This paper outlines the trajectory of South Africa抯 housing policy and practice in the post-apartheid era (post 1994). Particular emphasis is placed on the transition from an emphasis on building houses to an emphasis on creating sustainable human settlements. In fact the paper can be considered as a paper of two halves. The first half deals with a narrow housing focused delivery machine instituted since 1994 which has proved extremely successful within its own narrow parameters. In fact few countries in the world have achieved the kinds of delivery rates achieved in South Africa. China of course is an exception in this regard and this is one of the reasons we are so interested in engaging with you.  

 

The second half of the paper deals with South Africa抯 attempts to begin shifting away from a narrow focus on housing to a more comprehensive focus on the creation of sustainable human settlements.  This has been a reaction against the unintended outcomes of a narrow sectoral focus on housing. It is our understanding that China has been more successful in delivering not just houses, but also sustainable and livable settlements. Given our current obsession with doing the same ,  it follows that this is an even more important reason for wanting to engage with our Chinese colleagues.

 

 In this regard it is worth noting that the governance arrangements enshrined in South Africa抯 Constitution are quite 揹e-centralist?in character. South Africa has relatively autonomous spheres of government (national, provincial and municipal (local) rather than hierarchically arranged levels of government. As a consequence many development processes take on a de-centralised character and rely substantially on co-operative governance across spheres. Increasingly there is concern over the efficacy of co-operative governance and growing interest in how to marry more directive systems of governance to decentralized processes. This is certainly the case when it comes to thinking about the arrangements we need to successfully create sustainable human settlements.    

 

 

 

Post-apartheid national housing policy was initially formulated with reference to an understanding of structure of the housing market in the country. In short the  housing sector  was understood as being  comprised of 3 basic  sub-markets as follows :

 

 

It is worth noting that the intention was to make the housing market work as far down the income spectrum as possible leaving government to deal with  a focused core of poor people at the bottom end of the income spectrum.

 

The overall architecture of  post朼partheid housing policy was designed to respond to the configuration of  the market and the broad policy vision described above. As previously noted there was a recognition that the market had to be made to work for as many people  as  possible, given that failure to do so would create an enormous burden for government.  Macro-economic policy  was to increase the proportion of people in the formal and starter sub-markets by creating more jobs and therefore more people with regular incomes. The housing sector too was to contribute to job creation and economic growth ( via the labour intensity of expanded production and via the multiplier).   There was a recognition that subsidies would be necessary and that these should be designed in a way which allowed them to work with the market and to minimize market distortion.  Thus relatively modest capital (as opposed to interest) subsidies were introduced and were meant to be used in conjunction with loan finance. They were lump-sum up-front and 搊ne-off?subsidies. They were also relatively transparent and easy to manage for the fiscus (by avoiding the cumulative burden of interest subsidies ).  

 

As far as subsidy quantums are concerned the capital subsidy in the incremental sub-market  is approximately USD  6000 (using a May 2008 exchange rates of 7.2 Rand to the dollar)  . At the outset (i.e. in 1994) the subsidy was half this amount in real terms. Political pressure from the grassroots has resulted in the amount steadily creeping upwards over time.  The subsidy, it should be noted, is targeted at people earning less than USD 500 per month. In the starter housing market the capital subsidy quantum is approximately 3000 USD and is targeted at people earning between USD 500 and USD 1000 per month. 

 

As far as delivery arrangements are concerned  there are a number points worth noting. Firstly the National Department of Housing was no directly involved in delivery. It developed policies and parameters in terms of which delivery was to occur as well as mobilizing fiscal contributions for the sector.   A decision was made to try increase the fiscal contribution to housing from 1% if the overall budget to 5% over a 5-year timeframe.  Funds for the fiscus were split between 9 provinces (with the splits base on a formula?which could be adjusted in the event of non-performance by Provinces). Once funding allocations were made Provinces would call for housing project proposals. Criteria for project selection as well as certain key criteria were carefully spelled out up-front. Project proposals could come from a variety of sources?private sector developers, community organizations, NGO抯 or local governments. Proposals could also come from delivery wings within the Provinces (often acting on behalf of local authorities who did not have the capacity to do so) , but were subject to the same assessment processes. The idea was to mobilize maximum capacity across as wide a spectrum of possible delivery agents as possible and to create level playing fields upon which delivery agents could compete (subsidies were available to the private sector on the same basis as for politicians).   In the early years Provincial Housing Boards were established to assess, select and monitor projects. Such Boards were chaired by a Provincial Minister and staffed by prominent people in the society (business leaders, prominent people in the universities, churches  or elsewhere in civil society, and important politicians). The idea was to reduce corruption by putting decision-making in the hands of people who had reputations to defend. This worked well but unfortunately the system was abandoned after the first five years (precisely because it was too transparent for some politicians). 

