HDA & SHRA 2018/19 Annual Reports

Human Settlements, Water and Sanitation

15 October 2019
Chairperson: Mr M Mashego (ANC) (Acting)
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Meeting Summary

Annual Reports 2018/2019

The governance of the entities of the Department of Human Settlements, Water and Sanitation was keeping the Minister awake at night.

Mr Joseph Leshabane, Acting Director-General in the Department of Human Settlements, made this revelation during the discussion with the Portfolio Committee on the Housing Development Agency which had faced a financial crisis in December 2018 that led to the board's suspension of the CEO and others for financial irregularities. The then Minister had appointed an administrator and dissolved the board, whose term had expired, replacing it with new members. HDA went into extremes of organisational implosion. Several executives have been charged while others resigned. The current board had been unconstitutionally constituted. Hence the appointment of the board has been restarted.

Mr Leshabane pointed out what happened to the HDA was disastrous and painful to the practitioners in the sector. The main reason was that there was deviation from the HDA Act. However the erstwhile board which ended in 2018 should be commended as it acted decisively when the irregularities emerged. It suspended the CEO; detected and acted on misconduct; and commissioned an investigation which uncovered many things and dealt with them. He assured the Committee the administration of HDA has now been stabilised. The Department had to intervene as the HDA was not in a position to operate alone, but has to play in an intergovernmental space.

The HDA reported it had received a qualified audit opinion with 93 audit findings in total. The audit highlighted that irregular, fruitless and wasteful expenditure registers were not maintained during the year; internal controls for supply chain management (SCM) were not in line with requirements. There were internal control deficiencies and lack of oversight of the annual financial statements, performance reporting, compliance with laws and regulations, record keeping, and irregular fruitless and wasteful expenditure.

HDA has 252 employees, mostly young professional females. Substantial work continued to be produced by these professionals. 1.25% of BEE was spent on persons with disability. The target was not achieved due to limited availability of service providers. Against a target of 10% of BEE on youth, only 2.5% was spent. The target was not achieved due to limited availability of service providers. 34% was spent on women-owned enterprises against a target of 20%. The target was exceeded due to concerted effort to support women owned enterprises.

HDA was reviewing its governance structures taking into consideration the powers vested in the board as accounting authority. This would include establishing substructures of EXCO to assist at operational level in managing and monitoring with an objective of having an integrated governance framework. It would conduct strategic and operational risk assessments. It would review SCM policies and procedures. The accounting office and management would ensure the Audit Action Plan and Risk Management Plan were implemented through monthly reporting and oversight. Finally, it would finalise the appointment of the HDA Board, CFO, CEO, and conclude all current investigations, enquiries, disciplinary cases and grievances.

Members asked HDA for clarity on the shortfall of housing units to be delivered; the failure behind the establishment of platforms in the Northern Cape; how it would address the many audit findings; how many cases were closed by now after investigations have been; what measures were in place to ensure HDA stops using agricultural land for housing development. HDA needed to tighten its financial systems.

The Social Housing Regulatory Authority (SHRA) achieved 62% of all planned deliverables with 21 of 34 targets achieved for 2018/19. Currently, there were 102 fully and conditionally accredited social housing institutions on the SHRA Accreditation Register, of which 12 institutions were fully accredited and 90 were conditionally accredited. During the MTSF 2014-2019, 13 968 units have been completed with a further 9 273 units under construction and 12 477 capital grants awarded but which had not yet broken ground. There has been growth in the number of units under regulation. In 2017/18, the number was 32 046 and in 2018/19 it was 36 305. SHRA received an unqualified opinion with no material findings. There was irregular expenditure of R26 724 812 due to a contract for a social housing project in Soweto. SHRA made an interpretation mistake in its reading of Regulation 9(1).

Members asked SHRA about the R26m irregular expenditure; contracts for construction in other provinces besides the 7000 units to be built in Mpumalanga; completed projects that have no occupation; what it was doing to address the shortfall in the number of housing units completed in Northern Cape (0%), Limpopo (0%), and Mpumalanga (6%); why it did not comply with Section 9(1) of the Regulations. They remarked that it was shooting itself in the foot when it regarded anything below 100% as non-performance.

