“In our view, the Social Contract
represents the catalyst (the ‘glue’) to revitalise
stakeholders within the housing sector,” he
said. “What is needed, however, is for the
Social Contract to be translated into key
specific stakeholder deliverables.”
To address the supply and demand
challenges within the housing value chain,
Celliers recommended the formation of a
technical working group – a resolution that was
later adopted by the stakeholders present. He
also spoke of the success of the Financial Sector
Charter (FSC), which has resulted in loans
amounting to R110 billion being availed to
some 2.4 million families, who have thus been
able to improve their housing conditions.
While he noted that the market segment is
commercially viable and sustainable, lack of
suitable stock continues to bedevil the sector’s
ability to increase primary market end-user
finance. “Unless we overcome supply-side
challenges for new builds, lenders, despite their
willingness and ability to provide end-user
housing finance to new homeowners, will
continue to be hamstrung by insufficient
housing supply,” he said.
He called for key stakeholders within the
supply value chain, including bulk service
providers, municipalities, developers and
lenders, to commit to specific targets.
“All parties need to engage in good faith
and be prepared to embrace change, failing
which, the Social Contract will not achieve
its objective,” he said.
His suggestions included creating a firm
engagement with local councils, infrastructure
providers and developers to practically target
projects, getting the Housing Development
Agency (JDA) to package land parcels, and
reviewing the subsidy quantum of Finance
Linked Individual Subsidy Programme
(FLISP), as well as municipal charge-outs.
GOVERNMENT RESPONDS
Finance Minister Nhlanhla Nene said the NDP
made it clear that the country’s current urban
growth path was not sustainable, adding that
urban areas remained exclusionary, and that
building housing settlements on their outskirts
is no longer an option. “We need to build up
cities so they play a role – we can’t expect
more grants from government to subsidise
inefficient processes,” he said. “In our recent
medium-term policy statement we were
very clear that public expenditures remain
constrained. We cannot afford to pay for the
long-term subsidy associated with locating
our people far from jobs.”
He admitted that regulatory bottlenecks
meant that moving from “land to stand”
could take up to 43 months, adding up to
26
20% to the cost of housing units, and called
on municipalities to help cut down on red
tape and bureaucracy. Nene flagged the need
to get the private sector involved earlier in
the development process, but said that the
investment risks need to be shared by the
sector too. He committed to a technical
working group on behalf of Treasury.
Taffy Adler, CEO of the Housing
Development Agency (HDA), spoke in place
of the Minister of Human Settlements Lindiwe
Sisulu, who was taken ill. He noted that
following on from the first Social Compact
(signed in March 2005), the banking sector
had committed to significant investment into
human settlements.
“I would like to see similar commitment this
time again,” he said, adding that development
of soft loans and products for the lower end
of the market are of crucial importance in
working towards affordability. “The banking
sector has brought ingenuity to high-end
individuals and needs to do the same for the
lower end of the market,” he said. “One of the
challenges for the banking sector is to Z