Strategic Plan 2020 2025 Annual Performance Plan 20202021

Strategic Plan 2020 -2025 , Annual Performance Plan 20202021 and Budget Presentation to the Portfolio Committee on Human Settlements, Water and Sanitation 07 May 2020

Content 1. Purpose 2. HDA Mandate 3. HDA Objects, Functions and Roles 4. HDA Vision, Mission and Values 5. HDA Outcomes and Impact Statement for the MTSF 6. MTSF Targets and HDA Contribution 7. Outcome Indicators, Baseline and targets 8. MTSF targets and Role of HDA 9. Situational Analysis 10. External Environment 11. Internal Environment 12. Key Annual Targets 13. Key Risks 14. Budget 15. Recommendations 2

Purpose The purpose of this presentation, is to present to the Portfolio Committee of Human Settlements, Water and Sanitation the 2020/25 Strategic and 2020/21 Annual Performance Plan and the budget for the Housing Development Agency 3

HDA Mandate The HDA is expected to augment the human settlements The intention of the HDA Act is to create an agency to augment the performance of municipalities and provinces to meet their mandate for the delivery of sustainable human settlements. delivery role of municipalities and provinces to address Housing Development Agency Act, 2008 (Act No. 23 of 2008) failure in terms of delivery by using and leveraging the government-funded housing instruments. These efforts must address the spatial dislocation of poorer people from access to amenities and creating more inclusive and liveable towns and cities The HDA is mandated to support the activities of municipalities and provinces who are not able to meet the human settlement objectives and targets by complementing their delivery efforts through improved and fast-tracked spatial planning, land identification, acquisition, rezoning, packaging and housing 4

Objects, Roles and Functions of the HDA (HDA Act) Objects ( Section 4) Role (Section 5) Function ( Section 7) Identify, acquire, hold, The Agency must, in consultation with a) Develop a development plan to be approved by the Minister in consultation with develop and release state, the relevant owner, identify, acquire, the relevant authorities in the provinces and municipalities communal and privately hold, develop and release state, b) Develop strategic plans with regard to the identification and acquisition of state, owned land for residential and privately and communal owned land for privately and communal owned land which is suitable for residential and community purposes and for residential and community purposes for development the creation of sustainable human g) Identify, acquire, hold, develop and release state, privately and communal human settlements owned land for residential and community development i) Contract with any organ of state for the purpose of acquiring available land for residential housing and community development for the creation of sustainable human settlement 5

Objects, Roles and Functions of the HDA (HDA Act) Objects ( Section 4) Role (Section 5) Function ( Section 7) Project manage housing The Minister may, in consultation with the c) Prepare necessary documentation for consideration and approval development services for the relevant MEC, where there is lack of capacity in by the relevant authorities as may be required in terms of any other creation of sustainable human any organ of state to identify, acquire, hold, applicable law settlements develop and release land for residential and e) Enhance the capacity of organs of state including skills transfer to community purposes for the creation of enable them to meet the demand for housing delivery sustainable human settlements advise the h) Undertake such project management services as may be organ of state to conclude an agreement with necessary, including assistance relating to approvals required for the Agency to offer assistance in terms of the housing development Agency's skill and expertise; or direct the j) Assist organs of state in dealing with housing developments that Agency to engage with the organ of state with a have not been completed within the anticipated project period view to conclude the agreement contemplated k) Assist organs of state with the upgrading of informal settlements in paragraph (a) l) Assist organs of state in respect of emergency housing solutions Ensure and monitor that there is The Agency must ensure that there is funding f) Ensure that there is collaboration and intergovernmental and centrally coordinated planning and for the provision of all infrastructure that is integrated alignment for housing development services budgeting for housing development required for housing development in which it is infrastructure involved Monitor the provision of housing The HDA must ensure that there is monitoring d) Monitor progress of the development of landed property development infrastructure of Human Settlements infrastructure acquired for the purposes of creating sustainable human settlements 6

HDA Vision, Mission and Values Vision Mission Values Integrated and sustainable human settlements. Build a capable and developmental Agency geared to transform the sector and lead in the development of resilient, integrated and sustainable human settlements. The HDA has defined the following guiding values in its operations: Performance-oriented, Excellence, Accountability, Teamwork, Integrity. 7

HDA Outcomes & Impact Statement Adequate housing for lower & middle-income households provided in liveable neighbourhoods - Housing Units Delivered -Serviced sites delivered Title deeds registered Land acquired and rezoned for human settlements & PHSHDA IGR – Catalytic Projects -Informal settlements upgraded to phase 3 – 23 Mining towns provided with technical support Sustainable Human Settlements and improved quality of life for households 8

