Housing Code

Part 3

Chapter 10: Public Sector Hostels Re-Development Programme 

1. Overview
2. Objectives of Public Hostels Redevelopment Programmes Initiatives
3. Principles Application to The Hostels Proposals
4. Form of Redevelopment
5. Funding of Redevelopment
6. How to Apply for Public Sector Hostel Redevelopment Funding
7. After Approval
8. Key Points to Remember 

ANNEXURES 

This chapter deals with the rules for the Public Sector Hostels Re-Development Programme. These rules relate to assistance for the redevelopment of public sector hostels, that is, hostels under the jurisdiction of municipalities and provincial housing development boards, excluding those hostels owned by municipalities which are intended solely for the use of their employees. 

10.1 Overview 

On 2 October 1991 the government announced a hostels redevelopment programme and allocated an initial amount of R325 million to the programme. The (then) Local authorities (now Municipalities) were invited to apply for funds from the previous National Housing Commission via the provincial authorities. Potential applicants were referred to the Short-Term Guidelines for Hostels Initiatives of 1 November 1991 as the guiding principles for the planning of redevelopment projects. At the end of 1992, the National Housing Forum entered into negotiations with the government around the hostels programme. These negotiations resulted in the establishment of the National Hostels Co-ordinating Committee (NHCC), a "de-facto" decision-making body. As a result of the NHCC’s efforts, the Public Sector Hostels Redevelopment Programme, as set out in this chapter, was developed and implemented. 

The Public Sector Hostels Redevelopment Programme is available to all public sector hostels, with the exception of those owned by municipalities that are intended solely for the use of their employees. Municipalities or PHDB's (whoever the owner in the specific case may be) submit applications for redevelopment to the PHDB in four stages. Application for funding for emergency interventions may also be submitted in cases of extreme need. 

The central theme of the Public Sector Hostels Redevelopment Programme is that the planning and design of the hostel redevelopment or upgrade scheme must be done in an inclusive manner. This requires the formation of a representative Local Negotiating Group (or LNG) comprising stakeholders such as the municipality (or PHDB), hostel residents, representatives of the neighbouring community, and local business people. 

In respect of the Public Sector Hostels Redevelopment Programme, this chapter considers: 

• Eligibility & Other Conditions: this sets out the objectives of hostels redevelopment and the various forms it can take. 
• Funding of Redevelopment: this sets out the two grant types that are available for hostels redevelopment
• Application: this describes the four stages of the application process as well as how to apply for emergency intervention
• How the PHDB judges the application: this explains the principles on which hostels redevelopment is based and also sets out criteria for evaluating emergency intervention applications. 
• After Approval: This describes the need for ongoing needs assessments. 

Finally, the chapter ends with a summary of key points to remember. 

10.2 Objectives of Public Sector Hostels Re-Development Programme Initiatives 

The Public Sector Hostels Redevelopment Programme is available to all public sector hostels, with the exception of those owned by municipalities that are intended solely for the use of their employees. 

Any application for a hostel redevelopment grant must be based on a redevelopment proposal which sets out to: 

• promote humane living conditions for hostel residents; 
• include hostel residents, the neighbouring community, relevant public authorities and other stakeholders affected by a redevelopment scheme in the decision-making process; 
• embody a development orientation, both in terms of empowerment and participation and in terms of promoting economic development; 
• promote social integration within hostel communities and also between hostels and the adjacent communities; 
• include plans for accommodating those who will be displaced by the project; and 
• initiate local institutions and administrative procedures in order to sustain physical improvements and undertake socio-economic development. 

10.3 Principles applicable to the Hostels Redevelopment Proposals 

The following principles for the Public Sector Hostels Re-Development Programme, must be adhered to and the PHDB's will assess proposals on the basis of these principles. 

a. Urban Development: A redevelopment proposal must be formulated within the context of the development requirements for the urban area in which the hostel is situated because : 

• in certain cases hostel residents constitute a large proportion of the township community; 
• displacement will leave hostel residents in competition with township residents for land and facilities ; 
• for displaced families the issue is not simply one of access to the housing subsidy, but also a decent location; and 
• instead of duplicating amenities and services or providing them inefficiently, planning and delivery will be treated in an integrated manner. 

