ATC140711: Report of the Portfolio Committee on Human Settlements on Budget Vote 31: Human Settlements and on the strategic plan 2014/19 and annual performance plan 2014/ 2015, dated 8 July 2014

Report of the Portfolio Committee on Human Settlements on Budget Vote 31: Human Settlements and on the strategic plan 2014/19 and annual performance plan 2014/ 2015, dated 8 July 2014

The Portfolio Committee on Human Settlements, having considered Budget Vote 31: Human Settlements, and the strategic plan and the annual performance plan of the Department of Human Settlements and its entities, referred to it, reports as follows:

1. Introduction

The Constitution places an obligation on the State to provide access to adequate housing to its citizens. As the custodian of the housing sector, the Department of Human Settlements later referred to it as (the Department) has developed strategies, policies and programmes to ensure the progressive realisation of this right. The comprehensive plan for the development of sustainable human settlement, approved in 2004 and the revised housing code, published in 2009, mark a conceptual shift away from the mandate of providing shelter to supporting the residential property market. Furthermore, in the 2009 State-of-the-nation address, the name change of the Department of Housing to Human Settlements was pronounced that required collaboration from other departments to make it a success. The Housing Code allows for access to housing, services for low-income families, and ensures greater choice in quality, location and ownership.

Owning to time constraints, the Committee only received a briefing from the Department of Human Settlements and Human Settlements entities on the budget and on annual performance plan.

2. Department of Human Settlements

2.1 Aim and mandate of the Department

The mandate of the Department is to determine, finance, promote, co-ordinate, communicate and monitor the implementation of housing policy and human settlements. Since the formulation of the Comprehensive Housing Plan in 2004, the department has conducted various initiatives to enhance the creation of comprehensive, integrated, coordinated and sustainable human settlements and quality housing. These initiatives include the review of the National Housing Code, which determines national norms and standards in respect of housing development, as well as the provision of the Farm Worker/Occupier Housing Assistance Programme and the establishment of the Housing Development Agency.

Subsequent to that and during the course of January 2010, the Cabinet approved an outcomes-based performance approach to the mandate of the department with the adoption of Outcome 8 – Sustainable Human Settlements and Improved Quality of Household Life. The Outcome 8 has sub-outcomes that the department has to adhere to that are the adequate housing and improved quality living environments; a functionally equitable residential property market and enhanced institutional capabilities for effective coordination and spatial investment decisions.

2.2 Summary of the strategic plan

The Department reported that its strategic plan 2014-2019 was approved by Cabinet in June 2014. The Department further reported various stakeholders were consulted in the process. The strategic plan is informed by the Manifesto of the ruling party; National Development Plan and the Medium Term Strategic Framework.

The following are the delivery priorities that the department is expected to deal with for the period ahead in responding to the government manifesto:

• Ensure all South Africans live in decent conditions in suitable human settlements.

• Implement integrated human settlement residential programmes to provide all inclusive amenities and public transport, and overcome apartheid spatial development.

• Provide one million housing opportunities for qualifying households in urban and rural settlements over the next five years.

• Accelerate the provision of basic services and infrastructure in all existing informal settlements.

• Increase the supply of affordable housing through mobilization of housing allowances for teachers, nurses, police officers, office workers and many others in the gap market.

• Eliminate the backlog of title deeds.

• Issuing of title deeds for households in the subsidy market on occupation.

• Work with financial institutions, private sector organizations, co-operatives and social partners to increase the provision of capital for housing. (This will include the establishment of a mortgage insurance scheme).

• Increase the number of housing units in better-located mixed income projects (Especially in social, co-operative and rental housing, to revitalize inner cities, mining towns and developing cities).

• Use Catalytic projects, such as integrated residential programmes, to direct investment and overcome apartheid spatial geography.

• Promote integrated public transport systems in the new human settlements, including provision of passenger rail and buses.

• Connect additional 1.6 million homes to electricity grid over the next five years.

• Continue to work towards universal access to running water by providing access to those who still don’t have it.

2.3 State-of-the-nation address (SONA) and the budget speech

The 2014 SONA highlighted the following key strategic objectives pertaining to the Department of Human Settlements: The following key issues have been highlighted and are relating to the Human Settlements sector:

• Building housing and other services to revitalize mining towns, as part of the October 2012 agreement between business, government and labour.

