DHS 2021/22 Quarter 2 Performance; SHRA policies; with Deputy Minister

Human Settlements

23 February 2022
Chairperson: Ms R Semenya (ANC)
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Meeting Summary

In a virtual meeting, the Portfolio Committee received a briefing from the Department of Human Settlements (DHS) on its second-quarter report and a briefing from the Social Housing Regulatory Authority (SHRA) on home finishes and the qualification criteria for blacklisted people seeking to access housing.

The Deputy Minister said that the second quarter was impacted by unrest and disruptions such as the pandemic and July 2021 riots. This led DHS to direct its focus on urgently delivering sustainable human settlements. The report shows an unfavourable performance for DHS; however, this only accounted for the first six months and is likely to improve when the financial year ends.

The Director-General provided performance feedback of its five programmes: Administration, Integrated Human Settlements and Development Programme, Informal Settlements Upgrading Programme, Rental and Social Housing Programme, and Affordable Housing Programme.

The area that raised the most contestation in the meeting was the Integrated Human Settlements and Development Programme, as it focused on title deed administration and allocation. The Committee expressed concern that there was a severe backlog in the issuing of title deeds and that DHS’s performance in this quarter did not inspire much hope.

For the first time, due to the pandemic disruption, DHS had recorded a 15% decrease in its performance as there were delays in verifying performance indicator information received by provinces on three aspects: title deeds, building of temporary housing structures and grant allocations that provinces, municipalities and metropolitans have not fully used. The delay from these spheres of government in providing the requested information meant DHS could not verify programme deliverables which are considered incomplete without doing so.

DHS said that beneficiary lists and title deeds continue to be a challenge due to the backlog in the deeds register and the extensive waiting periods to allocate housing. DHS is implementing provincial recovery plans to address the backlog as each province has unique challenges in managing title deeds.

The Committee raised concerns about the delay in disbursing the grant funds to upgrade informal settlements as part of the Informal Settlements Upgrading Programme. It flagged municipalities and metros could no longer access emergency funds for disasters in informal settlements because it now requires approval from Treasury. The lack of integration in policy implementation was another area of concern. It causes delays in executing service delivery and, in some instances, budgetary underspending, which should not be the case as there is an increasing need for services in informal services. There needs to be a realignment of resources to deliver social services and better coordination between DHS and its entities to adequately tackle the challenges.

DHS acknowledged that there are concurrency issues between the different spheres of government that need to be managed appropriately as they affect service delivery. The kind of correlation required is like the World Cup which had strong integrated teams.

SHRA outlined that its mandate was to regulate the low-income rental housing market. It assists potential blacklisted tenants in an inclusive nature. It ensures that framework for home finishes and overall structural design speak to space standards, typologies, environmental issues and safety. As a result, the Social Housing Norms and Standards Development document was created in a response to the technical nature of the Technical Design Specs document and included qualitative aspects such as functionality and durability.

Blacklisted people are still eligible for housing however it is at the discretion of the landlord or homeowner if they wish to provide housing to the potential tenant. Housing institutions can make an informed decision based on information provided by the Tenant Profile Network (TPN) credit bureau and interrogate the information with a potential tenant to make a final determination.

Committee members suggested a briefing or documentation on MinMec consultative decisions to keep the Committee updated on the direction the sector is taking in implementing policies. However there was some disagreement amongst committee members with some stating it would breach the separation of powers as MinMec decisions are meant to be reported to the Minister who then briefs Parliament.

Meeting report

The Chairperson welcomed the Deputy Minister, the Department of Human Settlements (DHS) and the Social Housing Regulatory Authority (SHRA) to the virtual meeting. In addition to the Department’s performance report, SHRA would present on its housing finishes policy and the qualification criteria for blacklisted people seeking housing. He welcomed two new Committee Members, Mr B Herron (GOOD) and Mr Myburgh (DA). Apologies were received from Minister who was attending a Cabinet meeting.

Deputy Minister remarks
Deputy Minister of Human Settlements, Pamela Tshwete, wished the Portfolio Committee a good year and was thankful all Members had survived COVID-19. The second quarter of 2021/22 was impacted by the July riots which negatively affected the economy and resulted in increased joblessness and widening the wealth gap. Incidents like these urged DHS to deliver sustainable Human Settlements services at speed to improve household life.

At face value, the report paints a bleak quarter for DHS however, the report accounts for half of the financial year which will improve in subsequent quarters. There was a decline in Quarter 2 however DHS is working hard to remedy this. Beneficiary lists of completed houses including title deeds continue to be a challenge. DHS has implemented focus area driven strategic recovery plans to address this challenge. These plans will be implemented differently for each province as each has unique challenges to navigate. DHS has entered four external partnerships to ensure that these areas are adequately addressed. The Minister has issued ministerial directives to unlock service delivery. These efforts may not be visible at this stage; however there will be long-term tangible results.

The Minister is hard at work to stabilise DHS, especially in its entities. All DHS entities have the necessary staffing, and stable boards have been appointed.

Department Presentation
Director-General Mbulelo Tshangana outlined the five DHS programmes that form its budgetary structure: Administration by providing leadership and support in DHS; Integrated Human Settlements Planning and Development Programme (IHSPDP), which is where DHS administers its programmes and its grants; Informal Settlements Upgrading Programme (ISUP) which is funded by the new and specialised Informal Settlement Partnership Grant (ISPG) dedicated to upgrading informal settlements; Rental and Social Housing Programme (RSHP) focused on affordable rental housing through the Consolidated Capital Grant (CCG), and Affordable Housing Programme (AHP) focused on facilitating provisions of affordable housing financing.

