The Ekupumleni (Hazeldean) Project

1. The Ekupumleni (Hazeldean) Project The Perspective of Utshani Fund Presentation to Portfolio Committee on Housing, November 7 2007

2. Who’s Who • SA Homeless People’s Federation: nationwide federation of women’s savings schemes initiated 1991 – split in 2005 • Federation of the Urban Poor: • Re-formed Federation founded 2005 by majority of SAHPF regions • The South African affiliate of Shackdweller's International • Supported by Minister Sisulu via 2006 Memorandum of Understanding and pledge of 7000 subsidies • Shackdwellers’ International: Network of Federations in Africa, Asia, Latin America, recognised as leading international network of slumdwellers • SAHPF “section 21”: Breakaway group founded 2005 by Cape Town Federation leaders based at Victoria Mxenge Philippi • Utshani Fund: NGO founded 1995 to support SAHPF via housing finance, now partner to FEDUP

3. Our Principles • Maximise role of poorest women • Participation in regular savings activity • Non-hierarchical, transparent, grassroots-driven approach to development • Focus on positive partnerships with government and other stakeholders to find win-win development solutions • No official leadership positions – leadership by example • Utshani exists only to support – it is not a membership organisation or a CBO

4. History • NGO People’s Dialogue founded 1990 to assist formation of community savings schemes and support learning through networking • Original SAHPF founded March 1991 • Cape Town region formed late 1992 • Utshani Fund founded 1995 to manage housing finance for Federation, including subsidy prefinance loans and subsidies • Utshani Agreement signed 1997 and grant of R10m made by Minister Slovo; government promised to supply subsidies for Federation housing development • Rapid housing delivery funded by Utshani 2005-2001 – nearly 15 000 large houses of good quality, low cost • Utshani prefinance system suspended in December 2001 due to lack of cooperation from government with respect to housing subsidies

5. History • Problems emerged Federation around 2000 when it became clear that • Some households were joining just to get an Utshani loan, not to save • Some regions of the Federation were not upholding core principles, esp. Western Cape, e.g. by acting as gatekeepers • Utshani would have to stop subsidy prefinance due to government’s failure to honour Utshani Agreement of 1997 • Period of self-evaluation and increasing tension amongst Federation “leaders” during 2002-2004 • Cape Town Federation leadership based at Victoria Mxenge secretly registered ‘SAHPF” as section 21 company in mid-2004, then wrote to Utshani to demand that all funds and assets be handed over to them • Bulk of national Federation decided in early 2005 not to contest the SAHPF “name” and to re-form as Federation of the Urban Poor (FEDUP) • People’s Dialogue closed late 2005 • Utshani decided not to work with “section 21” SAHPF • Relations with “SAHPF-S21” have regrettably deteriorated since then

6. Current status of the Ekupumleni Project • Development is intended for the benefit of the Hazeldean Housing Association, the CPA on site • Land and buildings are still owned by Utshani Fund pending final legal transfer of land • 106 permanent houses have been built on site with Utshani prefinance • No internal services have been installed except electricity and communal toilets • Utshani has been told by provincial officials that they will not entertain any application for Ekupumleni until certain issues are resolved • Interference in the development by VMX-based “SAHPF-S21” has caused increasing turmoil • A political solution is needed to move the process forward

7. Origins of Ekupumleni Project • Land identified for acquisition by original SAHPF and People’s Dialogue in December 1997 • Property purchased by Utshani Fund in November 1998 • People’s Dialogue raised funds from European donors to renovate farm buildings and operate a resource centre for the national Federation in 1999-2001 • Intention was to establish a mixed-use development catering for the very poorest households in savings schemes in Khayelitsha • However from the start VMX leaders demanded control over the development

8. DLA Involvement • From 1998 it was envisaged that the Department of Land Affairs would provide a grant to cover the purchase price as part of a policy of urban land acquisition • In 2003 DLA approved this and accordingly paid approximately R883 500 to Utshani’s attorneys pending transfer of the land to the Housing Association, at which time the funds would be transferred to Utshani Fund • Funds are still held in trust by Utshani attorneys because land has not been transferred to CPA (more on this below) • This has caused great concern to DLA

9. Intended use of the Ekupumleni site • Because the resource centre (DHRC) was supposed to be an asset for the national Federation, the original intention was for Utshani Fund to retain ownership of that portion of the land in trust • The residential portion was to be owned by the Hazeldean Housing Association, a CPA, as a communal asset • This would entail subdivision of the site after it had been transferred to the CPA and donation of the DHRC portion to Utshani • Therefore co-operation of the CPA has been critical to the Ekupumleni development and its history

10. Why houses were built “prematurely” • Concerns were raised from the beginning that if the site was unoccupied, it could be subject to invasion • NGO leadership proposed temporary structures to house “guard families” • Cape Town SAHPF leadership based at Victoria Mxenge (VMX) insisted that Federation members should not move into shacks • In deference to their wishes permanent houses were built from 1999 onwards using Utshani Fund subsidy prefinance loans – without services on site