• Upgrading or conversion of hostels into family units”.

• Developing a sustainable energy mix that comprises coal, solar, wind, hydro, gas, and nuclear energy.

• Providing support to Moqhaka Local Municipality in the Free State with the eradication of the bucket system and open toilet challenges.

2.4 Political Overview by the Minister of Human Settlement, Ms LN Sisulu

The Minister gave a political overview on the strategic direction of Department. She indicated that the National Development Plan (NDP) adopted by the government will be the basis for the work of the Department. It was essential that the promises made to the people of our country through Manifesto of the ruling party are fulfilled. She noted that all indications were that the Department would go back to the Breaking New Ground (BNG) and amplify it to ensure that the Department would deliver the 1.4 million houses it had set to build in the next five years. She also indicated the Medium Term Strategic Framework (MTSF) was tabled at Cabinet Lekgotla. She further reported that the Department of Human Settlements was in a process of aligning its work to the documents mentioned. She reported that she engaged with entities wanting to understand what was happening in the sector and she continues to do so as she has not met all the entities. She noted that after consultation with stakeholders, legislation would be developed and some cases will be preceded by the green and white papers on Human Settlements.

The Minister informed the Committee that according to 2007, statistic the Department has managed to deliver and provide houses to 3,6 million beneficiaries since 1994 while the backlog is still huge at 2,3 million. She committed that the Department would be expected to deliver 270 000 per year that would yield results of 1,4 million houses in the next five years. The Statistician General was concerned that houses were built in a manner that still follows the apartheid spatial patterns. The Minister and the Department would need to develop legislation that talks to the creation of human settlements, as the Department is still using the old Housing Act. She noted that urbanisation was very high and government needs to join hands and reverse this by creating work opportunities in rural areas.

The Minister indicated that one of her priorities would be to clean the database of people in the waiting list using the services of the State Information Technology Services (SITA). The Minister also undertook to conduct an occupancy audit on the houses that have been built thus far, i.e. the verification of owners. She indicated that the Department has been leading an Inter-Ministerial Committee on Sanitation (Bucket eradication) comprising of the Departments of Water and Sanitation and Cooperative Governance. Discussions will be held with the newly formed department, Water and Sanitation to ensure that this function as it relates to houses provided by government (reticulation) remains with Human Settlements. She informed members that the strategic plan tabled on 27 June was concluded before she joined Human Settlements and it was possible that it would be amended. She invited members to make inputs to the plan and once she has finalised consultation with Human Settlement stakeholders shoe would table a revised plan.

3. Budget analysis and programmes

	2014/15	2015/16	2016/17	% to total allocation
Final Allocations.	R' 000	R' 000	R' 000
National Department Operational Budget	828 464	863 382	914 398	3%
Grants and transfer payments	29 692 928	31 978 980	33 538 194	97%
Total	30 521 392	32 842 362	34 452 592

Source: Department of Human Settlements - 2014

3.1 Budget allocations per programme

Programmes	2014/15 R`000	2015/16 R`000	2016/17 R`000
Administration	425 905	445 612	472 038
Human Settlements Policy, Strategy and Planning	89 396	94 299	100 332
Programme Delivery Support	298 475	307 715	325 404
Housing Development Finance	29 707 616	31 994 736	33 554 818
Total	30 521 392	32 842 362	34 452 592

Source: Department of Human Settlements

3.1.1 Programme 1: Administration

Administration aims to provide strategic leadership and administrative and management support services to the Department. During the 2014/15 financial year this Programme receives an allocation of R425.9 million. This allocation reflects a 0.83 per cent increase in nominal terms and 5.06 per cent decline in real terms. Expenditure is dominated by both the Departmental Management and Corporate Services sub-programmes, which constitute 72.5 per cent of the overall programme allocation.

3.1.2 Programme 2: Human Settlement Policy, Strategy and Planning

The purpose of the programme is to manage the development and compliance with human settlements sector delivery frameworks and oversee integrated Human Settlements strategic planning services. Expenditure in Programme 2 increased from R84.1 million the previous year to R89.4 million the current financial year, resulting in a 6.30 per cent nominal increase and 0.10 per cent real increase. The sub-programme Human Settlements Strategy and Planning dominates expenditure in Programme 2, with a budget of R53.7 million, representing an increase of 6.55 per cent in nominal terms or 0.33 per cent in real terms. This is mainly due to the strengthening of the planning process in the provinces and municipalities to develop a programmatic approach to human settlements development planning.

