Housing options for lower-income people

Sunday Times - Property
People earning less than R1,500 month, qualify for a government housing subsidy to the value of R36,528, which is the cost of building a RDP house. To buy a similar house, it would cost about R100,000
Buli Gotyana lives in a shack in Seaview, near Port Elizabeth. She had an RDP house, but had to vacate it when it was found she had been incorrectly assigned the tiny home in Greenbushes. At the time, she was six months pregnant and the stress of having to return to shack life – without electricity and having to collect water from the community tap – concerned her. She had no idea how she would look after her new baby in this kind of environment.
Nevertheless, she was able to buy a used shack for R400 and after her baby son was born in October she settled into motherhood in her new home – determined that her child would have the best she could give.
Buli decided to approach her employers for help in finding out how she could buy or build a small house in her area.
The first thing Buli discovered in a phone call to the Mandela Bay municipality was that she needed to visit her local housing department in Port Elizabeth to apply to be placed on a waiting list for an RDP house. In order to apply, she needed her ID document and her son‘s birth certificate. If she were married, she would need her marriage certificate as well.
Even though she is single, she qualifies because she has a dependant son who relies on her. She also needs the ward number of her place of residence, her ward councillor‘s name and her pay slip.
Once she is on the waiting list, she will be in line to claim a house when a housing programme becomes available in her area. She found out by speaking to people in the housing department that it works in her favour that she permanently lives in shack in Seaview as that makes her eligible for a house when a housing project starts there.
How long she will wait depends on the area she lives in and if a housing project is planned for that area. She may also have to relocate to the next available area where houses are scheduled to be built.
The Government‘s housing department has a useful website – www.housing.gov.za (click on subsidy info on the left) – that points out that because Buli earns less than R1,500 month, she qualifies for a housing subsidy to the value of R36,528, the cost of building a RDP house.
The grant she gets can only be used to build or purchase a house and is not available as cash. She has to be over 21 to apply and not have been the beneficiary of any other government funding.
If Buli earned more than R1,500, she would have to make a contribution of R2,479 upfront to gain access to the Housing Subsidy Programme.
In other words, because of her salary, Buli qualifies for a free house when one gets built in her area. If she had a higher salary, she would have to pay a deposit to get a housing subsidy. According to the website, people who earn more than R3,500 do not qualify for a housing subsidy.
If she bought a house from an estate agent, the average price in similar areas to hers is about R100,000, but estate agents have confirmed there are no available houses in the areas she wants to live in. However, if she moved to Motherwell or New Brighton there are houses available in the R100,000 range, with one in New Brighton going for R45,000.
“The bond repayment on R100,000 is about R1,000 a month and you need to earn three times more than that to qualify for a bond. So Buli will need to earn R3,000 to qualify for a R100,000 house. With regards to other expenses, electricity and water will cost about R250 a month and rates are about R50 a month in Motherwell as it is an urban renewal area,” says Nobuntu Plaatjies of Genprop in Port Elizabeth.
Plaatjies is marketing homes in Motherwell and New Brighton in a variety of price ranges and she could help Buli if she decided to relocate.
“If she wants to stay in the Seaview area, my advice to her would be to register for a RDP house and wait her turn. The areas she wants to live in have mostly RDP houses and these are never supposed to be sold,” says Plaatjies.
Household insurance against theft and damage can be arranged for a bricks and mortar home, not a shack, but the actual cost depends on the area‘s profile. If the area is high risk, she will pay more.
Currently her employer pays R200 to ensure household contents in an area five minutes from her, so she is using that as her base. She did not pay for water and electricity when she lived in her RDP house in Greenbushes so the same should apply if a RDP house is given to her in Seaview.
She will also need to start saving for furniture for her new home. Luckily her employer had a baby a year before she did, so she won’t need to purchase a cot or other baby needs.
Produced by Johncom Group Newsroom, originally commissioned for our sister newspaper, the Weekend Post