Meeting report

Housing Development Agency 2018/19 Annual Report
Mr Neville Chainee, Acting CEO: HDA, took the Committee through programme performance. Within its Administration programme, it has established a Project Management Office which started to be fully functional by 31 March 2019. 61% of BEE level 1 to 4 service providers were supported. 100% activities in the approved communication and marketing plan were implemented. HDA has 252 employees, mostly young professional females. Substantial work continued to be produced by these professionals. 1.25% of BEE was spent on persons with disability. The target was not achieved due to limited availability of service providers. Against a target of 10% of BEE on youth, only 2.5% was spent. The target was not achieved due to limited availability of service providers. 34% was spent on women-owned enterprises against a target of 20%. The target was exceeded due to concerted effort to support women owned enterprises.

On built environment implementation, HDA has achieved an inter-ministerial agreement on the release of state land that was approved and signed on 27 May 2018. Six projects have been packaged for development. The target was exceeded due to the intervention programme by premier to accelerate service delivery on the Rapid Land Release Programme. 3124 8773 ha of well-located land was acquired or released for poor and middle-income households. The target was achieved due to the donation of state land received in January 2019. 7 998 housing units were delivered against a target of 11 754. There was a shortfall of 3 756 housing units delivered.

Concerning development management and operations, 100% requests for technical support from Regions, Land Management, Spatial Information and Programmes responded in the agreed timeframe and cost. Five informal settlement projects have been provided with implementation support. 57 catalytic projects have been identified and implemented. The Project Implementation Plan was re-assessed to identify projects that could be fast-tracked by subjecting these projects to transactional advisory processes which led to seven additional private-led projects identified and implemented. Five catalytic projects on development status graduated from inception stage to planning stage by implementing two additional projects. An analysis of the programme was undertaken. An updated programme was issued with new timelines and resources were allocated to assist in resolving backlogs, and progressing the projects to the implementation stage.

In terms of regional coordination and implementation support, he reported that 22 mining town have been provided with technical and implementation support on Spatial Transformation Plans and Project Pipeline Partnerships. Agreements were being concluded with mining companies. No achievement was recorded on the priority project assisted with land acquisition for the rehabilitation of the fire disaster in Knysna because the funding application has not been approved by the provincial department. No achievement on the priority project packaged for the development of Imizamo Yethu, including township establishment and delivery of sites. The appointment of the professional team has been ceded to the provincial department due to funding constraints at the HDA.

Pertaining to stakeholder management and relations and spatial information, it was reported that only 50% platforms have been established and 40% maintained. The establishment of the steering committee in the Northern Cape was being reviewed with the Department. Support was also provided on spatial information systems management, GIS mapping and profiling, and spatial analysis and decision support systems. A total of 51 Priority Housing Development Areas (PHDAs) were approved and declared.

Mr Chainee said HDA received a qualified audit opinion. There were 93 audit findings. The audit highlighted that irregular, fruitless and wasteful expenditure registers were not maintained during the year, internal controls for SCM were not in line with required compliance, and there were internal control deficiencies and lack of oversight related to Annual Financial Statements, performance reporting, compliance with laws and regulations, record keeping and irregular fruitless and wasteful expenditure. As a corrective measure, irregular expenditure would be recorded on identification and reported to the CFO for further action. The CFO would review the register monthly. SCM officials would be trained about irregular expenditure to ensure the correct information was updated on the register and reviewed by the CFO. Procurement would use the checklist to identify irregular expenditure. Finance would use a checklist to identify possible irregular payments.

HDA was in the process of reviewing its governance structures taking into consideration the powers vested in the board as accounting authority. This would include establishing substructures of EXCO to assist at operational level in managing and monitoring with an objective of having an integrated governance framework. It would conduct strategic and operational risk assessments for 2019/20. It would review SCM policies, procedures, and processes. The accounting office and management would ensure the Audit Action Plan and Risk Management Plan were implemented through monthly reporting and oversight. Finally, it would finalise the appointment of the HDA Board, CFO, CEO, and conclude all current investigations, enquiries, disciplinary cases and grievances.

