SV110707

MEMORANDUM ON THE OBJECTS OF THE SOCIAL HOUSING BILL, 2007

1.         BACKGROUND

The Social Housing Bill, 2007, has been developed to provide a legal framework for the regulation of the social housing sector.  The social housing sector is currently not being regulated by any dedicated legislation, and this has complicated and impaired growth in the sector.  It is hoped that the legislative and regulatory framework will ensure a viable and sustainable social housing sector, which will also contribute to the overall functioning of the housing sector.

2.         OBJECTS OF THE BILL

In order to achieve its aim, the Bill has been structured as follows:

2.1       Definitions and general principles applicable to social housing

In chapter 1 of the Bill, the terminology used in the draft legislation is defined, and makes provision for the general principles applicable to social housing.  The general principles have to a large extent been gleaned from the approved national social housing policy as well as the principles contained in section 2 of the Housing Act, 107 of 1997.  These principles are binding on the national, provincial and local spheres of government.

2.2       Roles and responsibilities of government and other role players

Chapter 2 deals with the roles and responsibilities of the three spheres of government, the National Housing Finance Corporation, and other delivery agents. 

Whilst National Government is mostly responsible for creating and upholding a sustainable environment for social housing by inter alia instituting and financing a social housing programme, provincial government will be responsible for administering the national housing programme applicable to social housing, including the approval and administration of grant funding.

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.

Entities who are not accredited social housing institutions may partake in approved projects based on the terms of agreement entered into by the entity and the Social Housing Regulatory Authority.

2.3       The Social Housing Regulatory Authority

The Bill deals with the establishment and functioning of the Social Housing Regulatory Authority as a statutory body.  The Regulatory Authority shall consist of a Council, a Chief Executive Officer, a Corporate Services Manager and such other staff as are necessary for the day to day functioning of the Regulatory Authority. The powers and functions of the Regulatory Authority are, inter alia –

(a)       to regulate the social housing sector;

(b)       to accredit social housing institutions;

(c)        to advise the Minister on matters pertaining to social housing;

(d)       to administer and disburse capital and institutional grants;

(e)       to conduct compliance monitoring via inspections etc; and

(f)         to intervene in the day to day management of social housing institutions in cases where regular inspections have identified maladministration.

2.4       Social Housing Institutions

Chapter 4 makes provision for the accreditation and functioning of social housing institutions.  Only accredited social housing institutions may participate in the national housing programme for social housing and thus derive any benefits thereof.  The Bill proposes strict criteria within which these institutions must operate, such as adherence to all applicable or relevant legislation and the approval of a corporate governance policy by the Social Housing Regulatory Authority.

2.5       General provisions

Lastly, chapter 5 of the Bill makes provision for the funding of the social housing programme by the Minister, as well as enabling the Minister to make regulations on a variety of issues.

3.         PERSONS CONSULTED

3.1       A task team consisting of Provincial Departments, Metro’s and other stakeholders participated in the preparation of the official policy and guidelines which culminated in this Bill.

3.2       Consultation also took place with –

*           the Social Housing Foundation;

*           National Treasury;

*           The Department of Public Service and Administration;

*           The National Housing Finance Corporation;

*           Dutch and United Kingdom social housing experts; and

*           The National Association of Social Housing Organisations.

3.3       Furthermore, the Bill was published in the Gazette for comment on 3 November 2006..

4.         IMPLICATIONS FOR PROVINCES

MEC’s and provincial housing departments will be responsible for administering the social housing programme to the extent set out in the programme and the provisions of this Bill.

5.         FINANCIAL IMPLICATIONS FOR THE STATE

The 2006 Housing Vote has allocated the following medium-term expenditure estimates to the social housing programme –

-           2006/07                      R110 million

-           2007/08                      R160 million

-           2008/09                      R240 million

These funds will be utilised for, inter alia, the Regulatory Authority staff costs, grant funding and operational costs.

6.         PARLIAMENTARY PROCEDURE

6.1       The State Law Advisers and the Department of Housing are of the opinion that this Bill must be dealt with in accordance with the procedure established by section 76(1) or (2) of the Constitution of the Republic of South Africa, 1996, since it falls within functional areas listed in Schedule 4 to the said Constitution, namely "Housing".

6.2       The State Law Advisers are of the opinion that it is not necessary to refer this Bill to the National House of Traditional Leaders in terms of section 18(1)(a) of the Traditional Leadership and Governance Framework Act, 2003 (Act No. 41 of 2003), since it does not contain provisions pertaining to customary law or customs of traditional communities.