Housing Amendment Bill: briefing

NCOP Public Services

08 March 2001
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Meeting Summary

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Meeting report

PUBLIC SERVICE SELECT COMMITTEE

PUBLIC SERVICE SELECT COMMITTEE
9 March 2001
HOUSING AMENDMENT BILL: BRIEFING


Chairperson: Ms P C P Majodina

Relevant Documents:
Housing Amendment Bill [B 7 – 2001]
Housing Act [No. 107 of 1997]
Department’s clause-by-clause presentation on the Bill

SUMMARY
The Committee was briefed on the Housing Amendment Bill by the Director General of Housing, Ms Nxumalo, and her Deputy Director-General, Mr M Narsoo. They outlined the Bill, calling it "simple but with far-reaching implications". The major changes it provides for are the abolition of the South African Housing Development Board and regulatory measures to restrict the sale or alienation of state-subsidised housing.

MINUTES
All provinces were represented, with the exception of Gauteng. The Department of Housing was represented by its Director-General (DG), Ms Nxumalo, and her Deputy Director-General (DDG), Mr M Narsoo. The Chairperson called their presence "proof the Department is not taking the NCOP for a ride. "

The DG said the Amendment Bill is a simple one, but with far-reaching implications. Although it was completed last year, rationalisation and re-prioritisation delayed its passing until now.

A distributed summary of the Bill says "the Housing Amendment Bill, 2001, proposes to rectify the current inefficiencies of state institutional arrangements in the Housing Act (Act No 107 of 1997) by:
1. Abolishing the South African Housing Development Board;
2. abolishing all nine provincial housing development boards;
3. transferring the powers, duties, rights and obligations of provincial housing;
4. providing for the establishment of an advisory panel for the Minister;
5. providing for the establishment of panels to advise the MECs responsible for housing;
6. empowering the Minister to determine procurement policy in respect of housing development; and
7. putting in place regulatory measures to restrict the sale/alienation of state subsidised housing."

Ms Nxumalo took the Committee through a detailed clause by clause reading of the Bill (see attached presentation). She drew specific attention to clause 4 which, in establishing a panel of advisory experts, implicitly signals the abolition of the South African Housing Development Board. The DG said this Board had been problematic, the main problem being "non-delivery". The Board met irregularly and only took decisions on the issues the Department had worked on. Board members were recruited from the industry. This proved to have great potential for conflict of interest. Some investigations into the awarding of contracts resulted in some members recusing themselves from certain projects.

At the same time, the Department recognises its need for expert technical advice and wants to retain this function of the Board. Accordingly, the panel of clause 4 will function in an advisory, not decision-making, capacity on specific issues only and will not be permanent.

Clause 7 is the central part of the Bill. It restricts the sale of state subsidised houses for eight years after the property has been acquired. In the exceptional case that a property is to be sold within this eight year period, it must be first offered to the Provincial Housing Department, with a purchase price to be agreed on between the MEC and the beneficiary or creditor. These restrictions are in response to the problem of subsidised housing being sold after the beneficiaries have taken possession. Such sales will be blocked. Exceptions will be dealt with on a case by case basis. The Department hopes to "catch" 80 per cent of the culprits but, in reality, is anticipating unregistered sales. Occupancy will be monitored. Ms Nxumalo said the situation may become more complicated than expected and clause 7(9), which restricts creditors to the financial institutions issuing the mortgage bond, may have to be amended or deleted.

Clause 12 ensures that any business of the Provincial Housing Board now becomes the business of the MEC.

Discussion
Mr Suliman (ANC, Northern Cape) asked if the restriction on sale infringes on property rights. He asked if this is constitutional.

The DG said this is exactly what the Department was concerned about when the Bill was being drafted. The issue is if government can restrict the property rights of a certain group of people. She said if a person buys property without any subsidisation, this person can sell it or not, as the person pleases. However, when the state makes a contribution with a specific purpose for doing so, the individual’s property rights are superceded. The state’s intention in subsidising housing is to house the homeless, not to enrich others. Funds for subsidisation are provided by taxpayers and so must be protected and used for their intended purpose.

Ms Thompson (ANC, Kwa Zulu-Natal) asked when the Department would take ownership of a house and if preference would not be given to the next of kin. She also asked about houses that have already been sold.

Ms Nxumalo replied the Department will take possession when an individual sells the house to the Department in order to be exempted from the ‘eight years without selling’ clause. The Department will sell the house again to whatever qualified applicant is next on the list. No preference will be given to next of kin, although the DG emphasised this was not likely to be an issue since when a person moves, the next of kin normally accompany that person. Further when a person sells a house, it is normally not sold to the next of kin. The DG said they do not want to create a system of nepotism or "queue-jumping".

Mr Mokoena (ANC, Northern Province) asked if the replacement of the Board by the advisory panel was enough to "close the gap". He said "people are people", suggesting any available opportunities for corruption will be exploited.

Mr Narsoo answered that the Board had the power to allocate hundreds of millions of rands with no accountability and could even overrule the decisions of elected officials. The new panels will deal with policy only and not particular projects. They will have no decision-making power on projects. He agreed with Mr Mokoena that power is easy to abuse.

Ms Ntwanambi (ANC Western Cape) asked who would get the house when the owner dies. She also asked if the panel would eliminate bureaucracy within the Board.

When an owner dies, the DG replied, the normal process of inheritance will occur so the beneficiary will get the house. She commented on the current relevance of this in Kwa Zulu-Natal where so many parents have died of HIV/AIDS, leaving behind child-headed households. She wants property of the parents to be transferred to these children through inheritance before other relatives can try to take advantage of the situation, as has been the case. The principle is to protect inheritance.

Mr Mokoena asked if the movement of occupants would be regulated.

DG Nxumalo did not respond to the suggestion of regulation, but said they would begin to monitor the occupants to get an idea of what kind of movement occurs post-subsidisation. She said it is the responsibility of government to see if any trends emerge from housing subsidisation. She mentioned the problem of houses turning into shops.

Ms Swaartbooi (ANC, Kwa Zulu-Natal) asked what plans there were to correct the mistakes of the previous Board.

The DG replied there is no legal basis to enforce the legislation retrospectively. Any attempt to do so would result in contractual challenges. So the Bill can be enforced only when it becomes an Act.

Dr Nel (DA, Free State) asked what could be done to prevent the sale of houses purchased before the Bill becomes law.

Ms Nxumalo responded, "Nothing". Sales cannot be prevented. This is why she is asking that the Bill be fast-tracked.

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