Briefing on the Social Housing Bill B29B of 2007

Meeting report

Social Housing Bill (the Bill): Briefing by Department of Housing (DOH)
Ms Crofton Crofton, Acting Chief Director, Social / rental housing, DOH, gave a presentation on the outline, implementation and plans for the Social Housing Bill. She stated that the purpose of social housing was to contribute to the national priority of restructuring South African society in order to address structural, economic, social and spatial dysfunctionalities. Social Housing would contribute to the Government’s vision of an economically empowered, non-racial, and integrated society living in sustainable human settlements. The aim was to contribute to the widening of the range of housing options available to the poor.

Social housing was a rental or co-operative housing option for mixed income households (those earning between R1 500 and R7 000) at a level of scale and built form which required institutionalised management, and which was provided by accredited social housing institutions or other delivery agents through approved projects in designated restructuring zones, with the benefit of public funds.

Social housing could be delivered through accredited housing institutions, private sector, or public private partnerships. The dedicated restructuring zone concept was set out and explained. 

The Social Housing Bill therefore aimed to regulate the social housing industry, ensure affordable rental housing for households which could not access rental housing on the open market and a framework of legislation. Briefly it also establishes & promotes a sustainable social housing environment, define functions of national, provincial & local government and establish a social housing regulatory authority (SHRA) to regulate Social Housing Institutions that would be receiving public funds.

Ms Crofton briefly described how the Bill was divided and explained the five chapters.

Discussion
Mr A Watson (DA, Mpumulanga), wanted more clarification as to what constituted a restructuring zone and what was the purpose of it, and whether it was intended to allow more low income earners to stay closer to work.

Ms Crofton gave a response by explaining what social housing would be. She summarised that social housing would start by having geographic areas identified and initiated by municipalities, supported by Provinces for targeted, focused investment. These areas were medium density, multi-unit complexes requiring institutional management and outside zones and an institutional subsidy would be used to create them. She gave examples of such settlements in Mpumalanga, Northern Cape and Port Elizabeth area. These areas were different from the regeneration zone such as Motherwell in Port Elizabeth. Motherwell did not need economic development to attract people to that area. It was a residential area, and people left it to go to the city centre to work. A restructured zoning area would also have a social element. It would bring lower income earners nearer to their place of work, and an added social element was to promote the integration of race and class, and the economic element was one of promoting job opportunities .

Mr Watson asked whether this was a national or provincial housing bill.

Ms Crofton responded that it was a national housing bill .She elaborated further by saying that Gauteng had its own provincial law to implement the plan, and had established an office of a registrar. 

The Chairperson noted that in the past houses previously handled by social housing organisations had been handed over to private concerns, with a huge increase in rental. He suggested concrete proposals for the housing policy officials. Firstly, he proposed that the Social Housing programme must account to the Cabinet so they were aware of the situation. The Bill had mentioned that the financing of the housing was done respectively by the provinces and the national body, and he asked how liaison with both would take place. Thirdly, he noted that there must be more clarification and specific criteria as to how this policy should benefit children, and to guard against abuse.

Mr N Mack (ANC, Western Cape) asked how the private sector would be encouraged to get involved with this programme. Secondly, he noted that the programme was meant to benefit the tenant. However, he believed that in the long run it would benefit the owner of the property; similar to the situation where a child grant actually put the money in the hands of the mother.

Ms Crofton responded, in regard to the first question, that a private company would have to put an investment of 10% or more into the project, then would need an additional loan from the bank, and they would get 60% subsidy grant money from the government. After 15 years the private investor would probably own the house and would have the freedom to decide what to do with it. The banks and institutions were said to be interested in this project but they had very little knowledge about it and they did not trust the government to do its part, and this might be problematic. This Bill would help to confirm the situation and affirm the rights. In regard to the second question, she said it would depend on whether there was to be a demand-driven or supply-driven situation with the houses. Overseas, a supply-driven policy was used, and it started with a subsidy strategy then changed to an operational role. In South Africa there was a need for more stock houses. However, the supply drive option seemed to be preferable.

Questions that were not answered and would be addressed in the next meeting were as follows::

Mr Watson asked for clarity what was meant by the statement that it was hoped to bring investment back to the market. He noted that the private sector would not benefit short-term, although it might do so in the long term, and asked if this policy was intended to appease those excluded. 

A Member asked what role did rental stock play.

Mr Worth asked for clarification on the appointment of staff as set out, and particularly whether the salary was to be decided by the Chief Financial Officer, or whether it was to be determined by the Council. He cautioned that there seemed to be loopholes for abuse. Secondly, he wanted to know the role of the Minister and Department, and whether this would fall under the Public Service conditions. He asked for clarification where the funding would come from, whether it would first go to the national housing co-operation first or to the Council, and how these were related. He asked for assurance that there could be no abuse of the municipality employer being able to put himself in the position of the Director, and the description of employer and employee in the Bill.

Rev P Moatshe (ANC, North West), asked for a clearer indication of the Social Housing Agency, who it would be answerable to, whether municipality or province, and who was to make the rules and ensure that they were not in conflict with other laws.

Mr Mack wanted more clarification on what was meant by the cross subsidisation, and on the figures of 1000 and 7000 that the presenter spoke of.

The meeting was adjourned.