SPEECH BY LN SISULU MINISTER OF HOUSING AT THE HAND-OVER CEREMONY OF THE ALIWAL GARDENS HOUSING PROJECT BY COMMUNICARE

30 July 2007

Ruyterwacht, Cape Town

________________________________________

Master of Ceremonies

Invited guests

Ladies and Gentlemen:

The generation of our time carries an immense burden, not only to correct the imbalances and distortions of the past, but also to cement the foundation that will provide a secure and a brighter future for all. Not only must we have the necessary conscience to undertake this task, we must also be prepared to expend the necessary resources for this. In reversing the legacy of the failed and catastrophic policies of the past we must have the vision of a country able to increase productivity through the retention and nourishment of critical skills. We must bring citizens closer to their places of employment and of social interaction. We must place the country on a sustainable growth path to increase peace and stability. An honorous task where we need all the help we can get.

Thus, I was particularly thrilled when in 2005 the Board of Communicare asked to see me to give me a presentation on their programmes. They were a natural social partner for me faced with the enormous challenges as I have outlined. In particular the challenge that rapid urbanisation has thrown up. For any country experiencing the phenomenon we are experiencing and alarming urbanisation combined with increased cross-border migration, greater efforts should be put into work such as Communicare is doing; ensuring adequate affordable shelter.

With the distortions and the displacements of our different communities caused by political and spatial planning policies of the past, our generation can achieve our collective vision of a better life for all our people. This it can do if it is to prioritise the dominant issue of our historical backlog. In addressing this particular care has to be taken to adequately respond to the low levels of low-cost and affordable rental housing.

A 2002 StatsSA survey indicates that South Africa’s rental housing comprises of one third (29 percent) of the entire housing sector. This is far less than in other developing countries at the same level as ourselves where rental housing constitutes more than 50 percent. This, then, is an anomaly that needs rectification, more so especially when account is taken that according to a Social Housing Foundation study the estimated demand for rental housing was in 2001 for 1,8 units. Moreover, the study expected that by the end of a ten-year period the demand for rental housing would reach 81 000 units per annum.

One of the major reasons why we lag so far behind in our provision of rental housing are as you would know related to the fact that developers do not see the development of new rental housing units for the low and the middle-income sectors of our societies as an investment opportunity. They associate the sector with risks related to the non-payment of rentals including the long-held perception that the sector is not profitable. Recent evidence indicates that they have only now begun to take an interest, albeit tentatively, due to rising house prices in the upper market. What this means is that even as they do, the low-income category where substantial demand sits will still not be provided for. And to make matters worse only Johannesburg and Cape Town seem to be on their radar screens where in taking advantage of below market value property acquisition opportunities they focus developments on conversions and the refurbishments of existing buildings.

Yet the huge and unmistakable present demand for rental housing is a loud cry that this has to change quite rapidly. Together, therefore, both the public and the private sector and communities need to find innovative ways in which to address the demand for rental housing.  This includes not only paying attention to and providing solutions to concerns by the private sector about perceived imbalances between risk and return but to paying attention to the needs for empowerment of communities. In a sector whose possibilities are as unexplored as these are social housing institutions have a vital role to play. If we are prepared to commit the required resources and energy in this respect, I am confident, that through rental housing we can achieve the outcomes we are looking for.

However, we must confess from our side as government, that the issue of rental stock has not been given the priority it should have. Attempts have now been to rectify this loophole. The Social Housing Foundation was established and, by 2005 I was happy to note that thirty-nine institutions were established to undertake and manage rental housing.

We have noted that whilst the limited social housing institutions had more experience in terms of administrative systems and management structures, their understanding of the requirements of the sector were severely limited and lacked innovation to reach to the low-income groupings.

As government we view rental housing as an important alternative tenure system that can help us meet the housing challenges we have. We therefore would like to call on all stakeholders in housing to join in the battle to make rental housing affordable and accessible to meet the demand of a growing urbanised people.