Outcome indicators, Baseline and Targets MTSF Priority 1 A capable, ethical and developmental state Outcome indicator Functional, efficient Baseline & Unqualified audit opinion on financial Qualified audit 2018/2019 Integrated government statements MTSF Priority 4 Spatial integration, human settlements and local government Land acquired and rezoned for Number of hectares Human Settlements Five-year target Unqualified audit opinion on financial statements of land located No baseline in within PHSHDA acquired 6 000 hectares acquired in PHSHDA’s 4 000 hectares acquired PHSHDA % of acquired land during 2014 -2019 No baseline 100% hectares rezoned falling within the PHSHDAs Adequate housing for lower- Number of Housing Units Delivered No Baseline 67 669 Housing Units Delivered Number of serviced sites delivered No Baseline 51 146 Serviced sites delivered Number of title deeds Registered No Baseline 39 002 Title deeds Registered and middle-income households provided in liveable neighbourhoods 9

Outcome indicators, Baseline and Targets Outcome indicator MTSF Priority 4 Spatial integration, human settlements and local government Integrated and coordinated Number of Baseline development plans Five-year target for No baseline 94 Development Plans in PHSHDA’s spatial planning and inclusive PHSHDAs completed sustainable human settlements Number of Informal settlements supported No Baseline 1500 Informal settlements supported for upgrading to phase 3 Number of national and/or provincial 57 priority human settlements national catalytic priority and/or human provincial 50 national and/or provincial priority settlements human settlements catalytic projects provided with implementation support implementation support Number of municipalities provided with 22 municipalities provided with 23 municipalities provided with technical implementation support distressed mining communities for technical implementation support implementation for distressed mining communities 10

MTSF Targets and the role of the HDA Target: Implement housing & human settlements transformation, social justice and spatial justice programme in 94 priority development areas INDICATORS Priority development areas targeted for achieving spatial transformation through multi-programme integration are declared An integrated implementation programme for the 94 priority development areas completed Number of houses and serviced sites delivered through a range of programmes in the housing code 2024 TARGETS 94 priority development areas declared for human settlements development HDA Targets 94 PHSHDA’s declared • Development Plans for all 94 priority developed areas, categorised and prioritised with budgets & finance options 94 Development Plans developed • • • 470 000 housing units 300 000 serviced sites Rezone 100% of acquired land within the priority development areas 67 669 51 146 6000 Ha of land acquired • Number of rental housing units • delivered in priority development • areas Number of informal settlements Number of title deeds registered 30 000 Social Housing 12 000 CRU 6000 Ha of land rezoned Included in Housing Units and Sites delivered • 1 500 informal settlements upgraded / formalised to Phase 3 1500 informal settlements upgraded (in terms of the HS Code) • Total number of title deeds registered = 1 193 222 Title deeds Backlog (1303 222 New title deeds • Pre- 1994: 45 535 • Post- 2019: 300 000 39 002 Title deeds delivered • Post-1994: 50 845 11

ANNUAL PERFORMANCE PLAN 12

Situational Analysis The role of the HDA can be summarised into 3 key functions i. e. Identification, acquisition of land for human settlements development, facilitation of housing delivery and packaging and design of Human Settlements Development. Furthermore, the HDA will provide support to the sector with activities related to the validation of project implementation readiness and the status of implementation of human settlements projects. The HDA will ensure that the delivery of projects is undertaken in line with the district development model. 13

External Environment HDA Response to Sector Constraints Issues HDA response High Need for Housing ● Improved national spatial planning ● More rapid urban/new settlement planning and development ● Better integrated and sustainable settlement ● Land acquisition ● Mobilisation of technical, programme and project management skills ● Improved financial packaging and fund mobilisation ● De-risking projects through unblocking and related interventions (e. g. expediting plans) ● Securing funding for critical infrastructure ● Ensuring funding (esp. subsidy) flows ● Improved spatial planning ● Better programme, project as well as contract management ● Building public-private partnerships ● Improving IG coordination and funding packaging ● More effective fund management ● Mobilising other public and private resources (in addition to HSDG) ● Contribute to the creation of black industrialists with a specific focus on women, youth, persons with disability and communities ● Influence changes to materials supply chains Insufficient Public Sector Delivery Declining Private Sector Delivery Poor Human Settlement Outcomes Fragmented Funding Framework Untransformed Human Settlement Sector 14

