Department of Human Settlements & Western Cape Rental Housing Tribunal 2018/19 Annual Reports: consideration with MEC

Meeting report

The Chairperson welcomed everyone and invited the Rental Housing Tribunal to make a presentation.

Briefing on the Western Cape Rental Housing Tribunal
Mr Thando Mguli, Head of Department: Western Cape Department of Human Settlements, introduced the Tribunal and lauded the great work it had achieved during the year under review. He requested the Tribunal to brief the Committee.

Ms Sibongile Marara, Deputy Chairperson of the Rental Housing Tribunal, read the foreword that was in the Annual report, after which the Chairperson invited Members to ask questions.

Discussion
Mr P Marais (FF+) mentioned the De Nova judgement that was won by a tenant and said that to date the houses are not refurbished yet as per the court order. He enquired further whether the Tribunal does have mechanisms to enforce such judgements. He also asked whether the tribunal is dealing with the evictions that are being carried out by Communicare, although it is receiving subsidies from government and the process by which the public lodges their complaints.

Mr Roy Steward, Acting Director of Land and Asset Management, Rental Housing Tribunal, responded that the De Nova property belonged to the Department of Public Works; therefore the aforementioned Department is responsible for the refurbishments that were ordered by the court. There are some renovations that are being undertaken in De Nova.

Mr Nathan Adriaanse, Director of Communications, Western Cape Department of Human Settlements, added that the Tribunal received 600 complaints from the public against Communicare. A dispute resolution process has been initiated. A Tribunal will be held on the 19 November 2019 in order to attend to the matters raised. The tribunal had made other rulings against Communicare which were taken into consideration and were related to the affordability of the rentals especially for vulnerable groups such as the aged and unemployed persons.

Ms N Makamba-Botya (EFF) requested the Housing Tribunal to share information about the nature of the complaints lodged and the process undertaken to address them.

Mr A van der Westhuizen (DA) asked about the increase of the Tribunal’s expenditure and wanted to know if its escalation is being addressed. Further he enquired about how the Housing Tribunal is addressing the backlog of complaints.

Mr Francios de Wet, Western Cape Department of Human Settlements, responded that in the year under review, the Housing Tribunal received an increase of 33% in cases that were lodged by the public. He asserted that the aforementioned increase was beyond that which the Housing Tribunal staff complement could bare. Regarding cost escalation the Housing Tribunal implemented cost containment measures such as moving to electronic means of communication and providing staff with data instead of buying cellular phones.

Ms Marara elaborated that the increase in rental fees in the social housing sector combined with other socio-economic challenges such as unemployment is the major cause for the 33% increase in cases lodged with the Housing Tribunal. She further explained that the nature of the complaints lodged were in the main included unlawful notices and failure to pay deposits.

Mr Adriaanse explained that the nature of the dispute resolutions of the Housing Tribunal is the creating backlog. He gave an example that some of the cases lodged were complex and required more time to be resolved. The Housing Tribunal has secured additional human resources to address the backlog of cases.

Mr van der Westhuizen requested that the Housing Tribunal give the Committee an assurance that they are dealing with the backlog. He was supported by the Committee Chairperson who said that the Standing Committee required more information regarding the causes of the backlog, and would like to request the Housing Tribunal to submit a plan on how the backlog is going to be addressed.

Mr Adriaanse responded that the Housing Tribunal is dealing separately with the complaints that were lodged against Communicare, and this will improve the situation. Mr Thando Mguli elaborated that the Department also brought some of the interventions such as placing some of the complainants in the Ministerial Housing allocation especially those that were certified to be vulnerable.

Mr D America (DA) wanted to know if the Housing Tribunal had a system in place for workflow and case management as well the distribution of cases among the members of the tribunal and the turnaround times set each of the cases. He further enquired about the powers that the Housing Tribunal had to enforce its rulings.