DHS achieved 37% of its target for Quarter 2, a 15% decrease from its first-quarter result of 57%. This is the first time DHS has underachieved in its quarterly reporting. This is not a cause for concern as the main challenge that DHS faced was the verification of performance indicators of work done by each province. The performance and audit framework binds DHS to verify these indicators and conduct provincial verification visits. If these indicators are not confirmed, it is considered incomplete and not delivered, regardless of provinces providing the information. Once the information provided by provinces is verified, the figures will change and likely be over 50%. Their verification status will be provided in the Annual Report. In the previous financial year, DHS received a qualified audit from the Auditor-General in the area of performance information which DHS wishes to correct in 2021/22.

- Programme 1: Administration, DHS aimed to achieve eight targets but had only fully achieved four targets and partially achieved four.
- Programme 2: IHSPDP, DHS sought to achieve 19 targets but only fully achieved six, partially achieved five and eight were not achieved.
- Programme 3: ISUP, only two out of nine were completed and two partially achieved.
- Programme 4: RSHP, three out of five targets were achieved but not the remaining two. - Programme 5: AHP, achieved two out of five targets with two partially and one unachieved.
DHS fully achieved 17 targets, partially completed 13 targets and underachieved on 16 targets.

Ms Nelly Letsholonyane, Deputy Director-General: Corporate Services, reporting on Programme 1: Administration (see document).

Mr Neville Chainee (Deputy-Director General (DDG): Human Settlements, Planning and Strategy) reporting on Programme 2: Integrated Human Settlements Planning and Development (IHSPD), said that DHS was preparing its Priority Development Areas (PDA) Investment and Implementation plan for the 136 PDAs to address spatial disintegration and lack of coordination in government expenditure in developmental areas.

DHS had achieved none of its sixteen integrated implementation programmes. DHS is awaiting provincial and municipal data, which was outstanding mainly because of the lead up to the Local Government Election. Planned municipal sittings did not occur, and situational analysis reports were compiled but were not approved and signed off. There has also been resistance from provinces and municipalities to provide funding for the Municipal Spatial Framework (MSF) that align with PDAs, Security Technology Integrated Programme (STIP) and other planning instruments. DHS will achieve all 16 integrated implementation programmes by the end of the financial year.

DHS with the Housing Development Agency (HDA) aimed to have 10% of land acquired within the PDAs rezoned and developed. However, 0% was achieved. There are now vigorous monitoring plans to attain its target. Part of the reason this target was unachieved was due to the HDA procurement process not delivering within stipulated timeframes.

The first draft of the 2022/23 National Human Settlements Development Plan was achieved.
Six provinces, totalling 23 municipalities, have implemented the Programme for Revitalisation of Distressed Mining Communities. DHS provides for planning, coordination, executing and monitoring the programme and ensuring that the funding given is correctly managed.

There is a backlog of issuing title deeds that need urgent addressing. The timeframe for issuing title deeds is not satisfactory. There is a backlog of verifying title deed information given to DHS by provinces due to the lack of evidence being provided.

No Breaking New Ground (BNG) houses or serviced sites per the Human Settlements Development Grant (HSDG) and the Urban Settlement Development Grant (USDG) have been delivered as the information provided by provinces is awaiting verification. Verifying these figures will be accompanied by a verification certificate once the process is completed. The Committee will be provided with an audit report that will outline the number of houses and sites constructed to determine if the provinces have provided accurate data.

Thirty-five of the 50 National Priority projects were partially implemented due to capacity issues which are not allowing DHS to complete some projects fully. There have also been governance challenges within the HDA, which meant that Provincial Steering Committee meetings and site visits were not held for all projects during the quarter.

Forty per cent of the budget allocated to entities owned by designated groups was not monitored. Provinces not observed under the HSDG were Eastern Cape and Limpopo for women-owned entities and Gauteng, North West, Eastern Cape and Limpopo concerning youth-owned entities. Under the USDG, Buffalo City, Ekurhuleni, City of Joburg, City of Tshwane and City of Cape Town were not monitored for women and youth-owned entities. The only monitored municipalities were Nelson Mandela Bay, Mangaung and Ethekwini. There was no monitoring or allocation for persons with disabilities.

Dr Zoleka Sokopo (Chief Director: Human Settlements Strategy), reporting on the Upgrading of Informal Settlement Programme (UISP), noted that the Socio-Economic Impact Assessment System (SEIAS) Report on the Policy on Social Facilitation has not yet been developed. Draft reports have been produced; however, this process has not yet concluded.

Forty percent of the budget allocated to entities owned by designated groups was not monitored. No disaggregated data on budget allocation for designated groups were provided as only an overall figure was provided. The other challenge that arose was that the programme has been in existence since 2009. Still, the Informal Settlement Programme Grant (ISPG) was only introduced in Quarter 2 of 2021/22. As such, there are challenges in planning projects and the Annual Performance Plan (APP) and its targets.

None of the projects under the Upgrading of Informal Settlement Programme (UISP) was monitored. No expenditure incurred as the grant was only transferred in July 2021. Monitoring and evaluation of projects have now taken place by the monitoring and finance team. The project implementation support team has a catalogue of informal settlements in South Africa as part of its project plans and 329 informal settlements in Phrase 3 of the UISP are being monitored.

0% implementation of the UISP Human Settlements Capacity Assembly Programme was achieved. The conclusion of the facilitation process was delayed due to the unavailability of nominated Bid Evaluation Committee members to evaluate 153 bids received, which will only be made possible in 2022/23.
Ms Nonhlanhla Buthelezi, Acting Deputy-Director General: Human Settlements Delivery Frameworks, reporting on the Rental and Social Housing Programme (RSHP) and the Affordable Housing Programme (AHP), said that the RSHP is between DHS, SHRA and CRU programme, which is a partnership with provinces. The 40% budget allocation to designated groups under this programme could not be monitored as SHRA had not given DHS its disaggregated data.

