Complexes, estates and gated communities are government’s next target for BEE in South Africa

 ·8 Aug 2023

Minister of Human Settlements, Mmamoloko Kubayi, says that community schemes – which include sectional title complexes, homeowners’ associations, retirement housing schemes, share block companies and housing cooperatives – need to be subject to mandatory “economic transformation”.

Speaking at the first Community Schemes Ombud Service (CSOS) Indaba in Johannesburg last week, the minister noted the growth in the multi-trillion-rand community scheme economy and its importance in South Africa

According to the minister, South Africa has an estimated 70,000 community schemes and has also seen a growing trend in gated communities.

“27% of the total value of residential property in South Africa is from organised communities, which means that community schemes are a significant economic sector,” she said.

Because of the scale of the community schemes economy, services that these schemes solicit – such as security and gardening – make the sector a huge contributor to job creation, she said, especially as many of the services are sourced from small and medium enterprises.

“We, therefore, need to put measures in place to ensure that a procurement approach that gives opportunities to emerging SMMEs, especially those from previously disadvantaged communities, becomes mandatory.”

Managing agents should also be a focus area, she said.

“An estimated R800 billion in assets is managed by community scheme managers, therefore the transformation of the managing agents in this sector remains critical.”

Last year in an effort to transform the managing agents industry, CSOS signed a memorandum of understanding with Pretor, MidCity and Trafalgar to collaborate on the development of emerging black managing agents so that they can also play a meaningful role in the sector.

“The collaboration must yield tangible results, and CSOS has to ensure that these emerging black managing agents are integrated into the sector,” the minister said.

“Transparency is important, so it is expected that part of community schemes’ responsibility is to be able to be transparent in the manner that we do things, but also understand consciously that we have a role to play to ensure that the economic participation is broadly opened for all to participate.”

Noting that people from all cultures live in community schemes, the minister also urged stakeholders to embrace diversity within schemes.

“Community schemes are growing at a rapid rate because of the growth of the middle class, migration and rapid urbanisation. As people flock to urban centres in search of economic opportunities, there is an urgent need for spaces to live in. The scarcity of land in urban centres, security concerns and the convenience of community schemes have made them an attractive option for many middle-class people,” she said.

“Implicit in this development is the fact that community schemes are occupied by people from diverse cultural backgrounds. Instead of enriching the living experience, cultural diversity has unfortunately become a major source of disputes within the schemes.

“Issues and conflict will be greatly reduced if people learn and accept that living together means embracing diversity and not forcing people to adopt their preferred way of living. Embracing cultural and religious diversity has to be made a necessary element of the good governance of community schemes,” she said.

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