Housing needs fast-tracking

South Africa’s proposed national housing agency is needed to fast-track housing delivery in the next two years and resolve problems of slow pace of approvals by municipalities and provincial governments for affordable low-income housing, says Housing Minister Lindiwe Sisulu.
Legislation would be put to parliament this year to provide a legal framework for the agency, Sisulu told a media briefing at Parliament.
Sisulu said the new agency would need to work closely with developers and the banking sector to accelerate delivery of housing. South Africa needed to build 500,000 houses a year - but instead it was achieving somewhere in the region of 265,000 this financial year.
The private sector was producing some 60,000 housing units.
The housing department budget was being fully utilised, she said, noting that she had been "nice" to Finance Minister Trevor Manuel but that she could not expect her budget to be doubled.
Noting that it sometimes took three years to get the appropriate approvals from municipalities and provincial government, she pointed to the example of the N2 Gateway project in Cape Town where after a long wait the city had only in the last few days provided a land availability agreement for further housing development.
She said the agency would need to source other funding methods - other than state funding - such as attracting international agencies that could provide housing loans and be able to find "innovative ways of inclusionary housing".
In a statement the housing minister reported South Africa’s housing backlog as 2.5 million houses - with 200,000 houses added to this figure each year.
At a delivery rate of just under 500,000 the backlog would be eradicated by 2014 at a total estimated cost of 345 billion rand.
I-Net Bridge

Concern over uncompleted Bay housing projects

THE provincial portfolio committee on housing and the committee on public accounts have expressed concern about the poor working relationship between the provincial housing department and the Nelson Mandela Bay municipality.
Speaking yesterday after a tour of blocked projects in Nelson Mandela Bay, housing portfolio committee chairman Dennis Neer said the two were “not speaking the same language” and this was adversely affecting housing delivery.
“We are concerned. The municipality is telling us a different story from what the provincial housing department is saying. For instance, the housing department told the committee there were about seven blocked projects in Nelson Mandela Bay, but when we came to the municipality, we were told there were only two.
“This is a cause of great concern. If the housing department is allocating money for seven blocked projects to be unblocked and the municipality is saying there are only two, where is the other funding going to? This is serious. We will call on the housing department to explain,” said Neer.
Blocked projects are those which are not completed because either there is no funding, or the contractor did not complete the work, or if he did, the workmanship is poor and the project is stopped.
Neer said a check was being carried out on how much money the municipality had received from the housing department, and how much had been spent.
“We are also looking at the challenges facing these projects, what programme should be put in place to unblock them, and also verifying if they are provincial or municipal projects.”
He also said the committees were looking at what happened to the money not spent at the end of a financial year – where it was kept, what interest accrued and what happened to it. The municipality was left with a questionnaire to complete. This will be presented in the legislature by the committee.
Neer described the situation as “confusing”, as the housing department and the municipality did not agree on many issues.
“We have told the municipality that from now on this unhealthy working relationship must stop. How do we talk of co-operative governance when spheres of government are not co-ordinating?”
He said the committee would take the municipality‘s questionnaire to the housing department and compare it with what they had to say.
The committee is visiting all municipalities in the province.
The working relationship between the municipality and the housing department has always been strained. This is evidenced by the move by the municipality to be accredited as a fully fledged housing developer, thereby cutting out the housing department in the delivery process.

IOL: R100m housing tender graft exposed in Gauteng

IOL: R100m housing tender graft exposed in Gauteng: "The Star can on Thursday reveal the contents of an explosive forensic report into tender irregularities worth over R100-million in the Gauteng department of housing.

Implicating the most senior officials in the department, the report - which was never made public - was so damaging that it is understood its author was forced to omit certain details.

The two men at the centre of the allegations are Eugene Perumal, former chief director of the department, and Sibusiso Buthelezi, then the housing head of department (HoD) and now in the same position at the Department of Transport."

IOL: Low-cost housing fraud to be rooted out

IOL: Low-cost housing fraud to be rooted out: "Low-cost housing fraud to be rooted out

October 05 2006 at 02:16PM

The Special Investigations Unit (SIU) will investigate corruption in low cost housing subsidy schemes, its head Willie Hofmeyr said on Thursday.

'We hope to start an investigation within the next few months,' Hofmeyr told reports at a National Press Club briefing in Pretoria.

The SIU will appoint 50 new investigators to work full time on the project.

'We are looking at fictitious applications, fraud committed by conveyancers and houses which were not built even though payment was made,' said SIU deputy head Faiek Davids.

He said investigations would initially focus on KwaZulu-Natal and Gauteng. The unit said they would give more details once the President had issued a proclamation for them to continue with them. - Sapa"

Housing backlog increases despite new homes : Mail & Guardian Online

Housing backlog increases despite new homes : Mail & Guardian Online: "South Africa's housing backlog has widened due to growing urbanisation and demand despite the building of 1,9-million new homes for the poor since the end of apartheid in 1994, the government said.

