Parliamentary Portfolio Committee 02/09/2011

Social Housing Act and SHRA Accreditation Report Draft Regulations Process Structure of Presentation 2Parliamentary Portfolio Committee

Social Housing Act & SHRA 3Parliamentary Portfolio Committee

Context 4Parliamentary Portfolio Committee

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6 6 purposes Establish & promote a sustainable SH environment Define the functions of National, Provincial & Local government iro SH Establishment of SHRA Allow for undertaking of approved projects by other delivery agents Statutory recognition of SHI’s Matters connected therewith 5 Chapters 1. Definitions & general principles 2. Roles & Responsibilities 3. SHRA 4. SHI’s 5. General Provisions

Social Housing Act & SHRA 7Parliamentary Portfolio Committee Social Housing Act 16 of 2008, promulgated in December 2008 came into operation on 1 st September Introduced 3 new instruments:- Legislative & regulatory Instruments Social Housing Act = framework legislation Social Housing Regulatory Authority (SHRA) Defined sector roles & players Financial instruments Restructuring capital grants for social housing Capacity building grants Tax incentives Risk mitigation measures Capacity building instruments Focus on capacity to run viable projects 1. Capacity to develop and implement projects 2. Effective interventions 3. Support to gear up SHI’s

The mandate of the Social Housing Regulatory Authority (SHRA) is derived from the Social Housing Act 16 of 2008 CHAPTER 3 SOCIAL HOUSING REGULATORY AUTHORITY Establishment of Social Housing Regulatory Authority 7. (1) There is hereby established a juristic person to be known as the Social Housing Regulatory Authority. (2) The Public Finance Management Act applies to the Social Housing Regulatory Authority. (3) The Social Housing Regulatory Authority is accountable to the Minister and Parliament. The Act further sets out the composition of SHRA in Section 8 and the functions of SHRA in Section 11 SHRA 8Parliamentary Portfolio Committee

SHRA 9Parliamentary Portfolio Committee Mandate To invest in social housing and be able to regulate the sector Vision Affordable rental homes in integrated urban environments through sustainable institutions Mission The SHRA will regulate and invest to deliver affordable rental homes and renew communities

Parliamentary Portfolio Committee10 SHRA SHRA “reason for being”…. Restructuring Social, Economic and Spatial Re-structuring LiveWorkPlayPray

Parliamentary Portfolio Committee11 SHRA SHRA Business Model SHRAInvestmentCapitalCapacitationRegulationAccreditationRegulation Accredited Service Providers

SHRA Functional Structure 12 SHRAInvestmentRCG Grant/contract management Capacitation Grant compliance RegulationAccreditation Regulatory Compliance Monitoring & Evaluation Institutional Performance Measurement InterventionRemedial Action Council Sub- Committee Parliamentary Portfolio Committee

13 SHRA SHRA High-level Process

Parliamentary Portfolio Committee14 SHRA Progress Investment : 2342 units approved (target of 1705) and 2 nd call for proposals still to come estimate further 1500 units. Huge interest from private sector. Capacitation grants recommended. Engaging service providers for proposals/quotations. Accreditation : 2011/12 cycle complete. Preparing for 2012/13 cycle. See report later. Draft Regulations ready for presentation to Parliament and for gazetting (noting Parliament’s comments) Monitoring and Evaluation on accredited SHI’s started

Parliamentary Portfolio Committee15 AG Dashboard

Accreditation 16Parliamentary Portfolio Committee

1.All institutions having undertaken housing developments with the benefit of an institutional subsidy and 2.who carries on the business of providing rental or co-operative housing options for low to medium income household on an affordable basis. SOCIAL HOUSING ACT 17Parliamentary Portfolio Committee

1.Social Housing Institutions 2.Municipal Owned Social Housing Institutions 3.Co- Operatives CATEGORIES OF INSTITUTIONS 18Parliamentary Portfolio Committee

ACCREDITATION PROCESS 19 APPLICATION ASSESSMENT ACCREDITATION COMPLIANCE MONITORING Parliamentary Portfolio Committee