3.1.3 Programme 3: Programme Delivery Support

This programme oversees and supports the execution of human settlements programmes and projects. Compared to the previous financial year, budget allocation for Programme 3 increased from R 261.7 million in 2013/14 to R298.5 million. There has been an increase in the utilisation of consultants who were sought during the implementation of strategic programmes such as National Upgrading Support Programme; also rolling out of sanitation facilities through the RHIG programme. This also includes providing technical support to 53 municipalities through the national upgrading support programme. Expenditure on consultants and professional services increase from R107.1 million the previous financial year to R131.1 million in 2014/15, resulting in a nominal increase of 22.4 per cent (real 15.26 per cent).

3.1.4 Programme 4: Housing Development Finance

The purpose is to manage and support Human Settlements Grant Management services, mobilise sectoral resources and identify possible discriminating lending patterns by financial institutions. For 2014/15, Programme 4 received an allocation of about R29.7 billion compared to R27.4 billion in the 2012/13 financial year. This reflects an increase of 8.08 per cent in nominal terms and 1.77 per cent increase in real terms. The bulk of expenditure in Programme 4 is in the form of transfers, i.e. 96.7 per cent of the budget is transferred to provinces, municipalities (through four conditional grants), as well as to the departmental entities.

· Human Settlements Development Grant (R17.9 billion)

· Urban Settlements Development Grant (R10.2 billion)

· Rural Household Infrastructure Grant (R113.1 million)

· Municipal Human Settlements Capacity Grant (R300 million)

The four types of grants located in Programme 4 are critical for giving effect to the commitments articulated both in the 2014 State of the Nation Address, as well as Outcome 8.

4. Delivery agreements for Outcome 8 for 2014/15 to 2015/2016 (planned targets)

Source: National Department of Human Settlements - 2014

4.1 Targets for 2014/2015

The programmes and targets are indicated below:

· Slum upgrading - targeted to upgrade 22 882 sites and develop 40 691 units as per the allocated budget as indicated above. There was no sites allocated for Northern Cape province and there were no units allocated for the Limpopo province.

· Affordable rental housing – targeted to provide 887 sites and 7 946 units. Out of nine province only three provinces (Limpopo, Northern Cape and Western Cape) has set aside sites for the provision of affordable rental.

· Rectification - targeted to rectify 514 sites in the Eastern Cape and 8 929 units other provinces besides the Gauteng and Mpumalanga provinces.

· Rural programme – targeted to provide 4 522 sites and 34 168 units.

· People’s Housing Process – there are no targeted site in all the provinces while there is a target to provide 8 415 units.

· Mining town – targeted to provide 5, 648 sites and 10 919 units.

4.2 Planned targets for 2014/15 to 2015/2016 – bucket eradication programme utilizing Human Settlements Development Grant

Province	Bucket backlog		2014/15	2015/16	Number of Units 2014/15	Number of Units 2014/15
	Number	% of total	Number	Number
Eastern Cape	43 550	15.95%	143 442 755	155 602 214	7 550	8 190
Free State	101 810	37.29%	335 336 553	363 762 604	17 649	19 145
Gauteng	30 031	11.00%	98 914 567	107 299 428	5 206	5 647
KwaZulu-Natal	10 956	4.01%	36 086 311	39 145 301	1 899	2 060
Limpopo	562	0.21%	1 851 087	2 008 001	97	106
Mpumalanga	4 205	1.54%	13 850 213	15 024 278	729	791
North West	38 041	13.93%	125 297 493	135 918 802	6 595	7 154
Northern Cape	11 764	4.31%	38 747 659	42 032 249	2 039	2 212
Western Cape	32 076	11.75%	105 650 283	114 606 122	5 561	6 032
TOTAL	272 995	100.00%	899 176 920	975 399 000	47 325	51 337

Source: Department of Human Settlements - 2014

The Bucket Eradication Programme (BEP) grant was attained to slicing 5% of the Human Settlements Development Grant over two years to fund the programme. The BEP grant for 2014/2015 year (April 2014 to March 2015) amounted to R899 177 000, and the BEP grant for the 2015/2016 (April to March 2016) amounted to R975 399 000. Grant funds were divided among provinces in proportion to the number of households that reported using the bucket system. This grant is allocated for two years and will end in March 2016.