Internal Environment Identify, Hold Acquire and release land In relation to the key responsibility to identify, hold, acquire and release land, the HDA performs the following: Land planning: which requires spatial planning and establishing and defining housing need; Identification: a Land study to identify land for housing development; Feasibility assessment of land; Acquisition; Landholding; Property management of acquired land whilst it is being packaged for development or in the case of land banking it will be held for future development when the planned investment has taken place; and Land packaging: This includes, Bulk services provision; Town planning: township establishment, zoning, subdivision or consolidation, EIA etc. 15

Internal Environment Facilitation of Housing Delivery In order to facilitate housing delivery, the HDA performs the three core functions, i. e. Implementing Agent, Project Manager and Project Developer. Underpinning these functions are processes of social facilitation and Inter-Governmental Relations. The diagram below provides further details of the 3 core functions of the HDA. Housing Delivery and packaging and design of Human Settlements This function is implemented by designing, packaging, implementing and project managing of Human Settlement Development aimed at fast-tracking delivery and achieving Human Settlement Sector Outcomes: 16

Internal Environment HDA Core Functions Implementing agent: An implementing agent is responsible for the implementation of the priority housing development area plan. This includes: Township establishment, Top structure development, Monitoring and evaluation, Infrastructure development, Social and economic facilities development. The HDA will be responsible for implementing the following Section 29 projects: Nelson Mandela Bay, N 2 Gateway, Zanemvula, Gauteng Province, Lephalale. Programme management: The Programme Management function will manage the National Priority Projects of the human settlements sector. These include: Catalytic projects, Mining towns projects, Informal settlements upgrading projects, Inner city projects, HSS support services. Development: Development role of the HDA focuses on conceptualising, funding, planning, coordination and managing. This can include land acquisition, designing, financing, construction, selling or managing. Developers work with different counterparts along each step of the process, including architects, planners, engineers, constructors, other developers and more. 17

Internal Environment HDA Operating Model Research ACTIVITIES OUTPUTS Spatial research housing need Housing need research Opportunity identification Acquire and hold Plan Acquire and hold Land identification Feasibility studies Land planning Development planning Programme design National spatial Land plan development framework Priority development areas Housing needs analysis Negotiate land Acquire land Obtain development rights Obtain funding Package land Land ready for housing development Develop Release Package development project Project manage Procurement and contract management Development funding Construction Social facilitation Housing developments delivered Conveyancing Deed transfer Title deeds are given to beneficiaries or organs of state 18

Key Annual Targets Outcome Output Indicators MTEF PERIOD Baseline 2020/21 No Baseline 1500 2021/22 hectares of land 2022/23 1300 hectares of land 1200 hectares of land Land acquired and rezoned Number of hectares of for Human Settlements in land located within located PHSHDA acquired Land acquired and rezoned Number of hectares of land 10% of acquired land during 30% of acquired land during 50% of acquired land during for Human Settlements in rezoned within PHSHDAs 2014 -2019 rezoned falling within the PHSHDAs 19 Development plans for 25 Development Plans for PHSHDA completed 30 Development Plans for 375 informal settlements No Baseline PHSHDA Number of development No Baseline within PHSHDA completed plans for PHSHDAs located within PHSHDA completed Integrated and coordinated Number of Informal spatial planning and settlements supported for upgrading to inclusive sustainable upgrading to phase 3 50 national and/or provincial priority human settlements catalytic projects provided with implementation support human settlements Number of national and/or implementation support No Baseline 50 19

Key Annual Targets Outcome Output Indicators MTEF PERIOD Baseline 2020/21 2021/22 2022/23 Integrated and coordinated Number of municipalities 22 Mining towns provided 23 municipalities provided spatial planning and provided with technical and with technical and inclusive sustainable implementation support for implementation support for human settlements distressed mining for mining towns distressed mining communities % of HDA procurement 61. 77% of HDA 50 % of HDA procurement 55 % of HDA procurement 60 % of HDA procurement spend on BEE Level 1 -4 spend on BEE Level 1 -4 companies companies Adequate housing for lower Number of housing units 7998 housing units 11479 housing units delivered 13229 housing units 13628 housing units - and middle-income delivered Number of serviced sites 12403 serviced sites 9719 serviced sites 10205 serviced sites delivered Number of Title Deeds 0 Title Deeds Registered households provided in liveable neighbourhoods Registered 9256 serviced sites delivered 7058 Title Deeds Registered 7411 Title Registered Deeds 7782 Title Deeds Registered 20