Of the total figure, 1,6-million houses worth about R37-billion have already been transferred to poor households, according to a review released late on Tuesday by the national treasury.

'Despite these delivery rates, the housing backlog has grown,' it said, adding that the number of dwellings classified as 'inadequate' -- mostly shacks -- had grown 20% from 1,5-million in 1996 to 1,8-million in 2001.

'This is because of the increased demand and the pace of urbanisation, with urban populations growing at 2,7% per year,' it said.

The report also expressed concern about the quality of state-subsidised houses, saying there was 'emerging evidence that some of the houses did not comply with the required standards'.

The South African government aims to eradicate shack dwellings by 2014. State spending on housing has grown from R4-billion in 2002/2003 to R5,1-billion last year.

It is projected to reach R8,7-billion rand by 2008/09. -- Sapa-AFP"

High-speed housing plan needed

High-speed housing plan needed February 15, 2007By Donwald PresslyJohannesburg - South Africa's proposed national housing agency is needed to fast-track housing delivery in the next two years and resolve problems of slow pace of approvals by municipalities and provincial governments for affordable low-income housing, says Housing Minister Lindiwe Sisulu.Legislation would be put to parliament this year to provide a legal framework for the agency, Sisulu told a media briefing at Parliament.Sisulu said the new agency would need to work closely with developers and the banking sector to accelerate delivery of housing. South Africa needed to build 500 000 houses a year - but instead it was achieving somewhere in the region of 265 000 this financial year.The private sector was producing some 60 000 housing units.The housing department budget was being fully utilised, she said, noting that she had been "nice" to Finance Minister Trevor Manuel but that she could not expect her budget to be doubled.
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Noting that it sometimes took three years to get the appropriate approvals from municipalities and provincial government, she pointed to the example of the N2 Gateway project in Cape Town where after a long wait the city had only in the last few days provided a land availability agreement for further housing development.She said the agency would need to source other funding methods - other than state funding - such as attracting international agencies that could provide housing loans and be able to find "innovative ways of inclusionary housing".In a statement the housing minister reported South Africa's housing backlog as 2.5 million houses - with 200 000 houses added to this figure each year.At a delivery rate of just under 500 000 the backlog would be eradicated by 2014 at a total estimated cost of R345 billion

Housing the Nation

Business Day (Johannesburg) EDITORIALFebruary 13, 2007 Posted to the web February 13, 2007 Johannesburg
THE delivery of low-cost housing has long been one of government's toughest challenges.
No matter how fast SA builds houses, more are needed, to the point where the housing backlog has actually risen in recent years.
President Thabo Mbeki's frustration was clear in his state of the nation address on Friday. Despite funding 300000 new subsidies over the past two years, he said, the pace of delivery was much slower than expected and had to be addressed.
Government can no longer point to the banking sector as a key factor in stalling the process. Last year, government and banks reached agreement on how to proceed with the R42bn banks had promised to lend in low-income home loans as part of the financial sector charter. While it seems that not all elements of this agreement have been implemented, the banks have clearly tried to come to the party.
Almost half of the agreed amount has been lent into the lower end of the market -- funding people who earn between R1500 and R7500 a month. Banks are also looking into more innovative ways of lending, such as extending the lending term and implementing a stepped-rate product where the initial interest rate charged is below the market rate but increases over time. Both will require educating customers, but the point is the banks seem to be attempting to pull their weight.
So why are we not beating the problem of homelessness? It's partly due to large-scale migration of people from the rural areas to urban centres. The fact that many construction companies left the industry during the lean times has not helped. But principally, there is not enough available land on which to build low-income homes.
So government's plan to set up a special purpose vehicle to buy land for housing and speedily release it for development seems sensible. But it needs to get on with it. Agitation for homes is growing along with the backlog. People have been patient for far too long.