100% of projects under the RSHP, through SHRA and CRU, have been monitored.

On the AHP, the literature review of the evaluation study into the functionality and effectiveness of the Rental Housing Tribunal was conducted, and the report has been concluded.

The draft document on the Affordable Housing policy, which will be implemented by the National Housing Finance Corporation (NHFC), has been submitted; however proof of Phase 1 of the SEIAS and the policy framework has not yet been submitted as DHS awaits feedback from the Department of Planning, Monitoring and Evaluation (DPME) in the Presidency. Once feedback is received, and the policy framework is completed, DPME will issue a SEIAS certificate.

On title deeds, the main challenge is having mechanisms for verifying submitted evidence. DHS with the Department of Land Reform and Rural Development is creating a system that will verify the information. DHS is also in the process of buying deeds stamps as proof of evidence of deeds given. It will also be used as a general verification tool of project information such as the BNG houses and projects where provinces can share a portfolio of evidence of completed and inspected projects. At this stage, email addresses have been created of where provinces are meant to submit this information and instruction notes have been issued on what is required from the Auditor-General on what the evidence of work done should consist of.

Ms Lucy Bele, Acting CFO, said that as of 30 September 2021, DHS budget expenditure was over R 31bn. The two programmes that took the bulk of the budget were Integrated Human Settlements Planning and Development which includes USDG, HSDG, Informal Settlements, Informal Settlement Grant and Emergency Housing Grant. The RSHP budget incorporates SHRA, its investment portfolio and the CCG. AFP has the Finance Linked Individual Subsidy Programme (FLISP) support and capital budget. AHP had the most spend at 47% of the budget.

National Treasury has mandated departments to make savings on Goods and Services due to the impact of Covid-19. DHS has limited its travel and specific events to make savings for 2021/22.

The estimated compensation of employees has not yet been reflected because increases are paid in the first and second quarter; however, this year, the increases were effected late. The Quarter 3 report will detail performance awards and salary increases.

On grants and transfers, only 1% of the grants to provinces were spent on the Provincial Emergency Housing Grant because it is a schedule seven grant released upon an application declaring a disaster and the need for housing emergency. Only one application has been received and subsequently approved.

The relatively low percentage of grants sent to municipalities is because the first quarter for municipalities is 1 July – 30 September. Grants are sent in three tranches. Thus by 30 September 2021, only one tranche was transferred. There were no applications for the Municipal Emergency Housing Grant. There was also a decline in the spending of the DHS Scholarship programme due to more undergraduate students being funded by NSFAS.

The high percentage on the Household line item is due to DHS paying leave gratuity to staff who have either resigned, retired, or passed away and are entitled to their gratuity. There has been an increase in this line item due to more staff falling into this category.

DHS administers six grants and three of them are conditional grants:
• HSDG: There was much underspending. Gauteng, North West and Limpopo had spending below 40%. They have been requested to submit recovery plans to see if they can spend the allocations and see what support is needed to do so. If not, funds are relocated to provinces that need additional funding support.

• ISUPG funds were transferred late since it is a new grant. The Division of the Revenue Act states that funds cannot be transferred until the Bill pertaining to the grant is enacted which was done on 28 June 2021 hence the first tranche was sent in July 2021 which explains why provinces were struggling to continue the programme due to a lack of funds. The Northern Cape, however, was able to overcome this challenge because they had an agreement with their Provincial Treasury to spend on this programme and claim back from the grant. Provinces that are struggling to spend will be requested to provide recovery plans. This will be reported in the Quarter 3 report.

• USDG is transferred to metropolitans and municipalities. 30 September is the end of their Quarter 1 which explains why spending and grant transfer were low as most municipalities were finalising their financial statements for 2020/21. A way forward on interventions to spend this grant will be presented in the Quarter 3 report. The highest-spending service item across all metros is on water/sanitation/sewer services followed by human settlements, roads and stormwater. There is expenditure on electricity-related programmes and socio-economic amenities. This highlights that informal settlement households are in dire need of water, sanitation and sewer services followed by human settlements related programmes.

For the other grants including the Provincial and Municipal Emergency Housing Grants, see document.

Social Housing Regulatory Authority (SHRA) Presentation
Ms Busisiwe Nzo, SHRA Board Chairperson, said that SHRA is mandated to regulate low-income markets. It aims to ensure that its mandate for both home finishes and for the criteria of blacklisted people is inclusive and considers long-term goals to ensure effectiveness and sustainability.

Mr Dewalt Koekemoer, Acting CEO: SHRA, said that good structural designs are important for a country like South Africa where spatial transformation is linked to quality and well-located housing that is healthy, safe and secure. Housing structures must not only meet building norms and standards and material specifications but also space standards, typologies and environmental issues.

In 2012, the Technical Design Specs document was formulated and spoke to unit sizes, legislative requirements, health and safety, substructure and superstructure requirements. However, the document was too technical and did not address qualitative considerations. As such the Social Housing Norms and Standards Development document was developed in partnership with DHS and principles for developmental housing were informed by Rental Housing Regulations. Key aspects of the document focused on functionality, accessibility, adaptability, durability and sufficient resource space. The investment government makes in housing projects is a long-term approach and durability of finishes is critical. The cost of granite is expensive, but it does not need to be replaced every two years thus it is cost-efficient.

