is a myth. It is a culture of struggle against
exploitation, against unequal access to basic services. Research in Soweto showed that most people are in
fact paying. But since the idea of cost recovery/return on investment, people feel they are asked to cover
the high cost of servicing the distant areas, where they did not choose to live. Under apartheid, services
were charged at a flat rate. In the meantime, unemployment has gone up, the rich are getting richer, the
income gap between blacks is increasing. A company like Alusaf pays less per kilo-litre of water than a
grand mother in Soweto. Further, water cut-offs are unconstitutional. The demand is for free services for
all, and 6 000 litre per household is not enough. Lastly, the shallow sewer system is not considered
adequate.
Discussion:
This presentation triggered a lot of discussion. The HoD, Sibusiso Buthelezi, commented that pre-paid
meters give the consumers better control over their budgets. His question was why the Anti-Privatisation
Forum is so fundamentally opposed to this, when everyone agrees that its appropriate for telephones.
Another question on payment of services was whether the perception is that government is ripping off the
consumer, or whether the service delivery is inadequate.
In his reply, the presenter emphasised that privatisation, which was promoted a few years ago, had in fact
failed, as was evident from the Nelspruit and the Dolphin Coast cases. Given the volatility of African
markets, with less than 1% of foreign direct investment, of which 70% goes to South Africa, it is a pipe
dream to believe that private banks will lend to municipalities. Victims of apartheid are asked to pay 2x for
apartheid. Johannesburg wants to be considered a world-class city. London is a world-class city, yet
prepaid meters are banned in London. With prepaid meters, there is no administrative justice. It is a matter
of government being ripped off by capitalists, not government ripping off consumers. There is a need to
return to the RDP and the Freedom Charter.
Suitability for book
A chapter based on this presentation would make the important contribution of portraying the thinking in
civil society, particularly the new social movements in South Africa. Many of the arguments, while very
contentious, are relevant, and should be engaged with. Presumably the book would also be disseminated to
civil society organisations, and including this contribution might contribute to a better understanding on
both sides. However, to my knowledge the paper has not been written up, and one would have to request
the presenter to put some time into writing a paper that is fully substantiated, and also replies to the
questions that were raised.
2.11 Approaches to delivering services in cities in sub-Saharan Africa – Karin Pearce (CEO
Municipal Infrastructure Investment Unit)
This presentation emphasised that the choice is not between public or private options, but cost tariffs, and
how they are paid in a sustainable way (user vs. tax payer), transparency in performance measurement, and
how to overcome fiscal constraints (loans etc.). Public-private partnerships (PPPs) did not take off in the
expected way. Private participation in PPPs peaked in 1997 and has dropped since. Many projects
(including the Nelspruit Concession) had to be renegotiated. There has been a decline in investor appetite in
PPPs, as well as grassroots opposition. Only 5% of the world’s water services are held privately.
In SA the role of the private sector is seen in lessening the fiscal burden. The Municipal Infrastructure
Investment Unit (MIIU) was set up to facilitate deals for municipalities. However, there is still a substantial
financial gap. The two water concessions in SA had to be re-negotiate, one of which is now successful.
Investor appetite is low for various reasons. The presenter acknowledged the impact of organised labour
and anti-privatisation movements. There still remains a lack of capacity within municipalities to negotiate
and manage contracts. This is very similar to the experience internationally. The World Bank still believes
that PPPs can work better. However, in South Africa there is renewed emphasis on public-public
partnerships (though different from previous monopoly public providers). The principles of public-private
partnerships are now applied to public-public partnerships, capital has to be raised in the market, and
transparency and accountability are important. The idea is to compete fairly with public-privatepartnerships.
The presentation also pointed to the experience of community-public partnerships, specifically in the
Brazilian city of Porto Alegre. It also emphasises the need to understand the economic base, so that services
and tariffs can be differentiated to different user groups. In a case like Orange Farm, there is a need to
incentivise consumer behaviours. However, basic access must be guaranteed.
Discussion
David Kithaki of UN-Habitat asked what has generated the demand, or is this simply assumed.
Other comments were on the Triple P (?) model, and the Dolphin Coast Agreement.
The reply was that the Dolphin Coast case seems to have been resolved. She also referred to the Mexican
example, in terms of municipal bonds (?). She would welcome any suggestion for a financial solution
through which people did not have to pay.
