NCOP Public Services
Housing Development Agency, Rural Housing Loan Fund, National Housing Finance Corporation, Social Housing Regulatory Authority on challenges and service delivery
Chairperson: Mr M Sibande (ANC, Mpumalanga)
Date of Meeting: 27 June 2011
The Housing Development Agency was a national public development agency that promoted sustainable communities by making well-located land and buildings available for the development of human settlements. Its two main objectives were to identify, acquire, hold, develop and release well-located land and buildings for human settlements and to provide project management support and housing development services. It collaborated with provinces and municipalities and supplemented their capacity. An implementation protocol stipulated the framework of cooperation, areas of operational activity and the institutional and funding arrangements. Implementation protocols existed at this stage between it and five provinces. Protocols were still being negotiated between the HDA and the
The mandate of the Rural Housing Loan Fund was to make loans available to low income households in rural areas, to build or improve their houses. These were households with an income of R9 800 and less. It empowered rural dwellers by giving them access to housing finance from sustainable retail lenders and government subsidies through the Individual Rural Subsidy Voucher Programme. In 2008/09 RHLF had approved 40 537 loans. In 2009/10 this figure went down but in 2020/11 it increased again to 44 933. The impairment rate (people who could not repay the loan) was around 20% of the amount disbursed. 88% of the approved loans went to non-metropolitan areas and 62% went to households earning less than R3 500. The borrowers paid between 10% and 15% interest. It worked with funding institution intermediaries in the provinces and itself employed just 11 people so that more funds could be spent on its mandate. RHLF was collaborating with the Department of Human Settlements to provide councillor training on human settlement issues. Major plans were to introduce the Individual Housing Subsidy Voucher Programme plus market itself more effectively in provinces and areas where it had less impact.
Members were concerned about how the Rural Housing Loan Fund marketed itself. It should take at stall at government imbizos to popularise itself. Members raised concerns that 15% of loans went to borrowers in
The National Housing Finance Corporation was established in 1996 as a Development Financial Institution to broaden access to affordable housing finance for low to middle income households, either by renting or owning a house. It facilitated increased and sustained lending by financial institutions to the affordable housing market and mobilised funding into the human settlement space. It ran its business in an economically sustainable manner while promoting development.
Between 1996 and 1012, the NHFC had created 16 884 housing opportunities, 64 158 beneficiaries benefitted from its activities, providing funding to the amount of R 776 million. It had leveraged private funding of R1 297m, created 1 860 jobs and empowered women and youth entrepreneurs to the tune of R100m. The NHFC offered learnerships for students, internships for new graduates and sponsorships for student who were still at university. It provided top-up loan funding for most Social Housing initiatives by province. Its Finance Linked Subsidies programme provided gap housing for people who earned too little to get a commercial subsidy, but too much to get an RDP house.
Challenges were that changes in political leadership affected relationships and the delivery of projects on the ground. The National Environmental Management Act stipulated that environmental impact studies had to be done and this led to delays. There was no effective coordinated support by provinces to ensure the recovery of monies owed by rental defaulters. Provinces were not honouring their payment undertakings to financial institutions for work done by provincially appointed contractors. There was no provincial support for gap housing initiatives. NHFC had set aside R1bn for the current financial year for Human Settlements initiatives. It expected to create 1 860 jobs. R100m was earmarked for women and youth empowerment initiatives.
Members asked which criteria were used to recruit the students for internships and from which provinces they were; how were women and people with disabilities empowered by the NHFC; why the NHFC only worked in some provinces and not in others; how the NHFC managed to effect the repayment of loans with the lack of effective support from the provinces to recover monies.
The Social Housing Regulatory Authority (SHRA) was a new body and it derived its mandate from the Social Housing Act of 2008. Its mandate was to invest in social housing and to regulate the sector. The CEO and 80% of the planned staff complement started in January 2011. Its reason for being was to restructure human settlements which still reflected apartheid spatial planning. The SHRA must support provincial governments with the approval of project applications by social housing institutions, assist where requested in the process of the designation of restructuring zones, enter into agreements with provincial governments and the National Housing Finance Corporation to ensure the coordinated exercise of powers. Challenges that SHRA experienced with provinces were: Delivery demands set by Outcome 8 required R12 bn, which was not available; DORA funds sitting with provinces (R1.2bn for 2011/12) which may not be spent elsewhere; the establishment and growth of Restructuring Zones; Skill/capacity at provinces to manage social housing/rental programmes; Lack of understanding of rental programmes; Rental Tribunals not aligned to SHRA programme and vice versa; Slow turnaround times regarding payments to SHIs; Social housing was not prioritised in some provinces; Provinces did not make their own land available for rental housing. The SHRA responded to these challenges by establishing the National Social/Rental Housing Task Team and engaging with the provinces to draft agreements with them and developing the SHRA Outreach Programme to create awareness and deepen understanding of rental products. Members asked which province had failed to meet with SHRA after six months of requests for a meeting and how SHRA marketed itself in the provinces where it had programs.