The policy for blacklisted people follows the Rental Housing Act. In practice, SHRA takes an inclusive approach to screen applicants. Most potential tenants have experienced compromised financial situations due to Covid-19. Institutions check through the TPN which develops a profile of a potential tenant which is used to inform the SHRA final decision. While the information is used to form a final decision, it must get an understanding of what process they have followed to settle their debt. It is important to note that blacklisted potential tenants qualify for rentals or homeownership despite the compromised debt.

Mr B Herron (GOOD) asked what are the objectives, products and implementation mechanisms of the Affordable Housing Policy because accessing and implementing affordable housing remains a key challenge for the growing housing gap.

What is the status of the Municipal and Provincial Emergency Housing Grant which is tasked with providing emergency assistance due to fires and natural disasters in informal housing structures? Some municipalities such as the City of Cape Town have released a notice that they will not be able to assist applicants for the Grant due to a lack of budget allocation from DHS. Is this true and if so, why is this the case and does the Grant indeed cover informal settlement emergencies? Housing starter kits are not a permanent solution for informal settlements when a disaster emerges which is why the emergency grants should be accessible to provide quality temporary housing relief until such time a permanent solution is reached. In some instances, informal areas that do receive assistance like the Knysna informal settlement which is slightly better than the current starter kits, are being told that the assistance will be the last form of assistance which is not a permanent or viable solution either. There should be adequate information given to the public about the grant so that municipalities can correctly assist citizens and not tell citizens they are unable to assist due to a lack of government funding – which may not be true.

Why is there a delay in the disbursement of the Informal Settlement Upgrade Partnership Grant? The establishment of the Grant as a separate funding scheme to improve informal settlements should not be the premise for underperformance in this area as municipalities prior to the establishment of the grant, have identified and started working on various programmes aimed at upgrading informal settlements.

What are the policy positions on norms and standards in technical design specifications? Do they consider intensification and densification on well-located land of higher value which will require a change in funding model so that social housing companies can develop higher density/high rise social housing projects?

Ms E Powell (DA) asked why the title deed target is not met, six months into 2021/22 considering the target of 1.19 million title deeds for the five-year term until 2024. Every year the Committee is told that there is a turnaround plan but this has not yet been presented to the Committee. The Title Deeds Restoration Grant was abolished and redirected to the Informal Settlements Upgrade Partnership Grants and provinces will administer their title deed claims process but there is still no progress. DHS has yet to deliver a comprehensive turnaround plan to the Committee to address the lack of progress. When will DHS be presenting such a plan?

The DG mentioned that the KZN title deed restoration model was the best in the country. Could he provide details on the innovations KZN is using that can also be used in other provinces?

Can the DG also provide an update on how many provinces use electronic systems to register title deeds in three months and provincial breakdown on the number of title deeds given, pre and post 1994, post-2004 and post 2014-present?

The planned priority development areas (PDAs) have also been an area of concern as only seven of the 94 PDAs planned for the five-year term have been achieved and there is still the outstanding matter of rezoning 19 900 hectares of land. What is causing the delay in achieving targets considering that the seven achieved PDAs are from 2020/21?

Why is the Bid Evaluation Committee not able to evaluate the 153 bids considering that it is six months into 2020/21?

During a site visit to Masiphumelele where over 100 informal structures were burnt by fires, the MEC of Human Settlements in the Western Cape said that to access emergency funds to rebuild disaster-struck informal areas, it must follow an increasingly bureaucratic process which previously was not the case. Municipalities through their designated MMC apply for the funds which are then referred to the MEC who must seek final approval from the DHS DG. This process can take up to three months and based on Ms Bele’s presentation, it requires Treasury’s approval to disburse the funds. This process is unsustainable. Previously municipalities could use their discretion in using emergency funds in providing starter kits to help people in informal settlements rebuild their housing structures within 24 hours in the aftermath.

A fire at Kennedy Road Informal Settlement in Dodoma in KZN late last year destroyed over 480 structures and displaced 4000 people. The Dodoma Housing complex in front of the informal settlement, which is only building 95 flats, has not been completed. The fire at Jika Joe in Pietermaritzburg has residents angry with the provincial government for lack of assistance during trying times. Can the DG provide clarity on the process as it should be at the discretion of the municipalities who are the first to quickly respond? How long does Treasury take in disbursing emergency funds?

The DHS priority must be ensuring that people affected by disasters should be afforded the dignity of housing and a quick response to ensuring they can start to rebuild their lives, considering that the DG had told the Committee during a visit to Gauteng that informal settlements are here to stay. As such, it requires mechanisms that can support those living in those areas.

She noted in the presentation an error in percentage spent of transfer funds in the Western Cape. This needs to be rectified to correctly illustrate the percentages.

Mr A Tseki (ANC) said that DHS regularly refers to improving policy positions on fraud and corruption. How often does DHS review its policy considering that policy reviews should generally occur every 3-5 years?

Can DHS provide details of at least 10 corruption cases investigated and their outcomes? The public and whistleblowers raise corruption concerns and there needed to be regular updates on how DHS is investigating corruption matters brought before it.

In a Committee oversight visit to Ekurhuleni, it was reported that there are clashes between people who have paid to receive housing and those who have been told that they have been allocated housing by the government. Similarly in Savannah, it was reported that a person by the name of Bumba had been manipulating the housing urgency which forces people to pay him for housing when that should not be the case. What is DHS actively doing to investigate corruption and show its commitment to fighting corruption?

Adv M Masutha (ANC) said that there is no coordination between planning, budgeting, and executing programmes that DHS wishes to implement. How is DHS ensuring that there is clear integration between these aspects so it improves service delivery in Human Settlements? There cannot be underspending in emergency funding for emergency circumstances considering that there is an increasing need to address emergencies arising in informal settlements. It also raises the question how MinMec can assist DHS to unlock spending for emergencies. DHS needs to tell the Committee if there is an implementation breakdown of these entities and what can be done in addressing this breakdown as it affects service delivery to the public.