11. Divisions around the development • From the beginning the VMX leadership disputed aspects of the Ekupumleni development including • Overall control over the project • Access to sites and control over the beneficiary list: project was supposed to be for poorest, but VMX leaders successfully insisted that their friends and relations get sites • Use of the DHRC: the national Federation and NGO argued that it should be for use of all Federation members, but VMX leaders argued that it should be controlled by them since it is located in the Western Cape • The underlying problem, however was, and remains about the philosophy and practise of development

12. Delays due to dispute over the land transfer • As noted previously, in order for DLA money to be released from attorney to Utshani, land had to be legally transferred to CPA first • From 2003-2006, interference and threats by VMX-based leadership concerning the DHRC meant the CPA was unwilling to sign the deed of sale and transfer of DHRC to Utshani • CPA Executive Committee was caught in the middle and felt threatened by VMX group, who had friends and relatives living on the site • This conflict prevented any progress on the project, especially a subsidy application, and therefore on installing services for the site

13. Utshani and the CPA reach agreement • In 2005, in order to break the deadlock, new Utshani management decided to offer the entire site including the DHRC to the CPA • The CPA agreed and signed a Deed of Sale on November 2, 2006 • CPA signed a Support Organisation agreement with Utshani and appointed Utshani to manage subsidy application process • Utshani gave the CPA full rights to control access to and use of the DHRC pending final transfer of ownership to them • Currently the process is stalled – we have been waiting for the City of Cape Town to issue a rates clearance certificate for almost a year, and a VAT exemption from SARS • During that time VMX “SAHPF-S21” leaders have used the opportunity to interfere in the project, blaming Utshani for the delays

14. Why has there been no progress? • Ongoing interference by VMX-based SAHPF-S21 group in the project, at level of both CPA and provincial and local government (e.g. illegitimately representing themselves as the “developer” and Utshani as the obstacle) • Provincial and local government misunderstand Utshani’s role and have been influenced by distortions of the facts by the SAHPF-S21 group and other historical issues in Cape Town • Provincial and local government are understandably unhappy with fact that houses are on site before services • Provincial and local government are uncertain whether the City of Cape Town must be the developer of services • The SAHPF-S21 group are currently illegally occupying the DHRC against the wishes of Utshani and the CPA • There is a climate of fear in the community • Marches and threats of violence have been made regularly • At least one CPA member has been murdered • Death threats have been made against the Utshani director and his family

15. Role of the VMX leadership (SAHPF-S21) • When Utshani proposed to transfer the DHRC to the CPA in 2005, the VMX leaders increased their interference in Ekupumleni • VMX leaders approached the MEC and other stakeholders to claim that Utshani was responsible for problems in the development and asking him not to approve subsidies • The VMX leaders have been telling falsehoods about the development and Utshani to the Ekupumleni residents in order to divide them • At all times the VMX leaders present themselves as victims, whereas the opposite is the case • Ultimately the VMX leaders are interested in control of the DHRC and not the best interests of the community or the Ekupumleni development – they are willing to see people remain homeless to achieve their goals

16. Other factors • The SAHPF Cape Town leadership has refused to be subject to any accountability mechanism, whether social or financial • Groups that oppose them have been systematically pushed out of the Federation • At least R1m in Utshani and subsidy money and community savings has been stolen or otherwise misused whilst in the control of the VMX leaders • Massive corruption in the purchase and use of building materials has been proved • The VMX leaders have blamed Utshani for unfinished houses in Cape Town, but the fact is that this happened because money under their control went missing or was misused • Savings belonging to Federation schemes all over Cape Town remains under SAHPF-S21 control, who refuse to return it – these funds are being used illegally to fund the SAHPF-S21 • The SAHPF-S21 are operating illegally out of the DHRC using computers and other resources stolen from the NGO

17. Analysis • Some of the these problems are not unique to Cape Town (e.g. unfinished houses) • What is unique is that other provinces, FEDUP and Utshani have taken joint responsibility with the state to resolve them • The SAHPF-S21 presents itself as a victim and passes blame onto UF in an attempt to mobilize against a constructed “enemy” instead of mobilising to find a solution • In this way they create a false contestation over resources as opposed to working together to secure resources for the homeless

18. Way Forward • Utshani has no interest in conflict with the VMX leaders • A political intervention is urgently needed to resolve the illegal occupation of the DHRC by the VMX leaders – the problem cannot be solved administratively • The subsidy process for Ekupumleni must be fast-tracked and the project managed by a third party appointed jointly by the CPA, Utshani, and government • The VMX leadership must be investigated and accounts under their control audited • Provincial government must make a good-faith effort to understand the nature and origins of Federation problems in Cape Town and end their bias against Utshani