* BULLETIN : 4
  August 2006

THE CHALLENGE OF ENGAGEMENT

It is almost 16 years now since the SDI process began to take root. It started with community-to-community exchange programmes between pavement dwellers in Mumbai, India and shack dwellers from the informal settlements of South Africa.

Since then it has grown into an international network of urban poor Federations in 24 countries on 3 different continents. Many of the strategies and tactics for securing land tenure and housing that were developed in the early days remain in place today, although they have been refined and adapted by an ever deepening process of action and reflection.

The centrepiece of all these strategies is a commitment to engage formal institutions, especially the local State, in dialogue and negotiation. The objective has always been to broker deals in ways that secure tenure and provide decent housing for vulnerable and marginalised households and to do so in such a way that precedents are set, institutionalised, and scaled up.

This strategy has earned SDI many detractors. There have been intermittent accusations of co-optation and collaboration. When these criticisms come they are often constructed in a way that suggests that SDI takes the easy option. We are accused of legitimizing evil governments and simultaneously betraying the courageous struggles of those who man the barricades in a bitter fight for land and housing rights.

We understand that these reactions are often provoked by events with no direct relation to our work. For example the Mumbai Municipal Corporation will embark on wide-scale evictions. This will prompt rights-based activists to question why we continue to try to broker deals with the government institution carrying out these evictions. The same applies in Zimbabwe, where the Mugabe regime embarks on massive demolitions, or in Durban where the Metro finds itself facing protests from the militant slumdwellers group, Abahlali Basemjondolo. We are deemed guilty – if not by association – then for our association with these Governments – in spite of the fact that our efforts at negotiation are yielding the very results that are sought for in struggles against evictions: secure tenure, basic services and affordable housing for the most marginaized and vulnerable citizens in our cities.

We understand, therfore, that those who challenge us when we seek negotiated alternatives in the midst of demolitions, are usually ignorant of the way we work.

They do not acknowledge that whilst the strategies and terrain are different, the struggle is just the same. Certainly the goals are the same: secure tenure, basic services, affordable housing. But the conditions of struggle are pretty similar as well. There should be no disagreement here. All of us, whether we adopt SDI methods or not, are struggling with the State. From the moment of its birth as an underclass, the homeless and landless poor has been condemned to the fringes of our cities; whilst the market dictates this exclusion, the State regulates and enforces it.

Perhaps SDI has not done enough to demonstrate to the general public what its strategy of negotiation and engagement entails. It may lack the spilling of blood, the crunching of bone and the trashing of treasured possessions , but it is the same passion play of struggles with power and over resources. It is the same unequal struggle, with the odds stacked against the poor and in favour of a system that advances the interests of the rich and the powerful.

Nowhere, perhaps, is this clearer than in South Africa. There, the eradication of poverty is firstly a propaganda instrument for the State, secondly a mechanism for the enrichment of the politically connected, and lastly a genuine opportunity for the poor.

SDI continues to believe that whilst this moment in history in South Africa is characterised by the propulsion of some sections of the underclasses into the economic elite, it also provides significant space for organised constituencies of the urban poor to secure resources, and to open more space for a deeper redistribution of wealth.

What the general public needs to know is that this ‘SDI process’ is a seriously difficult struggle in South Africa. Perhaps a growing popular awareness of the complexities and difficulties involved in making deals for the poor in South Africa will assist those with political power and will in their efforts to bring about meaningful institutional change. Perhaps it will liberate an obdurate bureaucratic machinery – a bureaucracy that regards its power to regulate as an index of its own liberation – so that they can support real change and work with genuinely organised constituencies of the urban poor to achieve it.

What follows is a summary of the ongoing struggle of the Federation of the Urban Poor (FEDUP) and its support partner uTshani Fund to get subsidies released to urban poor families who have taken the initiative to build their own houses, instead of waiting for developers to provide for them.  These families and the extraordinary organisation they formed are in effect being punished for their capacity to organise, unite, and meet their housing needs.  They have been stymied in their efforts to be proactive and innovative, to build houses for themselves and for their government, instead of waiting for a dubious alliance of private developers, bureaucrats and sometimes local councillors to provide inferior housing at higher cost.

Does the following story prove that our strategy of engagement is misguided?  No more than a judicial eviction order on the basis of relatively enlightened laws proves that fighting demolitions is a futile exercise.  SDI and FEDUP, its SA affiliate, will continue to engage all three tiers of government, in order to ensure that the rights of the poor are recognised and honoured.  We will continue to capacitate and strengthen slumdwellers in the skills required to secure universal rights to land and adequate housing: to organise, negotiate, manage resources, identify suitable land, install services, construct houses and use these collective capacities – multiplied a thousand times over – to create real change in South Africa and beyond.