DHS, with its entities, need to work towards an integrated legislative and policy framework to realign the use of resources to address critical issues such as housing and delivery of other social services that should support Human Settlements such as schools and job opportunities. It seems that each entity is working in silos thus the inability to tackle challenges adequately. There have been investments in building state of the art housing units which have been unoccupied for years due to the lack of bulk services to support these developments. How is this the case? This leads to invasions as people are desperate for housing to occupy them without bulk services.

The DG should state what DHS and relevant sectors are going to do jointly to rectify the disjuncture between them. There seems to be an acknowledgement by DHS of a disjuncture however there is a lack of concrete plans. Perhaps a workshop will be an appropriate platform where DHS will take the Committee into its confidence and demonstrate its plans.

The areas in which DHS is building houses are a concern as they are built far away from economic hubs that can provide job creation, as apartheid spatial planning sought to achieve. The areas where DHS is building housing, mostly small towns, used to be supported by industries such as mining but now is no longer the case due to the rapidly changing nature of the economy. This creates a great imbalance compared to those living in areas near economic hubs.

There is a lack of coordinating and implementing micro policies and strategies by all spheres of government. There needs to be a thorough implementation of these policies together which do not purely depend on matters arising in the country such as the Section 25 land reform led by the Deputy President. The recent SONA debates raised the question if South Africa is truly a developmental state – a central policy statement for decades. What does such a state mean and look like? DHS should be a key component in creating a developmental state. DHS and government are not able to articulate how it is implementing their policy objectives due to a lack of coordination and integration.

A Committee member should address the Cabinet as all departments are present and they can commit to joint planning, budgeting and execution so the concerns raised by the Committee can be sufficiently addressed and not be merely acknowledged with no resolve.

There is the problem of endless litigation which take a long time to resolve thus stalling service delivery. Are there preventative measures in place to limit litigation and ensure resources are used to actualize service delivery?

The Chairperson raised the concern that there is a 19% vacancy rate in DHS and welcomed its invention in addressing this. She hoped that vacancies are not part of the reason DHS is underperforming this quarter. While DHS needs information from provinces to verify the housing number, DHS needs to improve its quarterly performance as the current rate of 37% is not satisfactory and needs to be improved by the end of the financial year.

The expenditure performance is welcomed however there are provinces that are in the red. While these provinces should be supported in their expenditure performance, they should not lose their finances to other provinces as it derails their ability to execute their tasks. DHS must ensure that the right people are used to ensure projects are implemented and finances are correctly managed.

The DG should speak to Auditor-General South Africa (AGSA) to receive provincial audits so that when DHS is compiling its reports for the national audit it should not find itself with a qualified audit due to figures that DHS may not have from the provinces. There needs to be correlation between DHS and the provinces.

The Chairperson disagreed with Ms Powell on the full discretion municipalities previously had in utilizing emergency grants. They cannot have complete discretion as there needs to be adequate evaluation to ensure funds are correctly disbursed based on the assessments. What may happen is that funds disbursed will be a regular occurrence and that is not sustainable. There needs to be a permanent solution to addressing emergencies that arise from provinces and municipalities

SHRA should engage with provincial departments as the norm and standards are being interpreted differently per province. In Gauteng, while the housing units were fine, their finishing was of concern to Committee members which force tenants to pay for additional services to ensure adequate finishing. In some provinces, there were no stove structures which is a necessity for a housing unit. However, provincial departments and their developers argue that SHRA policy make no mention of such necessities.

DHS response
On the PDAs, Mr Chainee said that the target of 19 430 hectares of land had been acquired, of which 4615 hectares fall within the PDAs which must be rezoned. To date, the HDA, which is responsible for rezoning as it acquired the land and is within its asset register, has undertaken to rezone 4227 hectares. Part of this amount falls within the PDAs, and part of it does not. The DDG will report back to the committee for with a definitive amount. Most of this land acquired was state land from the Department of Rural Development and Land Reform, Department of Agriculture and Department of Public Works through the HDA and provincial and municipal requests. DHS intention is to have the 19 430 hectares rezoned. This will be reflected in the HDA and DHS APP.

On the priority development plan, 136 PDAs have been declared, each with its implementation plan. Last year, 14 implementation plans were concluded. DHS had initially wanted to complete 19 plans; however, five projects had to be reconsidered as municipalities had changed their spatial framework. For 2021/22, 47 implementation plans were targeted, with 36 concluded. As committed by HDA, the remaining eleven implementation plans will be finalised by 31 March 2022.

The report lists that seven PDAs were completed in 2020/21. However, however, in the audit report that DHS compiled, DHS has revised the figure, which came to 14 completed PDAs. The reason for this is that in the Northern Cape, 6 PDAs were completed; however, they were consolidated into one development programme; however, the audit report had requested that DHS split the consolidated programme into seven PDAs which is now a total of 14 complete PDAs. DHS will provide a breakdown of the PDAs and the rezoning efforts in the following quarterly report. The 0% listed in the report for rezoning is correct; however, HDA has provided additional information where they have rezoned 559 hectares of land. DHS has asked that the HDA revise this figure to clarify what is and what is not within the PDA.