The Department reported that service level agreements were entered into for the eradication of bucket toilets with the following public entities:

· NURCHA (National Urban and Reconstruction Agency) – Eastern Cape.

· HDA (Housing Development Agency) – Western Cape.

· Bloem Water – Free State.

· MISA (Municipal Infrastructure Support Agent) – Northern Cape.

· Sedibeng Water – Northern Cape.

· Umgeni Water – Kwazulu Natal.

· Umhlathuze Water – Kwazulu Natal.

· Rand Water – Mpumalanga and Gauteng.

· Magalies Water – North West.

· Lepelle Northern Water – Limpopo.

5. Transfer payments

	2014/15	2015/16	2016/17
Final Allocations.	R' 000	R' 000	R' 000
Direct Grants	27 716 677	29 538 349	32 066 027
Human Settlements Development Grant	17 084 369	18 532 576	20 409 567
Urban Settlements Development Grant	10 284 684	10 654 773	11 231 861
Municipal Human Settlements Capacity Grant	300 000	300 000	300 000
Rural Households Infrastructure Development: Direct Grant	47 624	51 000	124 599
Indirect Grants	964 677	1 042 727	-
Human Settlements Development Grant: Indirect	899 177	975 399	-
Rural Households Infrastructure Development: Indirect Grant	65 500	67 328	-
Entities	1 002 070	1 388 035	1 461 601
Social Housing Regulatory Authority: Operational	33 480	34 560	36 392
Social Housing Regulatory Authority: Capital Restructuring Grant	827 543	1 195 860	1 287 049
Housing Development Agency	101 047	104 615	110 160
Community Schemes Ombud Services	40 000	53 000	28 000
Departmental Transfers	9 504	9 869	10 566
Bursaries Scheme	4 485	4 642	4 888
Nelson Mandela University	3 906	4 077	4 467
UnHabitat	1 113	1 150	1 211
Total	29 692 928	31 978 980	33 538 194

Source: Department of Human Settlements -2014

6. Grant allocation to provinces

6.1 Human Settlements Development Grant (HSDG) Provincial Allocations

Provinces R`000	2014/15	2015/16	2016/17
EASTERN CAPE	2 159 218	1 929 157	2 147 265
FREE STATE	1 061 756	1 131 794	1 252 868
GAUTENG	4 417 641	5 065 766	5 631 437
KWAZULU-NATAL	3 273 045	3 313 983	3 547 298
LIMPOPO	1 219 115	1 201 733	1 329 147
MPUMALANGA	1 146 690	1 316 401	1 450 045
NORTHERN CAPE	374 832	376 006	416 487
NORTH WEST	1 517 136	2 153 545	2 363 612
WESTERN CAPE	1 914 935	2 044 191	2 271 408
Total	17 084 369	18 532 576	20 409 567

Source: Department of Human Settlements

The national Department of Human Settlements reported that the purpose of the HSDG is to provide funding for the creation of sustainable human settlements. The goal was the creation of sustainable human settlements that enable and improved quality of household life. The Outcome 8 programme would facilitate and provide access to basic infrastructure, top structure and basic socio-economic amenities that contributes to the creation of sustainable human settlements. This will improve the rate of employment and skill development in the delivery of the infrastructure. The Department’s target for 2014/15 was to provide 58 064 sites and 126 352 units.

7. Urban Settlements Development Grant (USDG) provincial allocation of the grant for 2014/2015 to 2016/2017

Provinces	Metros	2014/15 R`000	2015/16 R`000	2016/17 R`000
EASTERN CAPE	Buffalo City	673 290	700 458	743 775
	Nelson Mandela	828 863	858 144	903 625
Sub Total		1 502 152	1 558 602	1 647 400
FREE STATE	Mangaung	654 406	680 907	723 188
GAUTENG	Ekurhuleni	1 804 532	1 868 280	1 967 298
	Jo'burg	1 695 189	1 755 074	1 848 093
	Tshwane	1 469 450	1 521 361	1 601 993
Sub Total		4 969 171	5 144 715	5 417 384
KWAZULU-NATAL	eThekwini	1 800 076	1 863 667	1 962 441
WESTERN CAPE	Cape Town	1 358 879	1 406 883	1 481 448
Grant Total		10 284 684	10 654 773	11 231 861

Source: Department of Human Settlements 2014

The USDG was introduced in the 2011/12 financial year, parallel to the accreditation (delegation of housing responsibilities) of metropolitan municipalities. The aim of this grant as contained in the Division of Revenue Act is to assist metropolitan municipalities to improve urban land production to the benefit of the poor households by supplementing the revenue of the Metros. This grant is line with the agreed 12 outcomes by Cabinet within which to frame public-service delivery priorities and targets. Outcome 8 refers to sustainable human settlements and is aimed at achieving an “improved quality of household life”. In this regard, four major outputs are spelled out:

· Accelerate housing delivery.

