His Excellency Ambassador - Michael Lake The Executive Mayors of our Metropolitan Councils His Excellencies - the Ambassadors of EU member states; Members of the Executive Councils of the different Provincial Governments; Members of the Mayoral Committee from the City of Tshwane; Members of the European Commission Delegation in South Africa; Chief Executive Officers and representatives of different housing institutions; Representatives of the different associations; Invited Guests; Ladies and Gentlemen:

Recently, the South African Human Rights Commission released a report assessing the progress that government has made since 1994 in providing shelter to poor South Africans, in line with the constitutional provisions. The report noted that substantial progress had been made over the last ten years. It highlighted, in particular, that whilst government showed a clear commitment in the period being discussed to fully discharge its constitutional responsibility of providing poor families with shelter some serious challenges still remain. These are manifested as follows:

First, there has been an average population growth of 2.1% per annum resulting in the population increasing by 10.4% or over 4.2 million people between 1996 and 2001. Second, the country has experienced a 30% increase in the absolute number of households, where only a 10% increase was expected. The reason for this is the drop in average household size from 4.5 people per household in 1996 to 3.8 in 2001, which is a significant difference and has serious consequences for housing demand and hence service delivery. Thirdly, as result of the foregoing, the housing backlog has increased and current figures indicate that there are over 1.8 million dwellings which can be classified as inadequate housing, either in the form of backyard shacks (4.8% of all dwellings) or informal dwellings (16.4% of all dwellings). This does not include traditional dwellings (another 14.8% of dwellings), a proportion of which could also be classified as inadequate. Fourth, urban populations are increasing as a result of both urbanisation and normal population growth. One fifth of urban residents are relative newcomers to urban area (i.e. first generation residents) and urban areas are expected to continue to grow at a rate of 2.7% per annum. Gauteng has a significantly higher population growth rate, of twice the national average.

The Western Cape, KwaZulu-Natal and Mpumalanga also have population growth rates above the national average. Fifth, employment is scarce with the economy creating only 12% more jobs over the last five years, while the number of potentially economically active individuals has increased threefold. Added to which, of those employed, over half earn less than R3500 a month. These factors have affected the number of individuals who join the informal economy and are therefore invariably unable to access affordable housing.

As South African's, committed to the possibilities of development in our ten year old democracy, our aspirations sometimes exceed our capacity to achieve them. We have often achieved a great deal with quite modest resources. However, looking to the next ten years, we must plan for the right levels of capacity in order to achieve our ambitious targets.

Since we attained democracy, the European Union partnered with us to support our development. It is therefore in order, I believe, His Excellency, that I use this occasion to thank the European Union as represented by yourself here including the Ambassadors of the European Union Commission Delegation for its immense role and contribution in helping the South African government deliver a better life, houses in particular, for South Africans in our last ten years of freedom. By launching the current programme at this particular time you also indicate that we still will have your support into the next ten years, where we intend to make an even a bigger dent into homelessness.

Despite the achievements we have made the backlog has continued due in part to policy changes that were necessary to make. To address this particular problem in June we committed the Department of Housing to eradicating the backlog that exist in housing by fast-tracking delivery. This will be done through building the capacity of our various implementing agencies. Today, I wish to recall this commitment, and to display what was meant by it by focusing your attention on the Support Programme for Social Housing.

The Support Programme for Social Housing is an Institutional Development and Capacity Building programme designed specifically to bolster the capacity of our various implementing agencies and support agencies in the area of Social Housing. As our partners in development, the European Union, are assisting us to build the capacity we need through the European Union Programme for Reconstruction and Development in South Africa.

The past eight months have cemented the partnership between my Department and the European Union through the Delegation of the European Commission in Pretoria. Social housing however is not an easy programme. Some difficulties were perhaps inevitable in the early phase. However, things that are worth doing are worth doing properly. We believe that the momentum of this programme has now been built up to a level where there can be no turning back. In partnership with your very able team, my Department has created the dedicated capacity necessary to implement our contract with the European Community.

We would like to commend the Ambassador, Mr. Michael Lake as well as Ms Nicoletta Merlo and her colleagues at the Delegation for their support and guidance in establishing this important programme. Now that we have reached this point where we are completely confident about the prospects of success, we are ready to announce to all our stakeholders and to the public in general that the Support Programme for Social Housing is now underway.

Your contribution of 20, 7 Euros (R160m) together with the Department's budget allocation will contribute immensely into building institutional capacity for developing and managing social housing. The investment of the EU is met on the South African side by investment into social housing in a ratio of approximately R6 for every R1 invested by the European Union. These monies will be spent through our partners from the private and non-governmental sectors on construction activities, subsidised loans, institutional capacity building and small contributions towards operational costs.

