Human Settlements Development Bank a step in the right direction for SA

ANC’s Freedom Charter was the first document, throughout the world, to proclaim the right to dignity of shelter, something which long preceded what was to claim that this is a natural right.

It is now a universally accepted right, deeply embedded in the UN’s Universal Declaration of Rights, binding on all states to provide.

We as South Africans are the precursors of the proclamation of this right.

Following on the tradition of the Freedom Charter, access to (“adequate”) housing is a right very aptly captured in our Constitution and one that the current South African Minister of Human Settlement, Water and Sanitation subscribes to.

Many decades later it formed part of the global policy agenda.

However, our current reality is that housing remains a global challenge as millions of people around the world still live in the most atrocious conditions and access to housing remains a challenge that sharply throws up the huge inequalities which define those that “have and the have not”.

It is now generally accepted that the demand for housing will increase as urbanisation and population growth persists, and South Africa is no exception in this regard.

This is also the case in most vulnerable parts of the world (Africa and some parts of the Middle East that are plagued by wars is a glaring example).

The UN Human Settlements Programme (UN-Habitat) has estimated that the number of people living in inadequate housing will rise to 900 million by the end of 2020 worldwide.

This problem is unsurprisingly concentrated in the poorest countries.

In South Africa, the General Household Survey (2018-Stats SA) reveals that approximately 2.3 million South Africans or 13.1 % of households in South Africa still live in informal settlements and is in need of adequate housing.

In this context, housing finance is normally unaffordable to the low income groups.

In the international context the McKinsey Global Institute Report (2014) estimates a housing affordability gap affecting 330 million households, with 200 million households in the developing world living in slums.

The operating business model of the Human Settlements Development Bank (HSDB) has already been approved by National Treasury in 2020. The office of the State Law Advisor has already been consulted on the contents of the draft HSDB Bill and a process is underway to incorporate the comments received for consideration by cabinet.

The HSDB was also mentioned in State of the Nation Address in 2020.

A process is under way to incorporate comments received, and once this process is completed, the Bill will be considered by Cabinet, where after the Bill will be tabled in Parliament.

The idea of the Human Settlements Development Bank started in 2014, when the Minister of Human Settlements Lindiwe Sisulu committed herself to the establishment of a so called “Housing Bank” in support of the entire human settlements delivery value-chain.

This is a painful milestone to her detractors, but a significant progress towards the ideals of the Freedom Charter, underpinned by the ANC’s 54th Conference Resolution, which may see her becoming once again a victim of her conviction and allegiance to the broader objectives of the National Democratic Revolution (NDR), as it transpired when she implemented the ANC’s resolution on Israel while she was in the Department of International Relations.

It is still a mystery why there was not even a single individual who prevailed in her defence from those who tasked her with the responsibility to implement that (Israel) resolution. Ironically nobody is saying anything about that even today, an indication that such was a toy and agate resolution from that conference.

Perhaps we need more Bushiri incidents as a proof of glaring leakage in our sovereign and foreign policy regime.

One is tempted to even ask; why is our revolution so weak and cheap?

There are challenges in the human settlements value chain that is also exacerbated by funding issues, which together with affordability from a demographic perspective create challenges specifically for African/black housing finance customers, let alone the fact that Human Settlement and Water budget has been halved by the Finance Minister, opting to save SAA instead, just before local government elections.

In this regard the Department of Human Settlements is confronted with a number of challenges that include: I must emphasise that the above is by design, not accidental that there is no money for these essential services.

Black people are not a priority in this country and their situation is not treated with the urgency it deserves by National Treasury. With the Human Settlements Development Bank (HSDB), access to financing will be created, while social outcomes will be maximised, ensuring a more effective housing market and reducing the cost of human settlements financing.

With the 54th Conference of the ANC at Nasrec in 2017 in mind, a resolution with regard to human settlements was adopted with a clear outline of the direction to eradicate past imbalances and housing insecurity in general.

This resolution specifically mentioned the implementation of housing in such a way to support black owned companies in the housing residential property sector, the transformation of urban planning and management in such a way to change apartheid spatial residential patterns, and the creation of new cities and towns by de-racialisation of society.

The question is; how does the R33 billion MooiKloof Housing Project link to the 54th ANC conference resolution?

It’s worth pondering both its genesis and modalities.

Furthermore, human settlements housing options must include site and service schemes, with options for people to build their own houses.

With this resolution in mind the Human Settlements Development Bank can be considered as visionary, in reaching the set goals.

In this regard the new Human Settlements Development Bank will target specific segments of the market from an affordability perspective.

Therefore, the following markets will be targeted:

When the source of income of African/Blacks is analysed it shows that limited access to housing finance for Africans to housing finance exists.

Together with the fact 86.7% of African/Blacks received an income of less than R19 999, access to housing finance, specifically in traditional housing finance markets, is limited.

In this context, the new Human Settlements Development Bank will be able to fulfill the role of service provider to the so-called “Gap Market”.

The credit for this development should go to the Department of Human Settlements and specifically Minister Sisulu who championed this initiative from 2014.

The Human Settlements Development Bank will definitely accelerate the delivery of housing across the country.

This development will also change the landscape of housing in South Africa from an “apartheid spatial planning perspective” to an outlook of a non-racial society.

The Minister has so far made remarkable progress towards adequate housing and transformation of society.

  • Mphumzi Mdekazi is advisor to Minister Lindiwe Sisulu.

OPINION: Mphumzi Mdekazi