The Chairperson opened the meeting and explained that the Committee called the meeting so that the State Owned Entities (SOEs) working in the field of human settlement development could inform the Committee about their objectives, their challenges, their strategies around job creation and poverty alleviation as well as their obstacles to service delivery.
Housing Development Agency (HDA) presentation
Mr Taffy Adler, HDA CEO, said that HDA was a national public development agency established by an Act of Parliament (Act 23 of 2008). The HDA promoted sustainable communities by making well-located land and buildings available for the development of human settlements. It was accountable through its board to the Minister of Human Settlements. Its two main objectives were to identify, acquire, hold, develop and release well-located land and buildings for human settlements and to provide project management support and housing development services.
The HDA had ensured that its strategic plan was aligned with Outcome 8 and set targets towards ensuring the ‘creation of sustainable human settlements and improved quality of household life’. The HDA collaborated with provinces and municipalities and supplemented their capacity. An implementation protocol was negotiated between the HDA and each organ of state which stipulated the framework of cooperation, areas of operational activity and the institutional and funding arrangements. Implementation protocols existed at this stage between the HDA and Limpopo, Free State, Northern Cape, North West, KwaZulu Natal. The protocols were still being negotiated between the HDA and the Western Cape and the Eastern Cape.
The HDA had different programmes. Its Intergovernmental Relations and strategy alignment program (IGR) was to secure the key intergovernmental relationships in order to streamline the development of human settlements.
Its Land Acquisition and Management Program coordinated the identification of suitable land and landed property and facilitate its acquisition or release for human settlement development. It also managed acquired property, undertook spatial analysis and provided geo-spatial services. This was directly linked to its land release program.
The presentation listed several land parcels at various stages in the process towards being released for human settlement development. Among these there were properties belonging to Transnet. The HDA had tested 6 692 properties belonging to Transnet for suitability and had subsequently approached Transnet for 309 properties measuring 812.6267hectares to be released for human settlement development.
Challenges encountered by HDA was limited planning and coordination with respect to physical and social infrastructure, misalignment between fiscal arrangements and the mandate of the Agency, a lack of alignment between provincial human settlement planning and municipalities, the HDA’s image as a private sector service provider and the conclusion of IGR Implementation Protocols with provinces and municipalities.
Mr Z Mlenzana (COPE, Eastern Cape) asked what the concept of the Department of Human Settlements was of human settlements. The Committee had visited Cuba to look at integrated housing developments. He wanted to know whether the DHS was able to change its thinking from Housing to Human Settlements. The issue of co-housing (cooperative housing) was also raised. Did the HDA see a difference between the two, or was it a question of semantics and terminology?
Mr Morris Mngomezulu, Chief Director: DHS, replied that the DHS itself was still grappling with the concept of what constituted a human settlement. The Department was working on a turnaround strategy which tried to answer that question. The DHS was also coming up with service level agreements with other government departments. At this stage it was still a half-cooked concept. Regarding co-housing and how it differed from social housing and cooperatives, Mr Mlenzana would get a comprehensive answer in response to the written parliamentary question he said he had already drafted.
Mr Mlenzana said that there were many fires in informal settlements. What was on the cards to prevent these, because it was common knowledge that informal settlements would not disappear in the near future.
Mr H Groenewald (DA, NW) noted the Minister had said that housing delivery had to be speeded up. Problems in the process caused delays. What were the general problems the HDA experienced in the acquisition of privately owned land?
Mr Joseph Leshabane, Deputy Director General, Chief of Operations, DHS, replied that HDA had a role to play in land acquisition in the open market. The HDA would engage with any owner. The two parties would agree on the land to be sold. The only limitation would be capital. Well located land was expensive. The acquisition would depend on whether the HDA had access to the capital.
Mr Groenewald asked what the size was of the average house the HDA built.
