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What the 2023/2024 Human Settlements Budget Vote Speech didn’t say

Isandla Institute | 2023-05-22 | 437 views

On 10 May 2023 the Minister for Human Settlements delivered the Budget Speech for the 2023/2024 financial year. The significance of this date is that it was also the 29th anniversary of the inaugural address by former President Nelson Mandela which, as the Minister highlighted, serves as a significant reminder of how much still needs to be done to achieve the promise of [adequate and dignified] ‘houses for all’.

In seeking to position the sector as the ‘primary instrument for creating a better life for all’, as stated by the Minister, we were expecting a sober assessment of the human settlements sector and the broader socio-economic environment it operates in, clear commitments for the year ahead, and clarity on how budget allocations would serve to translate those commitments into measurable actions and results.

However, the speech was light on detail and mostly focussed on progress in the previous year – which, given the examples quoted, is quite meagre. The big picture was missing, as poor households are struggling in the current economic climate, and the sector is not speaking to this reality in terms of its actions.

Welcomed is the progress in facilitating the release of 539 hectares of land for housing development. The Minister indicated that a further 1,500 hectares of publicly and privately owned land is in the process of being acquired. However, no clarity was provided on whether this land is indeed well located, as is necessary for spatial transformation, a fact acknowledged in the Minister’s speech. To date, state-subsidised housing development has relied on large tracts of greenfield land on the urban periphery, and thus the focus has to be on in-situ informal settlement upgrading, supporting informal backyard housing, and releasing well-located (green- or brownfield) land for social and affordable housing.

The Minister’s take on informal settlements was somewhat confusing and regressive. On the one hand, there was an affirmation that the focus on informal settlement upgrading remains key, with 1 269 settlements at various stages of upgrading. On the other hand, the language of ‘eliminating slums and informal settlements’ evokes memories of a not-so-distant past when ‘slum eradication’ was the ultimate goal, to be achieved through the mass roll-out of greenfields housing projects (coupled, of course, to a law-and-order response to ‘illegal occupation’). Indeed, the Minister’s intention to acquire suitable land parcels to build houses for informal settlement communities takes us back at least 5-10 years, despite the oft-repeated declaration by the Department that there is a shift in programmatic focus from the delivery of full structure BNG homes ‘for all’ to a greater emphasis on delivery of serviced sites, and the facilitating of self-build processes. This, as pointed out in the Department’s 2022-2023 Annual performance Plan, is to ensure that limited budget is concentrated on the needs of the most vulnerable. The Minister provided no clarity on the Department’s thinking as to what will be done to support self-build top structure construction. The informal backyard housing sector has once again been ignored, despite it being a vital provider of affordable rental accommodation.

In launching First Home Finance in February this year, the Department has provided a mechanism to include previously excluded beneficiaries who could not qualify for Finance-Linked Individual (FLISP) subsidies. In many cases, the disqualifying criteria for households was the inability to access loan finance via banking institutions or other approved credit providers. An innovation of First Home Finance is that 'housing loans granted by community-based savings schemes, such as stokvels and co-operatives’ as well as ‘household’s own resources or savings’ are now accepted. While questions remain about how this will be implemented in practice, it is a positive step to see the inclusion of previously excluded beneficiaries who cannot leverage funding for self-build via traditional finance institutions. It is concerning that in the budget vote speech the Minister chose to highlight the importance of facilitating employment-assisted housing schemes as opposed to the broader inclusion of the many vulnerable potential beneficiaries living in informal settlements and backyard dwellings who could use the mechanism to realise their right of access to housing. The subsidy could also be used by homeowners to expand or develop their properties to contribute to rental stock.

The increase in the subsidy quantum is welcomed, particularly as the increase can be used for solar panels and rainwater harvesting devices to improve the resilience of households. But this measure does not appear to include any retrofitting of BNG housing or extend these services to backyard dwellings. These households, who often do not have access to basic services, could benefit from technology such as rainwater harvesting and even shared gains from solar infrastructure. It also not clear if, and/or how, households who embark on self-build could be assisted to ensure that they too can benefit from these amenities.

The importance of tenure security cannot be over-stated. While the Department recognises the need to fast-track the issuing of title deeds, we advocate for alternate forms of tenure security, short of title deeds, that can be used by beneficiaries in the meantime to enable greater security of tenure. This would allow for property owners, ranging from subsistence landlords to micro developers in lower income areas, the opportunity to leverage their property to provide dignified rental accommodation to backyard residents.

The Minister remained silent on the status of the ongoing Human Settlements policy and legislative review, and how or when civil society will be drawn on to provide input into these processes. Arguably, policy and legislative clarity is essential for ensuring a more coherent, effective and coordinated approach to the complex human settlements challenges facing the country. The informal backyard housing sector and self-build housing construction are key policy gaps that need to be addressed. Only with a more nuanced approach to the challenges and opportunities in the human settlements sector can the sector be the ‘primary instrument for creating a better life for all’.

Slum upgrading remains the most financially and socially appropriate approach to addressing the challenge of existing slums. UN Habitat (A Practical Guide to Designing, Planning, and Executing Citywide Slum Upgrading Programmes 2015 (PDF), page 15)

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