Ms Buthelezi replied that the title deeds strategic plan will be available in Quarter 1 of 2022/23. The challenge with finalising the plan has been the pre-1994 title deeds. This is because some beneficiaries are deceased beneficiaries, and some townships were not proclaimed during that time. There is also an exchange of title deed information from the National Housing Board and Provincial Housing Boards which should have been delegated to provincial structures. Post-1994, work is being done in collaboration with Treasury to establish systems that can verify information already available in the Deeds Office and confirm historical information. The Western Cape has been leading this process that is a result of work DHS is doing in collaboration with provinces where the aim is to address the existing tendency that housing structures are built without the title deed process having been followed. DHS has since advised provinces that they should construct houses simultaneously with beneficiary administration, especially in townships that have been proclaimed. DHS is hiring additional capacity to assist national and provincial governments in addressing title deeds and completing outstanding tasks.

The primary focus of the Affordable Housing Policy is to target people who earn between R3501 – R22 000 to improve the delivery of affordable housing in SA. The policy acknowledges that other sectors play a role in delivering affordable housing. The government will provide subsidies however there are other sectors like mining that provide a housing allowance to its employees. DHS is working on a micro policy on affordable housing which will provide beneficiaries various options to tap into to access housing. One key component is to provide land which is serviced and other aspects speak to employed beneficiaries where they should be able to tap into housing allowances and approach FLISP which has been discussed and approved at MinMec. This helps beneficiaries to buy a home and use other options to do so such as pensions. Beneficiaries should be provided multiple avenues to access affordable housing

DHS is working on an integrated policy framework. DHS has drafted a chapter on the micro policy on land, micro policy on informal settlements, micro policy on renting and finalising the Affordable Housing Policy. Once the policy is finalised, there will be further consultations with sector stakeholders in consolidating these policies to provide comprehensive interventions.

DHS is seeking information from provinces on which projects have been blocked due to a lack of bulk infrastructure and projects are blocked by legal, contractual and community disputes. DHS will provide a full report at a later stage on these projects.

Dr Sokopo replied that the informal settlements programmes have indeed been in existence for a while. However what has been found is that the lens through which the programme was viewed through a housing lens and not an informal settlement lens. Now that there is a grant, it will help to streamline processes so that the programme as it was envisioned can be implemented throughout the country with provinces and municipalities being instructed to carry out implementation plans in the phases they are currently working on. Previously, the reporting of the programme was under the Human Settlements Development Grant (HSDG). However it will now be reported separately and account for key informal settlement priorities. The first is the proclamation of townships and greenfields so that it does not add to the current backlog of issuing title deeds and aids in upgrading infrastructure in informal structures. The second is the prioritisation of bulk services such as water and sanitation, transport and ICT. There were pockets of success under the HSDG however DHS is focusing its efforts on these two priorities to ensure further success as approved in 2009.

On emergency housing, there is an increase in the number of disaster incidents. As such DHS is consulting with partners in expediting its emergency response so that repairs can commence as swiftly as possible. Provinces and municipalities will also be empowered to adequately and immediately respond to these incidents as and when they arise. This does not take away the application process for emergency housing. DHS seeks to use available resources such as the HSDG to deal with its responses.

Ms Bele replied that DHS has a framework that guides the Emergency Funding Grant and when and how it is disbursed. The purpose of the grant was to help with temporary housing for low-income households affected by disasters and if there is a housing emergency. DHS disburses the funds on the application and agreement of a mayor stating that their municipality has been affected by a disaster. There is no need to wait for the COGTA Minister to declare a disaster for the funds to be disbursed. Once an application has been received, it is sent to National Treasury to disburse the funds while at the same time informing the Disaster Management Centre – to avoid double-dipping when it comes to disasters. The Minister has instructed department officials to have a quick turnaround time to respond to grant applications which have been confined to five working days.

Normal procurement procedures as per the PFMA and MFMA are revoked when an emergency is declared as emergency procurement procedures are invoked. This revoking of normal PFMA and MFMA procedures in the case of disaster emergencies has been agreed to.

The challenge that DHS faces is that when an application is received and approved and funds are disbursed but then provinces and municipalities send a request to DHS to change the intention for the use of the funds. Such requests are turned down as they go outside the criteria of what the funds were meant to be used for – hence a delay in completing designated projects. An example of this is that the funds are meant to repair or erect temporary structures however DHS will get a request to erect permanent structures which are not in the scope of the grant. The Division of the Revenue Act does not allow funds to be used for other purposes that have not been applied for. As such, transferred funds end up being returned to DHS and Treasury.

The DG acknowledged that there are structural challenges in the sector and appreciated the suggested practical steps DHS could implement. The standard rule in any housing project is it should not commence without procuring bulk services. Megaprojects such as the one in the West Rand in Gauteng should not have commenced as bulk services were not finalised. Municipalities should not have any excuse for not providing bulk services as a sizeable portion of the USDG is dedicated to bulk infrastructure. There are no major challenges in metros for bulk services even though they have funding requirements which they generally go to the capital markets to raise funds for.

There are concurrency and intergovernmental challenges between national, provincial and local governments which have not been properly managed. The last time there was a strong correlation between these spheres of government, though at a cost, was during the 2010 World Cup due to the creation of local organising committees which provided project governance support to the infrastructure build. This sort of correlation needs to be reinvigorated along with capable people who can aid DHS and other departments in delivering their mandates, considering that South Africa has a complex set of issues that it requires addressing.

There are coordination challenges that need to be addressed. The role of national government is to consolidate policy for the country. The Minister within six months of being in the portfolio has managed to amend the FLISP which is usually referred to as the Help Me Buy A House capital subsidy which the Minister had approved as a policy as part of DHS and was presented before MinMec. It helps people in lower-earning capacities or who are highly in debt thus not creditworthy to afford to get a house so that they will be able to trade in the capital market at a later stage.

