presentation to commonwealth local government forum 10th june, 2010

Presentation to Commonwealth Local Government Forum

10th June, 2010

Lessons inPolicy and Practice dealing with

Displaced People Living and Working in the Streets of Johannesburg

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Homelessness in Jozi: Contents

What homelessness and informal existence can and does mean on the streets of Johannesburg

Policy response at City Level

Practical experience of policy roll-out

The Siyasizana programme and the Registered Social Landlord (RSL) Programme.

Concluding considerations

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Homelessness and Informality : Problematizing

• The population of those living on the streets of Johannesburg (and in informal circumstances with inadequate services closely linked to the streets) involves a range of different groups, the majority of whom are in some way economically active.

• The socially disconnected individuals with very high personal barriers to self-sufficiency are a presence (particularly over-35 males), but in operational experience constitute no more than a third to a half of those who spend their nights on the street

• The remainder are linked to the informal economy, with some form of residence on weekends, but during the week sleep rough and/or are tied in deeply with the slumlord-centred micro-economies in the City’s ‘bad’ buildings .

• In all cases the constituency of documented and undocumented migrants is a significant one.

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Homelessness and Informality : The statistical picture

• Joburg has 182 formally categorised informal settlements, home to approximately 200,000 households (estimated at between 500,000 and one million individuals).

• 2007 community survey (CoJ sample size 40k) shows at least 1 in 4 CoJ residents live informally (across range of possible circumstances)

• The OECD estimates the informal sector as 15% of total economic activity in RSA, but all evidence suggests it is the largest and in many cases only economic activity informal settlements, and is highly concentrated in Johannesburg’s inner city (case study on informal recyclers forthcoming).

• Active night counts of the homeless only show a few thousand at a time actually sleeping in the open – remainder are less visibly shelter-less

• Transport costs and the transaction costs of managing informal business, promote week-night homelessness as a rational choice for informal economic actors

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Draft Deprivation heat map of Joburg SAIMD CS 2007 at datazone level (draft model) by CASASP, Oxford

[ note : this model is still being finalised at time of presentation – presented here for discussion only ]

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Homelessness /Informality : link to ‘slum economy’

• Invaded buildings in Inner City Johannesburg are strongly linked to the informal economy, specifically to actors such as street traders and informal recyclers, who constitute their rental base.

• The slumlords have set up an obnoxious market offering facilitation to these groups, but income instability and non-security of rental arrangements result in individuals connected to the slum economy sleeping rough, sometimes as ‘overflow’ from invaded spaces, but also as an economic choice (particularly as slumlords drive up black market price of shelter – now as high as R1200 per month). This adds to the working poor living on the street, rather than the destitute.

• Initial evidence suggests these informal actors earn in the same bounds as entry level service sector professionals, but have no formal rental options.

Virtuous Property Cycle (Courtesy Dr Tanya Zak)

TenantTenant

LandlordLandlord

MunicipalityMunicipality Financial Financial institutionsinstitutions

Public Public Infrastructure Infrastructure

& Services& ServicesNew Rental New Rental

StockStockPays for rent and services

costs

Receives market-related accommodation

Repays mortgage plans to financial institution

Fund new accommodation development

Increased supply of accommodation

Payment of rates and services charges

Investment & maintenance in / of infrastructure and services

Improved / good quality urban environment

New investment

TenantTenant

LandlordLandlord

MunicipalityMunicipality Financial Financial institutionsinstitutions

Public Public Infrastructure Infrastructure

& Services& ServicesNew Rental New Rental

StockStockNon-payment of rents & services

costs

Poor accommodation & high rents

Unable / unwilling to repay debts

No commercial funding available / redlining

No new supply of quality accommodation

Reduced or non-payment of rates &

service charges

Reduced funds for investment &

maintenance in / of infrastructure

and services

Deteriorating / poor urban

environment

X

Slumlords / Slumlords / Hijacked Hijacked BuildingsBuildings

X

Vicious Property Cycle (Courtesy Dr Tanya Zak)

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Case study : Informal recyclers

[ Courtesy Dr T Zak and Sarah Charlton, Wits University]• Informal recyclers collect waste material (mainly

cardboard and paper) for onward sale to bulk recyclers• Can earn as much as R3000-R4000 per month

(comparable to minimum wage service sector work)• Wide variety of shelter-less living circumstances during

weeknights especially. Significant proportion have “once a week” homes or homes in rural zones outside city.