Mr Leshabane said that the Housing Act determined minimum norms and standards for the size of houses. It was 40m2. Anything above that was a bonus.
Mr Groenewald asked whether the HDA took into account the need for parks and schools and especially graveyards, when developing new areas, as he knew that municipalities had problems in making land available for graveyards.
Mr Leshabane replied that the reality was that the brief of the HDA was wider than housing. Land identification for release responded to the need for shelter. It included matters of infrastructure like parks and graveyards. The Agency could assist the municipalities that approached it, to get land parcels released.
Mr Groenewald said that lots of money was made available for development. It was easy for corruption to occur. What management measures were in place to prevent corruption?
Mr Leshabane said there was a comprehensive framework around fraud and corruption prevention.
Ms M Themba (ANC, Mpumalanga) asked Mr Adler to clarify how the HDA was put in place.
Ms Themba asked why there were no females in the delegation. She said the slides showed only males looking for land. Did HDA ever come across women looking for land? What criteria were used?
Mr Leshabane pointed out the Agency’s employment equity situation. More than 50% of the employees were female. The females were absent due to other commitments. He assured the Committee that the gender balance in the Agency was in line with a modern public entity. The Agency had a high density of professionals. They were the pride of the Agency. The Agency had assembled the best skills in the industry. The head of the division as well as the CFO were females.
Mr M Jacobs (ANC, Free State) said that the HDA offices were situated in JHB, CT and PE. These were all well developed areas. There were no offices in underdeveloped areas, which was problematic.
Ms Themba said that only six provinces were mentioned. What about the other three provinces? Were there offices in all the provinces and where were they located?
Mr Leshabane replied that the presence of the HDA in a province depended on the amount of work that it had to do there. If it had offices in provinces where it had no work, it would be a waste of resources and be counter productive.
Mr Jacobs said that there was talk about a Joint Coordinating Committee. There had been a decision to move away from the previous way of planning of building houses before the water, electricity supply and roads were completed. Who coordinated the building and installation of the infrastructure before or during the building of the houses?
Mr Leshabane replied that the Joint Co-ordination Committee with the Department of Public Works only facilitated the release of state land. The development of the land was done by the province.
Mr Jacobs asked how the HDA provided the project management support and who did the projects in these cases, municipalities or private institutions? Mr Jacobs asked for clarity on the different roles the HDA played.
Mr Leshabane replied on the Project Management function. In some cases the province and the local authority agreed on a project. In some cases the HDA played a project management role and in other cases it played the role of implementing agent. It depended on the capital demand. In JHB, the HDA assisted with the implementation of informal settlement upgrading. In the Northern Province it also helped shape informal settlement upgrading.
Mr Jacobs noted there were no delegates from Gauteng. Gauteng had problems with Transnet. He wanted elaboration on the nature of these problems.
Mr Leshabane replied that there was a challenge around the release of land belonging to Transnet in Gauteng. The HDA was aware of this challenge, but the province did not divulge the size of the problem.
The Chairperson asked the HDA to explain its relationship with traditional leaders. He asked what the nature of the HDA’s relationship was with the South African National Civics Organisation (SANCO) and the different civics organizations. And what was the nature of the HDA’s relationship with municipalities?
Mr Jacobs noted the presentation said that HDA identified and acquired land for housing development. Did it do this according to its own spatial analysis or did it work in conjunction with municipalities?
Mr Leshabane replied that the HDA was compelled by law to work with other organs of state. All its work was done in collaboration with provinces and local authorities. Some provinces were not ready to work with the HDA and others had a negative attitude. The HDA was in constant communication with provinces and municipalities. It was true that the HDA started with the predominantly urban municipalities. It was working its way towards less densely populated municipalities. An agency could only work with those entities that wanted to work with it. Where necessary, it concluded the implementation protocol.
Mr Leshabane explained that when the HDA encountered communal land, it engaged with the Department of Cooperative Governance and Traditional Affairs (COGTA) to negotiate with the traditional leaders, who normally complied. There was no animosity or tensions between HDA and traditional authorities. The same applied to local authorities. The work of the HDA was aligned with, and enhanced the work of local authorities.
On the criteria for land identification, Mr Leshabane defined well located land as being determined by the functional physical attributes. It was land that the municipality thought was suitable as defined by its Integrated Development Plan (IDP). The HDA was not a planning authority. The local authority planned. HDA could only make available the provincial distribution of land.