Mr B Herron (GOOD) asserted that people must be encouraged to use the Tribunal in order to resolve the rental disputes. The housing tribunal must anticipate the increase of the cases and plan accordingly. He also advised that it is legally prudent that the matter of Communicare must be dealt with by the Department not by the Housing Tribunal. Mr. Herron disputed the notion that the social housing sector is increasing rental fees to be on par with market prices. He asserted that that would be illegal and would be acting outside the provisions of the Act governing them. Furthermore, he was surprised that the Department was not aware that the rental stock portfolio of Communicare constituted only a small portion of social housing and the bulk of the rental stock is not regarded as social housing.

Ms Marara responded that the Housing Tribunal engaged in processes that involved the magistrates in order to enforce some of its rulings. Mr Adriaanse added that the case management administration has also been strengthened.

Mr America reiterated that there is a mismatch with the figures of the cases lodged with the Housing Tribunal. Mr Mguli responded that the matter will be addressed and a report will be submitted to the Standing Committee.

Mr Marais requested the Department to confirm if Communicare is indeed a problem. The Department should consider claims made by the public against the rental stock of the aforementioned institution.                     
                                                                                             
Input by the members of the public
Mr Nevel Peterson represented the tenants that are renting at Communicare. He raised the concern about the failure of the Department to effectively address the complaints lodged by the tenants against Communicare. He further alleged that the officials of the Housing Tribunal are incompetent and are advising the complainants to use Attorneys in some cases.  He also enquired about whether the Tribunal does have a formula to calculate the percentage that can be legally deducted as rental fees from the pensioners in order to ensure that pensioners are not overcharged by their landlords.

Mr Peterson also reported that they have requested the Minister to investigate the activities of the Housing Tribunal as well the matters raised by the public against Communicare.

The Minister responded that the Department will establish a commission of enquiry on issues raised against Communicare.

Mr Adriaanse also responded to some of the questions raised saying that landlords are only legally permitted to charge 30% from the income of the pensioners. He further elaborated that the Department will be submitting quarterly reports on progress made by it in dealing with the matters raised against Communicare. He strongly disputed the assertion that the Tribunal is advising the public to use the services of attorneys regarding some of the cases lodged with the Housing Tribunal. Members of the public who happened to lodge similar complaints were advised to organise themselves.

Mr Mguli disputed the allegations that the staff of the Housing Tribunal are incompetent. He said that the Department acknowledged that some of the people who lodged complaints with the Housing Tribunal might not be satisfied with the outcomes of their cases; however this does not make the Tribunal incompetent. He further echoed the promise made by the Minister assuring the Standing Committee and the public that the commission to be established will be independent.


Briefing by the Western Cape Department of Human Settlements

Minister Tertuis Simmers: Provincial Minister of the Department of Human Settlements, Western Cape Government, led the briefing. The Minister reported that the Department had received a clean audit for the year under review. It has outperformed in all the areas of its portfolio. The Department has spent 62% of its budget on Historically Disadvantage Individuals (HDI) contractors and has created 578 jobs, mostly targeting the youth.

In the year under review the Department experienced a number of protest actions, mostly from backyard dwellers and increasing illegal land occupation. The aforementioned challenges affected the performance targets of the Department as it could have been even better had this been reported in the Annual Report.

The key focus areas for the new financial year are including the acceleration of housing opportunities, redirecting more resources to the upgrading of informal settlements and the development of affordable housing. Lastly the Department will be prioritising the allocation of housing opportunities to the most deserving citizens.

Mr Mguli echoed the sentiments expressed by the Minister saying that the Department has shown a high level of responsiveness in the year 2018/2019. It was now a consistent receiver of clean audits.

Discussion
Mr van der Westhuizen requested that the Department explain its plans to negotiate insecure home loans from the banks for the housing beneficiaries. He asked the Department to explain the reasons for planned targets that were not met during the year under review; the R37 million budget that is reflecting underspending; if the Department was really speeding up the transfer of title deeds, seeing that the targets set for the year were too small; why the Department is counting the training targets; and were the training programmes paid for by the Department or by private companies.   

