By Yolande Hendler (on behalf of CORC)
While the value of in-situ informal settlement upgrading is increasingly recognised by national and global actors, its implementation as a co-productive approach rooted in meaningful community participation is inadequate. An exception, however, is the Community Organisations Development Institute (CODI), a finance facility of the Thai government that has facilitated community-led informal settlement upgrading in more than 250 cities and towns in Thailand, demonstrating how a national government not only engaged with ‘pro-poor’ development but also managed to institutionalise an approach and implement at scale.
In early May, the South African SDI Alliance together with Shack / Slum Dwellers International (SDI) had the pleasure of hosting Somsook Boonyabancha, the founder and former director of CODI for a seminar in Johannesburg and Cape Town on ‘Scaling up informal settlement upgrading: The CODI model, Thailand’. ISN and FEDUP coordinators additionally used this opportunity to share current partnership and project implementation challenges with Somsook during a visit to Khayelitsha. Her visit to the Alliance occurred in the context of a broader meeting* with representatives of the South African National Treasury concerning CODI’s approach and its value for the South African context.
Informal Settlement Upgrading in South Africa
The upgrading context in South Africa is marked by a tension between policy and practice. Part three of the National Housing Code states that the Upgrading of Informal Settlements Program (the national policy and finance instrument for upgrading) set out to “facilitate the structured in situ upgrading of informal settlements as opposed to relocation(s)”. The aim: to achieve tenure security, deliver basic services and build ‘social capital’ in communities through participatory processes.
In practice, however, municipal application of UISP has been weak, especially in terms of community participation or alternative approaches to tenure security beyond freehold (See NUSP). Even after the National Upgrading Support Programme (NUSP) was introduced in 2010 to support municipalities in addressing these shortfalls, the lack of meaningful community engagement or in-situ upgrading of informal settlements persisted. This is largely due to inadequate municipal capacity for meaningful participation, a recurring preference of relocating shack dwellers to greenfields sites (the Joe Slovo judgement is a case in point) or repackaging reports on greenfield relocations as UISP projects (see State of Local Governance, p.64-65).
Where the SA SDI Alliance has implemented participatory upgrading projects in partnership with a local municipality (such as the City of Cape Town), these instances remain limited to a handful of settlements. Avenues for scaling up meaningful participatory practice in South Africa are rare, if not non-existent. In the experience of the Alliance, key challenges to scaling up relate to the disjuncture between lengthy bureaucratic processes and the pace of community preparation in informal settlements. For example, party political frictions may extend the time required to mobilise a community while lengthy municipal procurement processes regularly stretch project timeframes beyond the designated one year budget allocation period. When budget allocations are annulled or project dates postpoined, it is twice as difficult to restart and remobilise the community. Tools that intend to support community-led action (such as the UISP), can therefore have the opposite effect: they are often not flexible enough to adapt to project preparation and social facilitation processes in informal settlement communities.
How CODI Works
As an alternative, the CODI model offers relevant insights for the South African context. Formed in 2000 through the merging of the Urban Community Development Office and the Rural Development Fund, CODI is an independent public organisation under the Ministry of Social Development and Human Security. CODI functions as a revolving loan fund that enables direct access to grants for upgrading and loans for housing. As a national implementing agent, CODI manages the Thai government’s Community Development Fund that engages urban poor communities and networks who are organised in housing co-operatives and informally recognised community based savings schemes. CODI supports the building of community cooperatives, through sub-group clusters that manage community grants and wholesale loans. Such subgroups bring about collective action through group guarantee, helping eachother, and collective repayment. Read more about CODI here.
Thailand’s Upgrading Initiative: Baan Mankong
The Baan Mankong City-Wide Upgrading initiative is one of CODI’s most notable programs. Introduced in 2004, it focuses on poverty alleviation, community welfare, technical support and tenure security through promoting savings, credit, loans and planning support. Baan Mankong (which means “Secure Housing” in Thai) facilitates capital transactions through an infrastructure/upgrading grant from central government and a housing loan lent to borrowers organised in housing cooperatives. Since 2004, Baan Mankong has approved a total of 850 projects in 1660 communities and benefitted about 90 000 families. Geographically, its reach covers 286 cities in 71 of 77 provinces. The average housing loan per family amounts to US$ 5000 while the average upgrading subsidy grant averages about US$ 2500 per family. The total loans granted by CODI’s revolving fund (at 3% interest) amount to about US$ 185m with a repayment rate of 97.5% (Figures drawn from Somsook’s presentation).
In her presentation, Somsook highlighted the following as significant requirements for a city-wide, scaleable approach:
- Active communities: support for urban poor communities as owners of projects
- City-wide approach: changes at the real scale of the problem (i.e. that affect all poor communities in the city) will link scattered communities and their priorities to each other, contributing to a more systematised and sustainable approach
- Building strong communities: through secure housing and integrated development that includes:
- collective land ownership or lease
- community savings and fund (acting as a community bank)
- welfare activities
- activating the link between community networks and city organisations in regular meetings
- collective management
- Building partnerships: between community networks, local authorities and other development actors that enable deliberation and negotiation
- New finance system: active community savings and credit, City Development Funds
Scaling Up in South Africa?
With more than eighty representatives from NGOs, media platforms and think tanks in the sector, academic partners in planning and architecture and the Head of Department of Human Settlements in the Western Cape, the closing session of the seminar offered an opportunity for discussion. How does CODI straddle the tension between private and collective land ownership? Is collective land ownership/lease possible in South Africa? Is there government appetite for alternative finance mechanisms? While engaging with these points, Somsook continually pointed to the value of collective action:
“The key thing is to bring all actors to work together. Community is important to support each individual for a certain period of time. And land is an important factor [so we need] collective land as a project. Poor people will be weak otherwise. Its insufficient to just do one or two projects here and there… Let poor people at a big scale be the key actors to make a big change”
Similarly to CODI, a co-finance facility in South Africa has the potential to locate poor people at the heart of upgrading interventions. Where urban poor communities shift from beneficiaries to activated citizens that identify, plan and implement development priorities, informal settlement upgrading can become more nuanced, responsive and participatory. For a co-finance approach, community saving is a valuable mobilising tool, an enabler for meaningful participation and an indicator of household buy-in at settlement level. A co-finance mechanism that is institutionalised in local government but not subject to its bureaucratic process can enable flexible time frames for project budget allocations that are not constrained by annual provincial or municipal allocations. In this sense, innovation and meaningful participation occur only when community members become significant actors in the upgrading process.
*The visit was supported by the World Bank