• Earnings do not enable them to afford basic formal accommodation and storage space for goods is a major consideration. Informal support markets have developed to meet these needs.

• Share space in basements of abandoned buildings during the week , otherwise resort to the streets.

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The Siyasizana Programme and the Registered Social Landlord (RSL) policy


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Crafting a policy response : Displaced Persons policy

Displaced persons policy (adopted in April/ May 2010) specifically addresses itself to those living and working on the streets. It commits the city to creating and promoting a layer of services for homeless populations, specifically:

• Overnight shelter for weeknight sleepers • Programmatic shelter for those trapped in destitute circumstances due

to complex personal issues • Intake shelters that can receive individuals cleared from the streets in

the course of enforcement activities and can screen and profile them for appropriate interventions.

• The Registered Social Landlord (RSL) policy is a companion instrument designed to promote formal affordable rental for those who are otherwise trapped in the slumlord economy (more to follow)

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Crafting a Policy Response : Rollout

• Dedicated Displaced Persons unit (DPU) has been set up with a focus on outreach, enforcement against obnoxious markets in begging and the development of the 3 classes of shelter intervention.

• 2 pilot intake shelters in inner city already functioning one focussed on adults, the other on minors

• Adult services complex , including overnight and programmatic shelter (as well as space for an RSL) is being developed at a large site in Hillbrow. This could be a 700-1000 bed facility and will be the first integrated programmatic attempt to institutionalise best practice developed by key social housing actors such as MHA

• RSL policy approved and promulgated for piloting

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RSL The Expanded Social Package: What is it ?

• Siyasizana : the Expanded Social Package is a basket of benefits which the City allocates to citizens based on their level of poverty.

• It replaces the old City of Johannesburg indigent subsidy system.

• From 1st July 2009 an entirely new system of benefits was rolled out targeting poor individuals and the households in which they live

• It is different from the old subsidy system because people do not need to be account-holders to apply, so – for example those who live as tenants in apartments and backyard shacks are eligible.

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The Expanded Social Package: Who should register ?

• System targets individuals not just properties• Anyone with an income less than R3,660 per month

should register. • Property dwellers with utility connections declare their

address using the City account of the property on which they live (whether they own it or not)

• Also supply pre-paid meter numbers for Joburg Water, City Power and Eskom, as well as Eskom account numbers

• This allows the system to distribute across all formats

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The Expanded Social Package: Poverty Definition

• Band 1 - Is the lowest level of subsidy, aimed at helping those on the borderline of poverty.

• Band 2 – is the middle level of subsidy, aimed at those who earn some formal income but whose earnings fall below the survival level defined by the poverty index (R2,440 per month)

• Band 3 – is the highest level of subsidy, aimed at those with no formal income living in the most deprived circumstances.

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The Expanded Social Package: Registration

• Personal circumstances verified using ID number against national databases, so people only need ID number and city account number (pilot for the National Integrated Social Information System).