 

Turning to loan finance there was a discussion in the early years (1994 to 1998) of  the need for a national housing bank  which would mobilize wholesale finance for the housing sector and make end-user finance available to individuals in both the starter and incremental sub-markets.  The eventual consensus achieved  was that wholesale finance was not a problem for the sector as a whole. Also the private sector already had strong retail capacity. In fact it was recognized that South Africa had a world class finance sector. It was working very effectively for the formal market. The challenge was to make it work for the bulk of the population.  As far as end 杣ser financing (retail finance) was concerned the consensus was that current market failure was a function of a number of factors. Primary among these was the view that the banks perceived lending in both the starter and incremental markets  as high risk and that there was a need for interventions that would reduce such risks (perceived or real).  

 

In addition to the lack of mortgage loans being made in the starter market there was certainly also a lack of smaller/ non-traditional loans in the incremental sub-market. Although micro-finance was a rapidly growing area of activity within the finance sector,  the consensus was that interventions were necessary to grow the availability of finance in the incremental market.   Thus it was argued that there was a need for  a National Development Finance Institution (DFI) to facilitate private sector involvement in the starter market and to mobilise and provide wholesale funds for intermediary organisations providing (non-traditional) retail loans to borrowers in the incremental sub-market.   This is the basis on which the National Housing Finance Corporation (NHFC) came into being. The NHFC was established in 1996 and was tasked with a range of activities identified as necessary to mobilize credit for the housing sector. This incuded the 搘holesale and intermediary?activity referred to above as well as support to social housing  In its initial phase (1996 to 2001) the NHFC also incorporated the Rural Housing Loan Fund (RLHF) which in essence provided wholesale funds to intermediary organizations making small loans in rural areas. RLHF has however always had its own Board and was initially capitalized by a German bi-lateral  agency (KfW). At no stage has RLHF ever been capitalized by government. In 2001 RLHF split away from NHFC and currently manages its own affairs. 

 

In the early years there was substantial emphasis on measures aimed at 搉ormalizing?the market in the wake of apartheid era distortion.  In the first instance this had to do with introducing instruments to help deal with perceived/real risks arising from political instability. In this regard a Mortgage Indemnity Fund was introduced which provided cover to financial institutions in instances of losses arising from political instability.   However as the environment stabilized (and because of practical difficulties in implementing it) the Mortgage Indemnity Fund was dismantled. 

 

In the second instance 搉ormalization?of the housing market involved a range of interventions aimed at dealing with bad debt (in the starter market) and with the creation of circumstances which would allow the rule of law and due process to apply when individuals defaulted on loan payments.  A special company ( Servcon-- a joint venture between government and the banks ), was  established to deal with sorting out historical bad debt incurred by the banks as a consequence of mortgage non-payments.  

 

 

 

 

4. DELIVERY PERFORMANCE.          

 

The top priority in the housing sector in the years immediately after 1994 was delivery 朼nd delivery at scale. A delivery target of 200 000 units per annum was set which it was projected would  eliminate the  backlog and projected growth in need   within 10 years.  Delivery got off to a slow start but picked up substantially by 1996/7.  The delivery rate since 1994  has in fact averaged 180 000 units per annum (quite close to the intended target). By 2007 delivery is approaching 3 million units--  a magnitude of delivery in the developing world exceeded  only by India and China. When measured as a rate of production (number of units per annum per capita), SA抯 rate of production for low income people is currently as good as anyone in the world.

 

However the vast majority of  the units that have been delivered are in the incremental sub-market and are provided primarily via the capital subsidy.  The 揷onsolidation?of incremental units has been disappointing (i.e. people have not been adding to the basic core units in the way that was expected). This amongst other things suggests that the magnitude of funds flowing into the incremental housing sector via small loans has  fallen short of what was hoped for.  Moreover there has been substantial political and community pressure to  increase the capital subsidy to provide a better/bigger top-structure.  At present the minimum size unit that can be provided via the capital subsidy is 40 m2 --- a far cry from the much smaller core houses initially built. Thus instead of small loans being used to augment a core structure, increasingly the pressure is on government to provide bigger and bigger houses. In several quarters questions are being raised about the sustainability of ever bigger capital subsidies. Very large capital subsidies are also distorting the housing market further at the bottom rungs of the housing ladder. In short there is not much difference in size between 揼ive-away?incremental housing units and the bottom of the bonded housing products and for which people have to pay USD 30 000 or more.

 

Excellent delivery rates notwithstanding,  by  2007 the backlog is  still estimated at around 2 million units.  New household formation and in-migration was clearly underestimated when the housing programme was first launched.  Average household sizes have also reduced dramatically which may itself be due to the availability of the subsidy. In any event very substantial backlogs still exist .   