1.Accredited SHI’s 2.Declined SHI’s 3.Non Applicants 4.List from the Department 20 ACCREDITATION PROGRESS REPORT Parliamentary Portfolio Committee

SOCIAL HOUSING INSTITUTIONSTATUS 1.COMMUNICARE F/A 2.MADULAMOHO F/A 3.JHC F/A 4.CTCHC C/A 5.FIRST METRO C/A 6.GOVEN MBEKI C/A 7.MSUNDUZI C/A 8.SOHCO A.H C/A 9.HAEL C/A 10.YEAST C/A 1.ACCREDITED SHI’s

SOCIAL HOUSING INSTITUTIONSTATUS 11.IMIZI C/A 12.FRESHCO C/A 13.OWN HAVEN C/A 14.SOHCO SPI C/A 15.EHI C/A 16.MOKO C/A 17.STHA C/A 18.JOSCHO C/A 1.ACCREDITED SHI’s Cont…

10 Applications were declined, list may have to be revisited 2.DECLINED 23 SOCIAL HOUSING INSTITUTIONSTATUS 1.Bendile Housing Declined 2.Ekurhuleni Development Company (Internal Review) Declined 3.Grakol Declined 4.Indiza Terra Housing Declined 5.King William’s Town Housing Association Declined 6.Magret Property Declined 7.Maverick Declined 8.NN Architects Declined 9.SA Solid Estates Declined 10.Sol Plaatjie Housing Declined Parliamentary Portfolio Committee

Application for Internal Review received Council has 90 days within which to re-affirm or substitute decision Decision Affirmed SHI has 180 days to institute judicial review of the decision SHI makes successful application Accreditation Restored Management reinstated Accreditation Restored Management reinstated Decision Substituted Application Dismissed Commence with Court Process to recover Stock INTERNAL REVIEW (PAJA) Section 11(a) Compliance Monitoring 24Parliamentary Portfolio Committee

12 Institutions identified as non accredited were: 3.NON ACCREDITED INSTITUTIONS 25 SOCIAL HOUSING INSTITUTIONSTATUS 1.Abahlali Non Accredited 2.Affordable Housing Company Non Accredited 3.Badiri Housing Association Non Accredited 4.Housing Company Tshwane Non Accredited 5.Housing Association Blaauwberg Non Accredited 6.Mbombela Housing Association Non Accredited 7.Ethekwini Housing Association Non Accredited 8.Polokwane Housing Association Non Accredited 9.Reahola Housing Association Non Accredited 10.Shayamoya Housing Association Non Accredited 11.Reatlehile Housing Association Non Accredited 12.Vusani Amadolobha Housing Association Non Accredited Parliamentary Portfolio Committee

A list of 378 projects received from DoHS. SHRA is in the process of obtaining and collating information received from the Provinces to identify institutions administering those projects. 4.LIST FROM THE DEPARTMENT 26Parliamentary Portfolio Committee

No Application Received Intervention: Forensic Audit Suspension of Member Transfer of Housing Stock Intervention: Forensic Audit Suspension of Member Transfer of Housing Stock Application for Accreditation received Provisional Accreditation Assessments & Conditions (90 days) Conditions met Full Accreditation Certificate Issued Conditions met Full Accreditation Certificate Issued Compliance Monitoring Conditions not met: 1.Withdrawal of Prov. Accr 2.Institutional Intervention Fund 3.Intervention Forensic Audit Suspension of Chair & Management Transfer of Housing Stock Conditions not met: 1.Withdrawal of Prov. Accr 2.Institutional Intervention Fund 3.Intervention Forensic Audit Suspension of Chair & Management Transfer of Housing Stock Notice of Non Compliance i.t.o Section 13(9) (20 Days) Notice of Non Compliance i.t.o Section 13(9) (20 Days) WORK PLAN TO ACCREDIT THE NON ACCREDITED SHI’s 27Parliamentary Portfolio Committee

