SHI STAKEHOLDER ENGAGEMENT

SHI STAKEHOLDER ENGAGEMENT CONCEPT DOCUMENT

1.         PURPOSE

The Social Housing Institution (SHI) Stakeholder Engagement aims to address the performance challenges within the social housing sector. These range from challenges in upscaling the delivery of social units to evictions, hijacked projects, legal and administrative issues. The engagement is also an effort to develop a collaborative approach among stakeholders that will ensure the sustainability and stability of the social housing sector.

 

2.         BACKGROUND

The Social Housing Regulatory Authority (SHRA) oversees the sector’s growth and ensures that delivery agents meet their obligations in delivering social housing units. As part of the Medium-Term Strategic Framework (MTSF), the SHRA had a target to produce 18,000 social housing units between 2019 and 2024 and only 12,500 units have been delivered during the period, highlighting the need for a strategic response to overcome challenges and meet the demand for social housing in South Africa.

 

3.    CHALLENGES

There are significant challenges facing the sector that impact social housing delivery:

·       COVID-19: The Covid-19 pandemic during the 2019/2024 MTSF led to lockdowns and restrictions that disrupted construction activities and tenancy processes. The pandemic further led to the decline in local economic activity which impacted the performance of the SHRA resulting in a slowdown in project delivery, rising construction costs and financial constraints for tenants whose economic means and ability to pay rent during the period were affected. SHIs also experienced financial loss as a result.

·       Land availability: Limited availability of suitable, well-located land, particularly in urban areas with the highest demand for affordable social housing. Many of the prime areas are either already developed or are expensive.

·       Debt funding: Limited access to debt funding for social housing institutions delays the development of new projects.

·       Statutory approvals: Administrative delays at both the municipal and provincial levels can slow down the implementation of projects. These delays are often related to securing statutory approvals.

·       Bulk infrastructure: Some municipalities are not fully equipped in terms of bulk infrastructure, such as water, sewage, and electricity resulting in social housing projects not being developed or occupied until infrastructure issues are resolved.

The SHIs also face challenges of under performance which has led to the under-performance and instability of the sector. These issues cut across operational, regulatory, and perceptions about the programme. The challenges include the following:

·       Distressed projects: Some social housing projects are under administration or business rescue due to poor management, financial mismanagement, and operational inefficiencies. Some projects have been hijacked, disrupting housing delivery. The SHRA is faced with limited resources and funding which inhibits the ability to conduct site inspections on the 44 SHIs with stock and reporting across over 100 projects, which could assist with mitigating issues before they escalate.

·       Rental boycotts: Rental boycotts can be attributed to poor maintenance by SHIs, economic conditions experienced by tenants, and excessive municipal rates.

·       Reporting: Entities managing stock are required to report to the SHRA quarterly, but there is no efficient system in place within the SHRA to ensure consistent reporting.

·       Accreditation of SHIs: The criteria set by the Act and its regulations are stringent, causing delays in accreditation. However, the SHRA has made strides in ensuring a 90-day accreditation period is adhered to.

·       Enforcement under Section 12: SHRA faces obstacles in implementing administrative orders due to the lack of capacity and a dedicated budget for regulatory functions.

·       Misinterpretation of the SHRA’s mandate: The Social Housing Programme is often perceived as a “free government programme”.

·       Rent-to-own promises: Several rental boycotts have resulted from misunderstandings or broken promises regarding rent-to-own schemes.

·       Evictions: SHIs struggle to evict defaulting tenants because social housing is viewed a “free program by the government”. The challenge of evictions also poses a reputational risk for the sector.

The engagement will provide a platform for stakeholders to engage, share insights, and develop a strategic roadmap to address the sector’s challenges and enhance its performance.

4.         SHI STAKEHOLDER ENGAGEMENT OBJECTIVES

The objectives of the stakeholder engagement are to:

  • Provide a comprehensive analysis of the current state of the social housing sector, highlighting the key challenges, such as project hijackings, operational inefficiencies, and financial instability. This will include lessons learned from well-performing institutions and a look at the financial and regulatory landscape.
  • Examine the factors contributing to under-performance within SHIs and explore ways to improve the enforcement of administration orders and tenant regularisation processes.
  • Explore solutions and legislation reforms that can enable improved regulation of the sector.
  • Highlight the successes of well-performing SHIs and share best practices. These case studies will provide practical insights for overcoming common sector challenges.
  • Foster stronger collaboration between stakeholders. The event will promote collective ownership of the turnaround strategies and remedial actions necessary to stabilise underperforming entities.
  • Establish clear expectations for SHIs and stakeholders involved to ensure accountability and that all parties follow through on commitments to stabilise the sector.

 

5. INTENDED OUTCOMES

The intended outcomes of the engagement are:

  • More effective interventions in underperforming projects and faster implementation of turnaround strategies.
  • A clear understanding of the steps needed to address underperformance within SHIs, including best practices.
  • Proposal for legislative changes that grant the SHRA greater authority in dealing with sector challenges.
  • A roadmap for the implementation of identified strategies, including timelines and responsibilities for all stakeholders involved in the recovery and stabilisation of social housing institutions.

 

6          TARGET AUDIENCE

The following stakeholders will participate in the stakeholder engagement:

·     Department of Human Settlements (20)

o   The Minister of Human Settlements

o   The Deputy Minister of Human Settlements

o   The Ministerial Advisory Panel

o   The Director General

o   Senior management

·     SHRA Council (10)

·     SHRA Management (30)

·     Social housing institutions (SHIs) with and without stock (150)

o   Maximum two representatives per entity

Approximately 200 delegates are expected to attend the engagement.

 

7.  ENGAGEMENT FORMAT

The engagement will take place on 15 November 2024 from 08h00 to 13h00. It will be a round table engagement that will take place at Premier Hotel, Kempton Park, City of Ekurhuleni, Gauteng.

8. CONCLUSION

 

This engagement serves as a step toward overcoming the performance challenges in the social housing sector. By addressing issues such as the slow pace of unit delivery, rental boycotts, eviction processes, project hijackings, and administrative issues, this engagement aims to foster a stable social housing sector, ensuring that social housing continues to serve as a critical solution for South Africa’s housing needs.