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Provinces instructed to stop planned housing projects as government has run out of money

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Dear MyPE

The Department of Human Settlements (DHS) has sent an alarming letter to provinces, instructing them to put measures in place to immediately downscale the delivery of top structures (government houses). According to the letter sent to Provincial Heads of Department by the Acting Director General, “the current economic reality renders the housing subsidy approach to delivering top structures fiscally unsustainable”.

This means that the African National Congress (ANC) has unilaterally changed its housing policy as it can no longer afford to build houses for destitute South Africans. This is because over the past 26 years, money meant for housing projects has either been looted or used to bail out vanity projects such as the bankrupt South African Airways (SAA) and Eskom.

More so, this policy shift has been enacted prior to its formal adoption by Cabinet or Parliament and without any public participation.

With this instruction, the DHS has essentially put a unilateral halt on future housing projects and placed a number of restrictions on provinces. Provincial DHS have been notified that housing projects planned for next year will only be supported if:

  • They will prioritise the elderly, military veterans, people living with disabilities and child-headed households;
  • They contribute to medium to high density development (e.g. BNG Walk-ups etc), and promote integrated development;
  • There are current contractual commitments for the MTEF period, as part of a contractor’s current work package which has been awarded at present; and
  • Provinces have further been informed that no new top structure projects may be awarded until approval is sought from the National department first – (a significant departure from existing processes).

This instruction was given to provinces without clarity on how Provincial and Municipal housing departments must manage concomitant issues of beneficiary allocation; land and security costs; densities/typologies and the ranking/classification of Catalytic versus priority projects and Priority Housing Development Areas – gazetted earlier this year by the National Department, with great fan-fare.

The National Department has also instructed provinces to provide evidence of measures taken to downscale the delivery of units.

Housing delivery has already been dealt with major budgetary blows this year. In May, the ANC wiped R2.26 billion off the 2020/21 housing budget. R1.7 billion was cut from the Human Settlements Development Grant (HSDG) and R1.1 billion was cut from the Urban Settlement Development Grant (USDG). R377 million was cut from the title deeds programme to fund the informal settlements upgrading programme – a policy shift that saw the ANC actively perpetuating asset poverty amongst South Africa’s most vulnerable citizens.

Furthermore, during the October 2020/21 adjustment budget, an additional R345.399 million was transferred from the Housing Budget to the Department of Public Enterprises for the implementation of the SAA business rescue plan.

This instruction should therefore not come as a surprise as years of looting, wasteful expenditure on zombie SOEs and incompetent governance has inevitably caught up with the ANC and its empty promises.

Instead of taking full responsibility for this unilateral shift in policy, the Minister, acting on behalf of the ANC, has now placed the burden on provinces and local authorities to deal with the fall-out from their empty promises.

This instruction could potentially result in further social unrest, land invasions and the stagnation of development as fewer, if any, houses will be delivered. The Minister should therefore appear before Parliament to answer for this instruction and the potential consequences of this decision.

The DA will request that Minister Lindiwe Sisulu appear before the Portfolio Committee on Human Settlements to urgently provide feedback to Parliament and the public on the consequences of this decision.

Editor’s note: The DA will host a press-conference later this week detailing the significant implications of this instruction where it governs.

Regards

Emma Louise Powell MP
DA Shadow Deputy Minister for Water and Sanitation and Human Settlements

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