The Chairperson believed that just before the new dispensation, lots of municipal land was sold. Municipal land that used to be used to grow citrus as well as timber had disappeared. He wanted to know what the HDA knew about that.
Mr Leshabane said that he did not want to say anything about land that was sold before 1994. HDA could only deal with the relevant authorities as of now.
Ms Themba asked where the 33 000ha land was that had been identified by the HDA for development and to which custodian department did it belong. The presentation also stated that Transnet non-core properties were identified for development. She asked for a breakdown per province of the location of these land parcels.
Mr Jacobs said that he hailed from Bethlehem in the Free State and he wanted to know which specific properties were identified or acquired in this area for development, so that he could follow up.
The Chairperson said that the Committee would be grateful if the requested information could be supplied. The information of the land identified for development broken down by each province as well as which provinces did not cooperate.
The Chairperson was addressed as Madam Chair earlier in the meeting. He said that he could not let it go unchallenged. He insisted that state owned entities (SOEs) bring the full complement of their delegation to meet with the Committee at the next engagement. The genders also had to be represented in equal measure. If SOEs did not comply with these requirements, they would be asked to leave and come back better prepared.
Rural Housing Loan Fund (RHLF) presentation
Mr Jabulani Fakazi, RHLF CEO, said that its mandate was to make loans available to low income households in rural areas, to build or improve their houses. These were households with an income of R9 800 and less. RHLF empowered rural dwellers by giving them access to housing finance from sustainable retail lenders and government subsidies through the Individual Rural Subsidy Voucher Programme.
In 2009 RHLF had approved 40 537 loans with a monetary value of R139 313 000. In 2010 it went down. In 2011 it increased again to 44 933 loans to the value of R202 000 000. In 2014, 40 000 loans were projected to the value of R256 500 000. He noted that 88% of the approved loans went to non-metropolitan areas with 62% of the loans approved went to households earning less than R3 500. The impairment rate (people who cannot repay) was around 20% of the amount disbursed.
The borrowers paid between 10% and 15% interest.
RHLF had a strategy to increase the number of loans for 2011/12. It planned to add two more community based organisations (CBOs) as well as one new intermediary to its delivery channel. These CBOs would be situated in areas where the impact of RHLF was low.
It would extend a facility to RPH and Lendcor groups. These were low risk engagements and allowed RHLF to decrease its interest rates. It would roll out its low interest rate loans to all other clients. Mr Fakazi showed two pie charts depicting a provincial breakdown of the number of loans disbursed as well as the value of the loans disbursed.
RHLF was working with provinces to make funds available upgrading of informal housing like backyard dwellings and households which did not qualify for government subsidies.
It had an individual rural housing subsidy program which allowed for an owner driven building process. It also allowed for training opportunities for rural people as well as alternative building technologies.
The intermediaries that RHLF worked with employed a total of 4 866 people. RHLF employed a total of 11 people: six black, females, three black males, a white female and a white male.
RHLF was collaborating with the DHS to provide councillor training on human settlements issues. Major plans were to introduce the Individual Housing Subsidy Voucher Programme plus market itself more effectively in provinces and areas where it had less impact.
Mr Tau asked what the linkage was between RHLF and financial institutions. How did RHLF know how many people applied to financial institutions and were rejected. He came from Warrenton in the NC. How did people approach RHLF in Warrenton? Which institutions acted as intermediaries in the NC?
Mr Fakazi replied that the intermediary lenders submitted monthly statistics to the RHLF, containing the total number of loan applicants, the approval rate as well as the rejection rate.
The Chairperson asked how RHLF marketed itself.
Mr Jacobs also requested this information. He had never heard anything about RHLF. He knew that RHLF made an input in councillor training. RHLF needed to increase its visibility.
Mr Tau said that the popularisation of RHLF was a worrisome factor. RHLF did not use platforms created by Parliament like the imbizos that took Parliament to the people. Provinces also had events that took the executive to the people. He had never seen a RHLF stall at any of these events. The NCOP went to rural areas. He suggested that RHLF made use of these platforms.
Mr Fakazi conceded that more had to be done to market RHLF. RHLF tried to market itself on the African Language Radio Stations and in the print media. It needed to make use of the imbizo platform. It needed to do more especially in the rural provinces. RHLF would act on the suggestions to increase its visibility.
Ms Themba asked whether RHLF had a research unit which went to the provinces to assess the needs there.
