Housing Development Agency Bill: workshop

Meeting report

Opening Remarks by the Director-General of the Department of Housing (DoH)
Mr Itumeleng Kotsoane (Director-General, DoH) explained that the presentation would be based on two critical documents dealing with the establishment of a Housing Development Agency. He characterized the present workshop as important and necessary to ease the passage of the proposed Housing Development Agency Bill (the Bill). Also, he announced that the Minister of Housing expected to establish this Agency by the latter half of 2008 and therefore hoped that the finalisation of the Bill would be accelerated.

Introduction to the Housing Development Agency (HDA)
Mr Joseph Leshabane (Deputy Director General, DoH) sketched the background and the extent of the country’s challenges that inspired the move to establish a HDA. It was envisaged that this entity would have the capacity to trigger several interventions to address the delivery process and delivery bottlenecks currently experienced.

Mr Leshabane furnished an extensive list of reasons for the establishment of the Agency. He asserted that access to, and the rapid release of well-located land for integrated housing was one of the cornerstones for the success of a human settlement plan. In addition, he identified the serious capacity weaknesses in several provinces and municipalities as a further rationale for the creation of the entity.

Thereafter, he summarised the functions, funding and institutional arrangements of the Agency. He emphasised that the entity would be supplementary in character, and would thus complement the work of municipalities and provinces. An Agency agreement would be entered into, specifying that HDA would be the agent of provinces and municipalities.

The proposed Bill had received wide support from the Housing MinMEC, South African Local Government Association (SALGA), various government departments and from the public. Finally, he reiterated his plea that the Committee fast track the finalisation of the Bill.

Discussion
Mr A Steyn (DA) commented that he found the presentation interesting. He agreed that there needed to be a different and innovative approach to address the housing crisis in the country. However, he voiced concern that many of the proposed functions of the new Agency already resided in the Department of Housing. Consequently he queried whether the activities of the Agency could not be fulfilled by that Department.

Mr Leshabane affirmed that the Agency would be independent and not a division of the Department. He emphasised that it would be given sovereignty and space to perform in a similar way to the Road Traffic Management Corporation. Moreover, he explained that the Agency would have an indispensable advantage over the Department with its unlimited ability to transact with the private sector.

Mr Saths Moodley (Special Advisor to Minister of Housing) reinforced that the Agency would be best placed as an independent institution owned by government.

Mr Steyn enquired whether it was the Department’s intention for Thubelisha to be transferred into the new Agency.

Mr Leshabane confirmed that all the other housing institutions like Thubelisha would be rationalised and phased out. He emphasised that the Agency would assume duty at the closure of the rationalised institutions and hence tap into their financial and human resources. 

Mr Steyn asked whether the new Agency would be impeded by municipalities and provinces.

Mr Leshabane confirmed that new Agency would not be hamstrung by those spheres of government because it would function proactively. He clarified that the objective of the Agency was designed in such a manner that it would be able to identify and secure land irrespective of municipalities and provinces.

Ms B Dambuza (ANC) stated that she supported the establishment of the Agency. On the other hand, she expressed doubt whether the Department would have the capacity to drive the process. She pointed to the Department’s failure to exercise effective monitoring of provincial departments.

Mr S Masango (DA) was equally not convinced that the Agency would have the capacity to fulfil its mandate.

Mr Leshabane emphasised that there was competition for available skills and capacity across all spheres of government. Nevertheless, he guaranteed that the new Agency would be empowered with the necessary capacity to complement the work of municipalities and provinces.

Mr G Schneemann (ANC) posed three questions. Firstly, he wanted clarity on whether the proposed Agency would be budgeted for in the new financial year. Secondly, he asked how long it would take to set up the Agency. Thirdly, he wondered how soon the Department anticipated any impact from the Agency.

Mr Leshabane replied that funding had been set aside to finance the Agency. Furthermore, he disclosed that the Department intended the HDA to be operational as soon as possible. To this end, preparations were at an advanced stage despite the limitations arising from non-finalisation of the Bill. Mr Kotsoane was adamant that the Bill would begin to have some impact in the next two years.

Mr Moodley noted that Mr Kotsoane gave a conservative estimate on the impact of the Bill. He was confident that the impact would be seen much sooner, depending on the passing of the Bill.

Mr L Van Rooyen (ANC) (Free State) (SC Public Services) believed that the objects of the Bill were too narrow and would not address all the delivery bottlenecks. He advised that the Bill be broadened to include land acquisition. He continued to interrogate how the Bill would be tagged. This query was followed with a reminder to the Department that a section 76 Bill would have to be subjected to provincial public hearings and could thus delay its finalisation.

