Address to Thembalethu Community in George on Housing Allocation

Two months ago, when we last met here in Thembalethu, the biggest issue raised by members of the community revolved around allegations of dodgy allocation of houses to beneficiaries, and of foreigner and other non-qualifiers occupying state-subsidised houses. I undertook then to come back and see for myself what the situation is, and to report back to the community. And that is why we are here today.

I am not only interested in the extent of illegal occupations, although it is important to evaluate this, but also how people who do not qualify for a free house from the state came to occupy these houses.

Because there are two role-players involved in ensuring that a state-subsidised house is occupied by people who should be occupying it: the state - both provincial government and the municipality - and the rightful beneficiary of the house.

The State has a responsibility to ensure that the selection of beneficiaries for a housing project is fair and transparent. I think that, for the most part, we get the fairness right, although there are problems with allocation that arise from time to time.

But where we fall short more often, I believe, is with respect to transparency. We need to have a consistent approach to beneficiary selection, with standard criteria. The criteria we use and the process we follow must be easy to understand, and they must be clearly communicated to the community. Because the allocation of housing opportunities to beneficiaries must not just be fair; it must be seen to be fair.

We must communicate our selection policy and procedure to communities before we select beneficiaries for a project. You should agree that the process to be followed is fair before beneficiaries are selected. Fairness is not determined by whether or not you are happy with the outcome of the selection process; you must be happy with the process upfront, and then accept the result of that process whether or not you are selected as a beneficiary.

Because we can only help so many people every year and there will always be people who aren't selected for a particular project. In addition, the need is so high and the supply so low, that we have to apply additional criteria to beneficiary selection, based on the demand profile in a particular area. We don't expect them to be happy about that, but they should understand how the beneficiaries were chosen, and be satisfied that the process was correct and fair.

My department has recently launched a project to assist municipalities to improve the quality of the management of housing waiting lists. The first step is to improve the municipalities housing demand databases and ensure that they are linked to our provincial database and the national database.

This will help to ensure that people who do not qualify for a subsidy (for example, because they have already benefited from a subsidy in another municipality of province) do not get selected. It will also make it much more difficult for someone to manipulate the system to give someone a house out of turn. We will also collect and store more information about people needing housing, which will help us plan future housing projects and determine the best criteria with which to choose beneficiaries.

The second part is to look at all the different criteria and methods that municipalities are using to select beneficiaries for housing projects, to identify the best practices and then, in consultation with municipalities, to develop a standardised beneficiary selection policy with a minimum set of criteria that must be applied.

Besides ensuring that the selection process is all above-board and fair, this will allow us to communicate the policy more easily, which will improve the transparency so selection is not just fair, but also seen to be fair.

Let me just say that, where a house has been obtained fraudulently, I will not hesitate to act. If municipal or provincial officials involve themselves in corruption, they must face the consequences and that includes disciplinary action and criminal charges.

However, such fraud does not always involve officials. I had a case earlier this week where a man complained to a newspaper that he had been tricked out of his house by his neighbour. When I went to investigate the matter, I discovered that he had lied in his application by stating that he was married to this woman's daughter. He is actually single and therefore doesn't qualify for a housing subsidy. That is fraud, and I have asked my department to take action. The woman must vacate the house, and it will be allocated to another beneficiary who does qualify.

But non-qualifiers do not only gain occupation of state-subsidised housing through fraud or corruption. And this is where the role of the beneficiary comes in.

A study commissioned in 2008 revealed that about 20 percent of beneficiaries sell their houses within a few years. They tend to do so informally, because they are not allowed to sell their house for eight years after they receive the title deed; and, usually, they sell it for a fraction of its value. It costs the government around R100 000 to provide a house on a plot with services; but people who sell their house do so for 10 or 15 or maybe 20 thousand rands. And then they go back to living in shacks.

But once you have received a housing subsidy, you won't be helped again. It's up to you to look after yourself.

We have developed a consumer education programme which covers a broad range of topics, from the different options available and how to apply for a subsidy to the responsibilities of a home owner. However, I'm told that mostly people who attend are those who want to apply for a house, and want to know what their rights are. Once they receive a house, they are less interested in learning about their responsibilities as a new home owner. We therefore want to make consumer education part of the criteria for approval of a subsidy.

When someone has received a house fraudulently, that is an easy decision to make, they must be evicted and, if there is evidence of their involvement, charged with fraud along with any accomplices. We must stamp out fraud and corruption anywhere it occurs.

I must just point out that eviction is not a quick process. The Prevention of Illegal Eviction (PIE) Act means that there is a lengthy legal process we must follow in order to evict someone. And the courts are generally unwilling to evict people unless some form of alternative accommodation is available to them. Nevertheless, this is the process we must follow where people have gained occupation illegally.

But what about the person who has bought a house from the rightful beneficiary in good faith? Do we ask them to buy the house from us again, because the person they bought it from had no right to sell it to them? And if they refuse, or simply cannot afford the real cost of the house, what then? Do we evict them?

That is a much harder decision to take.

In 2002, the Housing Act was amended to introduce an eight year pre-emptive clause. That means that a beneficiary may not sell his or her house for eight years after receiving the title deed without offering the government first right of refusal.

However, last year, MinMEC - the committee of the national Minister of Human Settlements and the nine provincial MECs - resolved to review this clause. This is because, among other reasons, it has not had the intended effect of stopping people from selling their houses. Instead, it has encouraged people to sell their houses informally, without registering the transfer of the property to the new owner at the Deeds Office, which leads to all sorts of added difficulties - especially for municipalities who want to collect outstanding rates and services on those properties.

So, it may well be that, later this year, beneficiaries will once again be allowed to sell their houses as soon as they receive their title deeds.

Do we now undertake the lengthy and costly process of trying to obtain a court order to evict people who do not qualify for a housing subsidy, but have obtained a state-subsidised house for a fraction of its cost, even though they know nothing about the eight-year pre-emptive clause, and have handed over their hard-earned savings to buy a house at a mutually agreed price?

And how will the Courts balance the limitations of the pre-emptive clause against the strict requirements of the PIE Act? Especially if, by the time the case comes before the Court, the pre-emptive clause is no longer applicable?

I don't know all the answers to these questions. But my point is this, the fact that someone who doesn't qualify for a subsidy occupies a subsidised house isn't necessarily because of dodgy allocations. We must investigate how that person came to occupy that house.

And, based on previous studies, more often than not, it is because they have bought it from the rightful beneficiary.

In closing, let me say once again that we will do everything we can to ensure that the process of beneficiary selection is above-board, fair and transparent; and we will act wherever we find a house has been illegally obtained. If you have information about such cases, please report it, either to the Mayor or Municipal Manager here in George, or to my office in Cape Town.

In return, I ask that, when your turn comes and you receive a housing opportunity, you appreciate the value of the asset you have been given; that you look after it and maintain it so that it increases in value rather than depreciates; and that you do not throw away your asset by selling it for less than its value, and then moving back into a shack with no access to basic services. Because you cannot benefit more than once from the state housing subsidy. Once you've received your subsidy, that's it.

The rest is up to you.
Thank you.