· Improve access to basic services.

· Improve property market.

· More efficient land utilisation and release of state-owned land.

The grant is allocated R10.2 billion for the 2014/15 financial year. The grant is targeting about 8 metropolitan areas (Buffalo City, Nelson Mandela, Mangaung, Ekurhuleni, City of Johannesburg, City of Tshwane, eThekwini, City of Cape Town).

The performance of the grant for the past three years is as follows:

In 2011/12 the grant was allocated R6.2 billion, and 88 per cent was spent in that particular year. In 2012/13 the allocation increased to R7.3 billion and only R6.8 billion or 93 per cent was spent in that particular year, In 2013/14 the allocation increased to R9 billion and the expenditure information was not available at the time when the analysis was done.

8. Rural Household Infrastructure Grant (RHIG)

The grant was initiated as a schedule 7 grant in the 2010/11 financial year. In 2013/14 the schedule of the grant was changed from schedule 7 to schedule 5 with effect from 2013. The Rural Household Infrastructure Grant (RHIG) is divided into two components, there is schedule 5B which is a direct grant to municipalities and schedule 6B which is an indirect grant or grant in kind allocation to municipalities.

The intention of the grant is to provide specific capital funding for the eradication of rural sanitation backlogs and to target existing households where bulk dependent services are not viable. Its primary purpose is to improve basic sanitation in rural areas. For the indirect grant component an amount of R66 million has been allocated while for the direct grant component only R48 million has been allocated for 2014/15. The performance of the past three financial years is as follows:

· In 2011/12 an amount of R258 million was allocated for this grant, but only R77.8 million or 31 per cent was spent at the end of that financial year.

· In 2012/13 an amount of R340.6 million was allocated for this grant, but only R135 million or 60 per cent was spent.

· In 2013/14 an amount of R106.7 million was allocated for this grant; the expenditure for the third quarter was not available during the time of the analysis.

9. Municipal Human Settlement Capacity Grant

This is a new indirect grant introduced by the 2014/15 Division of Revenue Bill. To improve coordination of urban programmes and establish clearer lines of accountability, the National Development Plan recommends that the responsibility for housing should shift to municipal level, where human settlement planning takes place. In support of this government is developing planning and implementation capacity in municipal government through the introduction of the new R300 million municipal human settlements capacity grant for metropolitan municipalities from 2014/15. The intention of the grant is to build capacity in municipalities to deliver and subsidise the operational cost of administering the human settlement programme. The human settlements function is due to be assigned to the six metropolitan municipalities in 2014, however the 2013 Division of Revenue Act suggests that the process of assigning the housing function to municipalities was going to unfold at the beginning of the municipal financial year, July 2013. The different allocations to the six metros were made by the 2013 Division of Revenue Act and these have since increased in the 2014/15.

10. Human Settlements entities annual performance plan and budget

10.1 Housing Development Agency (HDA)

Mr Adler, Chief Executive Officer, reported that The HDA was established in 2009 as a public development agency to address the land acquisition and assembly process so as to accelerate housing delivery and human settlement development. The two main objectives of the Agency are to identify, acquire, hold, develop and release well-located land and buildings; provide project management support and housing development services. The HDA collaborates with provinces and municipalities to provide the following services: Land identification, assembly and planning; Project Pipeline development; Project management; Informal settlement upgrade; IGR support; and Geo-spatial information. The HDA has offices in six of the nine provinces. In its five years of operation the entity had unqualified audit.

10.2 Social Housing Regulatory Authority (SHRA)

Ms Z Ebrahim, Chairperson of the SHRA board, reported that the entity was established in terms of the Social Housing Act (2008). The functions of SHRA are to regulate the social housing sector and to support the restructuring of urban spaces through investments in social housing. It is responsible for the disbursement of restructuring capital grants to social housing institutions.

