Housing Development Agency Bill: Further deliberations and adoption

Meeting report

National Housing Development Agency Bill: Further briefing by National Department of Housing and State Law Advisors
Ms Suraya Williams, Principal State Law Advisor, Office of the Chief State Law Advisor, briefed the Committee on the proposed amendments to the Housing Development Agency Bill (the Bill). She tabled a document containing the proposals (see attached document). The document introduced new clauses, cited omissions on the Memorandum of Objects and Preamble. There were rearrangements of certain sections, and amendments to clauses 1 to 12, 18, 20, 21 to 24, 30 and 31.

Ms Williams detailed that the purpose of the Bill was to provide for the establishment of the Housing Development Agency (HAD), which would facilitate the acquisition of land and landed property in a way that complemented the capacities of Government. The main object of the Agency was to help with the fast tracking of land acquisition and housing development services, for the purpose of creating sustainable human settlements.

Clause 2, which was initially rejected, was replaced with one which defined the Housing Development Agency as a juristic person and made it clear that it was also operating as a national public entity with its executive authority vested in the Minister. The objects of the Agency were to identify, acquire, hold, develop and release state and privately owned land for residential and community purposes for the creation of sustainable human settlements. It was to project manage housing development services for the purposes of creation of sustainable human settlements. It was to ensure that there was centrally coordinated planning and budgeting of all infrastructure required for housing development; and monitor the provision of all infrastructure required for housing development.

Ms Williams noted that the role of the Agency matched the objects. After consultation with the relevant owner, it would identify, acquire, hold, develop and release state or privately owned land for residential and community purposes, for the creation of sustainable human settlements. It would have to ensure that there was funding for the provision of all infrastructure that was required for the housing development in which it would be involved. Where there was lack of capacity in any organ of State, the Minister could acquire, hold, develop and release land for residential and community purposes for the creation of sustainable human settlements. He could advise the organ of state to conclude an agreement with the Agency. The Agency would then offer assistance through its skill and expertise. Alternatively the Agency could be directed to engage with the organ of state with a view to concluding the agreement. Nothing in the Bill detracted from the power of a province and municipality to identify, acquire, hold, develop and release land for residential or community development without recourse to the Agency, and in terms of their functions under the Housing Act 107 of 1997.

Ms Williams noted that there was new wording for Clause 5. In terms of this, the Agency could, after consultation with the land owner, identify, acquire and hold land, either in terms of sub-clause (a), being land registered or vested in the State or any organ of state and which the State was prepared to dispose of; or under sub-clause (b), which related to privately owned land. In both cases the land would be acquired for residential or community development purposes. Furthermore, subject to section 25 of the Constitution, the Agency could appropriate land for the purposes of creating sustainable human settlements, under sections 6 to 23 of the Expropriation Act 63 of 1975. Certain conditions were set out, and any consultations between organs of State must comply with Chapter 3 of the Intergovernmental Relations Framework Act13 of 2005.

Ms Williams noted that there was new wording setting out the functions of the Agency. The Agency must draw a development plan, to be approved by the Minister, after consultation with relevant authorities in the provinces and municipalities. It would have to develop strategic plans with regard to the identification and acquisition of state and privately owned land which was suitable for residential and community development. It would need to prepare necessary documentations for consideration and approval by the relevant authorities. It must monitor progress on the development of land and landed property acquired for creating sustainable human settlements. It must enhance the capacity of organs of state to enable them to meet the demand for housing delivery. It was to ensure that there was collaboration and intergovernmental and integrated alignment for housing development services. Once again the requirement to identify, acquire, hold, develop, and release state and privately owned land for residential and community development was listed. It would also be required to undertake project management services, including assistance relating to approvals required for housing development. It would have the power to contract with any organ of the State for the purpose of acquiring available land for residential housing and community development, for the creation of sustainable human settlement. It must assist the organs of State to deal with housing developments that had not been completed within the anticipated project period. It would further assist the organ of state with the upgrading of informal settlements and in respect of emergency housing solutions. In performing its functions, the Agency would have to ensure that residential and community developments were sustainable, viable and appropriately located. It would furthermore need to  establish compliance and fraud prevention mechanisms to ensure the integrity of the Agency, to ensure that job creation was optimised in the process of residential and community development, and to introduce and manage a land inventory and information system; and ensure community participation.

Ms Williams noted that certain substitutions of wording had been made in clauses 7, 8, 9, 10, 11, 12, 18, 20, 21, 22, 23, 24, 30 and 31. She indicated the substitution of wording in relation to the Memorandum on the Objects and the Preamble. She noted that there had been some rearrangement of certain clauses (see attached document for full details).

Discussion
The Chairperson noted that the Committee’s proposed amendment on skills transfer was missing.

Mr Joseph Leshabane, Chief of Operations: National Department of Housing, responded that capacity building encompassed the whole totality, including skills enhancement.

Mr G Schneeman (ANC) concurred that with Mr Leshabane that skills transfer was encapsulated under capacity enhancement. He added that Members must understand that legislation could not go into minute details.

Ms B Dambuza (ANC) suggested that clause 1(e) must explicitly contain a reference to skills transfer to enable it to be more easily understood by ordinary citizens.

Ms Suraya Williams pointed out that it would be better to include words such as “inter alia, skills transfer”.

Mr Schneeman reminded Members that the proposed legislation would not be implemented by lay citizens but by experts in the housing industry who understood the terminology. He urged Members to guard against watering down the whole Bill.

A Member suggested that it would be advisable for the Committee to refer the matter to party caucus meeting before passing the Bill.

Mr Leshabane noted that it would be very difficult to try to unpack this concept without unpacking everything. He maintained that the term “capacity building” was all encompassing of various skills.