Mr Fakazi replied that for research, RHLF would have to work with the province. Some provinces invited RHLF. RHLF participated in the National Research Task Team. He would raise the issue with the member of RHLF that worked in the National Research Task Team.
Ms Themba asked, regarding the training of councillors, whether the Committee could have the training program. If the Members of the Committee were in the provinces while the training was underway, they would want to be part of those training workshops.
Mr Fakazi replied that councillor education was facilitated by the DHS, through the capacity building unit, which invited RHLF to the workshops. He would liaise with the capacity building unit of the DHS, so that when it had the program ready, he could share it with the Committee.
Mr Mlenzana asked about the pilot project with the three municipalities in the Eastern Cape. If he could get the details, he could assist during his constituency work by briefing these newly elected mayors.
Mr Fakazi replied that the municipalities were identified by the DHS in the Eastern Cape. He did not know the full basis of their identification. He could share the information on the engagement with the municipalities with the Committee.
The Chairperson asked what criteria RHLF used to help people get loans and what the maximum limit was for a RHLF loan.
Mr Fakazi replied that the intermediary accessed funds from RHLF in terms of the National Credit Act. The applicant had to receive an income. The intermediary looked at the credit record of the applicant. The maximum loan amount had recently been increased to R100 000. An affordability test was done to determine whether the applicant could repay the loan.
The Chairperson found it worrying that on slide 9 and 10, the presentation stated that RHLF lent money to people to improve RDP houses. Yet there were deep rural areas, where there were no RDP projects that were in urgent need of help.
The Chairperson said that a pie chart in the presentation showed a breakdown of loans per province. It showed that 15% of loans were given to people in Gauteng. He wanted to know where the rural area in Gauteng was. There were debates when talking about “the rural areas”. The fact that this was a fund for rural housing, while loans were given to people in Gauteng, which was a highly developed area, was problematic.
Mr Fakazi agreed with the Chairperson that the RHLF had to go to the deeper rural areas and areas under traditional rule. Where the RHLF gave loans to current RDP home owners, this was where these applicants and areas fell within its mandate. The RHLF was tracking loans to the deep rural areas using postal codes. It also determined the value of those loans. Presently the RHLF relied on intermediaries. It did not deal much with traditional leaders. It needed to increase its visibility amongst traditional leaders in order to make them aware of RHLF and what it had to offer.
The Chairperson asked whether the RHLF had risk management. Were there cases of corruption in the offices in the different provinces?
Mr Fakazi replied that no corruption had been reported in RHLF since he joined RHLF in 2002, or since its inception in 1996. There was one national office based in Gauteng. It extended its footprint to the provinces via a network of intermediaries. The challenge for RHLF was to effect an impact. Having a staff complement of 11 and only one office, allowed it to have more funds available for loans. If it opened offices in all the provinces, the bill for the overheads would increase significantly and it would have less funds left for loans. Operating as it did, it maintained its impact.
Mr Groenewald asked for the percentage of borrowers who defaulted on repayment of the loans.
Mr Fakazi replied by referring to the slide called Rural Housing Reach. It gave the percentage of impairments. In the last financial year, it was 19,3 %. This was a result of the state of the economy. People lost jobs, were struggling and then could not repay their loans.
Mr Tau asked what happened to defaulters.
Mr Fakazi replied that the RHLF facilitated unsecured lending. When people defaulted, they did not lose their house. The intermediary educated them about defaulting. If they could not pay, they had to make an arrangement with the intermediary. The borrower under normal circumstances did not want to blemish his credit record. This was an incentive to pay.
The Chairperson asked for proper records on which land in the provinces was communal land. He thanked RHLF for the presentation and asked for the provision of the information requested. He would request a full workshop at a later date.
National Housing Finance Corporation (NHFC) presentation
Mr Lawrence Lehabe, NHFC Executive Manager: Projects, explained that the NHFC was established by the National Department of Housing in 1996 as a Development Financial Institution to broaden access to affordable housing finance for the low to middle income households.
Its strategic objectives were to expand housing finance activities, thereby enabling low to middle income families to have a choice of renting or owning a house. It facilitated increased and sustained lending by financial institutions to the affordable housing market and mobilised funding into the human settlement space. It ran its business in an economically sustainable manner while promoting development.
