3.10 National Programmes, Plans and Strategies
3.10.2 Existing Informal Settlement Upgrading Funding and Constraints
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upgrading programmes (DAG, 2007). The programme is also premised on the objective to
‘progressively eradicate’ informal settlements (DoH, 2004). This approach is informed by the assumption that informal settlements are momentary places, which can be eradicated through generalized programmes of resettlement onto site and serviced plots on the urban edge (DAG, 2007). The new upgrading programme aims to facilitate a need to shift the official policy response to informal settlements from one of conflict or neglect, to one of integration and co- operation, leading to the stabilization and integration of these areas into the broader urban fabric (DoH, 2004). This is to be achieved through the introduction of phased in situ upgrading projects where possible and relocations where necessary. Proposed new funding mechanism for informal settlement upgrading is aimed at supporting upgrading at a broader level rather than on a project by project basis.
According to DAG (2007), informal settlement upgrading by virtue of its nature, is not simply the responsibility of housing departments, but rather the multi-sectoral responsibility of a range of stakeholders or partners who should work collectively to address the community’s development priorities through a range of complementary social and physical development initiatives that address issues of access to land tenure, basic services, and urban livelihoods. It is under this context that in situ upgrading can create an impetus for inclusive and integrated development which has the potential to reduce poverty, and to socially, physically and economically integrate an informal settlement into the wider city.
Programmes, plans and strategies are elements of policy directly responsible implementation.
They are tools through which policy objectives are to be implemented on the ground. They are important elements of policy. If developed and applied inappropriately policy objectives and goals cannot be met. In the context of this dissertation, programmes, plans and strategies outline and explain various choices taken by Ethekwini municipality in implementing its informal settlement upgrading programme.
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housing budget allocated to informal settlement upgrading is R67, 916 per household made up as follows:
Informal settlement upgrading programme (allocations for incremental interventions and servicing) – total budget of R24,410 per household (excluding relocation grant):
Phase 1 (R5, 830 per household): Survey, registration, participation, facilitation, dispute resolution etc (at 3% project cost); Geotechnical investigation; Land acquisition; Pre-Planning; Interim engineering services.
Phases 2 & 3 (R18,580 per household): Detailed town planning; land surveying and pegging; Contour survey; Land survey examination fee; Civil engineer's fee; Site supervision fees; Permanent engineering services provision; Project management ( at 8% project cost)
Relocation grants (R938 per household): Transportation and loading costs for people and household effects. Social service support including support for the registration of social benefits, school registration and other welfare support. Relocation food support to households (Misselhorn, 2008:17)
Top-structure construction for a 40sqm house – total budget of R43, 506 per household (Including earthworks, house construction, P&G, overheads, and contractor’s profit)
Based on Misselhorn’s calculations addressing the entire informal backlog by conventional means, whether by means of in situ upgrade or green-fields projects or a combination of both, will require massive financial resources. Informal settlement upgrading funding, proposed under ISUP, is smaller than what is required to address the informal settlement challenge.
Financial cost of upgrading is escalated by various factors such as land and bulk infrastructure (Misselhorn, 2008). Box 1(pg 56) illustrates typical funding constraints as demonstrated by Misselhorn (2008).
According to Mayekiso, Huchzermeyer and Harrison (2003), the past couple of years have marked an improved quality of life in urban and rural environments throughout South Africa.
There has been a significant increase in the supply of basic services such as shelter, water, sanitation and electricity. These advances are attributable to a profound restructuring of government institutions, legislative and regulatory frameworks, and systems of resource allocations.
56 Box 1.
Even optimistically assuming an optimistic cost of R70,000 per unit (including top structure, land acquisition costs, servicing of land, and bulk infrastructure provision), approximately R84 billion would be required for conventional upgrading of the estimated housing 1.2 million households currently living in informal settlements.
[Whilst the costs might vary from one urban centre to another, it is noted that in Ethekwini, the current total costs per site run at approximately R80,000 (for land, servicing, and housing) ] Assuming the current subsidy quantums for upgrading (R43,506 for top-structure + approximately R18,000 for Human Settlement Redevelopment Programme / servicing allowance), then approximately R76 billion of this would come from the DoH (SA Housing Fund) and the balance of approximately R8 billion would need to come from MIG / municipalities (although this amount would increase if the HSRDP portion were reduced or total infrastructure costs increased).
The per annum financial implications in this optimistic scenario assuming the 2014 target for the
‘eradication’ of slums is R12.7 billion in housing funding and R1.3 billion in additional infrastructure requirements (although the split between the two could vary if there were a change in HSRDP allowance or if additional Department of Land Affairs or Municipal Infrastructure Grant funding were put into the mix). It is noted that this scenario is probably unrealistically optimistic for the following reasons: a) does not factor in any growth in informal settlements which is almost certain to occur; b) is at current values and does not factor in the costs of inflation; c) the actual informal settlement backlog figure of 1.2 million is probably understated. In addition, the costs of free basic services have not been factored in. These are likely to be very significant and would need to be borne by the municipality.
The scenario also does not factor in the serious constraint of electricity supply shortages which would probably mean that few upgrade projects would be provided with electricity and that alternative energy solutions would therefore need to be explored at additional cost.
A slightly more realistic scenario which factors in a 7.5% annual growth in informal settlements and a total product price including all servicing and land costs of R80, 000 per unit (allowing for projected inflation), would require an annual budget of R27 billion per annum over six years to ‘eliminate’ informal settlement by 2014, but even this does not by any means factor in all of the additional cost variables mentioned.
Source: Misselhorn, 2008:21
According to the Demarcation Act of 2000, local government restructuring has particularly been a notable reorganization. Notwithstanding these advances, there are still critical insufficiencies in terms of both policy framework and implementation. Furthermore, Mayekiso et al (2003) agree that despite a clear commitment to urban integration and coordinated development, housing policies and practices are producing, as an unintended effect, results that are not entirely dissimilar to those produced under apartheid, namely poor
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quality housing which is badly located with respect to urban opportunities - such has been the nature of housing delivery in South Africa. This has contributed to the formation and perpetuation of informal settlements in urban centres. Some of the latter mentioned challenges have been discussed in this chapter. It is also important to consider theoretical and conceptual framework on which housing, water and sanitation policies are founded. The next chapter attempts to summarise some important theories and concepts informing service delivery policies.
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Chapter Four: Research Methodology
Undertaking any research requires that there be a method of collecting and analyzing data.
The objective of this section is to outline and describe the relevant method of data collection and analysis.