 

Whereas delivery in the incremental sub-market has been impressive, delivery in the  starter sub-market has until recently been very disappointing.  NHBRC delivery statistics reveal that the delivery of houses in the starter market has remained consistent at about 16 000 units per annum for the last decade. This is despite a building and property boom in the period since 2000. Moreover a study commissioned  by the Banking Association has revealed that whereas effective demand in the starter market is 76 000 units per annum supply is around 16 000 units. Not surprisingly units provided in the affordable market rapidly escalate in price.  In the first decade after 1994 the Banks dragged  their heels in the starter sub-market  . A major constraint proved to be the very rules that the bank themselves set for themselves about what they would fund and what not . Moreover normalisation of the housing  market proceeded very slowly through the 1990抯.  Dificulties with enforcement of rules of contract were raised continuously by the banks as a major constraint on their ability to lend in the starter market. Certainly there were instances in which communities  opposed attempts to repossess properties where mortgage non-payment had occurred.

 

This in turn led to questions being asked about the suitability of mortgage bonds as the financial instrument of choice in the starter market.  In the late 1990抯  the NHFC introduced a new initiative (Project Gateway) which  no longer depended on using the land /property as security for the loan. Instead end-users were required to take out insurance as a bulwark against default.  Moreover in terms of the Project Gateway scheme, banks would be abe to get risky  home loans off their balance sheets via securitisation (a hybrid Fanny Mae model).  In short the existing commercial Banks were to originate loans,  the  NHFC would purchase the  loans and would warehouse, repackage and sell paper against them  in capital markets (which in turn would provide finance with which to purchase additional loans).   

 

Whilst Project Gateway seemed particularly promising it never got off the ground. The primary reason for this was the fact that  the banks failed  to originate loans .The few that did  like Cash Bank were  bought out by the bigger banks and the nature of their business changed . It seems that the banks had little incentive to aggressively involve themselves in originating loans. In any event Project Gateway never really got off the ground and was  abandoned because of failure to procure business.  This was significant because it marked the end of the South African housing DFI system抯 flirtation with securitization. Further flirtation with such securitization is highly unlikely because of new developments regarding private sector participation in the starter market. Moreover the tremors that have been felt throughout the financial system internationally as a consequence of the difficulties  of the so-called sub-prime markets are also likely to make securitization a less attractive model. 

 

Lack of progress in enticing banks into financing affordable housing led to talk of compelling participation via some sort of community reinvestment act modeled on the US experience. This seemed to have a major impact on the attitude of the banks who immediately made  a renewed commitment to lending in the affordable housing market rather than be compelled to do so.  A   Financial Services  Charter was signed  in terms of which the Banks have pledged investment in the affordable housing market to the extent of USD 6 billion. And in the last four years the banks have  really begun to engage the starter market at scale (for the first time).  

 

It should be noted that the NHFC has sought to support the banks in their embracing of the starter market by offering guarantee/insurance/risk reduction products. Whilst initially the banks showed a lot of interest in these products it appears that they soon began to find alternate products in the private sector or to set up schemes of their own.  Surprisingly it now appears that risk mitigation in the starter sub market is much less of an issue although the banks have yet to reveal in practice how far down-market the are prepared to go.

 

Notwithstanding the banks new found willingness to finance units in the starter market they have discovered that  major constraints on the supply side have meant that there are few units to finance. In fact the banks are claiming that are prepared to make loans much further down-market but that there are no products for them to finance.. A major study (Shisaka 2005) by the Banking Association has revealed that the major constraint to housing delivery in the starter market is no longer the availability of end-user finance but rather supply side constraints ?primarily inappropriate and slow regulatory processes in the land market and the availability of affordable land.

 

In response the banks have actually begun to take on the role of developers. Whether this is a good idea or not is debatable but there can be no doubt that it is a far cry  from the  reluctant private sector financial houses of the past. By 2007 banks claim that they have already invested USD 4.5 billion in starter housing and are aggressively looking for new opportunities.  At face value it appears that the financial landscape of low income housing delivery in South Africa has changed dramatically. Instead of being starved of development finance,  it seems instead  that a 揻ull bladder?syndrome better describes the current reality.

 

 

 Whilst the trajectory described above bears testimony to a great deal of implementation success there have several concerns about the outcomes of the programme.  These are as follows: 

 

?nbsp;        Concern about the nature of environments being created via housing policy. In particular there is concern about the mushrooming of settlements which are made up of battalions of poor quality and small houses, which lack of the full range of services, and which are monolithic with respect to land use and building morpholgy.

?nbsp;        Concern about urban sprawl and relegation of the poor to the urban periphery as a consequence of operation of land market and subsidy constraints. Poor location threatens the viability of poor households and reinforces their exclusion from economic opportunity.  Moreover urban sprawl threatens the viability/sustainability of cities and is a form of urban development which is destructive of environmental resources.  

?nbsp;        Concern that the housing market is not yet working accross all sub-markets and that it is certainly not working in way which allows the bulk of South Africans a share in poperty related wealth accumulation.   

?nbsp;        Concern about the fact that government subsidy is not leveraging private investment sufficiently (in fact beneficiaries are increasingly selling off incremental houses at prices well below cost of building). 

 

As a consequence in 2004 a new policy direction was embarked on, which is generally referred to as the Breaking New Ground (BNG ) initiative. The BNG  shifts emphasis from delivering housing to delivering sustainable human settlements.  In policy terms this is translated in BNG to: 

 

?nbsp;        Provision of housing together with the full range of services

?nbsp;        Crowding in of government programmes and projects into government supported housing projects.