Suitability for the book
This presentation would make a very important contribution to the book, giving insights into current issues
around municipal service delivery in South Africa. It is a refined response to the previous presentation, and
definitely one that civil society organisations and activists must engage with. At this stage the presentation
is in the form of a well-structured and fairly dense power point. I don’t think it will take the presenter much
to turn this into a written chapter. She could be requested to build in some of the local examples she
referred to in the presentation, that are not in the power-point. She could also expand on the Port Alegre
case, and any other relevant cases from the South.
2.12 Approaches to financing service delivery in cities in sub-Saharan Africa – Reginald Max
(Infrastructure Finance Cooperation, INCA)
This presentation gives a sub-Saharan Africa perspective on financing service delivery. It gives the broader
context, in which national and local governments operate and finance nearly all service delivery, with a
gradual recognition of private sector participation. There is still very little competition, little autonomy in
financial management, and users have little opportunity to voice demands. With an increasing trend
towards fiscal decentralisation, mandates of local governments are increasingly unfunded, therefore the
need for local governments to find viable financing possibilities. There have been financial market reforms
towards greater efficiency.
A potential solution is to attract funding resources, using the potential of the local financial market
architecture (?). Sub national debt markets should be created to issue short term notes and long term bonds.
The debt instruments may be municipal treasury bills, municipal treasury notes, revenue anticipation notes,
revenue bonds, and general obligation bonds. Clearly this will involve conditionalities, both at the micro
level (disclosure requirements, budgeting and tariff setting, etc.) and the macro level (reforms,
standardisation and capacity building).
The presentation commented on the World Bank’s Local Capital Development Project, which is based on
an analysis of municipalities, the financial market, and legislation and regulatory frameworks, and then
recommends amendments and assesses the choice available to municipalities. Here the presentation pointed
to risks, for instance that “sub national borrowers have not repaid their debts, because they believe they will
be bailed out by government.” Other problems have been around untransparency of sub national borrowers,
assuming governments provide guarantees. The presentation concludes with some recommendations to this
World Bank project, including full participation by all stakeholders, in the context of a wider financial
sector reform.
Discussion
This was the last paper in a session that had to be closed in a rush in order for participants to catch the bus
for the city tour. Discussion was about all three papers presented in this session, and didn’t allow for much
discussion of this paper – this is not to imply that this presentation was not relevant.
Suitability for the book
As a sub-Saharan African perspective, this presentation would be very relevant to the book. The power
point presentation is well structured, and could easily be expanded into a written chapter, given some time
on the side of the presenter. One could request some concrete examples be included.
3. Responses to paper by delegates
See comments above for each of the presentations.
4.
Issues to be noted
4.1 Issues for further research
The People’s Housing Process
- How to make funding mechanisms for the people’s housing process more flexible.
- How can eviction and relocation (when necessitated) be made more responsive.
- How to incorporate poverty alleviation into a people’s housing process.
Housing rights
- Analysis of the Modderklip case, in comparison to Grootboom and others.
- Housing right in South Africa to be contextualised within Africa.
Social and rental housing
- Need to capture the experience to date in social housing.
- How to support a private rental system (forms of financial and technical assistance). A need to
document the new emergence of rows of formally constructed back yard room (e.g in Ivory Park).
- Low income housing cooperatives in Zimbabwe need to be documented and considered for
relevance to SA.
- Bulawayo’s Millennium Low Income Rental Housing Scheme (for relocation from hostels) should
be documented and considered for relevant to SA hostel situation.
Housing finance
- Finance mechanisms for financing housing room by room.
- Housing finance approaches in countries like Ghana and Kenya (mentioned by Cas Coovadia)
should be documented and considered for relevance to SA).
Service delivery
- Need to document the Porto Alegre example of public-community partnerships on service
delivery, and consider this for relevance to SA.
Research coordination
- Need for effective coordination between similar research initiatives (locally and internationally),
and good dissemination.
4.2 Recommended policy amendments
People’s Housing Process
- A focus is needed on good government, not just good governance.
- Flexible, process-oriented funding mechanisms must be found (beyond breaking the rules), to
make a people’s housing process responsive to the reality of the poor.
- Ensuring housing policy is aligned with the principles of the People’s Housing Process.
Housing rights
- Search for an appropriate policy response to Grootboom needs to be ongoing.
- Relocation needs to be done in a responsive way. Need to find appropriate relocation packages,
that also allow for choice, nut just buy-in.
Social and rental housing
- It was asked, whether the current approach to social housing is still appropriate. It needs to be
demand-driven, yet the demand is mainly for ownership.
- In terms of getting banks to lend to social housing institutions, a carrot and stick approach is
needed.
- Back yard shacks/rental units need to be seen as a form of housing that can be improved, as there
will always be a percentage of households that want to rent.