CASE STUDY 1:
FEDERATION OF THE URBAN POOR IN GAUTENG, SOUTH AFRICA

Introduction

In 1995, following a formal Agreement in which South Africa’s first Minister of Housing, Joe Slovo, pledged R10 000 000 (about USD $1,5 million) to the Federation’s revolving fund, uTshani Fund, Federation members began to build their own homes with ‘subsidy prefinance loans’ from uTshani.  A decade later, most of those loans are still outstanding.

To tell this tale properly, we first need to say a bit about South Africa’s housing subsidy system. A household that has never owned a formal house and whose income is low enough to qualify may receive a government grant to pay for land, basic services, and a house.  To scale up the impact of this programme, the system favours large-scale developments, but in principle there is no reason why organised communities of the poor cannot apply for and use subsidies to construct houses and entire settlements based on their own estimation of their needs, rather than those of profit-driven developers.

In 1995, the Federation and uTshani were keen to show how such a community-driven approach would work in practise.  South Africa’s housing subsidy system seemed tailor-made for such an enterprise, particularly when compared to resource-poor countries elsewhere in the developing world.  The South African government, however, was still working out procedures for deploying the housing subsidy; as always, communities were “running at a hundred miles an hour compared to the government’s ten”.  Nevertheless, given the support of successive Ministers of Housing, as well as the Utshani Agreement, which guaranteed subsidies to qualifying households, the Federation decided to use uTshani money to prefinance land and housing acquisition all over South Africa.  Loans were be issued to Federation savings schemes to build houses, on the understanding that the recipients would repay a nominal amount until a subsidy was approved to retire the loan, after which another round of households would benefit, and so on.  The timeframe for this cycle was thought to be less than a year.

Bridging finance becomes old debt

In the Gauteng Province, South Africa’s economic heartland and therefore a magnet for households moving to its newly-free cities, uTshani issued 1025 loans based on the uTshani Agreement between 1995 and 2000.  These loans were worth approximately the same amount as the Slovo grant – R10 million.

By 2003, however, uTshani had still not received any subsidies to retire these loans.

This failure to recover uTshani loans via subsidies was damaging for everyone involved – government included. This can be demonstrated statistically.  Given the Federation’s proven rate of construction, had subsidies been provided as promised, an additional 13 168 houses could have been built in Gauteng by mid-2006 with revolving uTshani prefinance!
 
In reality the Gauteng Department of Housing refused to implement the uTshani Agreement or entertain subsidy applications from uTshani and the Federation for the 1025 houses built with Joe Slovo’s grant.  The national Department of Housing, dealing with other priorities, did little to compel them, even though the uTshani Agreement required that they did.

We have noted already that Gauteng’s failure to respond to the initiative of its poor communities has cost it more than 13 000 houses.  There are other, less obvious, costs,  in addition to the 13,000  plus houses that were never built. The provincial government has not been able to build upon the goodwill of a large, organised constituency of Gauteng slumdwellers, many of whom have been alienated rather than affirmed as important political allies by provincial government. Whilst they persevere in their efforts to find workable solutions, many have been demoralised and are dismayed by the rebuffal they have received from officials in response to their efforts to engage Government in a peaceful and positive way.

Deepening the Engagement: enter the municipality

In October 2003 uTshani concluded a Funding Agreement covering all 1025 uTshani-financed houses with the Gauteng Department of Housing (GDoH).  This ‘1025 Project’, which is still in place, is based on certain conditions: the house exists; there is an approved plan and a title deed; and the household signs a ‘happy letter’.

The 1025 Project is important not only to recover uTshani’s money so that more Federation households may build: the GDoH has advised the Federation that uTshani has to finish it before any new projects will be approved.  This means that nearly a thousand households waiting to start greenfields developments in Gauteng on land purchased by uTshani have to wait for it to be completed.

The situation in terms of subsidy recovery in Gauteng has barely changed. Only 203 subsidies – less than 20% of the 1025 – were released under the 1025 Project between 2003 and mid-2006.

The reasons are to be found in the changed circumstances governing subsidised housing by 2003.  During the 1990s, provincial government drove South Africa’s housing efforts; municipalities played a background role.  By 2003, however, South African housing laws had been amended to shift the primary responsibility to the municipal level.