Key Risks Outcome Key Risk Improved administrative and compliance with all Inadequate Policy and procedures applicable prescripts Inadequate contract management and oversight Irregular expenditure Fraud and Corruption Failure to discharge HDA legislative mandate within the approved operational budget Failure to meet HDA transformation and empowerment targets Risk Mitigation Review Policy with all relevant legislative requirements Develop standard operating procedures Regular monitoring and reporting on contracts management Regularisation of oversight on contract management Cross functional teams to declare interest and Confidentiality agreements to be signed Fraud/corruption allegations to be investigated and closed off Develop documented process of ring-fencing of projects funds Implement adequate controls to ensure adherence to approved operational budget Conduct roadshows to promote awareness and buy-in. Review and update existing role specific and generic indicators to make transformation and targets more impactful 21

Key Risks Outcome Improved administrative and compliance with all applicable prescripts Land Acquired for Human Settlements Key Risk Failure to meet HDA transformation and empowerment targets Lack of funding to acquire land for human Risk Mitigation Establish HDA’s BBBEE level Set targets for the preferential procurement, enterprise and supplier developments pillars Develop implementation plan Preparation of multiyear land acquisition pipeline settlement due current fiscal arrangements. Delays from state land custodians in the release of Inter-ministerial committee on land reform has been established to coordinate expedited release targeted state land required for human settlement of state land required for human settlement Review of controls/processes on Land acquisition Potential land price collusion Land valuation processes conducted by independent valuers Delays in acquisition of land through expropriation Expedite the process through meaningfully engagements with the expropriation authorities (Minister, MECs, Local Authority, Courts) Develop and implement of proper financial and Adequate housing for lower- and middle-income Surrender of unspent projects funds to National cash flow management controls and processes households provided in liveable neighbourhoods treasury Programs and projects not delivered on time within Participate in the business planning processes of the Provinces budget and according to scope Implementation of proper project management processes 22

Key Risks Outcome Key Risk Mitigation Review of Planning Regime Adequate housing for lower- and middle-income Misalignment between National Priority households provided in liveable neighbourhoods Programmes and the priorities of Provinces, Municipalities and Sector Departments Fiscal alignment and coordinated budgeting between Provinces/Municipality and HDA Accepting unfunded mandates Signing of Implementation Protocols and MOAs Approval of additional functions mandated to the HDA by the Minister and Board. Lack of effective stakeholder relation management Inability to provide supporting and spatial information for decision making Unwillingness of stakeholders (Project managers/development managers/municipalities and provide contractors) to land, project information and source documents to measure Funding agreements and terms and conditions relating to the functions must concluded SIR Strategy and Implementation Plan and inclusion of Indicators on SIR for all Managers interacting with Stakeholders. Develop GIS Strategy for new MTSF period and communicate it to stakeholders to address time frames, resource limitations, data governance, data quality and security. -Development of Spatial Transformation Scoring Tool -Framework developed for M&E -Formulated appropriate M&E indicators in consultation with stakeholders 23

BUDGET 24

Resource Considerations The HDA has received the following allocation from the NDHS for the Medium Term Expenditure Framework period: The consolidated budget is based on confirmed grant funding from the Department of Human Settlements and funds received from provinces for operational expenditure in the respective offices based on agreed Medium Term Operational Plans (MTOPs). Total projected consolidated budget for the financial year is R 378 m, a reduction compared to prior year budget of R 475 m. The reduced budget is driven by a reduction in MTOP funding from R 211 m to R 107 m based on signed funding agreements. The Agency, excluding regions, is budgeting a negative balance of R 26 m which is then covered by management revenue. 25

Income Statement 2020/21 Budget estimate 2021/22 Revised budget estimate 2022/23 Planning Budget Estimate 2023/24 Planning Budget Estimate R'0000 REVENUE 378 464 397 203 417 257 438 119 Revenue from non-exchange transactions Operational grant funding 237 100 250 140 261 845 274 937 107 600 26 414 7 350 111 611 27 735 7 718 117 750 29 121 8 541 123 637 30 578 8 967 378 464 224 493 188 723 35 770 151 118 397 203 235 718 198 159 37 559 158 674 417 257 247 504 208 067 39 436 166 941 438 119 259 879 218 470 41 408 175 293 1 240 1 800 354 1 200 183 500 1 000 900 4 300 3 000 78 000 8 500 1 651 14 000 1 302 1 890 372 1 260 192 525 1 050 945 4 515 3 150 81 900 8 925 1 734 14 700 1 367 1 985 390 1 323 202 551 1 103 992 4 741 3 308 86 329 9 371 1 820 15 435 1 435 2 084 410 1 389 212 579 1 158 1 042 4 978 3 473 90 650 9 840 1 911 16 207 Revenue from exchange transactions Medium Term Operation Plans (MTOP) Management revenue Other income EXPENSES Current payments Compensation of employees Salaries and wages Social contributions Goods and services Of which Administrative fees Advertising Agency and support/outsourced services Assets less than R 5 000 Audit costs Bank charges Board costs Bursaries (employees) Catering: internal activities Communication Computer services Consultants Contractors Entertainment Inventory Lease Payments 26 26