Between 1996 and 1012, the NHFC created 16 884 housing opportunities, 64 158 beneficiaries benefitted from its activities, it provided funding to the amount of R 776 million. It leveraged private funding of R1 297m, it created 1860 jobs, it empowered women and youth entrepreneurs to the tune of R100m. The NHFC contributed to Outcome 8 of the national priorities which was to create sustainable human settlements and improved quality of household life.
The NHFC contributed towards job creation, skills development and entrepreneurship, which contributed towards economic development. The NHFC offered learnerships for students, internships for new graduates and sponsorships for student who were still at university.
For 2011, 3 555 housing units were projected. By 2014 this would be 9 094. In 2011, 5 121 incremental loans would be approved. By 2014 this would be 9 833. By 2011, 903 mortgage loans would be approved. By 2014 it would be 400. In 2011 total disbursements would be R711 067. By 2014 it would be R1 076 000. Jobs created by 2012 would be 1 860 and by 2014 it would be 2 546. Disbursements targeting women and youth would be R100m in 2012 and R165m in 2014.
The NHFC leveraged funds from commercial banks. In 2011 it would be R913m and in 2014, R3 199m. It had created the Mortgage Insurance Implementation Plan to absorb the risk when NHFC clients got loans through commercial banks. It would mobilise R306m into the Human Settlements space in 2012 and R500m in 2014.
Its objectives were linked to the National and Provincial housing plans. It provided top-up loan funding for most Social Housing initiatives by province. Finance Linked Subsidies programme (FLISP) was a program to provide gap housing for people who earned too little to get a commercial subsidy, but too much to get an RDP house. There were dedicated funds to fund inner city housing initiatives. The major focus was in Gauteng, KZN and Eastern Cape. Research was being conducted in Limpopo, Eastern Cape, KZN and the Western Cape, which would eventually evolve into housing projects.
Challenges were that changes in political leadership affected relationships and the delivery of projects on the ground. The National Environmental Management Act (NEMA) stipulated that environmental impact studies had to be done and this led to delays. There was no effective coordinated support by provinces to ensure the recovery of monies owed by rental defaulters e.g. Polokwane, Western Cape, Gauteng, and KZN. Provinces were not honouring their payment undertakings to financial institutions for work done by provincially appointed contractors. There was no provincial support for gap housing initiatives.
NHFC had set aside R1bn for the current financial year for Human Settlements initiatives. It expected to create 1 860 jobs. R100m was earmarked for women and youth empowerment initiatives.
Mr Groenewald asked what the objective was of taking legal action if the borrower could not pay.
Mr Groenewald said that he had seen the project in Rustenberg and it was very good. He asked whether there were enough people who could afford the houses.
Ms Themba said that she had a passion for gender equality. She asked the entities to send organograms so that the Committee could understand the composition of the staff and executive of the institution. She asked what criteria were used to recruit the students referred to in slide 9, and from which provinces they were? She asked how women and people with disabilities were empowered through the NHFC.
Mr Lehabe did not know the details about the criteria used to recruit students, but he would get the information from the HR department and provide a response. The NHFC ensured that funds benefitted women and people with disabilities. The NHFC ensured that funds benefitted women in construction. The current Premier of Gauteng had been at the head of the Human Settlements Ministry in the Province. She introduced women to the NHFC who needed funding for their projects. The NHFC funded three projects. It wanted to support women. He noted the issue of disabilities.
Ms Themba asked how the model of what was done in Gauteng was extended to other provinces. Gauteng was urban and well developed.
Mr Lehabe replied that the NHFC used it as an example and a lesson. It was in the plans to extend this to the other provinces. There was a program that the NHFC funded that bought and renovated dilapidated buildings. Funds were dedicated to help young people and women to own buildings.
Mr Jacobs was worried about the presentation, because it focussed on the future only. All the information started in 2010 and projected to 2014. It did not give pre-2010 information so that one could make comparisons. He was from the Free State, but he did not see his province represented.
The Chairperson reiterated the comment by Mr Jacobs. He asked what criteria were used in the NHFC’s budget plan. All the provinces were not represented.
Mr Lehabe noted the question of the budget plan. How were some provinces left out? The NHFC sat down with provinces and looked at their plans. In some provinces the presence of the NHFC was not what it was supposed to be, but it would rectify it.
The Chairperson said that institutions like the IMF and the EU had their own conditions for borrowing money. What were the conditions of the loans?