DHS forms part of the Inter-Ministerial Committee on Land Reform chaired by the Deputy President. As a result of its participation, the Minister and Minister of Public Works have agreed that 14 000 hectares of Public Works land will be transferred to the DHS. As a result of this, it has helped DHS with upgrading informal settlements such as the upgrading of the Msholozi Informal Settlement in Mpumalanga. Cabinet has passed a resolution that land owned by Public Works that is feasible for Human Settlements, should be transferred to DHS. The two ministers met late last year to operationalise Cabinet’s decision. DHS is open to having a Committee workshop to discuss DHS policy framework which the Minister will be happy to be a part of.

There is a challenge with bulk infrastructure financing and the Minister together with the Minister of Finance have agreed that in non-metro areas where this is a challenge, provinces and municipalities who are accredited should use 30% of HSDG for bulk infrastructure. Treasury has agreed and this will form part of the DHS grant framework to deliver bulk infrastructure before building top structures.

On Masiphumelele, it would seem the only beneficiaries of Human Settlements services are those who deliver the fire kits and not the residents who are meant to benefit from emergency resources. Every year there is a fire in Masiphumelele and fire kits are continually delivered. However in areas like Knysna which also had fires, it had state of the art temporary structures built which poses a challenge as beneficiaries from the same geographical area are being treated differently. There has to be a standardisation of temporary structures. Post-fire starter kits are mostly zinc and pole which is not feasible for human living as zinc attracts extreme heat in summer and extreme cold in winter, especially in the Western Cape which can have very low and high temperatures.

The DG does not support the use of housing starter kits and calls for a material that has better thermal control that is able to adjust to temperatures. The same applies to Imizamo Yethu which is also affected by fires. They require better temporary structures. The focus should be on providing permanent solutions to the housing challenges and not fire kits.

DHS, led by the Minister and accompanied by the Mayor of Cape Town and Human Settlements Member of the Mayoral Council (MMC), had visited Masiphumelele and other informal settlements which they have identified as areas where work needs to be done. R71 million was earmarked to Masiphumelele in the last financial year. However that was lost due to financial constraints which the City could have used to address Masiphumelele’s challenges.

The Emergency Housing Programme is still part of the housing code and does not prevent the City of Cape Town or any municipality from forming a panel of service providers in providing fire kits. It is at the discretion of the City whether to provide these kits as other provinces and municipalities make use of the programme to make available various forms of temporary housing. DHS however does not encourage starter kits due to their unsustainable nature. However it is the city that will have the final say on kits being distributed. The Knysna arrangement was meant to be a temporary option however if the province decided to turn the temporary structures into permanent ones, it will be at its discretion.

DHS is not absent in implementing its mandate. It is about ensuring that it does what is expected in the planning and delivery of services. An extensive conversation is needed to discuss how best to deliver emergency housing and emergency grant spending. There needs to be a broad consensus on what projects need to be done as during the World Cup and proceed to ensure that those projects commence and are concluded, paying the developers tasked with the projects. Provinces and municipalities should create panels that ensure smooth coordination of these processes and ensure that projects are completed to expected standards.

DHS does have a challenge with title deeds. These challenges vary from beneficiaries who are nowhere to be found, uncertainty about whom to give the title deed to and township registers that have not been opened. There have also been areas owned by government departments, such as Hawston near Hermanus, which was owned by the Department of Public Works with no subdivisions or planning. To do retrofitting, such as counting pipes and measuring the size of the pipes, will be a tall order. Some title deeds that DHS is struggling with are developments done without opening townships. As such, retrofitting and beneficiary administration becomes a challenge. The DG would be open to a Committee workshop to go through its detailed plan to address these challenges and highlight work done thus far.

The best title deeds restoration programme is KZN, as they have managed to get a suitable model to deal with title deed challenges, even though the numbers are not as high as DHS would hope. Eastern Cape and North West are experiencing challenges for which DHS is providing support to address. DHS is confident it will resolve the challenges presented to the Committee and it is open to having a workshop on title deeds.

It is not all doom and gloom at DHS and in the sector. Quarter 2 reporting may be unsatisfactory; however, DHS has had successes where it has delivered human settlements, for example, the Durban North project. DHS was initially criticised for building homes in the sugar cane areas; however, the human settlement including the road interchange has catalysed the area. DHS is working on developmental and spatial challenges in Cosmo City due to overcrowding. However, it is something DHS is dedicated to addressing – while at the same time highlighting its successes.

There have been governance challenges with DHS agencies, such as HDA which previously had an interim board, but the Minister has now appointed a permanent board. Similarly, SHRA had an interim board for three years. However, the Minister has appointed a permanent board. The NHBRC has appointed a permanent board and has grown the warranty fund to over R8bn. DHS has stabilised its entities at the governance level with advertisements for CEO posts. Interviews for the HDA CEO have taken place and the interviews for the SHRA CEO will commence at a later stage. The Quarter 3 report will include an update on the DHS entities and their progress.

The Deputy Minister agreed with the Chairperson and the DG on Masiphumelele. Some residents have houses that they sell or rent to foreigners and then the residents register onto the informal settlement system to receive housing assistance. There needs to be a permanent solution to this, especially on starter kits. DHS is working with the City of Cape Town, MEC Simmers, Councillor Malusi Booi to find a permanent solution as starter packs are not feasible. The Western Cape has since started building better temporary housing structures.

Informal settlements are a challenge not only in Masiphumelele in the Western Cape but also throughout the country and require permanent and lasting solutions that can bring dignity to South Africans. The concern raised about the selling and renting of houses in Masiphumelele happens in other parts of the country and needs to be addressed

The Deputy Minister thanked the Committee and her DHS and SHRA team. The concerns raised by the Committee have been noted, and DHS will come back with better figures in the next quarter.