Eastern Cape underspending, failing its people’ February 05, 2007, 17:15

The Eastern Cape is underspending on its allocated provincial budget and therefore failing its people, the Public Service Accountability Monitor (PSAM) said. Adrienne Carlisle, the PSAM spokesperson, said the province's budget had been underspent in the 2006/2007 financial year."Our concern is that the Eastern Cape had spent only 60.45%, or R1.24 billion out of its R2.5 billion capital budget by the end of December. This means that only 69.5% of the budget had been spent," said Carlisle. She said provinces at this stage of the year should have utilised about 75% of their budget.Education department on track with spendingThe National Treasury's quarterly spending results are responsible for the in-year monitoring mechanism that enables departments to reflect on achievements and to take steps necessary in correcting over or under expenditure.This ensures that the departments spend funds allocated to them responsibly, said Carlisle.Some of the departments that underspent on their budget allocation include the department of housing, local government and traditional affairs which spent R621.8 million of its R1.2 billion budget and the provincial treasury which spent only 49% of its budget.The departments on track with their spending include the department of education which spent 72.5% of its budget and the department of social development which spent 72.4% of its budget.Housing department on hot seat for underspendingCarlise warned the departments that their spending should be in line with their strategic and performance plans service delivery targets for the 2006/07 financial year. Carlisle said the province had not spent its conditional grants properly, referring to the department of housing, local government and traditional affairs.The department had only spent R291 million out of its R762 million budget, she said."We call on Sam Kwelita, the local government MEC, to explain why spending on conditional grants, meant to provide housing to the poor, has been so slow," said Carlisle.Kwelita could not be reached for comment. - Sapa

The danger of what we don't know

I wrote this article for the current issue of ACCESSHousing (No. 5, January 2007) which is available on the FinMark Trust’s website. I thought it might be a useful way to get back to a regular posting…

