Urban development component of the second economy strategy

1. Urban development component of the second economy strategy 31 October 2008

2. Problem • Impact of programmes on economic upliftment has been marginal: space is exclusionary, ‘rdp’ housing on outskirts, programmes not integrating poor into property market..asset rich/income poor • Growth of informal settlements – spatial manifestation of people’s place in ‘second economy’ • Uneven political support for pro-poor agenda, no clear national direction on urban land issues • Cost of transport impacts on ability to look for work and remain economically engaged..deep locational constraints • Spatial planning instruments not being utilised to effect spatial changes • Urban services- limited provision to urban poor, poor excluded from basic services • Inner city – poor gain foothold in regulatory gaps – poor living conditions, unstable relationships, deterioration of irreplaceable building stock • Lack of coherent strategy for addressing informal settlement

3. Focus Areas • Urban component focuses on investment in public infrastructure in urban areas and the impact of this investment on second economy • Motivation: infrastructure facilitates access to income generating possibilities, asset creation • Focus areas of investigation: (17 papers) • Economic Development • Spatial planning • Transport • Land • Housing • Informality – housing and economic activity (Misselhorn) • Urban services This presentation, brief introduction and focus on informal settlement upgrading

4. Current spatial forms • Persistent inequality- spatial manifestation • Ghettoisation • Investment impacts not optimal: • Spatial integration X • Economic integration X • Unequal access to benefits of urban living • Social/ economic / spatial exclusion

5. NDoH estimate: 2.4-million households in informal settlements

6. Urban form • Poor bear brunt of externalities • Access to employment • Poor more dependent on public services (e.g. transport, electricity) to access opportunities and earn income • Most likely to live in marginalised conditions, weak access to basic services • Urban inefficiency perpetuates and exacerbates other forms of inequality • Efficient cities work for everybody, but poor urban form undermines advantages of cities • Heightened by global energy crisis • Not poverty reduction first and sustainable development later

7. Strategic response: Including the poor in urban fabric Public investment must be focused where benefits of inclusion are maximized TWO framing responses for reducing marginalization: Access: focus on providing access to urban infrastructure, connecting poor into urban fabric Assets: focus on living environment that taps potential and promotes productivity

8. ACCESS: Infrastructure focus Investment in public infrastructure critical because: • Ageing bulk infrastructure reaching capacity • Low densities = high infrastructure/public service costs • Public infrastructure attracts private investment ; housing provision improves living environment • Extend basic services to poor; Consitutional, ultimately improves productivity But neither infrastructure nor housing is automatically poverty reducing: location dependent The optimal poverty reduction benefit of urban investment lies in the nexus between city restructuring, delivery of public infrastructure and shelter provision

9. Biggest pro-poor public investment - shelter BUT How do we shift from housing as shelter to housing as asset an to sustainable human settlements? Need an ASSET building focus…

10. INDIVIDUAL ASSET Financial The value of the financial asset is dependent on the functioning of the property market. Housing construction contributes dramatically to economic growth due to the forward (furniture, home improvements, etc.) and backward (building materials, infrastructure, etc.) linkages involved. In addition, formal residential properties are a fundamental component of a municipality’s rates base. Economic growth Job creation Housing construction is a labour-intensive exercise. An increase in delivery can lead to substantial job creation. The potential for SMME development in the home improvements industry is also significant, especially given the nature of RDP stock in South Africa. Social Economic The house as a social asset – something which provides an address, which can be transferred as inheritance, which gives shelter, was a fundamental underpinning of the original housing policy in 1994. The house can function as an economic asset by supporting home based enterprises and other income earning activities. Sustainable human settlements PUBLIC ASSET ASSET: Sustainable housing settlements

11. Core recommendations • Strategic pro-poor land use and transportation planning at municipal level (predictability) • Transportation corridors and mass transit • Infrastructure –led emergency relief and upgrading of informal settlements • Housing and land delivery • Area based projects with clear budget line • Development instruments

12. Upgrading of informal settlements…not slum clearance Huchzermeyer: SA: National target to eradicate informal settlements by 2014 MDG target: improving lives of 100million slum dwellers by 2020. Targets require that circumstances of those living in ‘slum' conditions be improved..specifically through providing access to (at least one of the following…) water, sanitation, secure tenure, structurally sound housing; reducing overcrowding UN-Habitat: “the long journey towards cities without slums” through best practice of “participatory slum upgrading programmes that include urban poverty reduction objectives”. Clarification of targets and spirit of BNG at strategy level and throughout spheres of state.