Mr Enver Daniels, Chief State Law Advisor, indicated that he had accepted the Department’s judgment that the Bill should be a section 76 Bill although he held a contrary view. He substantiated that the Bill was urgent and such a designation would delay its finalisation.

Mr Van Rooyen rejected this perspective. He stressed that the Bill should be assigned as a section 76 Bill for the reason that the provinces were directly impacted by it. Hence, provincial public hearings were necessary.

Rev P Moatshe (ANC) (North-West) (SC Public Services) sought clarity on when the expropriation mechanism could be triggered by the Agency.

Mr Kotsoane clarified that the proposed Bill would allow for the Agency to activate this clause after it had exhausted all other options.

Mr Schneemann wanted assurance from the Department that it had engaged other departments that would be affected by the Bill. Secondly, he sought to understand if the Agency would be accountable to any structure.

Mr Kotsoane declared that the Department had engaged with other stakeholders. He divulged that the Department intended to have a stipulation in the Bill which authorised the Agency to overrule portions of other legislation. It should have the power to identify land and acquire it.

Draft Housing Development Agency Bill, 2008
Mr Richard Thatcher, Director: Framework Legislation, DoH, explained that the Bill was in line with a Cabinet-approved Comprehensive Plan for the Development of Sustainable Human Settlements, to assist provincial and local government with the rapid release of well-located land for integrated housing. In this regard, the draft Bill established a HDA that would be the engine for facilitating the acquisition of land and landed property in a way that supplemented the capacities of government across all spheres.

The salient feature of the presentation included a brief summary on the content of each clause in the Bill. The presenter described the Agency’s function and powers, objective, role, mandate, governing board, staff, liquidation and dissolution, funds and financial.

Discussion
Mr Schneemann held that the Agency was not necessary because it would duplicate many of the tasks performed by the Department. Also, he expressed unhappiness that the staff of the rationalised housing institutions would be incorporated into the Agency. Lastly, he asked for clarity on the role of the Agency and whether it would have to wait to be invited by the municipality before it could intervene.

Mr Kotsoane acknowledged that some of the personnel from the housing institutions would be absorbed into the new Agency. The Department foresaw a less bloated Agency that would focus on skills lacking in municipalities. The Agency would be obliged to enter into an agreement with provinces and municipalities to use land owned by them.

Mr Thatcher indicated that provinces and municipalities were recognised authorities and could therefore not be undermined. He underlined that housing had concurrent jurisdiction in terms of the Constitution and consequently, the Bill used the word “may” and not “must”.

Ms Dambuza scrutinised two issues. Firstly, she complained that the accountability mechanisms in the Bill were not adequate. Secondly, she sought to determine the rationale behind including several government departments on the proposed Agency Board.

Mr Kotsoane answered that the accountability mechanism was satisfactory because the Agency would account to the Minister at the end of each quarter. He added that the different departments were represented on the Board because they would transfer knowledge and add value.

Mr Daniels remarked that it was important to note that the Minister must conclude a written mandate with the HDA and had control over it.

Mr Van Rooyen wondered whether the Agency would be able to generate its own income and how this would be regulated.

Mr Thatcher replied that the Agency would indeed have the ability to generate its own income and borrow money.

Mr Kotsoane added that the Agency would have to make a profit to be viable.

Mr Steyn asked the Department to explain the term ‘landed property’.

Mr Thatcher explained that it referred to a portion of land that had existing buildings.

Ms N Ngele (ANC) agreed with other Members that the Agency would simply duplicate the functions that were not done properly by the Department.

Mr Thatcher repeated the stated position that the Agency would be the vehicle to drive the delivery of human settlements.

Mr L Khoarai (ANC) accused the government of not assisting the current housing institutions and was not persuaded that this would alter with the establishment of the Agency.

Closing Remarks by the Director-General
Mr Kotsoane reminded the Committee that this was an informal briefing and therefore undertook to give a more detailed response at a later stage.

He explained that all the housing institutions were established for a specific purpose-to normalise the housing market in the country. Thubelisha was a section 21 company and did not have the space to engage with the private sector robustly. Treasury refused the Department’s attempt to convert SERVCON, a section 31 company, into the new Agency and insisted that it must be closed. In light of this, the Agency was established and was different in form, content and focus from its predecessors. He agreed that the Agency would not be the answer to all the problems as the challenges were far greater than the Agency, thus insisted that provinces and municipalities would continue their work and the Agency would supplement that.

The meeting was adjourned.