Trigger Maladministration / Non - Compliance Maladministration / Non - Compliance Institutional Intervention Programme Institutional Intervention Programme SHRA prepares a report Notice to Intervene and propose Remedial Action SHI takes proposed Remedial Action No improvement following remedial action Remedial Action Yield Results SHI Regularised SHI resist proposed Remedial Action Forensic Investigation Public Accountant / Auditor Appointed Internal Review 60 Days before we proceed Internal Review 60 Days before we proceed Apply to Court for suspension of SHI’s Management & Appointment of Administrator Forensic Report Positive Report SHI Regularised Buy out Process Consultation with Debt Funders Consultation with Debt Funders INTERVENTION BY SHRA & FORECLOSURE PROCESSES 28Parliamentary Portfolio Committee

Draft Regulations 29Parliamentary Portfolio Committee

INTRODUCTION Section 19 of the Social Housing Act (“the Act”) determines that the Minister, by notice in the Gazette and after consultation with Parliament: Must make regulations prescribing: -Any matter required to be prescribed by regulation under the Act; -A code of conduct, the investment criteria and the qualifying criteria for social housing institutions; May make regulation: -in respect of the required provisions of the agreements the SHRA, other delivery agents, provincial authorities and the National Housing Finance Corporation. -Any other ancillary or administrative matter that is necessary to prescribe for the proper implementation or administration of the Act The regulations may provide for offences in cases of contravention thereof. 30Parliamentary Portfolio Committee

Hierarchy of Legislation 31 Social Housing Act Regulations RulesDirectives, Instructions, Circulars Parliamentary Portfolio Committee

Hierarchy of Legislation 32Parliamentary Portfolio Committee

THE DRAFT REGULATIONS The draft regulations development began in 2010 and were published for public comment on 10 September 2010 under Government Gazette No Interested parties were invited to comment no later than 30 September 2010 and comments were received and checked for relevance. The ultimate goal of the draft regulations is to complement the Social Housing Act in ensuring an effective and proactive regulatory authority for social housing institutions and other delivery agents and to promote growth, stability, good governance and confidence in the Social housing Sector. 33 BACKGROUND Parliamentary Portfolio Committee

APPLICATION OF THE REGULATIONS In terms of the draft regulations, a social housing institution should be not for profit. It should also be able to demonstrate good governance, financial sustainability and effective service delivery. The main objective of the social housing institution should be the provision of rental or co-operative housing for low to medium income households. 34Parliamentary Portfolio Committee

35 Regulations to SH ACT Chapter 1: Interpretations + Definitions Chapter 2: Application, Qualifying Criteria, Accreditation Chapter 3: Regulatory Function Chapter 4: Approvals Chapter 5: Code of Conduct Chapter 6: Investment Criteria Chapter 7: Entry, Enquiry, Seizure of Documents Chapter 8: Agreements Chapter 9: General Structure of Regulations Parliamentary Portfolio Committee

THE DRAFT REGULATIONS PROVIDES FOR 1.Applications for accreditation of social housing institutions ( Regulation 2); 2.Qualifying criteria for accreditation (Regulation 3); 3.Provisional accreditation of social housing institutions ( Regulation 4); 4.A register of social housing institutions (Regulation 5); 5.Reporting requirement ( Regulation 6) 36Parliamentary Portfolio Committee

THE DRAFT REGULATIONS PROVIDES FOR CONT… 6.Withdrawal of accreditation ( Regulation 7); 7.Compliance monitoring ( Regulation 9); 8.Intervention on cases of non compliance and maladministration (Regulation 10); 9.Internal review ( Regulations 11); 10.Transfer of social housing stock ( Regulation 12); 11.Disposal of publicly funded social housing stock ( Regulation 13); 37Parliamentary Portfolio Committee

THE DRAFT REGULATIONS PROVIDES FOR CONT… 12.Approvals ( Regulation 15 & 16) 13.Code of Conduct ( Regulation 17); 14.Investment Criteria ( Regulation 21); 15.The powers of the SHRA in respect of entry, enquiry document seizure and inspection ( Regulation 32); 16.Agreements with other delivery agents, national and provincial government and the NHFC ( Regulation 33 & 34); 17.Offences and penalties (Regulation 36) 38Parliamentary Portfolio Committee