Ms Dambuza suggested that the clause title “mandate” be substituted with “governance relations”

Ms Williams maintained that the title “mandate” was in line with wording used in the Public Finance Management Act (PFMA) and the Housing Act.

Mr Leshabane observed an omission from the Bill regarding the powers of the Agency. He noted that although the Bill outlined the purposes, objects and duties of the Agency, it had no means of coercing other agencies, which in effect rendered it toothless and ill equipped to ensure that centrally coordinated planning was possible. He added that clauses setting out responsibility should be backed by the requisite package of powers to enable the Agency to implement its mandate.

The Chairperson noted that it was the Committee’s belief that the word “must”, as used in relation to the functions of the Agency, would encompass the powers of the Agency. She suggested that the State Law Advisor look into the matter.

Mr Leshabane clarified that beyond the issue of functions, there was a need for the Agency to have specifically defined powers over other role players for it to effect the functions bestowed upon it.

Ms Dambuza agreed that there was a need for powers of the Agency to be factored into the Bill, and suggested this be done by the State Law Advisors, in consultation with the Department of Housing.

Mr Leshabane pointed out that the section on the powers of the Agency was left out in the formulation and articulation of the clauses. He added that in some instances “functions” may be used to mean “powers”, but in the case of this Bill as presently worded, the functions were assigned to and binding on the Agency, although it did not have any powers to enforce its decisions.

The Chairperson agreed that a clause  on the powers of the Agency was needed. She asked the State law Advisors and the Department of Housing to deal with this issue.

Mr Leshabane also observed that the functions of the Chief Financial Officer, as outlined in the Bill, were likely to create conflict with project managers in the Agency. He recommended that the phrasing of the duties should note that the Chief Financial Officer must introduce and manage sound financial management systems for the Agency. He added that the financial engineering of projects and feasibility studies on projects was the preserve of project managers.

Ms Dambuza concurred with Mr Leshabane on the proper duties of the Chief Financial Officer. However, she asked whether these duties should be included specifically in the proposed amendments.

Mr Schneeman suggested the Bill in relation to the Minister placing matters before parliament should be amended so that the wording was “must” and not “may”.

Mr Leshabane noted that there were two levels of regulations. One would cover internal rules and procedures. The other would relate to external legislation, which would be passed by Parliament. He added the Minister would make regulations in regard to the functions to be exercised by the Agency. Of these regulations, the most important were those dealing with administrative issues.

Mr Schneeman wanted to know whether it was usual for the regulations to be formulated and gazetted without Parliamentary consultation.

Ms Williams responded that internal regulations were gazetted, for public information, and there was no need for them to come to Parliament for approval prior to this.

Mr Leshabane pointed out that when the Bill was passed it would set out the broad framework and mandate of the Agency. The regulations to be made by the Minister would provide the details of how it would operate. He added that the Bill, once it was an Act, would determine the parameters whilst the implementing agency had to determine the methods through internal regulations.

Ms Dambuza said that was clear. However, she said there was a contradiction where the Department crafted legislation after a directive from the Minister. She said that most of the time when the Committee was doing its oversight duties, people tended to refer regulations instead of the legislation. She added that this was creating unnecessary contradiction between politicians and administrators.

Mr Schneeman said these regulations were never submitted to the Parliament. He made a formal recommendation that the Bill substitute “must” instead of “may” in relation to matters being placed before Parliament.

The Chairperson, having noted the support of the majority of Members, concurred that the word “must” be used.

Ms Phumelele Ngema, Senior State Law Adviser, Department of Housing, clarified that the word “may” was being used to refer to the making of regulations.

Mr Schneeman noted that in that case “may” should remain.

A Member proposed that the words “hindrances and problems” be substituted with “challenges” in the Preamble.

Mr Leshabane suggested that the sentence be reconstructed to read “there are serious challenges that hinder the realisation of housing for all, therefore there is need to accelerate the delivery of housing and to enhance the security of the required capacity”.

The Chairperson suggested that the component on the powers of the Agency should be married with that on the functions of the Agency, so that it did not affect the structure of the Bill. She adjourned the meeting for a short while to allow the legal drafters time to come up with new wording.

On resumption, Mr Leshabane briefed the Committee on the proposed powers of the Agency. He said that in performing its functions the Agency may declare priority housing development areas for residential and community purposes, consistent with the approved Municipal Integrated Development Plan, and may develop and submit a development plan for such priority housing development areas as contemplated in sub-section 1(a).

Discussion
Mr L Modisenyane (ANC) said the presentation on the powers of the Agency was admirable. He applauded it as not encroaching into government power.

Ms Dambuza suggested that Integrated Development Plans (IDPs) should be defined in the definitions clause.

Ms Williams responded that there would be no objection to doing so.

A Member wanted to know whether there would not be problems if the Agency overstepped the IDPs of municipalities. He asked what would happen in cases where there were no IDPs.

Mr Leshabane said all municipalities were required by law to have IDPs outlining the development trajectory. He noted that the Agency would not encroach into municipal territory. He added that in areas where there were no IDPs, it was incumbent upon the provincial government to intervene. He said that the IDP would have legal standing once approved by the Municipality, notwithstanding whether the IDP was developmental or progressive.

A Member commented that most municipalities had no housing sector plans in their IDPs.

Ms Dambuza concurred and said that the wording that made reference to IDPs and municipalities should be deleted to avoid inconsistency.

The Chairperson agreed that the Committee had agreed earlier not to use the word “municipality” but to refer to this organ of government under “state organs”. She reminded the department not introduce issues through the back door.

Mr Leshabane agreed to delete the wording reading “consistent with the approved Municipal Integrated Development Plan”.

Members then proceeded through the Bill, clause by clause.

The Bill was adopted, with amendments as set out in the document and as accepted at the meeting.

The meeting was adjourned.