By now we should all know that the old saying “what you don’t know can’t hurt you” can’t be right. To know whether a snake is poisonous is useful information when faced with a hissing serpent that is advancing on your ankle. Information makes one better equipped to deal with the situation at hand, to respond appropriately, strategically, and competitively.
An ongoing mission of the FinMark Trust has been explicitly this: to provide critical information into the sector in support of evidence-based policy making, transformation and innovation towards making financial markets work for the poor. In the process of doing this, FinMark hopes that other players will see the benefit of this approach and integrate it into their systems and processes. The information that we generate, through the FinScope[1] survey, as well as through other targeted research initiatives, is not an end in itself, but a tool that promotes effective policy change and stimulates competition and innovation on the part of providers.
While there is increasing recognition that those people outside formal financial services provision collectively represent a substantial untapped market into which services can be provided on a sustainable basis (“the fortune at the bottom of the pyramid”[2]), there is a lack of credible information on what this market looks like, how it operates, what it wants. This is also true in housing.
Key studies in the past few years[3] have addressed some of this gap, but in the process have raised far many more questions. In an environment of (quite understandable) delivery impatience (last year was the worst year on record in subsidised housing delivery, and the delivery of ‘affordable’ stock is meeting only 14% of the estimated demand annually), there is a danger that we will be complacent with what we know and overlook what is inexplicable. And whether such ignorance obscures market opportunities or market realities, the outcome is something that today’s financial sector can ill afford.
These are some of the questions which need to be answered:
What does the ‘affordable market’ look like? It is remarkable that this is something we don’t know. With instruments and periodicals such as the ABSA House Price Index and Residential Property Perspective, the Standard Bank Residential Property Gauge, and the FNB Property Barometer, one would think that information on the supply, churn, and appreciation of the affordable housing market would be in abundance. ABSA’s analysis[4] does have a category for “affordable housing” and defines this as houses between 40-79m² and costing less than R226 000. However, while property prices in the higher income segment are analysed by province and by metro, ‘affordable housing’ statistics are only provided in national averages and no differentiation between ‘new’ and ‘existing’ is offered. FNB’s Property Barometer[5] is a useful addition, basing its analysis on surveys with estate agents. However, while it has recently included township-based estate agents in Gauteng, Cape Town and Durban, their comments are also generalised and neighbourhood specific dynamics are not reported. Standard Bank’s December edition[6] has an excellent section on Soweto, suggesting that there is indeed data to analyse – but what about the rest of the country? Without this critical information, banks cannot know the risks of lending into the ‘affordable’ market – they will be unsure as to whether there is a sufficient secondary (resale) market to support their collateral risk – and this will dampen their enthusiasm. As it is, FSC housing finance attention is on new build. Perhaps with more information, secondary market churn could also be stimulated.
How do people turn money into house? Current housing finance debates are dominated by a concern with three product categories: mortgage, pension-backed, and unsecured or micro loans. There is a growing recognition of incremental housing as a delivery process, but how households actually do this, what makes it easier and what makes it more difficult, remains a mystery. As a result of the mystery, a bias in favour of large scale developer-driven projects on open tracts of land persists, when opportunities for urban infill that is owner-driven might be more sustainable.[7] The Financial Diaries data, explored briefly in this edition of ACCESShousing, shows that most households in the sample were perfectly capable of their own project management on their homes, with or without a programme to help those efforts. This would seem to strengthen the case for housing micro loans, but how widespread are such skills? And critically, from a finance perspective, how can lenders support the process so that the finished product is mortgageable?
How do people turn house into money? Current information systems count the number of subsidised houses complete or under construction, and the number of subsidised beneficiaries (i.e. households with a title deed). With the advent of government’s Breaking New Ground policy, the delivery of sustainable human settlements becomes an area of inquiry. But sustainability is a long term prospect which arises as a result of a confluence of factors. What a subsidy beneficiary does with their house is a critical indicator in this equation. We need to know if people are upgrading their homes, and if so, with what sorts of finance. This will give us a sense of the level of investment in housing and whether households see their homes as an asset – be it social, financial or productive. It will also respond to the R2479 debate that says people must contribute to government’s investment – could investment be happening after the subsidy is allocated? We need to know if subsidised houses are being sold – how, why and at what price. If we don’t understand this we’ll never understand the role housing plays in the economic lives of low income people and whether through its housing subsidy, government is investing in economic growth as well as shelter.
What is actually happening in the FSC space? The FSC update later in this edition tells of the frustration of the Financial Sector Charter Council with the data provided by lenders in respect of the housing loans that have been originated. Clearly these are teething problems which the FSC process will iron out – the information requirements necessitate systems changes (i.e. to capture the relevant data) which are complicated all the more by additional requirements for compliance with Basel 2 and the National Credit Act. The critical need for the information, however, does not go away. Quite simply, we need to understand how low lenders can go[8] in extending housing finance into the target market. An important segment of the target market to watch is those households earning just outside subsidy eligibility: if they can access neither subsidy nor loan, this becomes a critical issue of concern for government seeking to meet its Constitutional obligations in ensuring that all residents in South Africa have access to housing.
Are lending patterns changing in South Africa? On the 24th of November last year, the draft regulations for the Home Loan and Mortgage Disclosure Act (HLMDA) of 2000 were released for public comment.[9] In the six years since it was promulgated, the HLMDA has been effectively dormant without the regulations. The issuing of draft regulations for comment was therefore a significant event. Once approved, the regulations will provide the sector with much needed information on the nature, scale and scope of lending for housing purposes and this will assist in determining where the blockages are in the housing finance value chain. While the Department of Housing considers the various comments it has received, it is hoped that it will also consider how the regulations, once accepted as final and implemented, support the development of a publicly available (and accessible) database. Ideally, all information should be made publicly available to enable researchers to identify trends and to provide incumbent and potential lenders (and other financial service providers) with critical industry information. While such information may currently be regarded as proprietary and confidential, greater disclosure can materially improve competition in the industry and enhance market functioning particularly in under-served market segments.
For policy makers as well as product providers, the lack of information regarding the low income housing sector is a major barrier to effective engagement. Without adequate market information, product providers find it difficult to devise innovative new products for the low income market, or to justify broad based roll-out. For their part, policy makers struggle to define the problem of access with sufficient granularity to develop a targeted response. And access to housing finance and the property market by the poor suffers as a result. The danger of what we don’t know is not only that we’ll overlook a potentially big and vibrant market, but also that we’ll undermine the opportunity for the majority of our population to build their housing wealth.
[1] FinScope is now conducted in nine African countries and Pakistan. For more information go to www.finscope.co.za
[2] See Prahalad (2005) The Fortune at the Bottom of the Pyramid: Eradicating poverty through profits. Wharton School Publishing.
[3] See, for example, research sponsored by the Banking Association in to housing supply and functioning markets, available on their website, www.banking.org.za. The FinMark Trust has also commissioned substantial research, including an analysis of the workings of township residential property markets (2004), the activities of small scale landlords and home based entrepreneurs (2005/06), the causes of default among clients of housing non-bank lenders (2006), and the access frontier of mortgage finance (2006). See the housing finance theme page on www.finmark.org.za
[4]http://www.absa.co.za/absacoza/generated/files/d81b1ae612a7e010VgnVCM1000003511060aRCRD/PropertyPerspective.pdf?F_C_ID=03b8ac45985bc010VgnVCM1000003511060aRCRD
[5] https://www.fnb.co.za/personal/borrow/homeloans/quarterlyReview.html
[6] http://www.ed.standardbank.co.za/research/SAGE_RPRP_011206.PDF
[7] This argument is developed by the Kuyasa Fund in its Delft Housing Needs Analysis. See http://www.finmarktrust.org.za/documents/2005/AUGUST/Delft_report.pdf
[8] A 2006 edition of the housing finance access frontier is currently being developed. For the 2005 edition, entitled “How low can you go?”, see http://www.finmarktrust.org.za/documents/2006/MAY/AccessHF_report.pdf
[9] The draft regulations were published for comment in Government Gazette No 1734, dated 24 November 2006. Comments were received by 29 December 2006 and the Department of Housing is now considering these towards the development of a new draft.