Mr Lehabe noted the caution by the Chairperson regarding conditions attached to loans. When approaching the lender, the NHFC did it in line with government provisions. The loans were part of the program of government. Conditions were negotiated with the DHS and Treasury. The NHFC had not approached the IMF for loans.
The Chairperson noted that Slide 9 should state R415 million disbursements to women and youth and not R415. A Member asked how the R415m would be spent.
Mr Lehabe replied that the NHFC, together with the provinces, would identify projects benefitting women and youth. The money would be allocated to those projects.
The Chairperson referred to the challenges and asked how the NHFC managed the repayment of loans if there was a lack of effective support by the provinces in recovering monies.
Ms Themba asked what the NHFC did to resolve the challenges in the provinces. It had to report on its actions. It could not continue to loan money to people who could not repay it.
Mr Lehabe said the NHFC was engaged in persuading provinces to set aside funding for gap housing in the form of the FLISP scheme.
Mr Mlenzana raised a point of order. He objected to the fact that the presenter could not answer the questions to the Committee’s satisfaction, because he was not senior enough and did not have all the information at hand.
The Chairperson said that the NCOP was not a banana republic. He told the DHS that when SOEs had to deliver presentations to Parliament, they had to send suitably senior and qualified people to answer the questions raised. He felt that the DHS and the SOEs did not take the Committee seriously enough. The Committee could assist the SOEs to get to their target markets to implement their programs, because it was in contact with the provinces every day. Earlier on, a presenter addressed the Chairperson as ‘Madam Chair”. The Chairperson took offence and said that this too indicated that the representatives of the SOEs did not take the work of the Committee seriously.
Social Housing Regulatory Authority (SHRA) presentation
Ms Zohra Ebrahim, SHRA Chairperson of the Board, introduced the organisation. She was appointed in August 2010. The names of the board members were gazetted on 3 September 2010. The composition of the council included five other women of which one was disabled. There were three men. The top structure of the executive council consisted of two men and one woman. Staff consisted of 65% women and 35% men. It was the first ever Housing Regulatory Authority in South Africa. It had a regulatory capacity that had been written into law, which meant that it had teeth. Funding flowed through SHRA. The accreditation process and investment process was clear. SHRA reported to the Minister. The Minister appointed the Council Members. The DHS had given its support to set up the structure. The CEO and 80% of the planned staff complement started working on 1 January 2011.
Mr Brian Moholo, SHRA CEO, explained that SHRA derived its mandate from Chapter 3 of the Social Housing Act of 2008. Its mandate was to invest in social housing and to regulate the sector. SHRA’s reason for being was to restructure human settlements from the current state this was in, which still reflected apartheid spatial planning, to create places where people could live, work, play and pray. These places needed social, economic and spatial restructuring.
SHRA had two functions: investment and regulation. The investment function needed capital and skills. It only worked with accredited service providers. The regulation function was divided in two, namely accreditation and regulation.
SHRA had four strategic objectives: the implementation of the Social Housing Act, the regulation of the sector, investment in the sector, and the SHRA outreach programme. SHRA worked with the provinces. The Social Housing Act stated that it was the role and responsibility of the provincial government to approve, allocate and administer capital grants, in the manner contemplated in the social housing investment plan, in approved projects. On the matter of provinces, Chapter 11 of the Social Housing Act stated that the SHRA must:
• support provincial governments with the approval of project applications by social housing institutions
• assist where requested in the process of the designation of restructuring zones
• enter into agreements with provincial governments and the National Housing Finance Corporation to ensure the coordinated exercise of powers and
• perform any other function or exercise that the Minister might prescribe.
Challenges that SHRA experienced with provinces were:
• Delivery demands set by Outcome 8 required R12bn, which was not available.
• DORA funds sitting with provinces (R1.2bn for 2011/12) which may not be spent elsewhere.
• The establishment and growth of Restructuring Zones.
• Skill/capacity at provinces to manage social housing/rental programmes. Lack of understanding of rental programmes
• Rental Tribunals not aligned to the SHRA programme and vice versa.
• Slow turnaround times regarding payments to Social Housing Institutions.
• Social housing was not prioritised in some provinces.
• Provinces did not make their own land available for rental housing.
SHRA responded to these challenges by:
• Establishing the National Social/Rental Housing Task Team
• Engaging with the provinces and drafting agreements with them (EC, Western Cape, KZN,FS, Gauteng)
• Meeting with the Rental Tribunals of Gauteng, Western Cape,KZN
• Developing a SHRA Outreach Programme to create awareness and deepen understanding of rental products.