?nbsp;        Improved location for low income housing projects

?nbsp;        A focus on informal settlements ( sustainable livlihoods approach)

?nbsp;        A recognition of the link between housing and environmental issues (energy efficient houses, reduction of urban sprawl etc.).

?nbsp;        Quality of houses and facilities

?nbsp;        Mixed income environments

?nbsp;        Access to jobs and economic opportunities linked to housing delivery and settlement development

?nbsp;        Policies and instruments to help make the market work for all  (linking housing to individual accumulation)

 

Whilst BNG articulates clear vision it has been much less clear about the tools and interventions needed to give effect to it.  To date the process has been to incrementally develop new programmes and products and to add these to the existing set ( and in some instances replace existing programmes). The Housing Code (which sets out the major housing programmes and associated subsidy instruments) has recently been amended to incorporate new mechanisms and more are expected

 

In general there has been a shift away from capital subsidies linked to individuals to project based capital subsidies (although capital subsidies linked to individuals have been retained as an option).  For example new social housing subsidies are calculated on a project basis and boil down  to the subsidy on capital cost necessary to make the units provided affordable to targeted income groups and still achieve a yield on investment for social housing companies. Whilst the subsidy is still a subsidy on up-front capital the amount is much more open-ended and dependent on specific project circumstances (however subsidy applied is subject to defined subsidy efficiency measures).   Running costs of social housing projects are unsubsidised.   The new BNG instruments and approaches may be necessary to achieve new vision but they do introduce an open-endedness in the deployment and use of subsidies. The old capital subsidy instruments are more rigid but are more transparent and therefore more amenable to monitoring accountability.

 

The National Department of Housing has recently published a new National Housing Code which includes SHS relevant provisions. Particularly relevant is the Section of the Code (Part 3) which articulates a Programme for the Provision of Social and Economic Facilities.

 

The main objective of the Programme is to facilitate the development of basic amenities which are normally funded by municipalities in cases where municipalities are unable to provide such facilities. Grants are made to local authorities who submit successful applications and which can motivate why they can pay for them. How CoJ will be considered in this regard is a moot point and will probably only be apparent when application is made.  Officials at NDoH indicated that much would depend on the nature of the application and the persuasiveness of the rationale presented. It should be noted however that the Programme will (as is the case with most Housing Programmes) be administered through the Provinces. Thus Gauteng will need to commit to the Programme and earmark funds for it.

 

Types of facilities that could be funded include :

?nbsp; Clinic or medical care facilities

?nbsp; Community halls (linked to a cr鑓he an municipal offices)

?nbsp; Community parks or playgrounds with basic play equipment

?nbsp; Taxi ranks

?nbsp; Sports facilities

?nbsp; Small business/informal trading facilities

?nbsp; Ablution facilities where appropriate

It should be noted that perhaps the key social facility from a SHS point of view, namely schools, is missing from the list.  Moreover the programme focuses on the capital costs of facilities rather than on the perhaps more important issue of getting commitments to staff up and run the facilities (building a school is one thing--- getting teachers into it on a sustainable basis is another).

 

Perhaps more important than the Social and Economic Facilities Programme (which has been around for some time in a slightly different form) is the new  Integrated Residential Development Programme.  As the name of the programme indicates the objective of the programe is to provide a 搕ool to plan and develop integrated settlements that include all the necessary land use and housing types and price categories  to become a truly integrated community.?nbsp;  While this sounds good,  in essence the programme allows for the development of 搉on-housing?stands and 搈edium to high income?residential stands in projects that also include low-income/subsidized housing. Such stands are then to be sold to appropriate business,  institutional or individual investors.

 

Also of substantial significance is the fact that the programme allows for a phased approach to settlement development against a flexible budget allocation which is determined on a project by project basis. The total project cost to be financed through the programme will be determined by the Housing MEC in line with policy (yet to be formulated) . A feature of the approach  is the separation of land acquisition and servicing from topstructure provision.   Implicit in this separation is the notion that land price can be highly variable and determined on a project by project basis. If this is the case, then the Programme provides a very useful tool for making location a key component of SHS creation. In short it should be possible to purchase well-located land even if it is expensive. The Code is however very vague on the parameters within which this is to occur.