In certain cases the hostel is so far out of town that a concern for urban efficiency outweighs the argument for re-development of the hostel. 

b. Participative process: The planning and design of the hostel redevelopment scheme upgrade must be done in an inclusive manner. This requires the formation of a representative Local Negotiating Group (LNG) comprising stakeholders such as the municipality (or PHDB), hostel residents, representatives of the neighbouring community, and local business people. The underlying principle is that all stakeholders affected by the hostel redevelopment scheme must participate in the LNG and related decision-making. It is understood that different role-players will participate in decision making at different levels of intensity depending on the extent to which they are directly affected by the outcome of the redevelopment. Municipalities and Hostel Residents will thus participate at the highest level of intensity. 

In the event that exhaustive attempts to facilitate inclusivity and consensus have been unsuccessful and it could be argued that a minority of role-players, not directly affected by the redevelopment, are engaging in unreasonably obstructive behaviour, the Municipality with the agreement of the hostel residents structure, will have recourse to the PHDB. The application submitted the PHDB in this regard must include details of all failed attempts to facilitate full consensus in respect of the planning process. The PHDB would then be expected to adjudicate the application in this light. 

c. Eligibility: All the hostel residents are eligible for accommodation under a redevelopment scheme. However, in order to prevent a sudden inflow of people when the redevelopment scheme is announced, a register listing the identified hostel residents must be drawn up immediately a redevelopment scheme is identified. The register should establish whether the hostel resident considers him/herself to be living in the hostel/area on a temporary or permanent basis, whether the hostel resident wishes to own or lease a unit, and for what term. 

d. Affordability and community needs: All planning must take into account the needs and affordability of hostel residents as determined by socio-economic surveys which must form the basis of planning for the redevelopment scheme. A socio-economic survey of hotel residents must be undertaken as a precondition for the application to be considered. The survey/s should therefore be conducted against a basic understanding by hostel residents of the rules set out in this Chapter. A guideline of the terms for which information is necessary and the survey methodology is included in the "Hostels Needs Assessment Guidelines" (Annexure A of this Chapter 10 of the Code). The socio-economic survey may reveal the need for a variety of upgrade options within the hostel (e.g. single rental, ownership at various standards to match affordability). 

e. Displacement: No redevelopment application will be considered if it results in the displacement of hostel residents unless alternative accommodation has been secured for the displacees and proof is provided of the acceptance of such accommodation by the displacees. The securing of funds for such alternative accommodation is a pre-requisite for the approval of a hostel redevelopment grant and the implementation of a redevelopment scheme. The issue and the process of reaching agreement on displacement will be a critical activity for the LNG. The principle of equity is paramount in the displacement issue and the alternative accommodation proposed must be in line with that to be provided within the hostel and that available to residents within the broader community, via other State funded projects. 

f. Accommodating “single women”: Most women living in single-sex hostels are not, in fact, single and are accompanied by children. These women, in effect, constitute a family unit, but they may face limited ownership opportunities due to their having been married in community of property or having had customary marriages. The circumstances of these women lead to their not being "legally competent to contract", but every effort should be made to ensure that they retain access to hostels as families. "Single women" who were married in community of property or have customary marriage are presently barred from ownership.. 

g. Cost recovery and sustainability: Applicants must provide full details of strategies for the recovery over and above those to be provided. This includes both capital and on-going costs, including the ongoing maintenance and service costs, and the strategies to attach additional funding for costs which will not be covered by the redevelopment grant. The strategy must enjoy the support of the LNG and show the commitment of the residents to their share of such costs. 

h. Employment creation: The redevelopment proposal must maximise the opportunities for employment by the hostel residents. Such opportunities include opportunities in physical development, for example, by using local contractors, artisans, labourers, as well as the stimulation of ongoing employment, for example, through including business areas in the design. The design must take cognisance of the existing entrepreneurial activities and strive to enhance and increase such activities. Local emerging building contractors must be granted easy and equal access to the work opportunities. 

i. Institutional development and capacity building: The redevelopment proposal must ensure that hostel residents acquire the skills necessary in order to participate in the planning and ongoing management of the redevelopment scheme. This is necessary because: 

• if residents are to assume "ownership" of and responsibility for the upgraded units, they must be fully involved in the planning thereof. 
• if overcrowding is to be avoided after redevelopment then the participation of residents in hostel management is vital,
• it will promote a sense of responsibility for the building, reduce vandalism, and facilitate maintenance, 
• it will improve the payments of rents, and 
• the management institution will provide access to opportunities such as small business loans and training. 

