Downscale housing projects due to budget cuts, provinces told

The DA says provinces and municipalities will have to carry the country’s housing burden after the Department of Human Settlements (DHS) ordered that projects be downscaled.

In a recent letter, addressed to the Western Cape housing department, the DHS instructed provincial departments to put measures in place to immediately downscale the delivery of government houses.

This comes amid the country’s dire economic situation.

“The current economic reality (economic recession that promoted budget cuts, and problems posed by Covid-19), … renders the housing subsidy programme approach to deliver top structure fiscally unsustainable,” the letter reads.

Planned projects for next year will only be supported if they are to benefit the elderly, military veterans, people with disabilities and child-headed households.

DA spokesperson on human settlements Emma Louise Powell said the country’s dire economic situation had been brought on by ANC corruption and government’s continued bailing out of bankrupt state-owned entities.

“While the government no longer has money to provide shelter for poor and destitute South Africans, just this month it has prioritised funding for another R10.5-billion bailout to the defunct South African Airways (SAA).

“The ANC’s apparent change in its 26-year housing policy coincides with a R2.26-billion budget cut and the abolition of the title deeds restoration grant from next year onwards,” she said.

Powell said, with a title deed backlog of 893 222, provincial and local housing departments would have to deal with the fallout of this decision.

“Provinces and municipalities have already had to deal with a series of major budget cuts impeding their ability to meet the housing demand. Instead of rightsizing the civil service and privatising SOEs, as every ratings agency has urged, the ANC government is retaining the bloated civil service and bailing out SOEs while making major cuts to critical frontline services,” she said.

Aside from the budget cuts, the DHS directive seeks to deliberately downscale the delivery of housing units.

“This means that provinces will not be able to enter into new contractual commitments for government houses as from 1 April 2021,” Powell added.

Projects planned for next year will only be supported if they contribute to medium to high density development (BNG Walk-ups), and promote integrated development.

Projects may go ahead if there are current contractual commitments for the Medium Term Expenditure Framework period, as part of a contractor’s current work package which has been awarded at present.

According to the DHS instruction, no new top structure projects may be awarded until approval is sought from the national department first.

Powell said the criteria not only restricted provinces, but also brought up the issue of “expectation management”.

“Many communities have been waiting for years for projects in the pipeline which will now need to be revised,” she said.

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