Ms Magagula, Acting CFO: HDA, presented the finances. There had been a regression in the audit opinion. She noted HDA has a deficit of R12m and a surplus of R21m which would be used to fund other operations. (Tables and graphs were shown to illustrate budget expenditure)

Social Housing Regulatory Authority 2018/19 Annual Reports
Mr Rory Gallocher, SHRA CEO, said the SHRA achieved 62% of planned deliverables. It achieved 21 of the 34 targets planned for 2018/19. Its vacancy rate at the end of the period was at 10%. There are currently 102 fully and conditionally accredited institutions on the SHRA Accreditation Register, of which 12 are fully accredited and 90 are conditionally accredited. During the MTSF (2014-2019), 13 968 units were completed with a further 9 273 units under construction and 12 477 awarded capital grants but which have not yet broken ground. There has been growth in the number of units under regulation over the MTSF period with 32 046 in 2017/18 and 36 305 in 2018/19. SHRA increased expenditure on the Consolidated Capital Grant (CCG) to R778 327 in 2018/19 which comprises a 105% performance against budget. He spoke on the SHRA four programmes:

• Administration: 86% of 2018/19 HR Action Plan was implemented by year end. The negative variance of 14% was due to inadequate Employee Performance Management and challenges with the implementation with a learnership programme. A service provider was appointed to assist with the development of performance contracts for 2019/20. The Information Communication Technology Action Plan had 76.7% implemented by year end. The negative variance of 23.3% was because the IT action plan could not be implemented at the older building since the SHRA was moving to newer premises. Now that the move was complete the identified technologies would be procured. There was 94% completion of the annual research plan by year-end. The negative variance of 6% was due to procurement delays in appointing service providers to conduct the norms and standards research as well the research piece on intervening on hijacked buildings. The outstanding research work would be completed during 2019/20. 100% achievement was registered against the Stakeholder Management Matrix by year-end. The positive variance was due to the increased stakeholder engagements in Quarters 3 and 4. Stakeholder engagements have been highlighted as key in ensuring that SHRA meets its goals.

• Compliance, Accreditation and Regulation (CAR): The final Social Housing Regulatory Plan was submitted to the Department of Human Settlement on 30 January 2019. 100% of accreditation applications were received and processed within an average of 59 days. The third quarter compliance report approved by the CAR EXCO on 10 December 2018 recommended that SHRA must intervene and establish reasons for the high vacancy rate as opposed to the regulated benchmark of 2%. The intervention plan was tabled on 28 January 2019 with an average of 49 days from the day of approval of the third quarter compliance report. Executive Committee meetings scheduled with a maximum of 60 calendar days. Property Management Agreements signed with Harrison Reef Housing Co- Operative, Philani Ma Africa (Pty) Ltd, Everest Court Housing Association and Troyeville Housing Co-Operative for four Institutional Subsidy projects.

• Sector Development and Transformation (SD&T): 71% has been recorded on Institutional Investment Grant funding allocation. 75% (R2.1m) work of work or contract value was awarded to BBBEE training providers. SD&T disbursed over R1m in Staff Gear Up Grant funding to fund three newly developed projects and created 22 new jobs. Work has been completed on Steve Tshwete Housing Association with others still in process. This institution maintained its conditional accreditation and, therefore,100% achievement has been registered. Work on other projects was still in process. The negative variance of 75% was where a project was not recommended for approval due to the size of units and institutional subsidy awarded previously.

• Project Development and Funding (PD&F): 5 out of 8 targets were achieved. 2 471 social housing units were tenanted. There was a negative variance of 1 385 units. The effect of appointed contractors not meeting the expected levels of delivery either as a result of a negative cash flow, capacity, capability, entrant ODAs and SHIs taking longer to source debt funding, amongst others, has impacted this target negatively. Going forward, grant recipients would be required to submit a tenant shortlist at least 6 months prior to unit completion, allowing occupation almost immediately after the municipality issues occupation certificates. This would be on the back of a construction methodology that meets occupational health and safety (OH&S) requirements. 2 284 social housing units were completed. The negative variance of 2 627 social housing units was a result of some of the large size contracts not performing as expected due to a plethora of issues such as contractual disputes, negative cash flow during implementation, delays in statutory municipal approvals to unlock project implementation. With the increase in Portfolio Managers and the imminent appointment of PRCs, there will be more engagement and on-site presence going forward allowing PD&F to upscale delivery.

Ms Alice Pudane, Corporate Service Manager: SHRA, presented the finances and audit outcomes. SHRA received an unqualified opinion with no material findings. There was an instance of non-compliance with legislation due to irregular expenditure. R26 724 812 in irregular expenditure was because of a contract for a housing social delivery project in Soweto which happened on sub-leased land. SHRA made a mistake of misreading Regulation 9(1). (Graphs and tables were shown to illustrate budget expenditure)

Discussion with Housing Development Agency
Ms L Arries (EFF) asked for clarity on the shortfall on housing units to be delivered.