The application must contain proposals for institutional structures supporting hostel resident involvement and participation, which proposals require the support of the LNG and the municipality. 

j. "In-budget" and "Out-budget": There is potential confusion about those items that constitute a part of the hostels re-development budget and those items for which proactive attempts should be made to attract funds in addition to the hostel budget, for example, for training and business development, or for social amenities.

The underlying principles are that: 

• funds designated for redevelopment of hostels should be used for improvements to accommodation and capacity building that enhances the ability of the local negotiation group to assess alternatives, participate in decision-making, and acquire the skills necessary to both help manage the hostel and proactively seek to promote a more comprehensive development process, 
• social facilities should be funded independently of the hostel budget - the responsible authorities should finance their own facilities, 
• economic development should be promoted through the appropriate design of the redevelopment programme and through the LNG seeking facilities, funding and training from the relevant government departments, development agencies, NGO's and so on, and 
• notwithstanding the fact that many facilities are "out-budget", the planning for the re-development should incorporate space set aside for economic and social facilities, indicate the optimum use of the area within the hostel grounds, and seek to incorporate the hostel within the neighbouring community. The cost of this planning should be met from the hostels budget. 

k. Equity: Redevelopment schemes should aim at ensuring equity both within hostels and between hostels and neighbouring communities. Applicants must show a genuine effort to have carried this important principle through the planning and design of the hostel upgrade. 

10.4 Form of Redevelopment 

Applications will be considered for: 

• A rental redevelopment scheme. 
• An ownership redevelopment scheme. 
• An alternative use redevelopment scheme.

a. A rental redevelopment scheme will be considered where : 

• there is a demand for rental in the area; 
• the proposed development can be adequately dealt with; and 
• such redevelopment proposal is approved by the LNG. 

b. An ownership redevelopment scheme to enable beneficiaries to acquire ownership of a redeveloped hostel under the housing subsidy scheme will be considered where : 

• there is not overwhelming demand for single rental accommodation in the area; 
• the hostel can be efficiently converted; 
• displacement can be dealt with; 
• the redevelopment costs are affordable to the beneficiaries; 
• such redevelopment proposal is approved by the LNG; and 
• the application provides concrete proposals for institutional structures by the LNG and the municipality. 

Ownership will be restricted to accommodate the potential beneficiary in accordance with the General Rules of the Housing Subsidy Scheme and the definition of a beneficiary is the same as described in Chapter 2 of Part 3 of the Code. The tenure requirements of the Housing Subsidy Scheme will have to be satisfied.

c. An alternative use redevelopment scheme for use as a school or community centre (and which may imply demolition) will be considered where : 

• funding from alternative resources than the PHDF has been obtained to fund the project; 
• there is no demand for the type of hostel accommodation; 
• the hostel is so run down that redevelopment is insupportably expensive;
• the location of the hostel is extremely inefficient in regard to access to work and other urban facilities; 
• displacement can be dealt with satisfactorily; and 
• it is approved by the municipality and the PHDB. 

10.5 Funding of Redevelopment 

Funds for which application can be made from the Public Sector Hostels Redevelopment Programme are divided into two categories: 

• Funds for physical redevelopment: these funds apply to the two forms of development, namely to rental and ownership, and the professional fees incurred by each. 
• Funds for enhancing participation, empowerment and capacity building 

10.5.1 Redevelopment Grants 

Redevelopment grants will be made available according to the rules set out hereunder. 