The Department's approach in supporting non-construction costs to non-governmental institutions involved in social housing is based on the principle of medium to long term sustainable of NGOs. Our host, Yeast City Housing, which enjoys the support of the City of Tshwane and the Provincial Government of Gauteng will be one of the direct beneficiaries of your generous contribution. The project we are currently visiting contributes to the government's vision of building secure environments with adequate access to economic opportunities, a mix of tenure options, reliable and affordable basic services, educational and cultural activities as well as health, police and welfare services.

In our strategy to fast-track the delivery of houses in form of sustainable human settlements, social housing is a central delivery element. Its potential is shown by the contribution it has made in addressing the housing need of approximately 1, 5 million households. Approximately 63% (or 7, 1 million households) are living in formal accommodation. Of these 50% (or 5, 6 million households) own the accommodation and 13% (or 1, 5 million households) rent the accommodation. In addition, social housing institutions are showing a steady growth with 59 having been established since 1995.

The relationship we have with the European Union provides us with the institutional mechanisms to support these important interventions. The recommendations; for example, of the Mid-Term Review that was conducted last year to improve the performance of the Support Programme for Social Housing in the Department are already being implemented. The review had recommended the strengthening of the Programme Steering Committee. I am able to report, His Excellency that the Steering Committee is - following the recommendation - now properly constituted and fully functioning. An Approvals Coordination Committee has been established to coordinate and expedite the provision of financial, technical and capacity building support to the social housing institutions. Since April this year, the Approvals Coordination Committee has processed 30% of all new applications received for Capacity Grants and Technical Assistance. On 18 August 2004 it is convening a further meeting to process a further 33% of applications that were received in April. The remaining applications will be processed during September and October. Further, a dedicated Programme Management Unit has been established as an operational unit to administer the Financing Agreement and implement the Support Programme for Social Housing Institutional Development and Capacity Building. The unit has been staffed and is fully operational.

Lastly, the Business Plan of the Support Programme for Social Housing and its related Work plan were drafted. Under the Work plan, R75, 5 million is available for investment in institutional development and capacity building between now and 5 June 2005. The balance on our Financing Agreement with the European Union, an amount of approximately R84, 5 million, will be invested after June 2005.

Of the initial R75, 5 million invested R22, 6 million will go directly to Social Housing Institutions in the form of Capacitation Grants, R13 million into focused Technical Support, R3, 7 million into our Social Housing Foundation in order to build the capacity of that organisation, R23, 1 million into project bridging finance through the National Housing Finance Corporation and the Trust for Urban Housing Finance, R5, 1 million toward building a strong sector of implementing agents (Social Housing Institutions) through the National Association of Social Housing Organisations, R6 million toward operations, procurement support, and monitoring and evaluation, R1,4 million toward ensuring sustainability amongst the national agencies and the Department itself from a policy and systems point of view, and R573 000 toward building adequate loan management capacity within the Trust for Urban Housing Finance. Ours is a working partnership!

The mandate we have as the current government is to transform South Africa in a way that will remove the effects of our segregated past, and replace it with an integrated South Africa where opportunities are available equally to all. Our vision in the Ministry of Housing is to make a significant contribution to this in order to ensure the building of non-racial and integrated society. Thus, the two primary objectives of our National Social Housing Programme are to promote to a restructured South African society in a way that addresses economic, social and spatial dysfunctionalities including improving and contributing to the functioning of the housing sector and in particular the rental sub-component thereof especially in so far as it contributes to widening the range of housing options available to the poor. The notion of quality integrated human settlements in quality locations, which promote strong and functional local economies, is central to the reason why government has a National Social Housing Programme.

Today, we are right in the heart of a very good example of a quality social housing project, which achieves many of the integration human settlement objectives that we are talking about. Yeast City Housing is a community-based and non-profit social housing association that provides decent affordable housing in the inner city of Tshwane. To date Yeast City Housing has delivered 297 housing units that are affordable, and appropriate to the needs of more than 600 inner city dwellers. The housing that has been developed is a mix of communal, transitional and institutional housing, which has been acquired, newly built or renovated, either office block or residential buildings. Not only have we supported this valuable initiative through housing subsidies and capacitation support through our Provincial Government but Yeast has enjoyed the support of the City of Tshwane, and will now enjoy the support of the Support Programme for Social Housing funded by the European Union in collaboration with my Department.

Finally, allow me to once again express mine, the government's and the Department's sincere appreciation to our partners at the European Union, as well as the stakeholders and agencies that have played a constructive role in putting this important initiative onto a firm footing. Although the Department of Housing is ultimately responsible for the implementation of this programme, and of housing in South Africa in general, we have designed our strategy in a way, which demands as much performance from our national agencies, as it does from government itself. These agencies, as well as the Department of Provincial and Local Government function together in a co-coordinated fashion toward one objective. That objective is defined by government through the mandate given by our people.

I thank these agencies for recognising their responsibilities and for remaining accountable for their performance in line with the expectations of government and our people. And I thank the European Union for its commitment and continued support in delivering the mammoth challenge we have. I thank you.

Issued by: Ministry of housing 15 August 2004 Source: Department of Housing