Mr de Wet responded that the R37 million unspent budget was as the result of a contractor that the Department could not appoint. The allocation came very late in the financial year from the National Treasury and it was meant for the victims of natural disasters. The aforementioned budget is being spent in the current financial year. The budget was over and above the Departmental budget.

Ms Phila Mayisela, Chief Director: Housing Implementation, Western Cape Department of Human Settlements, adding to the responses, and said that the Department is counting the training targets because the training programmes were funded with a grant from the Department in partnership with the NHBRC. She further elaborated that underperformance from some of the planned targets were as a result of protest actions by the public where a number of units were vandalised. The Department decided not to include the vandalised units in the performance targets for the year under review. In order to improve the performance of the targets the Department has to engage local government to fast-track the relevant development approvals. She further asserted that the Department became conservative in setting up targets for the transfer of title deeds since it is a complex problem, dealing with the old stock.

Mr Mguli echoed that some of the areas that were earmarked for the transfer of title deeds had houses built, while the townships were not registered yet. In some cases there were disputes amongst family members over who were the legitimate beneficiaries of the title deeds.

Ms Jacqui Samson: Chief Director: Planning, Western Cape Department of Human Settlements, responding to the question about unsecured loans said that there is a gap market that is struggling to secure the normal home loans from the big banks as the Department had approached banks leading up to signing an agreement with Capitec Bank.

Mr van der Westhuizen asked a follow-up on whether the Department is able to decrease the backlog in the transfer of title deeds.

The Chairperson enquired whether the Department undertook the refurbishment of the old houses before the handing over of the title deeds. She also requested an update on the issue of the utilisation of the pension funds as one of the means to secure housing loans for the housing beneficiaries.

Mr Herron wanted to know the Department’s reasons that led it to setting up low targets for some of the performance areas, knowing fully well that the implications would be a reduced budget allocation from the Treasury.

Mr Mguli responded that under the Enhanced Extended Discount Benefit Scheme (EEDBS) the Department is spending money to fix the houses and provide title deeds. The latter is then counted as houses delivered. Most of the beneficiaries under the programme are coming from vulnerable groups.

Mr D Smith (ANC) wanted to know how the Department paid for the difference between the set targets and the actual achievements, if the target set was at 250 and the actual achievement at 3000.  

Mr America argued that the setting up of small targets is distorting the appraised performance. The fact that the Department over-performed is because they had set small targets in the first place. In cases like these it is difficult to know whether staff have done more work than the norm.

Ms Samson said that the Department has approved the provincial policy on the Employee Assistant Programme which encourages the use of pensions for housing. A list of beneficiaries has been compiled to provide them with assistance in order to improve their credit worthiness. The national policy on rent to buy is still at the level of the National Economic Development and Labour Council (NEDLAC).  

Mr P Marran (ANC) enquired whether the Department had a mechanism to deal with the housing delivery protests.

Mr Herron wanted to know whether the issues of accreditation for the City of Cape Town has been resolved with the National Treasury; for the Department to explain their preference to partnership over the procurement of services providers; whether funding for the Southern Corridor has been finalised and whether the Provincial Department and the City of Cape Town have agreed to transfer the Urban Settlement Development Grant (USDG).

Mr Adriaanse explained that in order to build houses the Department has to secure land first and land is very expensive. Therefore, establishing partnerships with developers with the land will assist the Department in securing the land and fast-track the development of houses. Answering the question about full accreditation of the City of Cape, he responded that since 2016 the City of Cape Town has been underspending in its USDG funding allocation and therefore failed to meet the conditions in terms of the DORA requirement.  

Mr Herron asked a follow up question about whether the expected USDG allocation is still around R2 Billion.

