Housing Development Agency Bill & Delft evictions: Department briefing

Meeting report

Delft Evictions: Department of Housing (DOH) briefing
The Chairperson referred to the controversial evictions that were taking place at present in Delft. She noted that squatters had illegally occupied the houses built and allocated to others in the area, and that government had been successful in obtaining a court order for their eviction on 7 February.

Mr Itumeleng Kotsoane, Director General, Department of Housing, stated that in December 2007, when contractors working on the houses had closed for the holidays, squatters had illegally occupied the houses. These squatters had moved in after receiving letters from the DA councillor for Delft, Mr Frank Martin. The illegal occupants had been given until 17 February to vacate the houses. Their application for leave to appeal had been turned down on 18 February 2008. Thereafter evictions had commenced. The evictions were successful and many of the occupants had vacated voluntarily. There was no violence.

Mr Kotsoane said that Councillor Martin had made allegations of corruption in the allocation of houses. An allocation committee had been formed to deal with allocations once the houses were completed. The process was considered to be fully transparent. The allocations would be 70% for informal settlement dwellers and 30% for backyard dwellers. This decision was taken at national department, provincial department and M3 municipalities. There were allegations also that these percentages had not been followed in making allocations. There were allegations of racism in that allocations were only being made to informal settlement dwellers from Joe Slovo Informal Settlement. It seemed that Councillor Martin had used the exercise to further his political ambitions in Delft. It was not a councillor’s duty to instruct persons to occupy houses illegally, as it was considered that his behavior had been unacceptable as a public representative.

Mr Kotsoane said that the names of evicted persons had been noted in order for them to be allocated houses as the process moved forward. In the meantime they would have to return to their original residences. Many had not moved in properly and still had all their possessions at their previous addresses.

Housing Development Agency (HDA) Bill: Department of Housing (DOH) briefing
A delegation from the Department of Housing, including the Director General, Mr Itumeleng Kotsoane, the Deputy Director General, Mr Mziwonke Dlabantu and the Chief Financial Officer, Mr Richard Thatcher, briefed the Committee.

The Committee was presented with a brief background on the bill. Cabinet had, in 2004, approved a Comprehensive Plan for the Development of Sustainable Human Settlements. The Bill was in line with this plan and would assist provincial and local government with the rapid release of land for housing. The Bill established a Housing Development Agency (HDA) which would be the engine for driving and facilitating the acquisition of land and landed property in a way that supplemented the capacities of all governments across all spheres. The functions and powers of the Agency included the assistance to municipalities to complete projects which had not been completed, and the assistance to municipalities with the upgrading of informal settlements and dealing with emergency housing solutions.

Mr Thatcher presented a clause-by-clause summary of the Bill (see attached presentation). He noted that the drafters had taken heed of the Committee’s concerns at the workshop that had been held and had effected the necessary amendments to the clauses in question. A summary was given of those amendments. The role and structure of the Agency was explained.

Discussion
Ms N Ngele (ANC) was happy that the Department was willing to accommodate the illegal occupiers by considering them for allocations as some of them had been on waiting lists for up to 14 years.

Mr G Schneemann (ANC) proposed that a more informed discussion on the eviction issue be held at a later time. He felt that the Committee needed feedback regularly on the issue, and in particular the \action taken against Councillor Martin.

Mr A Steyn (DA) said that breaking of the law by any person could not be condoned. He asked if the 70 and 30 percent allocation figures were valid. Mr Steyn believed that Ministers had decided on the figures, and asked if this was indeed so.

The Chairperson stated that the Committee had pushed for a 50-50% allocation. The 70-30% split was nevertheless accepted. The Chairperson said that house invasions would not be allowed, no matter how many years people were on waiting lists. She also felt that swift action should be taken against Mr Martin.

Mr Steyn also asked why was Mr Martin still a councillor.

