The
City of Johannesburg herewith responds to your invitation to submit comments on
the Social Housing Bill as published in the Government Gazette No. 30022 of 6
July 2007.
The
following comments were received from the Office of the Executive Director:
Finance.
1.
AD PURPOSE OF THE BILL AND PREAMBLE
1.1
The purpose of the Bill is set out in the heading thereto and refers to
the three tiers of government, namely national, provincial and local government.
The preamble likewise refers to the three tiers of government.
1.2
Section 2(1) then describes the joint obligations of the national,
provincial and local spheres of government.
1.3
However, where sections 3 and 4 describe the roles and responsibilities
of national and provincial government, section 5 refers to the roles and
responsibilities of municipalities. The Bill thus commences with local
government and then moves to municipalities without creating a
connection between local government and municipalities.
1.4
Although provincial government is defined in the definitions section,
there appears to be no definition for either local government or municipalities.
To overcome the above problem and for the sake of consistency, it is proposed
that additional definitions be inserted for local government and municipalities.
2. AD DEFINITIONS
“Department” is defined so as to mean the Department of
Housing. It is presumed that the Bill refers here to the National
Department of Housing and not the Provincial Department of Housing. If that is
correct, it is proposed that the definition be amended so as to refer to the “National”
Department of Housing.
3.
AD SECTION 3(2) READ WITH SECTIONS 5(c) AND 18(1)
3.1 In terms of section 3(2), the costs
and expenses connected with the implementation of this Act (sic) must be
defrayed from money appropriated by Parliament to the Department for that
purpose.
3.2 By virtue of section 18(1), funds
for the social housing programme and for financing the implementation of the
social housing programme and any relevant provincial housing programme
consistent with national housing policy must be made available from-
(a)
money earmarked for that purpose from the
Department’s annual budget; and
(b) money allocated to a province for that
purpose in terms of the annual Division of Revenue Act.
3.3 In terms of section 5(c), one of the
roles and responsibilities of municipalities is “to provide access to
land and buildings for social housing development in designated restructuring
zones.” This might have a financial implication for the City, as the Bill does
not state whether the provision of access would actually include the provision
of land by municipalities for social housing development purposes.
3.4 Should access to land in fact entails
the provision of such land by municipalities, it appears that by virtue of
sections 3(2) and 18(1), the costs to obtain any land from the City will be
borne by the Department, as the costs of the land would of necessity be
regarded “as costs and expenses connected with the implementation of the
Act”.
3.5 In order to clarify this aspect and
put it beyond doubt, it is proposed that section 2(3) be amended to read as
follows:
“The
costs and expenses connected with the implementation of this Act, including
the costs to obtain land and buildings for social housing development in
designated restructuring zones and the costs of acquiring municipal housing
rental stock, must be defrayed from money appropriated by Parliament to
the Department for that purpose.”
3.6 The above proposal would confirm the
general role of municipalities as set out in paragraph 2.2 of the Memorandum on
the Objects of the Social Housing Bill that was attached to the Bill, where it
is inter alia stated as follows:
“Municipalities
are tasked with facilitating social housing delivery in their areas
of jurisdiction, while the National Housing Finance Corporation will
participate in social housing development by improving access to loan funding.”
4.
AD SECTIONS 13(4) AND (5)
4.1 In
terms of section 13(4) a municipality may establish “an institution”,
which we presume actually means a “social housing institution” as
defined in section 1. As no definition exists for “an institution” and
it is presumed that the intention is to actually mean a “social housing
institution”, it is proposed that the words “an institution” where
it appear in this section, be substituted with the words “social housing
institution”.
4.2 Section 13(5) stipulates which
legislation a social housing institution should comply with. As:
(i)
a municipality would by virtue of section 13(4) also be empowered to
establish a social housing institution;
(ii)
such institution might amount to an external service provider
providing a municipal service on behalf of the City as contemplated in Chapter
8 of the Local Government:
Municipal Systems Act, 2000, (Act 32 of 2000); and
(iii)
such institution might also amount to a municipal entity as
contemplated in Chapter 8A of the
Local Government: Municipal Systems Act, 2000, (Act 32 of 2000) and Chapter
10 of the Local Government: Municipal Finance Management Act, 2003 (Act 56
of 2003)
it is proposed that the following words be inserted at the
end of section 13(5):
“Provided
that in respect of a social housing institution established or to be
established by a municipality, the relevant provisions of Chapters 8 and 8A of
the Local Government: Municipal Systems Act, 2000, (Act 32 of 2000)
and
Chapter 10 of the Local Government: Municipal Finance Management Act, 2003 (Act
56 of 2003), shall in addition apply.”
5.
AD SECTION 15(1)(a)
This sub-section makes difficult reading. It is thus proposed that the
words “a corporate governance plan” where it appear in the second line
be deleted and be inserted after the words “accreditation, prepare and
submit” where it appear in the first line. Section 15(1)(a) would then read
as follows:
“(1) Each accredited social housing institution must-
(a) within
90 days of it having attained accreditation, prepare and submit a corporate
governance plan to the Regulatory Authority for approval, which must
address at least-
(i)
……
(ii)
……
(iii)
…… ; and
(iv)
…….”
The lack of a
legal framework for social housing has impacted on the scale and success of
social housing delivery to date. The development of the Social Housing Bill
should provide an enabling and supportive environment for social housing
delivery.
Section
3(1)(f) - Municipalities may not necessarily provide for restructuring zones in
their IDP’s given the timing of these processes. Therefore the clause should rather refer to restructuring zones
being aligned with the IDP.
It
is important to note the enabling and supportive role identified for
municipalities. However in many
instances municipalities are not able to effectively support social housing and
social housing institutions as a result of procurement processes that do not
allow for preferential treatment etc. as well as restrictions in term of the
MFMA.
The
establishment of regulatory authority is an important component of the Bill,
however it is proposed that a number of clauses especially regarding the
functions of the regulatory should not be included in the Bill but rather in
the regulations.
The
powers identified for the regulatory authority in this section with regard to
addressing maladministration of social housing institutions may not always be
possible, especially in circumstances where the grant / subsidy support to
social housing institutions are negligible in comparison with funding etc. from
other institutions eg. social housing institution that are wholly owned by the
municipality. In these situations the powers identified in the Bill may not be
applicable or implemented.
In
addition the role of the regulatory is not reflected as that of empowering the
sector or social housing institutions but is very much projected as having a
punitive function. Reflecting a more empowering legal framework may achieve
much more than the current punitive focus.
Section
15(3) (a) - is an example of the inappropriateness of certain clauses and the
detailed operational issues that the drafters try to be prescriptive on. It is
proposed that the Bill should not be stipulating such details but should rather
be promoting more broadly good corporate governance.
We
trust that the above comments would be useful in drafting the final
legislation.
Kind
Regards
MR EUGENE MöLLER
LEGAL ADVISER
LEGAL COMPLIANCE
OFFICE OF THE EXECUTIVE
MAYOR
CITY OF JOHANNESBURG