-
Need for a rental housing to complement home-ownership – this requires a re-focus in policy.
Subsidies and other housing finance
- It was found that the subsidy bands are no longer relevant, due to inflation.
- Should the capital subsidy for housing eventually be phased out altogether, or substantially
restructured, so as not to skew the market?
- Finance policy needs to be closely matched to housing policy. If incrementalism in our housing
policy is to be emphasised, one will require a policy framework for incremental finance (room by
room).
- Housing and finance policy must show confidence in the bankability of the poor.
Service delivery
- A policy response may be needed to the demand from the new social movements for free services.
There was a comment that communities have little opportunity to voice their demands.
- Policy on service delivery should incorporate public-community partnerships.
- Policy needs to respond to the fact that municipal mandates are under-funded.
- Need to create sub-national debt markets for financing of service delivery.
4.3 Implementation guidelines
People’s Housing Process
- Richard Martin’s paper gives practical ways of building support, control and regulation into a selfhelp / people’s housing process. Implementation agencies need to be truly bottom-up.
- Marketing or promoting the People’s Housing Process, so that it can withstand the competition (or
undermining) from developers.
Social and rental housing
- The need to develop guidelines for the improvement of back yard rental units, including
mechanisms for financial assistance to landlords.
- Local authorities have to recognise back yard tenants as part of the citizenry that need to be
serviced (including refuse collection, electricity connection, sanitation, etc.). A level of regulation
over this sector is also required (guidelines for municipalities would be relevant, if not legislation).
- Any guidelines on the management of rental housing must stress the importance of integrity of
data.
Housing finance
- Financing housing room-by-room: guidelines are needed for such schemes.
Service delivery
- Guidelines are needed on how to package housing finance on a project-basis (multi-dimensional).
- If public-community partnerships for service delivery were to be considered, guidelines would be
required for both community organisation and public authorities.
5.
Copy of rapporteur report-back (8 October)
Report back from parallel session on Shelter and Services
Rapporteur: Marie Huchzermeyer
______________________________________________________________________________________
Overlap with other sessions:
poverty, governance/management, land are all central to
“making shelter and services work for the poor”
Who are the poor? e,g, the lady called Zanele, who only has two goats to bring to the bank as collateral
(we need to understand who they are, what their capacities are, and we need to tailor systems that work for
them)
Its hard to do this if
- no local building material industry (reliance on imports);
- property rights are insecure;
- the macro-economy is in crisis – fluctuating inflation rates in Ghana, exponential interest rates in
Zimbabwe… (however: Bulawayo in Zimbabwe has 100% coverage of waterborne sewerage!)
*Note: the MEC expressed interest in learning more from aspects of the Bulawayo experience.
______________________________________________________________________________________
We discussed four different types of shelter
- individualised (assisted self-help, presumably in home-ownership, though occupancy permits in
Zambia)
- collective (referred to as “social housing” in SA)
- back yard/private rental
- Inner city quality housing (through Gauteng Partnership Fund) – key lesson: need to package finance
partnerships on a project-by project basis.
Each shelter type has specific challenges for
- finance
- services
- governance/management
Similar challenges: Assisted self-help (PHP) and collective housing (Social Housing) both require
- special skills – implications for training institutions (Wits)!
- customised management systems
- effective partnerships
- both rely on customised subsidies
______________________________________________________________________________________
The question of Back yard shacks/
- a sign of housing shortage, to be eradicated?
or
- a form of relief to the housing crisis?
A percentage of the population will always need to rent
- non-qualifiers of subsidy
- people on waiting lists
- temporary migrants
However, SA and Zimbabwe have been selling off their public rental stock (yet also East Block influence
over policy in Zimbabwe – have vibrant housing coops!).
Note that private rental fills this gap and is an important form of income generation.
(yet in Soweto very poor standard of shelter & services – in newer townships a better quality of
backyard rental is emerging … but how are the services dealt with? Local government needs to
respond to this important form of densification/compaction – “support”!)
Note: there will be less and less available land, therefor back yard rental will become more and more
attractive.
Irony: social housing (mostly a form of rental tenure) is targeted at a higher income sector that has homeownership aspirations.
______________________________________________________________________________________
There is a role for government specifically in making shelter and services work for the poor
-
assisted self-help housing
service delivery (contested terrain)
urban land reform (which is more than just urban land delivery) (contested terrain)
financing shelter and services
(or not? do we believe our society will “normalise” to the extent that subsidies can be done away with? Do
subsidies per se distort markets, or is their release in SA simply badly designed? … here we needed input
from the session on vulnerability)
Note: Zimabwe had to do away with its housing subsidies when it started lending form WB.