Mr Kotsoane responded that the City of Cape Town had distanced itself from the actions of Mr Martin. Action by the City was now awaited. He noted that there was a court case pending against Mr Martin on a separate matter. He added that the 70-30% split had been a policy decision. Mr Martin had apparently also questioned whether the 70-30% split had been used in making allocations.

Mr Steyn raised concerns about the necessity for the HDA. He asked whether existing department bodies could not do the work of the Agency. Mr Steyn felt that the Agency was performing secondary functions.

Mr Kotsoane responded that all departments’ were hampered, in their execution of tasks, by great amounts of red tape. There was a lack of speed. The private sector on the other hand dealt with matters swiftly. He gave the example that where developers had to submit documents to the Department, there was no wastage of time and follow-ups were often made over the progress of the process. Government departments did not necessarily follow up.

Mr Schneemann said that the core function of the HDA seemed to be purchasing land and developing land. He asked what would the Agency actually do. Mr Schneemann ventured that perhaps the HDA would deal with developing land and construction. He also asked whether the HDA board positions would be permanent.

Mr Kotsoane noted that it was the intention for the agency to acquire land. It also had to develop land for residential purposes. In certain instances municipalities lacked capacity to develop land that they already held. This was where the Agency would step in to assist. The Agency could furthermore bring in the private sector to assist with development by providing additional funding.

Mr Kotsoane clarified that the board of the Agency consisted of members from other departments, such as Department of Land Affairs, as well as the DOH.  The Agency would also be able to acquire land from other State agencies such as Eskom and Transnet. He felt the Agency was sorely needed. Competition from the private sector was another concern and the reality was that municipalities were lacking in capacity, resulting in poorly built houses. In summary, the Agency would be able to assist with a variety of issues.

Mr Thatcher added that the Agency was required to have a proper business plan.

Ms B Dambuza (ANC) asked whether the HDA would be established at national level. She stated that most municipalities had their own development agencies, and enquired as to the future of those agencies. Many of the development agencies in municipalities were doing actual development. She further asked who was to determine whether a municipality had capacity or not.

Mr Thatcher stated that some provinces did have development agencies, but others did not. He referred to the mandate of the HDA and said that the performance of the Agency would be monitored against set performance targets. Early warning systems were also in place and regulations accompanying the Bill would be published. Departmental experts would evaluate the performance. The Minister would be provided with regular reports.

The Chairperson said that the Bill was silent on the role of Parliament. There was a need to incorporate this role into the Bill.

Mr Thatcher said that Parliament would have a role, which would be similar to the role played in regard to other statutory bodies, such as National Home Builders Registration Council (NHBRC). The Agency would be accountable to the Minister and to parliament.

Mr Dlabantu noted that there was inadequate capacity in the Department for proper oversight over the two previous housing institutions, Thubelisha and Servcon. The Department had formed a special directorate to deal with oversight. This Bill was a better piece of legislation than the previous legislation covering the two previous institutions. Mr Dlabantu emphasised that the Agency was subject to the Public Finance Management Act (PFMA) and that parliament had oversight.

Mr Steyn referred to the earlier comments that the public sector was hampered by a great deal of red tape and that government departments hardly ever made follow-ups. He was not convinced that that reason justified the need for the Agency. Mr Steyn said the solution to the problem was that State employees should be made to work better. He asked, in light of the current skills shortages, how the Agency would get the skilled persons it required. Mr Steyn was concerned that the HDA would be top-heavy and that expensive consultants would be brought in to do the work.

Mr Steyn was concerned that clauses 4 and 5(4) were contradictory.

Mr Thatcher referred to clause 4, dealing with the role of the Agency. He said that the HDA’s role was multi-faceted. It had to acquire land, develop it, and get private sector assistance to get things done quickly.

Mr Kwezi Ngwenya, Legal Adviser, DOH, stated that the proposed amendments did attend to the contradiction.