10.5.1.1 Rental Redevelopment Schemes 

a. The funding limits for the re-development for rental purposes are to ensure that: 

• the Government has resources to convert as large a number of hostels as possible, 
• hostel residents are able to afford the ongoing maintenance and service costs, 
• expensive conversions do not create an inequitable situation where those who rent a unit in a hostel gain access to accommodation that is markedly superior to the large majority who only have access to the housing subsidy, 
• when families want to own their accommodation, they are encouraged to do so through the opportunities created by the housing policy and not through the conversion of hostels, 
• the expense for re-developing a hostel for single rental does not influence the chance of a tenant obtaining a housing subsidy where their families are located. 

b. The amount of a redevelopment grant for rental will be based on a grant of R16 000 per family and R4 000 per hostel resident preferring to live single.

• In designing these limits the important principle of equity of product between those accommodated in the original buildings and those displaced as result of the re-development must be upheld, 
• It is important to note that the funds allocation by the State are for the upgrading/redevelopment of Public Sector Hostels and should not be seen as financial assistance to the individual or beneficiaries. 

c. Local Negotiating Groups may mobilise additional resources to enhance the upgrading/development on condition that the additional resources are secured prior to the payment of the public sector hostel redevelopment grant. 

d. The redevelopment grant must be applied, as far as possible, to provide the capital cost of the following services : 

• Prepaid meter electricity supply, electric lights and plug points. 
• Facilities for hot water supply. 
• Concrete screed floors. 
• Basic engineering services. 
• Basic furniture - a bed and mattress, one locker/wall unit (per bed) and cooking facilities. 

e. The grant will only cover the cost of these upgraded services. It must be ensured that the operating costs pertaining to these services be recovered. 

10.5.1.2 Ownership Redevelopment Schemes 

a. The funding limits for ownership units will be determined by three factors : 

• The General rules contemplated in Chapter 2 of this Part of the Code apply. Particularly important are the rules relevant to the proposed form of ownership, such as individual or institutional. For example, under the individual subsidy scheme the maximum funds are R16 000 for households having an income of R1 500 or less per month, R10 000 for households having an income of between R1 501 and R2 500 per month, etc. If ownership will be obtained through an institutional subsidy project the amount payable to the institution is R16 000 per beneficiary household.
• The affordability of the hostel residents over and above the housing subsidy and the availability of loan finance. 
• Displacement policy. (see section 10.5 (e) here under. 

b. To ensure equity with other housing projects subsidised by the Government, an asset value must be calculated prior to the upgrade and offset against the subsidy. The asset value of the hostel must be determined prior to implementation of the redevelopment scheme and offset against the subsidy. The asset value should be calculated according to the original guidelines for the sale of public rented family housing units. Where the buildings have been damaged or are in a state of disrepair application can be made for a reduction in the asset value. An example of the calculation of the asset value is provided in Annexure B of this Chapter of the Code. 

c. Applications for conversion to units costing more than the subsidy amounts will only be considered if the additional funds required have been secured by the applicant or the Local Negotiating Group (LNG). 

d. Proposed conversions, which displace existing residents without alternative, acceptable accommodation, have been secured, will not be considered. 

e. The financing mechanism for an ownership redevelopment scheme is accordingly the housing subsidy scheme. 

10.5.1.3 Redevelopment Schemes For Alternative Use 

An alternative use redevelopment scheme will not be available from the Public Sector Hostels Redevelopment Programme, but will have to be sought by the applicant from the appropriate funding source, e.g. Department of Education in the case of conversion to a school. 

10.5.1.4 Professional fees and increase of the re-development grant 

When using the grant in the ways described above, the following two additional rules apply: 

a. Professional fees: A redevelopment grant includes provision for services of technical professionals to assist the LNG in the planning, design and implementation of a redevelopment scheme. The approval of such funds will be based on the competency and suitability of the professionals chosen by the LNG and the fees proposed by them for the work to be done. Fees will be negotiated with reference to standard professional fee scales. 

b. Discretionary increases: In order to maintain financial equity, funding limits may be increased for geotechnical, topographical and/or locational reasons, and/or, in the case of a redevelopment scheme for rental purposes, for reasons of deteriorated building conditions. For redevelopment for ownership an increase regarding deterioration does not apply as the condition of the building is considered in the asset value calculation. The maximum increase which will be considered for one or a combination of the above reasons, is 15% and applications to the PHDB must be properly motivated with supporting documentation. Additional funds approved in terms of the discretionary increase will be debited to the Hostels Redevelopment Budget of the Province; i.e. additional funds will not be made available for this purpose. 

