Letter to the editor

I am grateful for the exchange going on in the media about the 20% social responsibility target set to developers, even though the concept was conveyed on the basis of an unfortunate misunderstanding of what I said.  The important part is that there has been vibrant discussion on the matter and these various comments would give us an indication of the different views.

The reason why I have chosen to respond is because it is important at all times that each one of us who engages on public level, i.e. the media and those who write letters to the media avoid working up fears of the public.

What I have constantly expressed is my desire to ensure that we have integrated developments; that we can ensure that the property boom in the upper end of the market can benefit all South Africans.

We have been working towards selling this idea and had planned a conference where all relevant stakeholders can come together and work out a number of issues.  Chief among these would be defining the percentage that would be allocated to low income houses, secondly to work out where these houses would be located, bearing in mind the new policy.

Basically, we wanted to borrow from other developing countries that have similar challenges in providing housing for their people.

The basic principle applied in various other developing countries like Malaysia and Ireland is that out of any housing development, 20% to 30% of these developments, based on either the monetary value of the development or the value of the land (this differ from country to country) is allocated to low income housing, although not necessarily as part of the same development.  We did not want our target to be onerous on the building industry and therefore set it at 20%.  Other variables would have been worked out at the Indaba that took place on 22 and 23 September 2005.

The bottom line is to create communities and to ensure that we reverse the inhumane housing polices which apartheid created whereby small houses were built, far away from cities.  This kind of development will not work in South Africa.  It is costly in the long run and not sustainable.  I therefore set my sights to check with the industry what their variables will be.

The impression created in the media is that we laid down the rules.  This is not the case and this is why we had a housing indaba with all stakeholders.  If we wanted to lay down the rules, we could merely have passed a law to this effect in Parliament, but we wanted to consult all stakeholders, so that when the decision is taken, it has to be by general consensus.

I would like to reiterate what I had said before, that “there is no intention by the Department of Housing to build a low cost house on the doorstep of a R3 million house”.  What we do want, and that was the aim of the housing indaba, was to develop a social contract to assist us in providing housing to those in need.

We are grateful for the positive inputs and undertakings given by the participants at the housing indaba, which inter alia included representatives of the building and civil engineering sectors, the building material and manufacturers suppliers, the South African Institute of Architects, the mining sector, civil society organisations and labour unions, the banking sector, the property sector, the Homeless Peoples Federation, the CSIR, the Institute for Housing of South Africa and Women for Housing.

The Social Housing Contract that was discussed at the Housing Indaba binds all housing stakeholders to a contract compelling them to increase the construction of low cost housing by more than 200 000 units per year.  The Indaba also discussed guidelines for the implementation of the contract.

The agreement, titled “Social Contract for Rapid Housing Delivery”, will see signatories working together to remove bottlenecks in housing delivery, investing more resources in low cost housing and fast tracking delivery.

The government is currently building low cost housing at a rate of 200 000 houses per annum, with a backlog of 2.4 million units.  Given current housing trends, in ten years, if government continues building houses at this rate, the country will be facing the same backlog it is sitting with today and would not achieve its Millennium Development Goal of eradicating informal settlements by 2014.

This inequality is no more palpable that at housing, where at one end of the spectrum there has been a property boom, with housing prices recording the highest growth in the world and at the other we have 2.4 million people living in conditions that are unacceptable in a country such as ours.

To deal with this glaring inequality in the housing market, the Social Contract stipulates that for a developer to be allowed to construct new upmarket housing projects, he/ she should contribute a percentage towards low-income housing.

L.N Sisulu, MP

Minister of Housing