Social Housing Foundation

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Social Housing Foundation
Building Communities, Building Social Housing
Social Housing Bill
Presentation to Parliament 11th September 2007
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Contents

• 1. History
• 2. SHFs Response
• 3. ISHP Turnaround
• 4. Functions in the Bill
• 5. Phasing-In

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1. History

• SHF is a Section 21 company in existence since
  1997 and listed as Schedule 3A public entity in
  PFMA
• Provided capacitation, research and policy
  development expertise to the sector.
• Took as its point of departure, the Institutional
  Subsidy regime as espoused in the Housing Act,
  and Chapter 6 of the Housing Code.
• Established international relationships with
  sector leaders to research international trends
  and to develop a world-class best practice model
  for SA.

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1. History

• Institutional subsidies were disbursed in the
  absence of a well constituted policy framework
  leading to inconsistent and non-sustainable
  application.
• The institutional subsidy instrument was
  incongruent with construction practices, causing
  frustration in financial modelling and project
  packaging.
• Private sector funders (banks etc) were reluctant
  to extend credit facilities to the institutions
  due to this being unchartered territory and also
  due to doubts as to organisational strength and
  competence (non-profit sector, corporate
  governance etc)

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1. History

• Provinces were planning and budgeting for
  institutional subsidies, but, because the
  approval process is reactive (they wait for an
  SHI to submit projects), under-expenditure and
  under-delivery of units was realised.
• Government was also concerned that its
  significant investment was left largely in the
  hands of external entities, who were un-regulated
  and did not necessarily marry themselves to the
  mandate of ensuring that low income earners were
  also accommodated.
• Projects submitted by SHIs did not always
  conform with municipal IDP processes.

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2. SHFs Response

• SHF was given the mandate to manage the
  EU-sponsored Special Programme for Social Housing
  (SPSH) and a Programme Management Unit (PMU) was
  created.
• Focus was given to the capacitation of
  institutions to be able to bolster delivery.
• Tools were developed to facilitate technical SHI
  operations as well as good governance.
• Technical support was provided for ready-to-go
  projects.
• Support was also provided to the 3 spheres of
  government

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2. SHFs Response

• Research was commissioned that covered the
  following areas of concern-
• A Regulatory framework for SHI operations
• A financial model that kept pace with
  construction sector and the property management
  sector (operations and maintenance)
• A strategy to attract private sector funding
• A modus operandi that allowed proactive
  interaction by municipalities (IDP process
  inclusion, etc)
• Different grants that could be accessed the
  Restructuring Capital grant which favoured
  development in Restructuring Zones coupled with a
  bias for low income earners as the target market.

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2. SHFs Response

• NDoH, partnered by SHF, harnessed together a
  team of specialists drawn from international
  expertise as well as domestic industry leaders to
  form a think-tank, or laboratory of sorts to
  address the shortcomings of our policies and to
  customise an international solution to the South
  African scenario.
• The result of this passionate labour is the Bill
  before you.
• Elements of the Bill formed part of the
  Ministers ground-breaking Breaking New Ground
  document in 2004 and was also the basis for the
  Social Housing Policy approved by Minmec in 2005.

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2. SHFs Response

• The Bill seeks to address, inter alia, the
  following-
• The formation of a regulatory and compliance body
  the Social Housing Regulatory Authority
• 5 types of new grants, over and above the
  institutional subsidy (now referred to as the
  Top-Up portion). The most significant is the
  Restructuring Capital Grant which provides
  subsidies in line with inflation, CPIX,
  Construction Index.
• Provisional Restructuring Zones and Restructuring
  Zones
• An Interim Process
• Processes and cycles
• Roles and Responsibilities

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3. ISHP Turnaround

• Whilst SH Bill undergoing enactment process and
  SHRA still to be formed, NDoH mandated SHF to run
  with the Interim Social Housing Programme.
• Budgets
• 2006/07 R107m
• 2007/08 R180m
• 2008/09 R250m

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3. ISHP Turnaround

• Turnaround Strategy addresses SH projects in
  distress future role of SHRA

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4. Functions Outlined in the Bill

• Bill envisages the following functionality-
• Accreditation of Institutions
• Registration of Institutions
• Funding/Disbursement
• Regulation
• Compliance/Enforcement
• Capacitation
• Research
• Support (SHIs, govt, others)
• International linkages and networks
• Marketing and Communication
• Referee and player implications

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5. Phasing In

• Phase I

• 18 months
• allows for complete development (regulations)
• hand-holding
• fine-tuning and tweaking
• sector communication not a knee-jerk
  switch-over

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5. Phasing In

• Phase II

• Clear understanding of roles
• Well performing sector
• Separate legal entities but interdependent

Policy
Strategy
Funding
Programmes
Research
Capacity Building
Registration Accreditation
Compliance Legal
Interventions Turnaround
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5. Phasing In

• Considerations
• Policy
• Strategy (New Rental Strategy)
• Legal
• Programme (SH, CRU, Tenants)