BusinessDay Exporter

Monday, 05 February 2007

Posted to the web on: 05 February 2007Home-grown building an instant success
SA is already exporting what could turn out to be the solution to the domestic housing crisis, writes Sipho Masondo
IT IS no secret that the South African government is struggling to provide houses for the masses. The housing department says there is a backlog of about 2, 4 million houses, despite construction of almost the same number since 1994.
However, a home-grown “instant housing” technology is being used successfully in a number of countries, and questions have been raised because it is not being used in local mass construction projects.
Port Elizabeth entrepreneur Hennie Botes has been successfully exporting his “instant housing” technology for the past decade. His company, Moladi, markets his idea mainly to third world countries like Panama, Mexico, Angola, Botswana, Brazil and Kenya.
Negotiations are currently under way for Moladi to set up shop in Tanzania, Namibia, Nigeria, Zimbabwe, Ghana, Sudan, Algeria, India, Indonesia, Sri Lanka, Costa Rica, Guatemala, Ecuador and Venezuela. “Most of the business we get has been generated by our website.”
Botes says the concept came to him in 1986, when he was building a wall around his first home, which took a long time. “I thought there must be an easier way to do it than laying a brick on top of another.”
And there was. Moladi’s “instant house” is formed in a mould. He does not export whole houses, but rather the technology and systems to build and complete a house in a day.
“It is simple to mould the planned house and cast it with brick or block material,” he says. “This eliminates the slow process of construction, although obviously the moulded shutter has to be strong enough to withstand the pressure of the mortar.”
The mortar dries within 24 hours and is then ready to receive the top structure, plumbing, conduit window and door frames.
The advantages of such houses, Botes says, is the speed and quality of construction. They do not require skilled labour. The houses are socially acceptable, in that they are solid rather than prefabricated, and banks have no problem granting bonds with the structure as collateral.
“It reduces time, waste and cost, and eliminates chasing for plumbing and electrical pipe work, plastering and beam filling. It’s a cost effective, holistic design-and-build technology that far outweighs poorly designed costly concrete-block and masonry structures,” he says.
“If you have one mould you can build one house in one day, and if you have 100 moulds, you can build 100 houses in one day.”
Botes has patented and received the South African Bureau of Standards’ approval for the concept, and patents are pending for improvements on the original design as well as complementary products.
Botes is adamant that Moladi homes do not fall into the low-cost housing category, which has negative connotations in SA because of a history of sloppy workmanship by contractors. “Moladi is all about low construction cost technology and has nothing to do with low-cost housing systems. The principle can be applied to any house, whether low-cost housing or a mansion.”
He is also quick to say that Moladi is not in the business of building houses, but rather selling the concept to contractors. “We sell the idea to contractors, who then build cost effectively. We dispatch project managers to the countries we operate in to help contractors build the first show house, so transferring skills.”
Thereafter those who are interested buy the mould from Moladi. It is still only available to builders who want to build 50 or more houses.
The moulds are manufactured in Markman, outside Port Elizabeth, and exported from the city’s harbour. Botes says an 800-house project in Mexico is currently under way, and the company is bidding for a contract to build classrooms in Iraq.
Although the concept has proved viable overseas, Botes says the South African government and property developers remain skeptical.
Botes is convinced the Moladi method is the solution. And there is light at the end of the tunnel; Botes says local interest is picking up, and has even received a fax from Education Minister Naledi Pandor who wants to know more about Moladi.
Last year Botes won a subsidy housing merit award at the Innovation Housing Competition sponsored by the National Homebuilders Registration Council and Absa Bank. In 1991 he won the PRW award in the UK, and in 1997 he won the SABS design for developmental award.
Looking at the future, Botes is confident that Moladi will reach the milestone of having facilitated the construction of 1-million houses worldwide.