Investment Programme

· Targeted number of units to be approved in 2014/15: 5668 Units (depending on budget allocation).

· Grant Quantum increase to be submitted to MINMEC by DHS Policy Unit.

· An increased grant quantum should yield more financially viable projects on the pipeline and in terms of approvals.

· RCG grant quantum will be applied on a sliding scale based on project needs and typology. New funding methodology will ensure there is a maximum quantum per project and a minimum debt portion to ensure each project is co-funded between SHI and the State.

· Pipeline planning (pro-active approach) approach to be adopted and within two / three years replace the Call for Proposals process.

The SHRA has anticipated delivery of projects on the pipeline of 2113 units for the financial year. The entity reported that the targeted investment areas would be the urban renewal and capacitating of provinces and municipalities into pipeline planning and project assessment tools. The long-term financing strategy would be developed.

Regulatory Programme

SHRA reported on the number of Social Housing Institutions that applied for accreditation (process completed April 2014):

· Fully accredited: 5

· Conditionally accredited: 13

· Pre- accredited: 29

· Declined: 7

· Withdrew: 6

SHRA reported that total applications received for accreditation were 60 and the entity anticipated that a 15% growth in accredited institutions within this financial year. There would be a development of legal enforcement function (hijacked buildings, protecting state investment). It was reported that retrospective regulation of stock constructed prior to SHRA establishment and long term accreditation system to be developed and maintenance model to be developed.

Institutional Investment Programme

It was reported that 30 institutional investment grants would be awarded in 2013/14; gear up grants - 6; project acquisition and feasibility grants - 10; pre-accreditation grants - 10; general capacity building grants – 2; and remedial action grants - 2. The Provincial Rental Strategies to be developed in partnership with Provinces such as Gauteng, KwaZulu-Natal and Eastern Cape. Agreements would be signed with Metropolitan Municipalities, that is City of Cape Town and City of Johannesburg, and SHRA would also assist with the implementation of densification strategy for Johannesburg Inner City.

10.3 Rural Housing Loan Fund (RHLF)

Mr J Fakazi, Chief Executive Officer, informed the Committee that the entity’s mandate is to provide access to housing credit to low income rural households in order to enable them to improve their housing and living conditions:

The loan is used on a new house, an extension, fixed improvement to a house, connecting to utilities, water harvesting, fencing, productive housing; purchasing of land by individuals or groups for residential purposes.

· Rural areas: tribal/communal land, farm areas, small towns.

· Low income currently set at maximum of R15 000 per month. (60% of loans to those under R3 500 per month).

· To support the implementation of the government’s rural development programme - currently the Comprehensive Rural Development Programme (CRDP).

The RHLF is a Wholesale Development Finance institution that:

· Provides funds to commercial intermediary lenders.

· Has branch network in targeted areas.

· Partners with building merchants as loans distributing channels.

· Has field agents operating in villages in rural areas.

· Ring-fences facilities for community-based organisations to lend to members only and self employed people.

· Plans to target member based organisations such as unions to facilitate housing credit for members (Work with their Special Purpose Vehicles).

The Chief Financial Officer further reported that RHLF achieved its mandate within the constraint of its funding resources and will contribute about 160 000 housing opportunities during MTEF period. The target market is huge and more needs to be done to significantly increase market coverage. Tough market conditions and high level of indebtedness pose a challenging outlook. RHLF business model resonates with active citizenry advocated in the NDP — people drive their building process and improvement of their living conditions.

10.4 National Housing Finance Corporation (NHFC)

Mr S Moroba, Chief Executive Officer, reported that NHFC was established in 1996. The NHFC is a Development Finance Institution (DFI) that is a State-Owned Company, 100% SA government. The total assets are at R 3,114 billion (31 Mar 2014 – group). Its total liabilities are at R767 million (31 Mar 2014 – group). The entity is self sustaining and pays income tax. The entity’s main mandate is to broaden and deepen access to affordable housing finance for the low to middle-income SA households .

The NHFC developmental impact 2015-2017, the entity envisaged to create 1 817 housing private rental, social housing 3 028, home ownership 764 and 1 999 incremental loans.