Mr Bosco Khoza, Regional Manager: HDA, explained that most of their projects were happening in informal settlements. This meant they had to engage with communities to create space for housing developments. The communities have to agree to move voluntarily to alternative accommodation, and sometimes they refuse to vacate the identified piece of land earmarked for development. When that happens, they have to take the legal route to remove them. This was a laborious process. Delays were sometimes caused by illegal occupation. The search for employment opportunities was another contributing factor. Sometimes construction gets stopped because sub-contractors at ward level want to be employed in the project.

Ms S Mokgotho (EFF) wanted to understand the failure behind the establishment of platforms in the Northern Cape. She asked how HDA was planning to deal with the many audit findings.

Mr Khoza stated a target was set to establish the platforms in the Northern Cape, but there was a 20% deviation in the establishment of them with stakeholders. Nonetheless, that was not a problem as they have an Intergovernmental Relations (IGR) platform with the provincial department and HDA regional office. As a result, the contract with the COGTA provincial department has been reviewed for the next five years because there was a good working relationship between the HDA and Northern Cape.

Ms Daphney Ngoasheng, Head of Planning & Programme Design: HDA, indicated the senior management of HDA has taken it upon itself to monitor the activities of supply chain management because the policies were in order. Supply Chain Management issues were being discussed weekly in meetings. The management was keeping an eye on non-compliance identified by the Auditor General. It is a process they were currently working on in dealing with the AG concerns.

Ms M Mohlala (EFF) enquired about the kind of support the HDA was getting from the Department in order to strengthen intergovernmental relations.

Mr Joseph Leshabane, Acting Director-General: Department of Human Settlements, explained that its actions as the Department were enabled by the HDA Act. Intervention from the Department was after what has happened and that was why the Department was asked where the audit committee was. The Department has initiated a joint management committee to look at the challenges HDA. The HDA was not in a position to operate alone, but it has to play in an intergovernmental space.

Mr M Tseki (ANC) observed that the ills of society were a result of adults failing to guide the young ones. HDA was reporting wrongs to the Committee because there has been no oversight from the Department. This could well reflect negatively on the Committee. The Committee should devise a way of monitoring the HDA besides looking at quarterly reports. He asked for clarity on the deficit of R12m and surplus of R21m. He asked why the expenditure was R96m while targets reached were only at 57%. The targets and the financial were not on the same wavelength. He wanted to know the costs of the legal fees incurred.

Mr Leshabane made it clear that what happened at the HDA was not only disastrous, but painful for most practitioners in the sector. The Act that was passed for HDA was visionary. What happened was the departure from that Act. The presentation was reflecting what happened. He noted the erstwhile board which ended in 2018 should be commended because it acted decisively on what had emerged. For example, it suspended the CEO; detected and acted on misdemeanors; and commissioned an investigation which uncovered many items and dealt with them. Unfortunately, its tenure came to an end. The only provision that was available to the Minister was to appoint an administrator during December 2008. The administrator followed what the board recommended. The Department has managed to arrest the decline. The board took the right steps in addressing matters. That was why the Department was saying it was comfortable.

Ms Magagula pointed out that HDA annual performance was sitting at 70%. The figure of 57% was for Quarter 4 performance. The surplus was reflecting management fees that have been corrected as they were wrongly reported in the previous year. R6m was spent on legal fees related to the disciplinary process and forensic investigations conducted for suspended executive managers.

Ms G Tseke (ANC) asked why the Administration programme overspent by 25% as it achieved only 6 out of 11 targets. She asked for an update on the Alexander Housing Project. She asked why targets were not met on youth, women, and people living with disabilities as there was a set aside budget of 30% for them.

Ms Ngoasheng clarified they had a shortage of service providers which did not have a proper grading for what the Agency was doing. HDA was working with sister agencies, so that these groupings could participate in the provision of services to HDA. There was a concerted effort to ensure these groupings were accommodated. Recently, HDA established a database for emerging service providers. She noted 30% of work has been allocated to women companies in the Nelson Mandela Bay Municipality.

Ms Magagula explained the 25% over-expenditure was due to staff restructuring, organisational review and legal costs.

Mr Leshabane reported they have created an intergovernmental steering and project management committee to look into the Alexander Housing Project. The governance of the Department entities was the one thing that kept the Minister awake at night.