• System uses fingerprints for identification, so people can be given up to six months to get a new ID book if theirs is lost, provided ID number is known (can verify application from home affairs database). Those who have never had ID referred to Home Affairs

• Critically - People can also register with no address or as homeless, but then obviously have no benefits applied to a property

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Proposed ESP Service Level : Electricity

Score on Prevailing COJ Poverty Index

Allocation of additional free electricity per person per month (kilowatt hours)

Monthly allocation cap of free electricity per household in which at least 50% of registered social package recipients qualify for the band in question (Kilowatt hours)

Band 1 1-34 10 (R5) 50kw/h (R25)

Band 2 35-69 20 (R10) 100kw/h (R50)

Band 3 70-100 30 (R15) 150kw/h (R75)

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Proposed ESP Service Level : Water

Score on Prevailing COJ Poverty Index

Allocation of additional free water per person per day (litres)

Monthly allocation cap of free water per household in which at least 50% of registered social package recipients qualify for the band in question (Kilo-litres)

Band 1 1-34 25l. (R5.89)

10kl. (R15.24)

Band 2 35-69 35l.(R6.23)

12kl.(R24.56)

Band 3 70-100 50l.(R9.47)

15kl(R38.54)

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ESP Service Level: Rates, Sanitation and Refuse

• Rebate on owner-charged rates and services for Band 1 : 70%

• Rebate on owner-charged rates and services for Band 2 and 3 : 100%

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ESP Service Offering - Summary

Water/ Electricity : Per person allocation based on each person’s band

Rates/ Sanitation : Percentage rebate to indigent owners, / Refuse varying by the owner’s band

Rental subsidy: ESP benefits will now flow as a rent-rebate to those living in COJ / JOSHCO

rental stock. RSL proposed as private sector subsidy model

Transport To be linked to new Rea-Vaya fares

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Next Phase : Registered Social Landlord Programme

Objective : To provide targeted affordable rental as benefit to ESP recipients Key Points of departure :

- Utilities and Service Charges constitute one of the main component of rental charges, and rapid inflation thereof will impact both affordability for citizens and collection rates for both landlords and the City . More stable collection rates are a desirable outcome for the city, landlords and renters alike.

- Current national policy context has very limited instruments for promotion of rental

- Historic tariffs provide no way of singling out affordable or social housing for special treatment, and there is no capital subsidy for private sector, for-profit providers.

- The ESP systems can provide a targeted, verified and fully auditable way of incentivising both the private and the non-profit sector to rent much more affordably extensively to those earning under R3660 per month.

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Next Phase : Registered Social Landlord Programme

Strategic considerations• POMA have alleged commercial landlords are constrained in

servicing tenants with incomes less than R7500/pm (ESP cuts of at R3660) . Capital costs and cost of services are the key drivers.

• The current supply of tenure to the ESP income category in the inner city is arguably hijacked/ slumlord accommodation charging R800-R1000 per month

• Single room occupancy accommodation is not currently cost-effective due to tariff treatment (eg Europa House)

• The RSL will either (a) find a way to convert or formalise hijacked buildings, (b) make it possible for the commercial market to meet the state halfway or (c ) both.

• Entirely Convergent and complimentary with Inner City Property Scheme

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Proposal : Registered Social Landlord Programme

• Tier 1: Rates to recognise 40% rebate on commercial properties converted to residential, plus 100% rebate to non-profits in line with existing processes BUT RSL status is the verification tool for qualifying properties

• Tarrifs to recognise dwelling unit definition (see next slide) to facilitate communal living units

• City Power to install pre-paid metering at non upfront cost with capital cost recovery through rates account

• Tier 2 : Properties to be provided at no or lower cost on a developmental lease basis to fulfill portion of ICPS Social Housing quota BUT also allow RSL to function as decant from hijacked buildings

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Next Phase : RSL Programme Process

DEFINITION OF A DWELLING UNIT for REGISTERED SOCIAL LANDLORD PURPOSES

Any dwelling unit that includes space for cooking and toilet and ablution facilities would be regarded as a unit.

And/Or

The minimum of 10m2 room undivided room built with formal materials functioning as a self standing residential space subject of a single tenancy agreement accessing a common corridor with shared kitchen and bathroom facilities.

70% of residents must be ESP registered

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presentation to commonwealth local government forum 10th june, 2010

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