South Africa’s municipalities are based on the British tradition of stringent regulation of urban planning and development.  During the apartheid years, white South Africans were subjected to the same obstacles as their British cousins: planning approvals, engineering certificates, norms and standards, usage zoning, etc.  By contrast, South Africa’s townships, not regarded as integral parts of the urban fabric, were left to their own devices.  In the immediate post-apartheid period, Transitional Local Councils, dominated by councillors from the previous dispensation, tended to maintain this dualist attitude.  (For example, thousands of Federation households in Gauteng were allowed to build houses with uTshani prefinance between 1995-1999 on the basis of ‘Permission to Occupy’ certificates rather than the formal Deed of Title now required.)

All that changed in the late 1990s, when South Africa’s final local government structure took shape, and constitutionally-mandated local elections produced unified municipalities.  Slowly but surely, integrated super-metros began to impose a unified regulatory framework on historically black areas, including new townships.  However, instead of investigating the feasibility and relevance of the British system for South Africa’s teeming townships and informal settlements, South Africa’s municipaitiesl imposed the same strict framework on everyone. This vexing challenge is one of the most resilient legacies of Europe’s colonisation of the South. Many countries in Africa and Asia face this bizarre anomoly. The South African state, in this respect, has chosen to follow when its own history gave it the opportunity to lead.

The nett result in South Africa is that it has made the  housing subsidy system unworkable for organised poor communities.  To qualify for a housing subsidy, every potential beneficiary has to comply with every aspect of the municipal control system.  This is virtually  impossible for most low-income South African households, even those that are united and organised.

The result of South Africa’s shift to municipal control of housing, therefore, was a system that only functioned when private developers took over the regulatory compliance process, effectively doing the municipalities’ work for them on an agency basis.  Developers collected names and ID numbers from prospective project subsidy beneficiaries and did all the paperwork on their behalf (charging hefty fees for the service, paid out of the housing subsidy), then used what was left of the subsidy to build tiny, substandard houses.  Municipalities had only to receive and approve the paperwork submitted by the developers – an internal bureaucratic transaction that excluded poor households entirely.  Households with paperwork problems were simply ejected from the developers’ projects and replaced with someone else.

When uTshani and the Federation began the 1025 Project in 2003, they had little idea how compliance with this system would work in practice.  They soon discovered that they had embarked on a quixotic quest – to submit the largest number of individual subsidy applications ever attempted outside the developer-based project framework.

A Kafka-esque Journey Through the Bureaucracy

By mid-2006, it had become clear that the subsidy application system required of uTshani and the Federation to recover old debt in Gauteng – money that should have been released to uTshani Fund many years before, under a very different regulatory framework – was unworkable.  Not only was it virtually impossible for poor households to comply with the paperwork requirements, even with uTshani assistance; not only were government regulations contradictory and impracticable; provincial and local government in Gauteng also showed itself to be of questionable competence. 
Bureaucratic tangles

• Many areas where uTshani-financed houses have been built have not been proclaimed as townships, preventing half of the 1025 Project households from obtaining title deeds (even though they have Permissions to Occupy issued by Transitional Local Councils).  This prevents uTshani from accessing their subsidies.  There is no clear timeframe for township proclamation in these areas. This prevents these households from receiving subsidies under the 1025 Project.

• In November 2005, the Ekurhuleni Metro began to insist that it could not approve Federation house plans at the concessionary ‘People’s Housing Process’ rate because the houses, having been built up to eight years before when materials were much cheaper, were technically too large to qualify for the  concession.  The Metro still has the matter ‘under consideration’.

• In February 2006 – two and a half years after the 1025 subsidy application process started – the Johannesburg Metro advised uTshani Fund that all plans submitted for certain areas must have an engineering certificate.  uTshani Fund was forced to appoint and pay a private engineer to inspect 69 houses in this area.

• In Kanana in Johannesburg Metro, the municipality decreed that 27 houses built by the Federation were not aligned to the planning grid, and would have to be demolished. The GDoH investigated the matter, but has never advised uTshani or the Federation of the outcome. This prevents these households from receiving subsidies under the 1025 Project.

• In the Ekurhuleni Metro, the conveyancing attorney has been instructed by the Metro not to issue title deeds to anyone from the townships due to non-payment of services, whether they pay or not.  This prevents Federation members without deeds from receiving subsidies under the 1025 Project.

Bureaucratic Failures

• The Gauteng Department of Housing has been in administrative disorder for the entire period of the 1025 Project.  Internal coordination is poor, as is appreciation of the life context of low-income households in the province.  Paperwork is routinely misplaced, and government employees are indifferent or even hostile to uTshani and the Federation.  Processing of subsidy applications by uTshani is slow; on average only 10-20 applications are processed for approval per month (several hundred are pending).