 

Policy and vision aside, in the four years  since the announcement of BNG in 2004, the shift from  housing to sustainable human settlements has in practice involved the following:

 

 

As far as mixed income flagship projects are concerned the intention has generally been to learn by doing. The absence of clear policy frameworks and clearly defined subsidy and financial instruments has at times created major problems in these projects but there can little question that much has been learned. For example most of the projects have been undertaken in partnership with the banks which have brought a new energy and 搆now how?into the process.  Moreover in a number of the projects there has been substantial evidence of the growth of property value and substantial lessons have been learned on how to promote this. Moreover in some instances, such as in the Cosmo City development in Johannesburg, private developers have developed new ways of actually becoming champions of sustainable human settlements and doing so in a way which makes business sense. In Cosmo City for example it is a private developer that has taken on the role of mobilizing in and co-ordinating the full range of residential facilities and services. And they have been doing so in a way which is sustainable in the long run. The approach does depend on a close relationship with the Metro Municipality and very interesting lessons have been learned on how to structure such relationships. Most of the mixed income BNG projects have however been 搒pecial projects?with special resources allocated to them. The issue of how to deal with replicability at scale has yet to be fully confronted.  Moreover the difficulties of making inter-governmental relations work in the context of a decentralized governance and delivery system have become quite apparent.

 

On the issue of the greater mobilization of the full range of services into new projects, it should be noted that notwithstanding the development of a methodological approach for doing so by the National Department of Housing ( in terms of which SHS creation is linked systematically to municipal development planning proceses --IDP processes), it is fair to say that there has not been a great deal of progress in achieving this in practice. A review of the recent practices of Metropolitan municipalities and some Provinces (Smit 2008)  reveals that whilst  most government housing agencies do make something of an effort to mobilize a fuller range of facilities and services, in practice this is quite limited and constrained by the absence of dedicated budgets (for the ancillary facilities and services).           

 

Turning to the issue of improving the location of housing projects, the scan by Smit (2008) does reveal a greater sensitivity to the issue on the part of local and provincial housing agencies to finding better locations for housing projects. In some Metro Municipalities (e.g Tshwane/Pretoria) a fairly aggressive approach has been followed. In Tshwane a decision has been taken which disallows any new project outside of a 20km radius from the centre (CBD). Whilst the policy prescriptions may be a bit crude (Tshwane is actually a multi-nodal city and needs a more nuanced aproach) the intentions are nonetheless clear.  Other Metro抯 have been less aggressive and look rather to opportunistically secure land for housing in good locations.  However most Metro Municipalities, including Tshwane, have encountered difficulty in acquiring better located land primarily because of steep land prices. Recognising the importance of well located land for new projects, National government is currently in the process of establishing a new Housing Development Agency which will focus on land acquisition and project packaging in good locations.  The agency will be capitalized via the fiscus and it is at this stage to early to comment on the impact that it might make. But there can be little doubt that ambitions for the agency are far reaching.        

 

It is of course still early days in the process of shifting the paradigm from housing to sustainable human settlements. The intention is clearly right but it will take time to get the operational machinery in place. These concessions notwithstanding, examination of the full portfolio of housing project activity in South Africa suggests that a good proportion of new business is still 揵usiness-as-usual?  At present most of the energy in support of the paradigm shift is coming from the housing sector, which simply does not have control over many of the levers which are central to sustainable human settlement creation. Such levers include planning processes, education, social services, local economic development, public facilities, land and so on. The decentralized nature of South Africa抯  governance arrangements provides many advantages re SHS creation but it also makes it more difficult to take hold of the many levers required and co-ordinate the way in which they are directed.

 

Central among the levers which must deployed in service of SHS creation is the planning lever.  In fact one of the main reasons for the concern about the nature of the environments that we are currently creating, is the fact that processes of planning and housing provision have become disarticulated over time. Dealing with this disarticulation is absolutely crucial if we are to get anywhere with SHS creation. As a consequence I will expand on the relationship an its evolution over time .  The first point to note in this regard is that post-apartheid housing policy and practice was much quicker out of the starting blocks than is true of post-apartheid planning. There are a number of reasons for this. To begin with the housing sector had organized themselves into a National Housing Forum two years in advance of the first democratic national elections in 1994.  In the process the main framework of national  policy was thrashed out together with key stakeholders. Thus when a new and democratically elected government came to power, the Housing Ministry was ready to hit the ground running.

 

The same was however not true of planning. In fact there was considerable confusion at the outset over who (within government) had jurisdiction over what kinds of planning. The National Constitution which had been negotiated in the transition period (1990-1994) and which spells out the basic terms of reference, the values, the procedures and the checks and balances of our democracy, was not clear about which sphere of government (national provincial or municipal) had responsibility for planning. Nor was direction given in the Constitution about types of planning and their integration. As a consequence there has been confusion and competition both between and within spheres of government about who holds what kind of jurisdiction over what type of planning. This in turn has retarded progress in developing post-apartheid planning systems which can dovetail more effectively with post-apartheid housing policy (and practice). And from the point of view of achieving sustainable human settlements this has proved particularly problematic.

 

Housing  has tended to be 揹elivery target ?driven rather than 揵roader outcome?driven and has been able to get away with it.  In short what this means is that housing practitioners have been driven primarily by getting as many houses delivered as possible (because that is what their performance has been assessed on) rather than giving priority to the broader spatial planning outcomes of their endeavours. Ironically when housing as a sector has become self-critical and has attempted to shift the paradigm from housing to human settlement creation it has found that the planning environment is still 搖ncertain?and 揹isorganized?and not necessarily driven by the same desire to create sustainable human settlements.

