Financing housing consoldation in in-situ informal settlement upgrading programs in South Africa

    The structure of this report is as follows:

    Chapter 2: Shelter Consolidation and the National Human Settlements Context locates the practise of upgrading informal settlements in general, and the Upgrading of Informal Settlements Programme in particular, within past, current and evolving human settlements policy in SA. Key areas of policy review and uncertainty are identified and new policy imperatives of relevance to housing consolidation in informal settlements are noted.


    Chapter 3: Understanding In-Situ Informal Settlement Upgrading provides a conceptual framework for understanding the consolidation of houses within the context of informal settlement upgrading (ISU) programmes. It considers the theoretical approach to upgrading of informal settlements, and provides a framework for identifying the resources and involvement of different actors in house consolidation within a settlement’s institutional, subsidy and demographic context. It also develops a tool for categorising different approaches to housing consolidation in ISU and identifies three principal modes through which housing consolidation in ISU can be pursued, ranging from state provided houses, through a mixed state/private/community mode to a mode that is wholly unsupported by government after the site servicing stage.


    Chapter 4: The Upgrading of Informal Settlements Programme examines the principal programme instrument for informal settlement upgrading in SA – the Upgrading of Informal Settlements Programme - and explores how this programme provides for the in situ settlement upgrading work streams and activities discussed conceptually in Chapter 3.


    Chapter 5: The State Subsidy-Led Approach to House Consolidation in In-Situ Upgrading focuses on the state subsidized top structure dominant mode of housing consolidation (essentially the replacement of the informal housing stock in a settlement with state subsidised dwellings). The chapter starts by exploring the preconditions for the state led mode to succeed, where after the suitability of various subsidy delivery systems within the National Housing code are assessed against current capacity, (ii) creating the conditions for on-going private investment in unit expansion and improvements, and (iii) the need to create flexibility to respond to possible shifts in the housing subsidy environment. The chapter concludes with an assessment of whether the components necessary to sustain the consolidation process are currently provided for in public funding programmes.


    Chapter 6: The Private Initiative Led Approach/ Blended/ Incremental Mode of Housing Consolidation in Settlement Upgrading examines a housing consolidation mode suited to contexts where fiscal constraints and/or the social composition of the informal settlement dictate that the state provided top structure dominant mode is not feasible. The basic preconditions for the success of this mode are outlined, and thereafter the key activities and work streams associated with this mode and which actors need to perform which of these functions are examined. The temporal location of these activities within the overall upgrading process is explored, where after capacity of various publicly funded programmes to support these activities are assessed and key funding gaps are identified.


    Chapter 7: Conclusions and Recommendations provides a synthesis of the main findings relating to the viability of the various modes of housing consolidation within informal settlement upgrading and the funding of the key components of the various modes. The chapter concludes with a set of recommendations relating to the need for political consensus building; clarifying the intent, design and application of the UISP; developing alternative top structure instruments and funding methodologies; widening house consolidation supports in the UISP; undertaking case Studies and pilot projects to test new approaches; and engagement with other agencies.