Note: the low income housing finance debate in Africa has only just started (very few countries have a low
income housing finance system!) African Union on Housing Finance is intent on lobbying African
governments.
There is a role for local government,
but: don’t decentralise without also decentralising resources!
Infrastructure Finance Coroporation (INCA) asks how best to finance municipalities (for service delivery).
- looking to the financial market – note: there is a range of debt mechanisms, but micro- and macroeconomic conditions apply.
______________________________________________________________________________________
Roles beyond government:
-
important role of the courts in a context where the poor struggle to access land/shelter
(*note: Alioune Badiane was requesting that SA sets up a system of monitoring evictions, and through that,
interpretations of housing rights, need to link up with WB office in Pretoria – monitoring of Cities without
Slums)
-
role of social mobilisation (AFP) in pressurising government in areas where it is not making shelter
and services work for the poor. Victory: Eskom stopped cutting off electricity in Soweto.
Can greater cross-sector social mobilisation (including lawyers – see TAC) lead to more radical
judgements that lead to permanent rights to land/shelter for unlawful occupiers, so that their process of
consolidation can proceed? (did Grootboom lead to as significant a message to the poor as it did to
analysts, officials, policy-makers … any difference on the ground?)
Public-private partnerships
(mentioned in relation to social housing: note that banks are still not partners in the SA social housing
sector)
- for services delivery (Municipal Infrastructure Investment Unit - MIIU):
Public-private partnership (PPP)
(note global context of low appetite in this form of
partnership, but still promoted by WB)
In SA current emphasis on public-public partnerships,
and importance of community participation (reference to
Porto Alegre) – users must have an opportunity to
make their demand heard.
____________________________________________________________________________________
Challenges for agencies financing housing for the poor:
-
-
appropriate research (see African Union for Housing Finance – research on informal settlements in
African countries … *Alioune Badiane expressed interest in this, re current UN-Habitat emphasis on
slums).
recognise: by necessity, the poor are good financial managers (they know how to manage scarcity)
develop systems that enable incremental building
help the poor shift their resources from financing for death (funeral insurance) to financing for life
(housing credit)
Marry housing finance with housing policy
Hire a director with technical and banking expertise, and a big heart!
______________________________________________________________________________________
Additional detail:
Role of government in assisted self-help housing: practical lessons
Appropriate government for the poor – ensuring a balance between freedom, control, support … user
friendly,
i.e. open week-ends and evenings;
plan approval done on site (management and
control decentralised to the field);
Control of standards applies only to
- structure
- ventilation
- room size
Temporary shelter built with the roofing material for the formal house.
Constraints in government
- obstacles: bureaucracy’s control over
- its staff (reporting structure/…more recently “performance management” – same in SA’s
PHP)
- its funds
“For a system to be user friendly, it must break the rules”
Relevant comparison with PHP in SA
(But note: people first have to access legal sites, before they can participate in PHP)
- critical importance of the facilitation grant and technical assistance
- Its all about getting the best (customised) deal for the poor!
- Yet, has bureaucracy adapted sufficiently?
______________________________________________________________________________________
6.
Suitability of the chapters for proposed book
See detailed comments above for each of the presentations. Given that at least half of the papers are
specifically about the South African experience, one might consider structuring the book in two parts, one
international (or the south, or Africa), the other on South Africa. If most of the relevant papers are to be
included, and chapters to be a reasonable length (at least 5 000 words) then one might even have to
consider two volumes, i.e. two books on the same theme, one South African, the other international. In my
view there would be a market for both. The benefit of having only one book though is the dialogue (even if
mainly editorial) one could achieve between the international and the local chapters.
7.
Concluding comments
The shelter and services session was extremely useful, and it would be a pity if the experience and thinking
that was presented and discussed were not disseminated further. It was particularly relevant to consider
housing and service delivery together, as much can be learnt from the efforts in these two sectors (re
financing, regulating, governing, alleviating poverty, role of civil society, etc.), and if anything, more
collaboration is required between them. The African perspective that was incorporated through a number of
papers was also extremely useful, forcing the participants to consider a wider range of options and
situations. It was also beneficial to have policy issues considered in relation to the challenges of
implementation. The case studies that were presented added reality to the delivery challenges, and allowed
for comparison with other countries. It would be good if this initiative could be taken forward in the form
of a book, but also in the form of concrete policy discussions, the creation of research initiatives, and the
development of guidelines where appropriate.