The government’s brave new housing loan scheme will bring houses within the reach of the poor, writes Gaye Davis
A YEAR to the day after Joe Slovo first walked into the Ministry of Housing to give it the shake-up of its life, his successor, Sankie Mthembi-Nkondo, could this week announce a June 5 start for government’s mass housing
Unveiling new subsidy and loan and savings schemes, giving people earning R3 500 and less a foothold, and plans for housing support centres offering advice and cheap building materials, Nkondo paid tribute to the man whose first act as housing minister was to tell his director-general he wanted him to go.
Nkondo’s deputy director-general, Neville Karsten, remembers the day well — he and his colleagues were reeling with shock at the announcement that “a communist, someone seen as Public Enemy Number One”, was taking over.
“One expected to meet an ogre, yet found a quiet, gentlemanly person who was very forthright, knew exactly where he was going and what he wanted to do and who spelled out his policies in such a way that one could completely identify with him,” Karsten said this week.
Of all the ministries, housing has perhaps had the smoothest transition. One reason for this is the work that preceded the April 27 elections — painstaking and often painful consultations with stakeholders brought together in the National Housing Forum.
Slovo’s arrival aroused fears that the work done in devising a housing policy based on free-market principles would be washed away by command economy enthusiasms — but he quickly allayed them.
Said Karsten: “He accepted the work that had already been done, so we could build on it. We had a broad framework in place but at that stage it was a very shaky skeleton — we had to clothe it in flesh. We had a good basis on which to start — all we needed was the strategic thinking.”
Slovo gave it. His incumbent director general, Louis Koch, took early retirement and former National Housing Forum powerhouse Billy Cobbett came in.
“The same day, Joe addressed the entire department. He told us what had happened and spoke about the need to work together. In this way, he was able to cement relations between the old officials and the new,” Karsten said. “Without him, we would not be where we are today.” And without the pre-election years of negotiations with the National Housing Forum, the new ministry may well have found itself obstructed, sabotaged or generally debilitated by foot-dragging old-guard bureaucrats.
Refining the “shaky skeleton” of a legal, institutional and financial framework to get delivery going was the first priority of the new ministry. It meant the actual rate of delivery dropping to historic lows while all the pieces were put into place — but also means a new policy that is
>From June 5, Nkondo announced this week, banks will start lending to individuals earning less than R3 500 in terms of the record of understanding forged with government last
Consolidation subsidies, for people who have already had state assistance in the form of a serviced site, will be available for building “small but solid” structures.
And a new system of institutional subsidies will be introduced, allowing people to form housing co-operatives and associations — and opening the way for cheap rental
Bank loans will be offered across the country, but only where cover is available in terms of the Mortgage Indemnity Scheme (MIS) — in other words, areas where due process of law can be applied. Loans will be granted on a strictly commercial basis, and could be as small as R10 000, repayable over 20 years.
Those unable to afford the five percent deposit will be able to save money towards it over a minimum of nine months — and there will be subsidies to match the deposit they have saved for.
To meet the ministry’s part of its bargain with the banks – – it undertook to solve the problem of houses formally repossessed, but which lending agencies cannot get access to — Nkondo announced the creation of Servcon Housing
A joint venture by the department of housing and lenders, it will offer people living in the estimated 30 000 repossessed but still occupied homes a chance to reschedule their loans and resume payment or — if this is unaffordable — help find cheaper accommodation.
But Nkondo warned that although housing got the largest budget increase of any department, it was still “nowhere near large enough to satisfy demand all at once”, while the backlog would take years to deal with.
Communities across the country should accept that “nothing will move, nothing, if we do not take responsibility for ourselves” by paying for housing and services, and the repair and protection of community assets.
“This is what Masakhane is all about,” she said. “A strategic alliance where government, the private sector and individuals within their communities pool resources to transform and uplift South Africa.”
It was an unfortunate fact of life that most South Africans — those sidelined in the past by both government and the private sector — would never be able to afford housing on credit. But they are the focal point of the new policy.
“Let us be quite frank. The maximum subsidy of R15 000 will seldom, if ever, buy outright the kind of house people imagine when they turn to daydreaming. But it will do something South Africa has never seen before. It will provide the poorest people in our country with a tangible and workable housing opportunity.
“It will provide them with security, services and a structure. It will give them water, waste water disposal, solid walls and a roof … It is our task to ensure that people who have little to add to the subsidy can maximise the advantages to be gained from what little they have — whether it be their own labour, minimal savings or other
Housing support centres would be set up in each province to provide, over time, advice, finance, training, jobs and cheaper building materials to the poorest of the poor.
But ultimately, said Nkondo, only South Africa’s people could decide “whether we are to get to work building or not” — by organising within their communities and paying for housing and services, “because a rand withheld is one rand less for new housing or upgraded services”.
Joe Slovo would have been proud of her.