On 11 August 2005 I was here at the sod-turning of this complex. The photo taken at that occasion remains the most beautiful encapsulation of the best moments of my time in housing. The photo enjoys pride of place in my office. Returning today to this place can only be a fulfilment of the hope that glows in that photo. The same hope that glows in the project, the Aliwal Gardens project, which I learn will have within it seventeen rental units out of the total of eighty-six.

I have been told that six of the rental units have been completed and that three families are already occupying them whilst other families will be moving in during the middle of August. I have been told too that in respect of the sales units twenty-four families have moved in.

In mixing rental units with the sales units the project represents the kind of innovation we would like to see replicated across and in all our provinces. It will raise the number of rental units which we crucially need.

Communicare is an important social partner which has been in the field of housing since 1926, after taking over from its predecessor, the Housing League. It has always been involved and passionate about rental housing believing that it was in this regard providing a service to the vulnerable such as the elderly and the young.

Furthermore, the company has a long history in the provision of well located and good quality rental housing for families, individuals and the elderly. It is implementing this development to regenerate Ruyterwacht and has ensured that in doing so the development does address not only provides different tenure options but also addresses the circumstances of different income groupings. It located the development close to a major transport infrastructure and to amenities such as hospitals and schools as well as a commercial centre. All of this meets the criteria we have set for quality social housing.
 

As social rental housing is a critical element of its core business, Communicare has recognised too the need to develop housing and different tenure options for people with incomes between R7 500 and R15 000. It has support services that cater for not only the tenants of its developments but beyond.

I am impressed with the conceptualisation of the project as well as about the decision the Board took recently to ensure that ‘at least 20 percent of future housing developments’ by the company will henceforth be committed to social rental housing. The decision, which I read from the Chairman’s Statement, Mr. Herman Fourie, in last year’s Annual Report is that the rental units that will be developed will be for amounts that are ‘as little as R1,500 per month’. This, as he noted, and I would like to agree with him, will be a ‘remarkable achievement for a non-profit company, particularly given the burgeoning costs of land acquisition, and continuing inflation of construction costs and allied services’. 

This is a company that long ago committed itself to serving those who are disadvantaged and the poor. From its early days it adopted the aim of wanting to create awareness about the plight of the poor and the homeless. In wanting to ‘construct, acquire, maintain and manage homes for the working classes and others’ it set itself apart quite early on in its life. Thus, I am not surprised that at the achievement it has made in managing and owning over 2 057 units for the elderly. It was quick to embrace the government’s strategy on building through social housing integrated communities. Hence, the explicit commitment made in its Social Housing Strategy that the company will use and link its resources with those of national, provincial and local government to ensure that rental stock is for the elderly and poor families is increased. The company has in terms of the strategy committed to building 2 000 social housing units over the next five years focusing these on land being owned by itself.  

We have a great deal to learn from this company, especially on how it manages to continually educate the residents of their stock, creating a healthy understanding of mutual responsibilities. This is an important element for me because the biggest task we have to undertake is to create a culture of responsibility among the people we serve. A culture of responsibility is crucial for a country with such huge challenges as ours. The basis of development is each citizen’s responsibility to do their bit to build because it is on the basis of this that further roll-out can be undertaken to benefit more people.

Let me thank the Board of Directors of Communicare, the Chairman, Mr. Herman Fourie, and all the companies committed staff for an excellent track record. With their conscience they have moved ahead many companies or other partners in housing. As I read through the companies history I kept imagining what a different country we would be living in right now had such a conscience been allowed to prosper and grow unimpeded by any concerns from government over the desirability of residence of other races in certain locations. I keep wondering about how different it would have been had companies such as Communicare been provided with the support they needed by government to freely live their conscience and realise their goals.

On behalf of government I want to pledge our support to this company. May it grow in its work and may its efforts take root in many other areas.   

I thank you.