R'0000 EXPENSES Legal fees Non life insurance Printing and publication Property payments Repairs and maintenance Research and development Training and staff development Travel and subsistence Venues and facilities Other unclassified expenditure Depreciation Losses from Interest, dividends and rent on land Interest Dividends Rent on land Total Expenditure Surplus/Deficit Income Statement 2020/21 Budget estimate 2 000 550 350 12 540 1 900 550 2 600 13 000 1 000 2 850 3 3 378 464 - 2021/22 Revised budget estimate 2022/23 Planning Budget Estimate 2 100 578 368 13 167 1 995 578 2 730 13 650 1 050 2 809 2 2 397 203 2 205 606 386 13 825 2 095 606 2 867 14 333 1 103 2 809 3 3 417 257 - - 2023/24 Planning Budget Estimate 2 315 637 405 14 517 2 199 637 3 010 15 049 1 158 2 944 3 3 438 119 - 27

Balance sheet Notes Budget 31 March 2021 R'0000 ASSETS Non- Current Assets Property, plant and equipment Intangible assets Long- term land inventory 1 Total Non-current Assets Current Assets Land inventory Accounts receivable Cash and cash equivalents TOTAL ASSETS NET ASSETS AND LIABILITIES Net Assets Accumulated surplus LIABILITIES Non-Current Liabilities Finance lease obligation Current Liabilities Payables from exchange transactions Provisions 2 Budget 31 March 2023 R'0000 7 652 135 27 905 8 073 143 27 905 8 476 150 27 905 35 692 36 120 36 531 322 263 2 888 479 673 804 824 322 263 3 046 506 055 831 365 322 263 3 199 531 358 856 820 840 516 867 485 893 351 64 289 48 565 33 485 47 47 50 50 52 52 14 542 19 451 15 341 20 520 16 108 21 547 28 28

Balance sheet Notes Budget 31 March 2021 Budget 31 March 2022 339 988 Budget 31 March 2023 Land inventory funding 322 263 356 987 TOTAL LIABILITIES 776 180 776 227 818 870 818 920 859 814 859 866 TOTAL NET ASSETS AND LIABILITIES 840 516 867 485 893 351 29

Land inventory Short-term land inventory Long-term land inventory Asset name Value @ R'000 Erf 13120 Queenstown - Lukhanji 3 539 Ptn 237 of 78 "Farm Haartbeespoort" Tshwane 9 914 Ptns 78, 89, 90, 151 "Farm Ellof's Park" Tshwane 7 159 Erf 10509 Phillippi - Cape Town Farm 755/2 Machiel Heyns - Swartland Land inventory total 2 257 5 036 27 905 Asset name Ptn 170 of "Farm Roodepoort" Bela-Bela Erf 1816 Bethlehem Erf 4919 Kroonstad Ext 30 Erf 5246 Kroonstad Erf 229 Krronstad Erf 13120 Queenstown Erf 4049 Bethlehem Ptn 1 of 654 "Farm Bloemfontein Erf 2116 Bloemfontein Erven 17845, 243, 17847, 18093, 18844 Knysna Erf 3726 De Aar Township Northern Cape Erf 635 De Aar Emthanjeni Municipality Erf 3994 - 4225 Modelkloof KZN Portion 9 Farm 787, 807 Cape Road, Western Cape Value @ R'000 65 400 4 400 3 300 1 733 2 338 4 365 2 100 10 200 2 500 1 700 10 000 7 700 7 000 7 854 Erven 921, 924, 925, 927 - 938, 940, 941, 17735, 172883 Western Cape 15 569 Farm 700 Business Zone 949 Cape Town, Western Cape Erf 807, 3108, 21400 Phillipi 4 552 39 195 Erven 4061, 4062, 5636, 5637 Hout Bay, Western Cape Farm 791, 793 Cape Town, Western Cape Portion 64 Farm 787 Cape Town, Western Cape 45 354 10 842 6 365 Erven 35163 - 35174, 36148, 38368 Milnerton, Western Erf 14443 Strand, Western Cape Land inventory total 64 965 4 831 322 263 30

Recommendations That the Portfolio Committee of the Department of Human Settlements, Water and Sanitation take note of the briefing by the Housing Development Agency on the 2020/25 Strategic Plan, 2020/21 Annual Performance Plan and budget. 31