 

Since 1994 there have been two main streams of planning. The first is so-called integrated development planning which was championed as the new approach to planning in the post-apartheid era and which has progressed and developed quite well but which has also manifested serious shortcomings. The second is spatial planning or land use management which has not progressed well and which is still disorganized. There is a third stream which is important to the creation of sustainable human settlements, namely environmental management, which has made progress even if it has had little success in integrating effectively with other kinds of planning. Ultimately if we are to be successful in creating sustainable human settlements these three streams of planning will have to be drawn together and integrated.

 

As far as integrated development planning is concerned the country in the post-apartheid era has had a probabilistic  macro-economic development framework/strategy (not a plan) which has tried to find a balance between growth and equity issues (some would argue that it has in essence been a neo-liberal framework which in the end is much more about growth). Sectoral departments at national level have then developed sectoral frameworks and programmes which are consistent with (but not dictated by the macro-economic framework) and have tried to integrate their activities via 揷luster?processes where sectors with similar fields of activity are clustered.  Likewise at a provincial level (SA has 9 provinces), Provincial growth and development strategies have been articulated in the image of the National framework (not plan) and likewize there are sectoral cluster arrangements.  But in terms of current arrangements it is really at the municipal (or local government level) that development inputs are integrated via a plan --- the so called IDP抯 (integrated development plans).

 

 These municipal IDP抯 are at present perhaps the most important of existing planning instruments for achieving the creation of sustainable human settlements. In theory IDP抯 are based on a local development vision (which needs to be consistent with National and Provincial policy parameters) and an associated development plan. Various line functions (sectors) in municipalities are then expected to develop their multi-year operational plans in a way which is consistent with the development vision and which is integrated with the intended actions of other government players. The inputs/service delivery/programmes of other spheres of government are also expected to be co-ordinated with the IDP抯. In practice this has proved difficult since it relies on an assumption of co-operative governance which is seldom met in practice. For example crucial service delivery inputs for the creation of sustainable human settlements such as education, social welfare and health are generally the responsibility of the Provinces.

 

The Provinces are supposed to integrate their plans for service delivery in these sectors with Municipal IDP processes. But generally speaking they don抰 and instead operate according to programmes of delivery that they have devised themselves. This means that it is often the case that new housing projects are built without the provision of physical and social services that are central to moving them from soulless match box housing estates to sustainable human settlements.  Even internally within the municipalities the co-ordination of line function activity is not entirely successful but at least a city manager is in a position to demand accountability from his/her line managers. The city manager抯 cant demand this of the Provinces.

 

Turning to spatial planning it important to note that this kind of planning is also very important when it comes to the creation of sustainable human settlements. One of the many unfortunate legacies of apartheid is a spatial structure of our cities which continues to disadvantage the historically disenfranchised (and largely poor and Black) communities. In short in our cities the poor generally live at long distances from places of employment/production and consumption . Spatial isolation is further reinforced by weak public transport systems (which in essence are private transport systems comprised of numerous combi-taxi/ bus operators). The structure also creates an enormous amount of commuting implying high levels of environmental degradation. South African cities have ecological footprints which are cause for serious concern. Given the economic, social and environmental dysfunctionalities of current city spatial structure, it follows that interventions which can serve to restructure the cities spatially are very important.  In fact is arguable that such interventions may be more important than any others when it comes to sustainable human settlement creation (in the South African context at least).  For at least a decade spatial planning professionals have articulated visions of post-apartheid cities being restructured around high density nodes and activity spines which in turn are structured by a public transport network.

 

Whilst the vision has been there, it has been difficult to achieve any real movement (anywhere) in actually implementing the vision. In part this is because many of the cities lack the fiscal muscle to drive restructuring processes but also because there are contradictions between spatial forward planning arrangements and processes of land use management.   Whilst the legislation governing IDP抯 (the Municipal System抯 Act) makes provision for expressing IDP抯 in spatial terms (spatial development frameworks), land use management processes are still governed via different legislation which for the most part is still the legislative land use management framework inherited from the apartheid era. The national line function (Land Affairs) responsible for reforming the land use management machinery has (for a variety of reasons) still not been able to do so.  Thus forward planning and land use management continue to co-exist in a state of substantial disarticulation. To make things worse there are at least three National line functions which lay claim to 搒patial planning?as their preserve, whilst many Provinces argue that in terms of the Constitution,  spatial  planning is a Provincial function.           

 

Linked to processes of land use management are processes of environmental conservation and resource management. Substantial progress has been made in this regard in the period since 1994, and legislation has been passed which is quite demanding in terms of the 揺nvironmental compliance hoops?through which development applications much jump in order to achieve development approval. Such environmental legislation has to date proved effective in protecting valuable environments but has also stood in the way of (or held up) progressive socio-economic programmes. For example onerous environmental impact statement requirements have held up low income housing projects (sometimes for years). Enviros for years). Environmental processes and legislation are also largely 搑egulatory?in content rather than forward planning orientated. For example environmental legislation and policy does not address the need to restructure cities for environmental and other reasons.