Ms N Sihlwayi (ANC) pointed out the HDA has delegated powers, but was lacking clear financial systems which have not been tightened, and the leadership was weak and highly challenged. It was not clear how the employees and other stakeholders were going to trust and have confidence in the entity. She wondered if the HDA challenges were not responsible for the negative behavior of some provinces towards HDA. She stated HDA was in need of a clear organisational review, to perform well instead of spending time on court cases. She was unsure how the DG was going to address all the challenges if such negative things were happening.

Mr Leshabane made it clear they have taken the municipalities and other stakeholders into confidence because the Department has tried to arrest the erosion of confidence. The turnaround of HDA was happening now. Minister Sisulu has forwarded interventions to arrest decline. The attitude of staff was changing for the better, and the board was going to be appointed soon. The acting CEO has been given a direct line to the Department. It was his view it was perhaps key that all the Agency was receiving from government was an operational grant. Stakeholders and municipalities were only happy when they saw value on the ground. Where municipalities and provinces have been weak, the HDA became a star performer because it was operating in an intergovernmental space.

Ms Magagula explained it was not that there was a lack of financial systems. The main reason was what was there in the system before – as there was no irregular expenditure register. Hence they decided to give the AG all it wanted for the audit. The management was trying to ensure irregular expenditure was not re-occurring. Suppliers identified in the irregular expenditure have not been given more work, and that was a sign of consequence management.

Mr Chainee added that there had been no functional internal risk function. As a result, there was no internal control system in place, but now they have employed a person who would look into internal controls. Things were just taken for granted that there would be proper delegation and proper SCM. During 2017/18 the Department highlighted some of the deficiencies and brought them to the attention of the board. Unfortunately, there was a delay on the side of the board to act. He maintained not all was bad at the HDA. The work that was being produced has led to some provinces and municipalities wanting to continue working with the HDA. The oversight should continue, so that there should be no re-occurrence of what happened.

Ms Sihlwayi asked where the internal audit risk committee was when such things were happening to identify the risks.

Ms Magagula explained that they have outsourced the audit function last year, so that the service provider could raise its own findings and audit the progress of the implementation plans by HDA. The implementation plans would talk to the root causes.

Mr Chainee indicated they have taken an exercise to restore the confidence of all stakeholders. In the case of HDA, compliance had not been there. There were internal audit reports with findings, but they were ignored. The irregular contracts would be investigated and reported to National Treasury, SCOPA, etc. There was a land inventory on the land the HDA has acquired, and it was able to identify if those pieces of land were complying with the policies.

The Chairperson indicated responses have been given even if the stories were bad. At least the stories have been told and had to be listened to as long as there would be action plans in place.

Ms Mohlala asked how many cases were closed now after investigations have been done. She asked what measures were in place to ensure the HDA stops using agricultural land for housing development.

Mr Chainee reported four people have resigned, while others have been subject to disciplinary hearings. Not all disciplinary cases have been completed. The primary responsibility of the HDA was to identify, procure, and develop land for human settlement. A substantial amount of work has been done, and a report would be forwarded to the Committee.

Mr X Ngwezi (IFP) requested the Committee be furnished with the list of the projects being handled by the HDA, so that individual Members could visit these places when doing constituency work.

Ms Sihlwayi remarked that the 30% set-aside for work to be given to companies owned by women, youth and disabled should see the light of the day in Northern Cape because poverty and unemployment levels were too high. She would like to see more women participating in the mainstream economy. She suggested the Department should work closely with HDA in finalising the audit action plan to clear the AG findings. The Committee should be given timelines for its completion.

Mr Leshabane noted that Members should appreciate the nature of investigations. He asked the Committee to allow the process to happen because people have been charged, and it should avoid getting into law enforcement and court proceedings.

Mr Leshabane pointed out that HDA could identify land for housing development, but the planning authority on land use rested with the municipality. HDA was guided by the spatial transformation agenda. So, it was better to work in collaborative manner on land matters.

Discussion with Social Housing Regulatory Authority
The Chairperson remarked SHRA was shooting itself in the foot when it regarded anything below 100% as non-performance. This approach would create an operational problem. The content of the report reflected work that was being done.

Mr Gallocher agreed and said they were getting better at performance indicators. SHRA spent its operating budget and has a surplus of R10m. Performance management was a technical matter. The setting of targets needed to be done in a different way. SHRA aimed at 80%, but that came back to bite it. Three of the targets on Administration were double counted. This was on HR Plan and Performance Appraisal.