13. Infrastructure-led emergency relief upgrading of informal settlements • New paradigm: • away from IS as illegal, dysfunctional • importance of IS as reception areas, able to address accommodation needs at scale • A paradigm that is unambiguous in policy and in practice: (current rhetoric: slum eradication, upgrading or slum clearance?) • Programme of positive, active upgrading of IS…..A national strategy to unlock funding for municipal level upgrading of informal settlements (IS) • Premise: integration of the poor into the urban fabric is not only a housing responsibility

14. Community Survey 2007: by province and type of main dwelling

15. Informal settlement upgrading and second economy • Quick, affordable access to city, reception areas • Reach most vulnerable; relief in short term • Focus on livelihoods: access, location, rather than top structure; on the causal conditions of informality through access to land, regularisation (recognition), economic focused interventions, rather than the symptoms – through clearing of shacks • Focus on functional tenure security and assets, productivity and potential • Once settlements have been formally recognised and infrastructure is put in place, people feel secure enough to start investing in their dwellings. • Link between housing outcome and savings, housing support

16. Direct actions for upgrading IS Progressive upgrading (sophisticated) • Scanning and grading IS • A plan for emergency relief and progressive upgrading • Dedicated funding • Blanket recognition of well located IS • Fast-tracking emergency relief or progressive upgrading • Enabling tools for full upgrading of settlement • Getting ahead of IS: land release, limit densification • Monitor

17. 1. Rapid identification and grading of informal settlements • Inputs: • Assessment of status and ‘upgradeability’ of all settlements. Includes: • Environmental information • Site visits • Deeds office assessment - land ownership • Initial meeting(s) with community leadership to identify key emergency issues; • Existing structures of support and gauge levels of community organisation. • Outputs: • Schedule of existing settlements showing their extent, approximate size (no. hh), their ‘A’, ‘B’ or ‘C’ status...potential for upgrading • A. Full upgrade in short term • B1. Emergency relief only • B2. Emergency relief + incremental / long term upgrading • C. Must move – no interim relief

18. 2. Feasibility (plan of action for each settlement) • Tailored response • Detailed planning and budgeting exercise involving line function City departments, professional team and community leadership, financial institutions, NGOs • Detailed plan of action for a package of emergency relief measures • Capital budget • Funding application • Action plan: • emergency relief • land acquisition • Full upgrading

19. 3. Finance State subsidisation focuses on engineering, social and educational infrastructure Streamlined funding mechanism: • Quick • Flexible • Non bureaucratic • Plan-based; may be area-based • Subject to regular audit • One pot funding stream, grant alongside MIG Treasury – local government Group saving and Housing micro finance “ In a context where a household has been ensured security of tenure (whatever form that may take) and given infrastructure & other services, the literature suggests that there is sufficient incentive for households to then improve their housing situation”

20. 4. Recognition of informal settlements • Legal recognition • Benefits to households and municipality • Crucial step in asset creation, citizen responsibility, securing of rights to municipal services • Various legal options: • Municipal town planning scheme: special zones • DFA

21. 5. Fast track emergency relief May include: • Sanitation: portaloos, sanitation blocks, VIP’s • Fire protection: fire hydrants, buckets, local fire committees with stipends, portable fire extinguishers, rapid callout response protocol for helicopter / aeroplane bombers • Standpipes • Solid waste disposal • Footpath access with basic storm-water controls • Storm-water controls and drainage • Access ways for emergency vehicles • Transport • High mast lighting

22. 6. Enabling instruments to facilitate full upgrading Funding strategy Procurement that brings in private sector and NGOs Housing support services Streamline municipal planning approval; plans and advice Pro-poor municipal transport plans Social infrastructure LED Link housing delivery to provision of micro-finance (savings based)

23. 7. Getting ahead of informal settlement • Land acquisition (for full upgrading and greenfields) • Implied in BNG- necessary for proactive response to informal settlement

24. IS upgrading integrally linked to wider urban planning • Develop pro poor transport strategies • Implement appropriate service levels • Identifying, acquiring and servicing alternative land • Mechanisms for recognition • Addressing land-legal obstacles • Procurement Conclusion: Enter the policy space created by BNG, NUSP, various metro initiatives