Ms Mayisela responded that the figures are still being revised to align with the terms of the Fiscal Commission. In terms of the upgrading of the informal settlements, the Department has appointed eight services providers (NGOs) to facilitate the incremental upgrading of the informal settlements. 20 informal settlements were identified to benefit from the programme. It is a provincial wide programme where the Department is using a multi-departmental approach that will lead to the securing of tenure in the form of service sites.

Mr Smith wanted to know the areas that are the key hotspots for housing delivery protests, and whether the Department did have a proactive plan to anticipate them.

The Minister responded that the Department will submit a detailed report to the Committee on the housing delivery protests. He identified three areas as protest hotspots and these included Boystown, Joe Slovo, and Greater Theewaterskloof. He asserted that there were more protests with huge costs due to the damaged caused. Given the country’s fiscal condition the Department and public representatives must adopt a business as usual approach, where all must cease to make empty promises to the general public. Furthermore, the Department needs to intensify its pursuit of the alternative building methods.

Mr Marran requested that Department explain how it was going to reverse the underspending in the delivery of 1600 top structures.

The Minister responded that the Department has undertaken proactive engagements with the affected communities. He acknowledged that the Department experienced difficulties in delivering; however the budget allocation was not wasted.

Mr Marais wanted to know if the Department had a plan in place to address old apartheid flats.

Ms Makamba commended that the Department try for a transformed executive structure. She wanted to know the number of houses that the Department is planning to develop over the next five years; whether the Department intervened to assist the people that were evicted in Observatory; about the number of farm workers that were assisted with housing opportunities; and whether the upgrading of informal settlements led by the NGOs were supported by the municipalities.

Mr D Alli, Chief Town Planner, responded that the Department has started turning the tide in Saldanha Bay Municipality by implementing a Municipal Capacity Building Programme.

Ms Mayisela elaborated that the Department will provide a list of vulnerable people such as the disabled and elderly who were evicted but received assistance through the Departmental programmes. She said that the Department ring-fenced about 5% of the total housing budget to attend to the needs of the aforementioned group.

Ms Samson added that the Department will also provide the list of partnerships that are targeting farm workers. The aforementioned partnerships consisted of municipalities, farm owners and the Department.   

The Minister promised to submit a five year plan with clear targets for expected housing opportunities. The plan will be based on the new approach to housing delivery that consists of Ministerial housing. Redress housing development and the design for houses has changed.   

Mr Marran wanted to know the reason why five out of the seven development ready projects were all in the Southern Cape; how the Department is anticipating the risks of partnering with the farm owners where these included the risks anticipated by the fact that farm owners would insist that the projects prioritised their farm workers over the other deserving beneficiaries that are residing in the areas surrounding the farms. He asked further if the Department does have plans to integrate and prioritise other beneficiaries other than the farm workers; if the underspent amount that is close to R4 million could be used for other projects such as the one in Langeberg Ward 2, since the project will be coming to a standstill due to a shortage of funds.

The Minister responded that the 5 implementation ready projects formed part of the backlog that the Department is in the process of addressing.

Mr Mguli added that partnerships are based on what the partnering organisations are bringing to the party. These projects accommodated a wide range of beneficiaries, different income levels and different prioritisations.

The Chairperson cautioned that the Departmental programme is seemingly biased toward the prioritisation of informal settlements. She said this needed to change to prioritise the more backyarders. For example Nqubela is always having projects every year. The Minister promised to consider the suggestion made by Committee.

Mr Marran elaborated that the prioritisation of all housing projects should target older people. Furthermore the Department should provide a list of all the implementation ready projects to confirm if there were no other projects other than the five in the Southern Cape. The Department must also make a presentation about housing development on farm lands and explain how they are integrating different groups of beneficiaries into these projects. The Chairperson also concurred with the suggestion about a Departmental presentation.  

Mr America lauded the Department for allocating over R1 billion to the disadvantaged communities and 12% for women owned contractors in various CIDB grades.