• The GDoH lost 700 ‘happy letters’ collected over an 18-month period at great expense by the Federation and uTshani.  The GDoH insisted that the process start all over again, again at uTshani expense. When the recertification process started again, the provincial inspector responsible promptly resigned.  Due to internal ‘restructuring’ at GDoH, no one was assigned to continue the process for almost four months This prevents these households from receiving subsidies under the 1025 Project.

• In Duduza in Ekurhuleni Metro, uTshani and the Federation have sought title deeds for 52 beneficiaries from the municipality for the over three years without success.  The deeds exist; the problem seems to boil down to one bureaucrat who does not wish to work with the Federation. This prevents these households from receiving subsidies under the 1025 Project.

Corruption

• Municipal project managers, who receive incentives for collecting new subsidy applications, have registered Federation members, living in complete uTshani-financed houses for years, for new housing projects.  When uTshani applies for subsidies for such households under the 1025 Project, it is told that they have already received approved subsidies elsewhere.  For example, in Heidelberg in Johannesburg Metro, 29 beneficiaries’ applications were rejected by GDoH for this reason, even though these households have been residing in uTshani-financed houses since 1997. This prevents these households from receiving subsidies under the 1025 Project.

• Municipal project managers have knowingly applied for subsidies for households with houses already built with uTshani loans in order to line their pockets.  Project managers use part of the subsidy to supply materials to the Federation member to extend the house, keeping the balance for themselves.

• Some Federation members have been unable to access their title deeds after unscrupulous developers appointed to prepare their sites ran off with the money set aside to pay for them. This prevents these households from receiving subsidies under the 1025 Project.

The challenge of engagement: lessons learnt in Gauteng

uTshani Fund has spent well over a million Rands on the pursuit of old debt in Gauteng province over the last three years. 

Given the circumstances described above, as well as the South African government’s putative commitment to ‘batho pele’ (people first) governance principles for its civil service, one would expect senior politicians in the Gauteng provincial government and municipalities to take an interest in this situation.  Although some have done so, most have ignored the Federation and uTshani’s repeated appeals for assistance.

What does this example say about the challenge of engagement in the Shackdwellers’ International ‘model’?

First, it illustrates that organisations of the poor that choose to engage government face many of the same hurdles as their more militant and confrontational brethren.  In its detailed workings at the ‘delivery level’, the State is on balance hostile to the urban poor and their needs.  This hostility, however, is not political, intellectual, or emotional: it is systemic.  There are very few bureaucrats or politicians who actually do not want to serve the poor.  They honestly believe they are doing so, even when they evict slumdwellers or tear down their unauthorised dwellings.  The problem is that the procedure-driven urban governance system inherited from the colonial or pre-urbanisation past – the ‘received wisdom’ – is inadequate to the challenge of globalising cities in the developing world.  If the poor confront this inadequacy with protest, they receive rubber bullets and truncheons.  If they do so with creative engagement, they receive frustration and disappointment.

Second, engagement with ‘the system’ on its own terms does not work.  ‘The system’ in South Africa’s cities is not designed for the poor.  It is not even designed for the current reality of the non-poor.  No amount of engagement with an urban development system that is dysfunctional in and of itself will meet the needs of the poor, no matter how well they are organised.  Instead, engagement must be oriented to changing the system so that it works for the poor.  This means engaging with politicians and officials with the will and the power to change the rules.  Engaging the operational-level bureaucracy without explicit, documented, and enforced backing of senior politicians and officials does not produce results.

Third, the previous point means that there is no substitute for patient, constant, organising and reorganising, of poor women by poor women through savings, in order to build the critical mass and the organisation and insight required to pursue, engage, and capture the attention and support of the senior politicians and officials who are in a position to make change happen.  This mobilisation must be permanent); once it stops, the arrangements achieved by early breakthroughs become institutionalised; and once they are institutionalised, the logic of the system soon reasserts itself. 

In other words, the Gauteng experience shows most clearly that for the SDI model to achieve change, it has to institutionalise change itself – and there is no way to determine when a sea change is going to come - when the efforts, frustrations, disappointments and investment in time and money will pay off. What is clear is that the urban poor is not going to disappear. In its organised form, as the Federation of the Urban Poor it is going to engage, negotiate and dialogue until subsidies are secured for the 1025 families who have pioneered the process and for the tens of thousands who are ready to emulate them.

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Next Bulletin: Same Struggle/Different Province. The Federation and the Western Cape Dept. of Housing.

(Detailed statistical information on the Federation projects in Gauteng will soon be posted on the SDI website at www.sdinet.org)