Social Entrepreneurs Invent the Future

Housing and local government lags behind in E Cape grant spending

By Patrick Cull
THE Eastern Cape has spent less than 70% of the more than R1,2-billion in conditional grants it received from National Treasury for the first nine months of the current financial year.
The worst offender is housing and local government, having spent only a fraction over R291-million of the R656,7-million it received for the integrated housing and human settlement grant. In addition to the more than R365-million the department has not spent to date, National Treasury still has to transfer some R94-million to the province.
Apart from this grant and the ill-fated national school nutrition programme grant of which only R157,6-million out of R233,8-million had been spent by the end of the third quarter with little hope of the remainder being allocated, the Eastern Cape was essentially on track at the end of December.
Both the education and health departments were up to speed in spending grants for HIV/Aids, with education having used R21-million of its R25-million grant for life skills education and health having spent R191,2-million of its R218-million allocation for the comprehensive HIV and Aids programme.
And it would appear health will not have to forfeit funds from the hospital revitalisation grant as was the case in the last financial year, the department having spent R89-million out of a total allocation of R105-million.
Commenting on the figures, Finance MEC Billy Nel said there was cause for concern about some of the grant spending, particularly that earmarked for housing, although it was “a definite step forward” that the HIV/Aids and hospital revitalisation grants had been spent.
Overall provincial capital expenditure is well behind schedule for the year with only about 60 per cent of budget spent.
Education as well as health and roads and transport have still to spent large amounts, although Nel said this could be because of the time lag between receiving the money and awarding contracts.

Auditor‘s report slams waste as 200 houses must be rebuilt

THE Cacadu district municipality is rebuilding 200 houses in Paterson which are falling apart, allegedly because of shoddy workmanship by a contractor who was awarded the job by the municipality.
The municipality is also taking legal action against the contractor, who won a contract to build about 600 houses three years ago.
The Auditor-General in his report, tabled at a full Cacadu council meeting this week, slammed the municipality for “failing to adequately” monitor the project.
The AG‘s report also lambasted the municipality for not complying with accounting standards which are outside the ambit of the Standard of Generally Recognised Accounting Practice and the Standards of Generally Accepted Municipal Accounting Practices.
The AG said the demolishing and rebuilding of the 200 houses at a cost of about R10-million, amounted to “fruitless and wasteful expenditure”.
Municipal manager Ted Pillay said yesterday the houses in question had been built “many years ago. At the time of construction, there were no obvious defects. Over time, however, the structures began to crack because of the poor soil conditions”.
He said that although inadequate monitoring of housing projects had been given as the reason for the problem, it was unlikely that the officials involved at the time would have been able to foresee that the structures would crack.
“Consultants involved with the project do carry a certain amount of the responsibility, and the municipality is involved with litigation in this regard,” he said.
Pillay said more information had been submitted to the council, giving more insight into the challenges the project faced.
“This should be looked at before the expenditure can be deemed fruitless,” he said.
He said they had already obtained funding from the provincial government, and about 23 houses had been completed. The municipality would in fact gain, as the housing subsidy provided by the government when the houses were first built had been much lower than the current one of R36 000 per beneficiary.
He said the entire project involved about 600 houses, 200 of which had been built in the first phase and the remaining 400 in the second phase.
“We discovered that the 200 were poorly constructed. Another contributory factor is the poor type of soils in the area. We decided that these houses be demolished and rebuilt, and this irked the AG,” said Pillay.
“We are taking action against the previous project managers. I cannot give more information or name the project managers as the case is sub judice,” he said.
At a community meeting residents lashed out at Cacadu for not involving the Sundays River Valley municipality in housing projects as it was the local authority in the area.
They also said contractors were appointed by Cacadu, and in one project three contractors had to be fired as none of them could complete the work.
The residents also claimed massive corruption in housing delivery in the area, adding that some contractors left the site soon after receiving their payments.