10.5.1.5 Emergency grants 

The hostel residents may be living in conditions that seriously affect their health and safety. In such cases, application can be made for funds to address such health and safety risks. Funds expended in respect of the emergency interventions will be considered as the first phase of the re-development initiative and will be part of the redevelopment grant. Professional consultants should therefore design emergency measures in a way which optimises their potential for utilisation in the re-development. Exceptions to this principle will only be considered if fully motivated to the PHDB. 

a. The nature of an Emergency Intervention

• Interventions should occur only in circumstances of extreme need. Because ill-conceived interventions can cause more problems than they solve, circumspection before intervening should be the rule. 
• Assessments of the need for emergency interventions should take particular note of threats to health and safety. 
• Whilst most emergency interventions will be of a physical nature (e.g. getting the water working again) organisational (administrative) and social interventions should not be ruled out. The temporary defusing of major tensions between particular social groupings in a hostel may for example be appropriate. 

b. The table below sets out some of the conditions which, in circumstances of extreme need, will be considered for emergency intervention. 

Physical 

• Insufficient water supply 
• An unacceptable wastage of water 
• A blocked or collapsed sewerage system 
• Dangerous electrical connections 
• Built-up refuse 
• Lack of stormwater control within the hostel leading to flooding of residential areas within the complex 
• Serious fire hazards 
• Serious structural degradation posing physical danger 
• Damaged connector services within the hostel complex preventing sufficient supply of services to the complex 
• Damaged public lighting increasing security risks 

Non-Physical 

• Major tensions between particular social groupings in a hostel 
• Major tensions between hostel residents and the surrounding community 
• Total lack of hostel administration and rent collection (intervention to be aimed at setting properly functioning administrative and rent collection procedures in place, and not to compensate authorities for rental arrears) 
• Access to funding (outside of the public sector hostels redevelopment programme) in relation to damaged properties adjacent to a hostel complex and which damage could be ascribed to actions relating to the hostel. 

Table 13. Conditions Warranting the Implementation of Emergency Measures

c. Judging Emergency Intervention Applications 

The following criteria should be used in judging applications for emergency interventions: 

• Emergency interventions should in no way pre-empt longer term development strategy or “predispose” such longer-term strategy in any direction. 
• As a general rule emergency interventions should be as obvious and as likely to be “uncontested” as possible from the perspective of the parties directly involved. 
• The interventions proposed must be sustainable until such time as more fundamental interventions can be made. Provision for such sustainability must be made by establishing a programme for continuous funding provision (inter alia, from hostel rents) and maintenance. 
• Cosmetic improvements would not qualify as emergency interventions. 
• Interventions should occur largely in circumstances of extreme need. 
• Interventions should not negatively impact on the social structure of a hostel complex. 

d. General Rule 

As a rule, permission to proceed with an emergency intervention will only be granted if the intervention is of the nature described in Table 13 and in 10.5.1.5 (b) above, and only if progress on the hostels redevelopment programme is being delayed for good reason. 

e. Implementation Procedures for an Emergency Intervention

On application by the Municipality, the PHDB will assess whether the hostel qualifies for emergency intervention. The request from the Municipality must explain in detail the reasons preventing progress in terms of the Hostels Re-Development Programme and why emergency intervention is considered necessary. 

If approved, the Municipality shall then retain professional consultants (if necessary) to plan the intervention required and call for tenders by prospective contractors. Preference should be given to local contractors, local skills and labour. 

The tenders shall be submitted to the PHDB for approval. 

f. Monitoring the Emergency Interventions 

Mechanisms to monitor emergency interventions will be established between the PHDB, Municipality and the hostel residents structure. Particular attention must be given to ensuring that the requirements of this section of this Chapter of the code are complied with. 