10.5 Estate Agency Affairs Board (EAAB)

Mr B Chaplog, Chief Financial Officer, reported that the Estate Agency Affairs Board (EAAB) was established in 1976 in terms of the Estate Agency Affairs Act, 112 of 1976 (‘the Act”), with the mandate to regulate and control certain activities of estate agents in the public interest.

The EAAB regulates the estate agency profession through ensuring that all persons carrying out the activities of an estate agent as a service to the public are registered with the EAAB. A Fidelity Fund Certificate, which is to be renewed each year, is issued as evidence of such registration and confirmation that such person is legally entitled to carry out the activities of an estate agent.

The Estate Agency Affairs Board (EAAB), which has been reporting to the Minister of Trade and industry since 1976, was transferred to the Department of Human Settlements on 17 May 2012 by Proclamation of the President of the Republic of South Africa.

The EAAB is in the process of rolling-out the ‘One Learner - One Estate Agency’ Programme that will introduce approximately 10 000 new Interns over a three year period. Funding will be received from both public and private sector partners. The aim of the project is to increase the transformation target group licences.

The entity targeted to investigate and resolve 1 200 complaints, to register new 8 715 Estate Agents, to renew 52 500

Estate Agent licences and to inspect 1 452 Estate Agents.

10.6 National Home Builders Registration Council (NHBRC)

Mr M Monyani, Chief Executive Officer, reported that the NHBRC programme for Administration consists of:

· Governance and leadership;

· Well-functioning organization;

· Efficient Information Technology system;

· Satisfied and skilled staff compliment (Human Resources); and

· Internal control (Supply Chain Management, Finance and Audit).

The programme for Regulation consists of homebuilder’s registration; home builders de-registration; home builders reinstatement; compliance of home builders to set norms and standards; enforcement of home builders to set norms and standards; and training of homebuilders.

The NHBRC reported its targets for 2014/15 financial year as follows:

· to register 2,885 homebuilders; renew 12, 195 registration of homebuilders and enroll 45, 963 non-subsidy houses;

· to enroll 2, 298 late enrolments of houses; enroll 33,150 home subsidy and enroll 160, 377 non-subsidy inspection of homes;

· to enroll 45, 100 subsidy projects and 160,377 non-subsidy inspections of homes; and

· to inspect 201,300 subsidy homes; to train 1, 200 homebuilders and to train 2, 000 youth.

10.7 National Urban Reconstruction and Housing Agency (Nurcha)

Mr V Gqwetha, Chief Executive Officer, briefly presented the mandate of NURCHA stating that it ensures the availability of bridging finance to small, medium and established contractors, building low and moderate income housing and related community facilities and infrastructure.

The Nurcha’s key performance areas and targets for 2013/2014 to 2016/17

10.8 Community Schemes Ombud Services

Mr V Mehana, Chairperson of the Board, briefly reported the Community Schemes Ombud Services Act (Act No 9 OF 2011) [CSOS ACT] was promulgated on the 11 June 2011 and provides for the establishment of the Community Schemes Ombud Services (CSOS) as a public entity. The CSOS has been classified as a Schedule 3A Public Entity in terms of the Public Finance Management Act (Act No 1 of 1999) [PFMA]. The key mandate of the entity is to develop and provide a dispute resolution service in terms of the Act; to provide training for Conciliators, Adjudicators and other employees of the Service; to regulate, monitor and control the quality of all Sectional Title Schemes governance documentation and such other scheme governance documentation as may be determined by the Minister; to take custody of, preserve and provide access electronically or by other means to Sectional Title Schemes governance documentation and such other Scheme governance documents as may be determined by the Minister and to manage the Sectional Titles Management Act as provided by the relevant Act.

11. Committee deliberations and observations

The Committee, having been briefed by the Department on its strategic plan, annual performance plan and budget, deliberated as follows:

The Committee welcomed the presentation and appreciated that the Minister and the Deputy Minister of Human Settlements attended its first meeting. The Committee applauded the Minister and the Department for the emphasis on the issuing of title deeds and also in dealing with the backlog. This challenge has deprived beneficiaries ownership for quite some time. The Committee sought clarity on what would happen to the Rural Household Infrastructure Grant (RHIG) and its funding seeing that there is a fully fledged department that is mandated to deal with sanitation. Clarity was sought on the rationale to split the RHIG funding into direct and indirect while not sure whether the function was going to be transferred to the newly-established department or not. The timeframes for the eradication of the bucket system (toilets) was questioned with the view that two years was not adequate to eradicate the system. Clarity was further sought on whether the Department had any mechanisms in place to curb the development of new informal settlements as well as policies to regulate the invasion of land and buildings.