Mr Steyn pointed out that the State was already experiencing problems on monitoring the progress of houses being built, hence the poor quality of houses built.

Mr Dlabantu conceded that currently there were areas of deficiencies.

Mr Dlabantu pointed out that the issue of skills was a problem throughout SA. He felt that skills would be attracted if there were proper structure. He said that structures should be used to stop the gaps. At the moment there was no doubt that land acquisition was problematic.

Ms Dambuza was concerned that the employees of the Agency would be appointed in terms of the Public Services Act. She too referred to the comments about state employees not doing follow-ups, and asked what would prevent the Agency’s employees from acting in the same way. The Bill should be strict on the issue. In referring to the comments that the effectiveness of the Bill would be enhanced by the regulations, she requested that the Committee should see the regulations before they were approved.

Mr Thatcher responded that regulations would be submitted to the Committee for consideration and approval. He noted that the Bill was over-arching and that the detail would be in the regulations.

Mr Schneemann said that the Bill did not give any indication whether it would devolve down to provincial level. He noted that the NHBRC had different levels, and for instance had provincial offices. Mr Schneemann asked how would land be acquired, and whether municipalities would inform the Agency what land was required.

An ANC Member asked what were the challenges surrounding land, or whether these were more about development. He asked how was the Agency intending to deal with challenges. He further asked how the Agency was going to override existing legislative processes in acquiring of land. He referred to the issue of mandates and asked whether there was no clear mandate when Thubelisha was established. He asked how would the Agency overcome challenges that other institutions were unable to overcome.

Mr Dlabantu said that Thubelisha’s mandate had expired. Thubelisha was currently carrying out some of the functions that the Agency would be tasked with. He pointed out that Public Private Partnerships (PPP) required particular instruments. Some of the PPP programmes could be packaged. Thubelisha had lacked the ability to perform these functions. The intention was therefore to wind down the two institutions Thubelisha and Servcon and to replace them with the HAD. When they were disbanded, the HDA would take over their functions. Mr Dlabantu stated that the Agency would have to take into consideration Integrated Development Plans (IDPs) and housing processes. It would not be operating outside planning regimes. An assessment would be made of where it needed to assist. The idea was not necessarily to replace current arrangements. He believed it could be far more efficient than what was currently in place.

The Chairperson referred to the issue of housing development and economies of scale. She asked why the R42 billion that had been provided by financial institutions for housing had not been used. She noted that nothing had been said about economies of scale and delivery. She felt that housing delivery should be much greater than its current levels. This did not come out clearly in the Bill. She suggested that perhaps the Bill should be shaped better for what it intended to achieve. Statements about acquiring land and assisting municipalities were vague. The question was posed whether the Agency would solve the housing problem.

Mr Dlabantu said that the goal of the Agency would be looked at. He noted that there should be articulation of economies of scale. The Committee was urged to assist the Department where possible.

Mr Steyn remained unconvinced about the need for the Agency. He said that if there was red tape in departments, the bottlenecks caused could surely be dealt with by amending the Housing Act. The concern was that housing would become expensive, as the Agency might be top heavy. The work to be done by the Agency was already done by the Department.

Mr Dlabantu stated that it was difficult to comment from a cost perspective. The idea was to accelerate housing delivery and a “lean and mean machine” was required to do the job.

Mr Thatcher added that the Agency would ensure that all future developments would be more integrated than in the past.

The Chairperson did not support the sentiment that there was no need for an Agency. She was questioning rather what type of Agency was needed.

Mr Thatcher proceeded to take the Committee through the proposed amendments.

The Chairperson emphasised that deliberation on the Bill and its amendments would be done at a later time. At present Members were being asked to comment on their initial impressions of the amendments.

Members were for the most part satisfied with amendments.

The Committee agreed that Clause 4, dealing with the role of the Agency, needed to be better expressed.

Adoption of Minutes
The Committee adopted the Minutes of its previous meeting.

The meeting was adjourned.