 

In order for sustainable human settlement creation to become a reality it is apparent therefore that major changes are needed in the broader environment. The housing function cannot create sustainable human settlements on its own. Inputs from several other sectors are crucial  and it is apparent that broad assumptions of co-operative governance accross and even within spheres cannot be relied on. Accountability relations need to be clearer but it is also apparent that we need a firmer hand on the tiller. In addition it is quite clear that if we want to create sustainable human settlements at scale we need to bring the three streams of planning that have developed since 1994 into a much closer and more integrated relationship.   

 

In this regard it is worth noting that there are signs that government will seek to centralize at least components of the planning process and thereby take on a more directive role . There is talk about the creation at National level of a National Planning Council of Ministers who would oversee a National development plan , one component of which will in (all probability) be a National sustainable human settlements strategy (and which would address and rationalize the three streams of planning referred to above).  There is also much talk about turning the Provinces (which currently have relative autonomy and specific functions defined by the Constitution) into administrative arms of National Government. The main need for co-ordination would then be between National and Local government.  These 揷entralizing?trends notwithstanding, it appears that the new power bloc  is equally committed to moving away from 搕echnocratic?governance to a much greater emphasis on participation and people-driven development. Such an emphasis on grassroots participation in governance is highly consistent with sustainable human settlements creation. Thus we are likely to see a new phase of governance which assumes some of the characteristics of so-called 搊ld left?politics (more centralized planning),  at the same time a marrying this to 搉ew left?conceptions of 揹eep democracy.?Both trends may be good for the creation of sustainable human settlements and it will be interesting to see if the new power bloc can successfully marry two apparently contradictory styles of governance.           

 

Whilst resolution of intergovernmental relations and accountability regarding planning will in all likelihood do much to bring housing and planning into much better articulation, reform of planning systems has to go deeper than this. The process of trying to develop a comprehensive sustainable human settlements approach in the Tshwane Metropolitan Municipality has revealed several problems with planning processes at the Metropolitan level. One of the key observations of the Tshwane process is the fact that IDP planning processes as well as spatial planning processes tend to occur at a highly generalized city-wide level. Thus there are relatively homogeneous sector plans (water, electricity, roads, storm-water,  social services etc.) in the sense that relatively standardized services and products are offered everywhere and that they are seldom differentiated to take account of the challenges of particular settlements. Likewise spatial forward planning tends take the form of a generalized city-wide spatial framework. Some more detailed plans are developed for key precincts.  But as a general rule 搒ettlements?are missing from the planning framework.        

 

One option for re-introducing settlement sensitivity is to introduce an Area Based Management (ABM) approach (similar to what Ethekwini has been doing) . The trouble with an ABM  approach, as previously noted,  is that it is too resource intensive in a resource scarce environment and requires radical re-organization of management arrangements (to interface line and area management processes).  What Tshwane have done instead is to introduce settlement sensitivity into overall and line function planning and implementation processes. They have done this by developing a typology of settlement types and clearly articulating the SHS challenges of each type. Some of the challenges are the same from area to area allowing a standard intervention/service delivery response across all areas. But for each settlement types there are challenges which are different to the challenges in other areas of the typology and which require specific interventions/service delivery in order to achieve SHS outcomes. Thus in informal settlements, for example, an emphasis on interventions aimed at promoting the livelihood strategies of the poor might be central, whereas this would not be the case in peripherally located  medium to high income areas.

 

The settlement sensitive approach also recognizes that SHS creation occurs at a number of geographic scales. Firstly there is the overall city level where issues such the overall financial, political and ecological sustainability of the city as a whole needs to be addressed. Then there the internal city level which addresses the linkages between the various parts of the city and where mobility and connectivity are key notions. Finally there is the settlement level where the typology of settlements referred to above applies. The focus on settlements is summarized in the diagram below. 

 

 

 

 

 South Africa has had a great deal of success in delivering housing in the post apartheid era. In fact so great has this success been that international agencies such as the World Bank and UN Habitat consider South Africa to be one of the most successful developing countries in the world when it comes to addressing housing challenges. In part  South Africa抯 delivery success has  been achieved because it has kept policy and practice  simple and narrowly focused on getting housing delivered.  However this narrow and mechanistic focus has been it has carried within it the seeds of its own destruction (to borrow from Marx).   It has become apparent that South Africa抯 housing delivery process is creating a number of unintended and undesirable outcomes. Moreover it has become increasingly apparent that rows of poorly located houses which are badly integrated with places of consumption, exchange,  production and human resource development, are not what the country wants or needs. 