In terms of service delivery, social housing was important enough for the President to mention it in his State of the Nation Address. It allowed for spatial, economic and social restructuring, moving away from the apartheid models. Social housing catered for people who did not earn enough to get a mortgage from a bank, but earned too much to qualify for an RDP house. It would also alleviate the mushrooming of informal settlements, because economic migrants in the cities would have decent accommodation to live in.
Looking at job creation, Social Housing Institutions, developers and contractors created job opportunities by employing people with different skill levels, from professional to the unskilled, including women and youth. Social housing projects had to set aside a percentage of the units for people with disabilities, integrating them into the wider society.
In terms of poverty alleviation, social housing created living areas close to employment opportunities and transport nodes, leaving more disposable income for other needs. In research conducted in 2009, it was found that most beneficiaries of social housing improved their overall quality of life and as a result were more productive. Beneficiaries were satisfied that their children were safe because of the enclosed grassed areas and controlled access.
The Chairperson complimented the presenter on the pictures he used to illustrate the presentation. He objected to pictures in other presentations, showing poor black people in a stereotypical way.
The Chairperson noted the presenter had commented he had been struggling for six months to set up a meeting with a province. He asked which province this was. He wanted to know what the obstacles were. The Committee could facilitate the meeting. There were guidelines on how to go about it in the Constitution and the relevant Acts. There was the Public Finance Management Act that forced organs of state to account. No organ of state had the right to undermine another.
The Chairperson asked Mr Moholo a technical question. How long did it take to get a meeting? The council had been working since August 2010.
Mr Moholo replied that Ms Ebrahim was acting CEO before January 2011 when he started. She had already started discussions with the Eastern Cape, asking for a meeting. SHRA was still asking for that meeting.
Mr Mlenzana referred to the challenge that social housing was not prioritised by some provinces. He appreciated SHRA’s response to the challenges.
Ms Themba said that SHRA was the last to present, but it put meat into the presentation. She told SHRA to “Keep it up.”
The Chairperson referred to slide 8 on SHRA outreach programs. How did SHRA market itself in the provinces where it had programs?
Mr Moholo replied on the outreach program of SHRA, saying it had invited the DHS and the provinces to come to a workshop on 1 April 2011. The Director General was there as well as related institutions. SHRA had a workshop on reporting.
SHRA had launched Drommedaris. It was a campaign to promote and market the concept of social housing. It would also be launched in Gauteng and KZN next month.
Mr Mlenzana referred to Slide 10 which was a guide to all, extracted from Section 11 of the legislation. The Committee had just dealt with Sectional Title legislation. He asked who was responsible in terms of enforcement when it came to Rental Tribunals. Referring to Slide 10, was it SHRA, or the DHS?
Mr Moholo replied that SHRA had met with the Rental Tribunals in three provinces. It realised that the Rental Tribunals were either complementary or in conflict with SHRA. SHRA wanted the DHS to convene a national meeting with all tribunals. Most tribunals were in constant transition. Most had no full time staff, so reaching them was a problem. In KZN the old tribunal’s time had lapsed, but the new one had not been established yet.
Ms Ebrahim added that Tribunals operated differently in the different provinces. In Gauteng the court generally endorsed the decisions made by the Tribunal. In KZN, the court had its own hearing and implemented its own conclusion, irrespective of the findings of the tribunal. Social housing was part of a suite of products. The President had mentioned social housing in his State of the Nation Address.
Slide 9 showed Section 4 of the Act. It was very clear on the roles and responsibilities of the provincial government. It had to adhere to social housing norms and standards. This was why SHRA had to have a register. SHRA did not accredit projects. It accredited Social Housing Institutions. The accreditation lasted for one year. Institutions had three to six months to fix problems. The demand was high. Money had to turn and be spent. As its first regulatory body, the DHS had been very responsible in setting up SHRA.
At the MinMEC (Meeting of the Minister with all the provincial MECs), the Minister and the President had made the point that the provincial departments had to take social housing seriously.
The Chairperson said that if he had to allocate marks for presentations, the presentation by SHRA was the best. It gave the background of the institutions in terms of its constitutionality, as well as the structure. He repeated his instruction to the DHS to send qualified people to the Committee to make representations. He said that the Committee would call for a workshop, to workshop the issues discussed here.
The meeting was adjourned.