10.5.2 Participation, Empowerment and Capacity Building 

An application may be made for a grant to enhance the participation and empowerment of the affected community in the planning process and the management of the hostels. The grant is geared towards assisting with the establishment of a representative LNG; the subsequent empowerment of that LNG through training and skills transfer. In addition the grant is geared towards the provision of basic resources to enable the LNG to operate effectively. This takes the form of a trained co-ordinator, which will be selected by the LNG, but employed by the municipality; or be someone already employed by the municipality who has the necessary skills and is acceptable to the LNG. The provision of basic resources also includes infrastructure to assist the co-ordinator to work effectively. The coordinator is responsible to the LNG, however, if the LNG ceases to exist, then the coordinator will report to the Municipality. As a first step, Municipalities should evaluate its own capacity to determine whether existing capacity could fufil this need. 

In this regard, the following rules apply: 

a. Functions of the co-ordinator: The anticipated core functions of the co-ordinator are to : 

• support the LNG in its functions; 
• facilitate effective lines of communication within the community; and 
• staff an information office (where applicable). 

b. Establishment of LNG: Should the municipality or province experience difficulty in facilitating the establishment of a broad based LNG, a grant for the appointment of an experienced facilitator may be provided on application. Application can also be made for such a facilitator to workshop with the LNG all aspects of hostels to ensure that planning of the upgrade is done on an informed basis. 

c. Guidelines for the appointment of co-ordinator: Funds for the employment of a co-ordinator by the municipality on behalf of the LNG and for the establishment of an office infrastructure to assist in his/her work can be made available for the duration of the project. The onus will be on the LNG to raise further funds to sustain the process beyond this period if it so desires. 

d. The co-ordinator will be selected by the LNG, but guidelines for his/her employment are:

• unencumbered time 
• credibility in the community 
• work experience, especially in respect of community development 
• read with comprehension 
• write with communication 
• numerate 
• proficiency in two local languages 
• enthusiasm and motivation, and 
• drivers license/access to transport 

e. Training of co-ordinator: The co-ordinator will be required to attend courses to empower co-ordinators to become more effective in their duties. Provision for such training should be made in the budget submitted with the redevelopment application.

f. Empowerment of LNG: Over and above the provision of a specialist consultant to work with the LNG and the co-ordinator, workshops and training sessions will be organised for the LNG. Budgetary provision should be made for such workshops and also workshops in respect of needs surveys in the submission for approval of funds. Workshops will be structured according to the needs of the LNG but generally will deal with issues such as: 

• hostels policy and the re-development process 
• labour-based/community based construction practices 
• group dynamics and team building 
• participation in the management and administration of a hostel 
• roles within the LNG 
• financial accountability 
• project planning 
• communications 
• needs analysis 
• personnel practices and relationship with staff 
• reporting procedures - how to receive/discuss 
• development values and the role of the NGO sector, and 
• networking with external funders. 

10.6 How to Apply for Public Sector Hostel Redevelopment Funding 

The application process involves four distinct stages. The hostel owner makes the application to the PHDB. Where the municipality is the owner, it will make the application in own right. Where the PHDB is the owner the housing department of the provincial administration concerned will prepare the application. The PHDB then judges the application on merit, and based on the principles set out in section 10.5 above.

It is envisaged that four applications will be made for purposes of a public sector hostel redevelopment programme. A summary of the project stages is contained in Annexure C to this Chapter of this Part of the Code. These are set out below: 

10.6.1 The First Application: Notification 

On the basis of this application, the provincial government and the PHDB are informed of the intention by the applicant to initiate a hostel redevelopment project. In a situation where a LNG is not yet constituted, application could at this stage be made for the resources to establish the LNG in terms of the grant for participation, empowerment and capacity building (see 10.5.2 above). If the LNG is in place, details of the LNG will be supplied. The notification application should include the following: (see Annexure D) 

a. Details regarding the hostel, including 

• name and address of hostel 
• description of hostel 
• size and facilities 
• number of beds 
• estimated current population 
• description of current population e.g. single, family, sex, etc. 
• present monthly expenses and income 
• application for resources to establish the LNG, if not yet established

b. If a LNG has been established, 

• details of LNG 
• members (names and organisations) 
• how often meets/has met 
• description of capacity and motivation 

10.6.2 The Second Application: Consultants & Preliminary Planning 

Once the notification application has been approved and once an LNG has been effectively constituted and is fully briefed on hostel policy and the requirements of consultants, the LNG may call for proposals from consultants to form the professional team for the project. The team chosen will assist the LNG to prepare an application for funds for preliminary planning. Application can then be made for the funds budgeted for preliminary planning. The application should include: (see Annexure E) 

• names and addresses of professional team for notification of the province and the PHDB; 
• approach to be followed by the professional team in the preliminary planning in line with hostel policy and the LNG’s brief; 
• objectives of the professional team during this stage with particular emphasis on linking the planning with the policy parameters and the needs as will be identified; and 
• identification of the process to be followed to identify the needs, and goal projections. 