The Committee was concerned that only six provinces submitted their business plans and wondered how the Department allocated money without proper plans. The Committee wanted to know the Department’s plan to complete the incomplete houses in provinces and timeframes to handover those houses. The Committee requested the Housing Development Agency (HDA) to unpack the land that has been acquired and whether the land was suitable for human settlements developments. Clarity was sought on why the HDA was operating in only six provinces and how other provinces were being assisted. The National Home Builders Registration Council was requested to collaborate and to align its inspection function with provincial and municipal inspectors to save time for the developers. The Committee was concerned about the accreditation of one housing cooperative by the Social Housing Regulatory Authority and the entity was requested to explain the reasons. The Committee requested the Department to assist the municipalities in the upgrading and redevelopment of dilapidating hostels (Community Residential Units). The Department was requested to explain how the institutional subsidy was being utilised. In addition, the Committee enquired how far the Department was with regard to the contracting horizontally or vertically with other core department in an attempt to achieve its set targets.

The Minister stated that she would be passionate with the issue of title deeds and the Department would prioritise the issuing of title deeds. She reported that there was a process of separating functions and she was not sure what will happen to RHIG. However, she was negotiating with the Minister of Water and Sanitation to continue implementing the sanitation function (the internal reticulation) while that Department of Water and Sanitation would remain with the bulk infrastructure. The Department reported that the 2009 target for the eradication of the bucket system was missed, however significant achievements were made where the buckets were replaced by Ventilated Improve Pit (VIP) toilet of which its life span was approximately three years if not maintained. There were approximately 280 000 bucket toilets in the country that should be eradicated. The RHIG was split into two grants that is the direct and the indirect grants. The indirect grant would be implemented and monitored by the Department and the indirect would be implemented by the municipalities.

With regards to incomplete houses the Minister informed the Committee that in some instances the developer gone broke and could not finalise the project or in some instance there would be challenges within the municipality. However the Department would verify those and complete them and handover. The contracting with other core departments would be ongoing as she was going to meet with the Minister of Rural Development and Land Reform. She stressed that it is illegally to occupy land; she made reference to Lwandle case in Strand stating that the Department has requested land owners not to evict people in winter. She reported that the Prevention of Illegal Evictions from and Unlawful Occupants of Land Act, No 19 of 1998, needs to be reviewed as it was not implemented optimally. The Department would prioritise it.

The SHRA reported that there was a challenge with the legislation of the housing cooperatives by the Department of Trade and Industry. However, the Department would prioritise the housing cooperative and SHRA would be able to accredit more cooperatives. The institutional subsidy is the subsidy that is administered by provinces as a top-up funding. It is a mixed funding that included rent to buy project.

12. Committee recommendations

The Committee, having considered the strategic plan and budget vote of the Department of Human Settlements, recommends that the Minister of Human Settlements should:

1. Keep it abreast of the negotiations between herself and the Minister of Water and Sanitation on the proposal to retain the Rural Housing Infrastructure Grant;

2. Provide clarity on the scope of work with regard to the rolling out of sanitation at household level, as to how far the hand of the Department of Human Settlements stretches in the rolling out sanitation at household level;

3. Present the revised strategic plan and the annual performance plan to the Committee.

The Committee further recommends that the Minister should ensure that the national department:

1. Prioritise the amendments of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act, No 19 of 1998;

2. Fast-track the drafting of a policy that would curb the development of new informal settlements and the illegal invasion of land, houses and buildings;

3. Prioritise the contracting either horizontally or vertically with other core departments in the realisation of human settlements;

4. Fast-track the issuing of title deeds and ensure that in future each state subsidy house is handed over together with a title deed to curb the backlog;

5. Ensure that the Housing Development Agency unpacks the land that it had acquired for human settlements development;

6. Ensure that the National Home Builders Registration Council collaborates and aligns its inspection with the provincial and municipal inspectors.

7. Assist municipalities in the upgrading of hostels as most of them are dilapidated;

8. Fast-track the development of the policy that would regulate housing cooperatives;

9. Ensure that incomplete houses are completed and handed over to the rightful beneficiaries.

Report to be considered.