Mr Herron wanted to know if the Department was still pursuing litigation on the Siqalo matter as a test of the legal instruments available to government to resolve similar matters. He further wanted the Department to explain the uniqueness of the Living Cape and what necessitated its elevation above others. He asked for an update on the Conradie Hospital Project and whether it’s funding and beneficiaries had been finalised.

Ms Mayisela responded that the Department is waiting for Ross to initiate the court process on the Siqalo matter. She further reported that the Department has started with the provision of services to Siqalo residents. Regarding the Conradie Hospital Project, a contractor has been appointed who will resume work on the 07 January 2020 and USDG funding has been secured.

Ms Makamba wanted to know about the plans of the Department to beef up its structure particularly customer care services, given the rate of evictions. She further enquired whether the Department is working other national department in the spirit of cooperation and giving effect to Section 53 of the Constitution.

Mr der Wet responded that the new Departmental organisational structure has been approved. However the Department is experiencing budgetary constraints in terms of implementing it.

The Chairperson requested the Department to submit a list of and the breakdown of available rental stock that is ready to be handed over. In addition Mr P Marran had also requested the classified list of partnerships.

Mr America wanted to know if the Department did comply with the relevant legislative precepts when making transfers to municipalities and whether there were mechanisms in place for monitoring; requested an explanation about the shortfall in the number of solar heaters that were installed in Drakenstein; and who was the custodian of the assets that were procured but not installed.

Mr der Wet responded that municipalities were reporting their spending of the funds every month, the funds for the Drakenstein project came from unused funds.

Ms Mayisela said that the delays in the installation of solar heaters in Joe Slovo were caused by the protest but the assets are still kept safely with the contractor.

Ms Samson added that the municipalities were capacitated with a number of interventions. The Department has appointed eight NGOs to assist 20 municipalities with the upgrading of the informal settlements.

Mr van der Westhuizen commended the previous Minister of Human Settlements for reducing the budget of his office and urged the current Minister to do the same. He enquired about the number of houses built through using sustainable building methods and whether such programmes were still continuing; he questioned the amount of R5000 per title deed; and what the amount entailed.

The Chairperson asked whether the complaints of the Department against the National Home Builders Registration Council (NHBRC) regarding poor workmanship in some of the houses built by the contractors had been resolved.

Mr Mguli responded that the issues that the Department had against the NHBRC were resolved even though the Department was not satisfied with the outcome. The Department is dissatisfied that it still had to refurbish the houses that were built by the NHBRC registered contractors since the aforementioned organisation is refusing to take responsibility. He promised that the Department will make a comprehensive presentation to the Committee about the business plans of the municipalities. Responding to the issue of the budgeted amount for title deeds, Mr Mguli explained that the amount included other services not only the title deeds.

The Department is still continuing with sustainable building practises and in the ensuing financial year it will implement more radical sustainable practices and innovation technologies. The appetite of the beneficiaries has been tested and the Department is confident to implement the Green first policy.

Final remarks by the Minister

The Minister reported that the contract of the current Head of Department, Mr Thando Mguli had expired in September 2019 and he was asked to continue to allow the Department to initiate a process to appoint a new HOD. The Department invited applications, and Mr Mguli also applied, however he was not successful. Ms Jacky Samson who is the current Chief Director in the Department became the successful candidate and will be resuming her duties as from January 01, 2020. The Minister thanked Mr Mguli for his seven years of outstanding and selfless service to the Department.

In response, Mr Mguli thanked the Department for the opportunity that was given to him to serve the nation, he also thanked the Members for the good working relationship they had during his tenure as the Head of Department.

The Chairperson gave a special thanks to Mr Mguli, the Minister, officials, Members and the public for their discipline during the meeting.

Actions and Resolutions
The Standing Committee was pressed with time due to a SCOPA meeting that was to take place at 14h00 on the same day. Therefore they resolved to coordinate their proposed resolutions through the Committee Coordinator. Members were advised to forward their lists to the Coordinator by Monday 28, October 2019.    

The meeting was adjourned.