 

Shifting from a narrow sectoral focus on housing to a more comprehensive focus on creating sustainable human settlements is however not as easy as it may seem.  To date the housing sector has chosen to make incremental changes to the systems that have served it well in delivery terms. Four years since the inauguration of a new approach significant steps have been taken both in policy and practice. However impact at scale has yet to be achieved and it has become increasingly apparent that incremental system adjustment will not do.  More fundamental changes are required as the exploration of the need for change in planning systems has revealed. But the exploration could equally have focused on fundamental changes to the subsidy regime.to for example a stronger demand side orientation in which individuals could make trade-offs between better housing and better location. We are entering a new and challenging era and hope that we can learn a great deal from ongoing exchanges with China.              

 

In order for sustainable human settlement creation to become a reality it is apparent therefore that major changes are needed in the broader environment. The housing function cannot create sustainable human settlements on its own. Inputs from several other sectors are crucial  and it is apparent that broad assumptions of co-operative governance accross and even within spheres cannot be relied on. Accountability relations need to be clearer but it is also apparent that we need a firmer hand on the tiller. In addition it is quite clear that if we want to create sustainable human settlements at scale we need to bring the three streams of planning that have developed since 1994 into a much closer and more integrated relationship.   

 

In this regard it is worth noting that there are signs that government will seek to centralize at least components of the planning process and thereby take on a more directive role . There is talk about the creation at National level of a National Planning Council of Ministers who would oversee a National development plan , one component of which will in (all probability) be a National sustainable human settlements strategy (and which would address and rationalize the three streams of planning referred to above).  There is also much talk about turning the Provinces (which currently have relative autonomy and specific functions defined by the Constitution) into administrative arms of National Government. The main need for co-ordination would then be between National and Local government.  These 揷entralizing?trends notwithstanding, it appears that the new power bloc  is equally committed to moving away from 搕echnocratic?governance to a much greater emphasis on participation and people-driven development. Such an emphasis on grassroots participation in governance is highly consistent with sustainable human settlements creation. Thus we are likely to see a new phase of governance which assumes some of the characteristics of so-called 搊ld left?politics (more centralized planning),  at the same time a marrying this to 搉ew left?conceptions of 揹eep democracy.?Both trends may be good for the creation of sustainable human settlements and it will be interesting to see if the new power bloc can successfully marry two apparently contradictory styles of governance.           

 

Whilst resolution of intergovernmental relations and accountability regarding planning will in all likelihood do much to bring housing and planning into much better articulation, reform of planning systems has to go deeper than this. The process of trying to develop a comprehensive sustainable human settlements approach in the Tshwane Metropolitan Municipality has revealed several problems with planning processes at the Metropolitan level. One of the key observations of the Tshwane process is the fact that IDP planning processes as well as spatial planning processes tend to occur at a highly generalized city-wide level. Thus there are relatively homogeneous sector plans (water, electricity, roads, storm-water,  social services etc.) in the sense that relatively standardized services and products are offered everywhere and that they are seldom differentiated to take account of the challenges of particular settlements. Likewise spatial forward planning tends take the form of a generalized city-wide spatial framework. Some more detailed plans are developed for key precincts.  But as a general rule 搒ettlements?are missing from the planning framework.        

 

One option for re-introducing settlement sensitivity is to introduce an Area Based Management (ABM) approach (similar to what Ethekwini has been doing) . The trouble with an ABM  approach, as previously noted,  is that it is too resource intensive in a resource scarce environment and requires radical re-organization of management arrangements (to interface line and area management processes).  What Tshwane have done instead is to introduce settlement sensitivity into overall and line function planning and implementation processes. They have done this by developing a typology of settlement types and clearly articulating the SHS challenges of each type. Some of the challenges are the same from area to area allowing a standard intervention/service delivery response across all areas. But for each settlement types there are challenges which are different to the challenges in other areas of the typology and which require specific interventions/service delivery in order to achieve SHS outcomes. Thus in informal settlements, for example, an emphasis on interventions aimed at promoting the livelihood strategies of the poor might be central, whereas this would not be the case in peripherally located  medium to high income areas.

 

The settlement sensitive approach also recognizes that SHS creation occurs at a number of geographic scales. Firstly there is the overall city level where issues such the overall financial, political and ecological sustainability of the city as a whole needs to be addressed. Then there the internal city level which addresses the linkages between the various parts of the city and where mobility and connectivity are key notions. Finally there is the settlement level where the typology of settlements referred to above applies. The focus on settlements is summarized in the diagram below. 

 

 

 

 

 South Africa has had a great deal of success in delivering housing in the post apartheid era. In fact so great has this success been that international agencies such as the World Bank and UN Habitat consider South Africa to be one of the most successful developing countries in the world when it comes to addressing housing challenges. In part  South Africa抯 delivery success has  been achieved because it has kept policy and practice  simple and narrowly focused on getting housing delivered.  However this narrow and mechanistic focus has been it has carried within it the seeds of its own destruction (to borrow from Marx).   It has become apparent that South Africa抯 housing delivery process is creating a number of unintended and undesirable outcomes. Moreover it has become increasingly apparent that rows of poorly located houses which are badly integrated with places of consumption, exchange,  production and human resource development, are not what the country wants or needs. 

 

S