Revised Committee Programme
The Chairperson said that the committee calendar had minor changes which included moving the proposed workshop on the Housing Consumer Protection Bill to 9 March 2022 because approval of public hearings for the Bill came late, which did not accommodate government informing and educating the public about the Bill to avoid people saying they had not been consulted during public hearings. The AG will appear on 16 March 2022. The oversight visit of the Committee to the Western Cape has also been shifted to accommodate the programme of Parliament.

Ms Powell noted that the AG’s appearance before the committee was about its first special audit report on DHS Covid-19 financial management, which was released in June 2020 and dealt with by the Committee. Is this meeting a follow up on the DHS remedial actions on the AG’s findings?
Provincial and municipal annual reports were consolidated in October 2021; however, the Committee has not received a briefing on these reports, particularly on USDG and HSDG expenditure. Can the Chairperson indicate when the Committee will receive these reports as a briefing on those reports may soon become irrelevant as the financial year progresses?

MinMec has recently approved recommended changes to housing policies in South Africa, such as raising the threshold in social housing-qualifying criteria and quantum increases that will benefit the construction sector in aligning to the CPI. The Committee tends to receive information after the fact on significant matters that have happened in the country, which impacts the Committee oversight role and hinders the ability of MPs to answer questions arising from our constituents. Is it possible for MinMec to brief the Committee on its outcomes or to circulate a MinMec report after it meets so that committee members can timeously communicate to constituents on decisions being considered by the Minister and MECs?

The Chairperson replied that the AG’s appearance dealt with the follow-up Covid-19 special audit report that the AG released in consolidating the recommendations previously reported on, which was also discussed by the Committee. The calendar will reflect this change.

The request for a briefing on the provincial and municipal annual reports can only occur once committee members are available from other committees as their involvement is required. Parliament has usually allocated such briefings to Wednesdays; however, this must factor members’ availability. Chairpersons have been discouraged from requesting meetings on other days as Members must oversee their other portfolios. The Committee had asked if meetings could take place on Fridays; however the Chief Whip’s Forum expressed concern that Members are not able to attend their committees because they are requested to sit in other committees; hence the decision, through the Chair of Chairs, was to decline this request.

The Committee had previously agreed that it does not always get quarterly reports for DHS entities; however, DHS was responsible for ensuring that it played its oversight role in those entities and reported back to Parliament accordingly. Should the Committee have a particular matter that needs to be addressed with an entity, the Committee will schedule a meeting. The same approach is followed when it interacts with provinces. This had already happened when the Committee asked Gauteng to submit its Human Settlements plans for its oversight visit, and same will be asked when the Committee does the Western Cape oversight visit.

Some Chairpersons from the previous Parliament wanted to attend MinMec proceedings; however, this was not encouraged to respect the separation of powers and independence between the different arms of government, particularly Parliament and the Executive. This, however, does not stop the Committee from requesting information from MinMec should there be a need for clarification on its pronouncements about policy positions made by DHS. This, however, should be a last resort as MinMec is accountable to the Department, and it is the responsibility of DHS to provide updates to the Committee.

Ms Powell indicated that oversight of provinces and entities is the responsibility of the Committee and not DHS. She would write to the Chairperson quoting the applicable legislation to highlight this. She asked if the Chairperson can write to MinMec to request briefs, either in writing or during committee meetings about pertinent policy decisions after each MinMec decision rather than on an ad hoc basis as it means the Committee cannot ask questions on matters that will impact DHS.

Mr Tseki said that decisions taken by MinMec must be dealt with by the Minister who accounts to Parliament. There is no need to request information from MinMec as that will violate the separation of powers between Parliament and the Executive. Parliament’s role is to formulate legislation and oversight of government departments, whereas the executive is responsible for implementing legislation and policies.

The Chairperson will write to the Committee should a need arise for the calendar to be revised, especially if there are important events in the country that require committee oversight. He proposed to adopt the updated programme.

The Chairperson said that there is nothing wrong with being briefed on a policy decision. The decision however does not rest squarely with MinMec as it intrudes on the role of the Minister in making such pronouncements. The Committee has oversight of DHS where policy decisions must be explained before the Committee. If DHS changes its strategic plans and policy positions, it must account before Parliament to explain such changes. MinMec engages on the matter before the Minister appears before Cabinet for it to determine whether to approve the MinMec suggestion; hence becoming a Cabinet decision and not a standalone decision by supporting agencies. It is through the Minister and Cabinet directive that the Committee and Parliament will know about approved key proclamations.

Ms Powell said that MinMec has pronounced policy positions but the Committee has not been informed. Most recently, three important MinMec positions have been sent to Cabinet for noting and not approval. For the past two years, these decisions have consistently not come to the Committee for noting. As such the Committee needs always to know when decisions are being made, which currently has not been the case.

The Chairperson replied that in the future, policy proclamation and changes must be reported to the Committee; however, that will be through DHS and not MinMec as that would be an overreach of roles and foil the separation of powers in government.

Adv Masutha said that MinMec is not a constitutional body, whereas Cabinet is. Currently, no framework governs MinMec, and while there are matters that arise from MinMec, it still requires Cabinet approval. The Minister should alert the Committee of policy directives in which she uses her discretion in implementing, provided these directives do not require Cabinet approval.

The Chairperson agreed that MinMec is an inter-governmental forum aimed at interaction and facilitating efforts between the Minister and provincial MECs. Decisions made at MinMec still require Cabinet approval. The Minister should continually provide policy updates to the Committee so the Committee can track developments made in DHS and its projects.

After these concerns were raised, the Chairperson again noted the changes to the calendar.

The Committee adopted the revised Committee Programme

The Chairperson thanked everyone and the meeting ended.

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