10.6.3 The Third Application: Detailed Design 

Once the LNG has obtained approval for the budget for preliminary planning, they proceed with the planning to result in an application for public sector hostel re-development funding, and permission to proceed with detailed designs. The application should include the following: (see Annexure F) 

• profile of resident needs and potentials as identified by a socio-economic survey 
• description of how the above are to be addressed in terms of the policy guidelines under the following headings : 
• physical form of proposed development including town layout, residential and other units, levels of engineering services 
• tenure 
• allocation procedures and proposal for displacees (if applicable) 
• estimated development costs (including professional fees) and how to be recovered (proportion via public sector hostels redevelopment programme, remainder via other sources) 
• estimated running costs and how to be recovered (proportion from residents, remainder via other sources) 
• institutional arrangements for effective administration and maintenance after completion 
• description of participative planning process that was followed by LNG (workshop held, training sessions, how arrived at final decisions etc.) 
• description of tender and construction principles to be employed (to maximise employment and empowerment of residents) and estimates of benefits to be gained 
• strategy for securing funds for facilities not funded by public sector hostels redevelopment programme e.g. recreational, health, etc. 

10.6.4 The Fourth Application: Tender 

Once the LNG has obtained approval for their development proposal, funds will be reserved for the project and the team may proceed with detailed design and tender documentation to be submitted for approval. The purpose of the application is to obtain PHDB approval to proceed to tender after the detailed design and tender documents have been checked and approved against the approved application details. 

a. The application for approval to call for tenders should include the following: (see Annexure G and H) 

• Revised estimates of costs. 
• Programme of works (including institution building and legal procedures). 
• A description of participative process followed by LNG during this stage.

b. Once approval is obtained, tenders may be called. On receipt of tenders the professional team, on behalf of the municipality, will compile a tender report for approval by the PHDB. This report must reflect the normal tender approval criteria, and in addition must highlight any discrepancies between estimated and tender costs and between planned and tendered construction principles. 

10.7 After Approval 

The PHDB will monitor the project to ascertain that projects are executed according to the conditions on which projects and tenders were approved. It is further the purpose to keep track of the progress of the projects and to intervene where assistance is required. Summarised formats for each project stage have to be completed and submitted to the PHDB with each application stage. The PHDB may request such further information as it may require. 

Monitoring to inform the PHDB of project progress and to record information in a summerised format for management information purposes will commence at the notification stage and continue thereafter. Summerised formats for each project stage have to be completed by the Provincial Administration Housing Department, and submitted to the PHDB with each application stage. 

10.8 Key Points to Remember 

Remember: 

The Public Sector Hostels Redevelopment Programme provides for a funding limit of R16 000 per family, or R4 000 per individual living in a hostel under the jurisdiction of local and provincial authorities. 

Funding limits may be increased by up to 15% at the sole discretion of the relevant PHDB, to compensate for development costs where hostels are in a particularly poor structural condition or where there are geophysical difficulties. 

Applications will be considered for:

(1) a rental redevelopment scheme,
(2) an ownership redevelopment scheme, and
(3) an alternative use redevelopment scheme.

Two categories of funding are available:

(1) Funds for physical redevelopment: these funds apply to two forms of development, namely to rental and ownership, and the professional fees incurred by each, and

(2) Funds for enhancing participation, empowerment and capacity building. 

Funds expended in respect of the emergency interventions will be considered to be part of the redevelopment grant. 

The application process involves four distinct stages:

(1) Notification;

(2) Preliminary Planning;

(3) Detailed Design;

(4) Tender Approval

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