REPORT ON HOUSING

1. NEDLAC PROCESS AND BACKGROUND

1.1. Nedlac's involvement in efforts to enhance housing delivery started in 1997 with the development of a special reporton housing. The report analysed existing housing subsidy schemes and also identified some of the key barriers impacting on access to credit.

1.2. Some of the barriers were identified as follows:

1. that in 1996 prices, a total of 56% of the subsidy amount was taken up by the costs of land and infrastructure associated with housing development, thus leaving about R 7000-00 for the construction of the house itself.
2. estimates at the time showed that such an amount could only buy a house of 20-25 square metres.
3. CSS October Household Survey showed that commercial banks preferred to lend to those earning above R 2500 per month.
4. this trend has meant that about 42% of the population earning below R 1800-00 and those unemployed would not have access to commercial credit.

1.3. In its attempt to address some of the problems highlighted, the department of housing established a number of institutions which were aimed at alleviating the situation. These included the following initiatives:

1. the National Housing Finance Corporation which was established in June 1996 with the objective of facilitating wholesale finance to those who do not have ready access to formal credit markets.
2. the National Urban Reconstruction and Housing Agency established in October 1995 to offer guarantees for bridging finance to developers of low-income houses.
3. the People's Housing Process which involves setting up a number of initiatives to support people who are building their own houses.

1.4. The special report recommended the need for the department to become involved in more planning and also to explore other mechanisms to enhance access to credit. Against this background, the Development Chamber developed a terms of reference on housing which identified some of the key issues to be further developed with the aim of enhancing existing housing delivery programmes.

1.5. The Nedlac terms of reference had seven key points which can be summarised as follows:

Targets: to assess the Department of Housing's targets in respect of completed housing units.

Time frames for delivery: to consider the time periods in which it is possible for the targets to be achieved.

Quality: to consider the quality of the housing units delivered, the size of units and their allocation.

Financing Mechanisms: to explore the use of funds for housing delivery, including public sector funds, the resources which can be mobilised by organised labour and private sector resources from financial institutions, as well as the use of prescribed asset requirements.

Housing Parastatal: to explore the establishment of an institution to accelerate the delivery of housing in accordance with specified targets.

Social Housing: to consider public housing rental stock targets and a general increase in rental stock.

Information: to assess the feasibility of establishing a data-base of accurate and reliable information on the housing programme for use by all stakeholders.

1.6. To carry through this broad mandate, the Executive Council at its meeting of August 1997. approved a proposal to establish a high-level housing committee to be chaired by the Executive Director.

1.7. The housing committee comprised senior officials in the Department of Housing headed by the Director General for Housing plus the Nedlac constituencies.

1.8. Since the establishment of this committee in November 1997, frequent meetings have since taken place, including two sessions with the Minister of Housing.

2. The attached report therefore concludes in part, two specific proposals on housing.

3. The Nedlac Development Chamber and the Department of Housing may consider to make further proposals on housing.