Mr Ngwezi asked SHRA to comment on its R26m irregular expenditure. He appreciated the fact that the PFMA guidelines were followed. The investigation pointed to different interpretations of the law. But it was strange SHRA legal advisors did not pick that up. He asked if SHRA could indicate contracts for construction in other provinces besides the contract of 7000 units to be built in Mpumalanga. He asked it to comment on completed projects that have got no occupation and wondered if the absence of beneficiaries was the main cause of that.

Mr Gallocher replied that their legal department was fine-tuning their standard operating procedures to curb irregular expenditure. That was why received invoices were now signed by their legal department.

Ms Pudane added there were three things that were considered before approving a project: they have to ensure the availability of land rights; offer to purchase and valid lease; and valid title deed.

Mr Gallocher replied that the breakdown of project plans per province would be forwarded to the Committee and that was what they were reporting on a quarterly basis. The project plan did not confine itself to a particular province. On non-occupation of completed projects, they would usually start construction when they know who the tenants are. The last 20% of the grant does not get released if the tenants have not been confirmed.

Ms E Powell (DA) asked if it would be possible to get a list of accredited housing institutions. She asked what SHRA was doing to address the shortfall in the number of housing units completed in Northern Cape (0%), Limpopo (0%), and Mpumalanga (6%). KwaZulu-Natal and Eastern Cape were doing well, on the other hand. She also wanted to understand how staff leave was regarded as an accrual.

Ms Pudane replied that leave was indeed an accrual because it was certain, and not treated as provisional. An accrual is certain.

Mr Gallocher explained the progress on completed units differed from province to province and was dependent on regional specifics. It had reported to the previous committee that resources have been pumped into various provinces. The movement was now being seen. The Northern Cape was the only province that was not moving.

Ms Mokgotho enquired why SHRA did not comply with Section 9(1) of the Regulations because that led to irregular expenditure where it awarded a social housing institution with that grant.

Mr Gallocher made it clear they did not read that section correctly. They made a mistake because they did not read it in a restrictive way, but the auditors read it in a literal way. It was not that SHRA was not aware of Regulation 9(1). It was just a matter of interpretation. He stated when they put money in a project, they have to ensure the recipient has land rights. They were satisfied when they read the Regulation because the recipient had land rights and sub-lease agreement. They read it consciously and did not ignore it.

The Chairperson remarked that the reason for working on sub-leased land in Soweto was the result of no due diligence being done, and that would have a ripple effect in SA.

Mr Tseki asked for an update on the development that was going to take place in Green Point, but the City of Cape Town disagreed with SHRA. He asked if there were any hijacked buildings across the country that were owned by SHRA.

Mr Gallocher pointed out there were 260 units that were reportedly invaded in Msunduzi (KZN). The provincial MEC has been active in this matter and has raised the matter with the local municipality. The invasion was done by military veterans who said their houses have not been built.

Mr Gallocher made the point that the City of Cape Town issue was a matter of local property economics. There were very few opportunities left in getting houses in the City Bowl. Social, economic, and social integration was what they have to achieve. Unfortunately, they needed to get consensus with the City of Cape Town.

Mr Leshabane noted it was unfair to ask SHRA to comment on the Green Point Project in Cape Town. The conversation they had with the City of Cape Town made it clear the trajectory was not sustainable. It was not acceptable to build informal housing inside the inner city because that would be allowing the inner city to decay. That conversation was still happening, and the land that would be allocated by government for housing was still available, but it still belongs to the municipality. Urban management was the responsibility of local government. It is becoming important to arrest decay in inner cities. The Department was disbursing the Urban Settlement Development Grant to all the eight metros, collectively. The Department was always taking interest in any piece of land a city was disposing of. The Department was in continual engagement with the City of Cape Town on spatial land assembly because it has properties it wants to put to better use. The City of Cape Town was communicating with the Department on how it wants to use its USDG, and there was movement towards consensus to achieve the integrated spatial development goals.

It was important to locate the work SHRA has done, especially for rental housing projects. On rent defaults, he said that tenants were always demanding ownership of the units after some time. The rental housing sector would collapse if this was not counteracted or confronted. This was not rent to buy. The matter has to be navigated carefully. SHRA was a national entity with a national operation. The grant gets invested in declared social housing restructuring zones across the country. SHRA was not a social housing institution. It was important to understand it is packaging of the project that needs to be funded. Equitable distribution was desirable, but there are capital projects. So, you go with the ones that are ready.

The Committee adopted the minutes of 17 September 2019 and the Committee Programme for the term.

The meeting was adjourned.

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