Western Cape Human Settlements launches its own reserve fund
Provincial Minister of Human Settlements, Tertuis Simmers says the launch of the Western Cape Asset Finance Reserve for Human Settlements (WCAFRHS) will strengthen the Department’s ability to drastically improve the lives of the people of this province.
The WCAFRHS was first initiated in June 2020 and announced during the tabling of the 2021/22 Provincial Department of Human Settlements’ budget, in the Western Cape Provincial Parliament on 30 March 2021. Its establishment is in line with the conditions set out in the National Housing Code, stating that:
“Any income generated by the developer through the sale of stands, created during Phase 1, must be deposited in an account and be reserved for financing a housing development for the benefit of the National Government’s Housing Programme target group i.e. persons earning R7 000 per month and less.
These funds must only be utilised in terms of the provisions of any of the National Housing Programmes. Provincial Departments and Municipalities, must ensure that any income derived from the sale of stands are deposited in a central income account prescribed by National Treasury directives and must be reserved for housing development purposes only and that it can access such funds at any given time.”
Minister Simmers said: “This establishment once again shows how the Western Cape Government continues to lead in being innovative in seeking to address the needs of the people. This fund is quite significant, particularly since there is a continued shrinking budget envelope. More than this, it will allow the Provincial Government to continue empowering the people of the Province, as it seeks to fill gaps or shortcomings that might occur.
Further to this, it’ll also assist to augment the insufficient Municipal Infrastructure Grant (MIG) allocations in municipalities, assist municipalities to unlock the value of strategic assets including land and buildings, while it will also be used for job creation initiatives, including developing business/industrial hubs and many other initiatives. The fund will also be utilised to provide co-funding to municipalities to access the Rural Bulk Infrastructure Grant (RBIG) funding where the condition is that the municipalities must co-fund from its own resources an amount equal to the grant.”
This reserve is funded by various sources. Amongst others, these include all rental income, the selling of land and buildings, the selling of FLISP units/sites and the selling of business/government sites in IRDP projects. All revenue collected in excess of the Department’s revenue target will be transferred to this fund to ensure that revenue derived from the investment of the Human Settlement Development Grant (HSDG) will be available for future capital investment in human settlement projects.
Simmers added: “Among some of the other benefits are that it can be used for the provision of social amenities that contribute to safe and liveable settlements. As the Western Cape Government, we remain committed to accelerating human settlement delivery, while promoting social inclusion through the development of integrated, safe, resilient and sustainable human settlements in an open opportunity society.”