The Accreditation of Municipalities to Administer Housing Programmes

Thabile Chonco, Dullah Omar Institute, University of the Western Cape

Relevance of the Practice

In terms of the Constitution, housing is a concurrent national and provincial government function (Part A of Schedule 5). This placement is rather odd and impractical considering that local government’s service delivery functions are centred on the built environment, yet housing falls out of local government’s competencies.[1] Communities lay their housing delivery grievances at the local government’s doorsteps.[2] The concentration of both the economy and South Africa’s population in urban areas reinforces the focus on speeding up the development of cities through housing, amongst other factors/functions.[3] It is, therefore, hard to imagine how local government can carry out its developmental mandate without housing as a function, especially when housing lies at the heart of development.[4]

A portion of the housing function has partly devolved to local government through a rich body of Constitutional Court judgments (municipalities responsible for providing shelter to the homeless).[5] In practice, however, the devolution of the full housing function has not been undertaken with an equal amount of haste or resources because municipalities cannot regulate, set priorities and determine their housing delivery strategies, as well as issues surrounding the funding of the housing function. This is because they lack the necessary legislative powers and they do not receive the housing grant directly from the national government. The housing delivery function remains an unfunded mandate for municipalities, except in the context of accreditation.

Description of the Practice

The Housing Act enables municipalities to apply for and attain accreditation to administer housing programmes.[6] Applying for accreditation is voluntary, based on a municipality’s capacity to undertake the housing function, which is not a local government function as per the Constitution. The consequence of not applying for and attaining accreditation is that the housing function, if carried out, will not be funded – so it remains an unfunded mandate. The accreditation can only take place once the Member of (provincial) Executive Council (MEC) responsible for housing in the relevant province is satisfied that the municipality concerned complies with the criteria for the accreditation determined by the Minister of Human Settlements. Once a municipality is accredited, it can administer the housing programme and may exercise powers and duties relevant to the housing programme that would otherwise be performed by the national and provincial government.[7] The MEC allocates money to the accredited municipality and the municipality remains accountable and subject to the MEC’s directions. The MEC must review the accredited municipality’s performance regularly and can intervene if the municipality performs poorly or does not perform at all.[8]

The rationale for the Accreditation and Assignment Framework for Municipalities to Administer National Human Settlements Programmes (2012) was the subsidiarity principle, as provided in Section 156(4) of the Constitution. The aim of the framework was ‘to address various policy, constitutional and legislative aspects in order to enable municipalities to manage the full range of housing instruments within their areas of jurisdiction’ and expand the role of local government.[9] The framework targeted metropolitan municipalities mainly. To be accredited and ultimately assigned the housing functions, municipalities have to show their capacity to plan, implement and maintain the projects and programmes that are included within their Integrated Development Plans, within the three years mandated by the MFMA.

The 2012 Accreditation and Assignment Framework addresses certain legal difficulties associated with the framework for accreditation as set out in the National Housing Code.[10] A distinction was made between accreditation and assignment and the processes to be followed are differentiated. Accreditation is formalised by way of an Implementation Protocol in terms of Section 35 of the Intergovernmental Relations Framework Act, 2005 and assignment by means of an Executive Assignment Agreement in terms of the Constitution.

Accreditation recognises that whilst a municipality has met certain criteria and standards, it still requires additional support and capacity before assuming full accountability for the administration of national housing programmes. Accreditation allows the exercise of functions by a municipality on behalf of the MEC while further capacity is being developed. The financial accountability for these functions remains with the responsible provincial accounting officer.

Assignment involves the formal transfer of the functions related to the administration of national housing programmes from the provincial MEC responsible for housing to a municipality through the existing constitutional and legal framework for assignment.[11] Assignment moves the planning, financial and legal accountability from the assigning authority to the receiving authority. Assuming financial accountability for the housing function includes the right to directly receive the funds and the assets necessary to perform the function.

In 2017, a Revised Accreditation and Assignment Framework for Municipalities was drafted to provide the guidelines for enabling the administration of housing programmes by municipalities. The 2017 Revised Accreditation and Assignment Framework takes into account the legislative and policy shifts within the housing and broader human settlements and local government context; clarifies the roles of provinces in the accreditation process; and addresses lessons from the implementation of the 2012 Accreditation Framework.[12] It envisages a dual process where an accreditation eventually leads to the assignment of the housing function.

The accreditation will apply to metropolitan, local and district municipalities across South Africa; however, the focus will be on larger urban and metro municipalities due to the urgency caused by the urban sprawl. If a district municipality requests accreditation, the municipality must show that it is authorised by all or a majority of the local municipalities within its jurisdiction to act on behalf of all or some of the local councils and that it has the necessary powers and functions and financial responsibilities to ensure integrated and efficient service delivery.[13]

From an intergovernmental relations (IGR) point of view (report section 5), the Accreditation and Assignment Programme requires the three spheres of government to work together in the spirit of IGR. The Programme also obliges the housing sector within the spheres to liaise with various sector departments and with various organs of states as key stakeholders. The National Department of Human Settlements as the policy custodian of the Programme works with all the provinces, selected municipalities, SALGA, National Treasury, Department of Cooperative Governance and Traditional Affairs (CoGTA), as well as the Finance and Fiscal Commission (FFC) on all policy issues regarding accreditation and assignment of municipalities.

Assessment of the Practice

The Accreditation and Assignment programme is about building additional capacity in qualifying municipalities to enable municipalities to manage the housing programme. The legal and policy framework governing the accreditation and assignment of municipalities to administer housing programmes is quite detailed and technical in nature, which could have the negative effect of frustrating the entire process. Several challenges stand in the way of effectively assigning (frustrate the desire to effectively assign) legislative and administrative [housing] functions to municipalities. The most pertinent of these challenges is the lack of requisite capacity in municipalities and the subtle reluctance of provincial and national government to surrender their [housing] powers and functions to municipalities.

It is, however, encouraging to see how the framework links the instrument of accreditation with assignment as provided for in the Constitution. The accreditation, as set out in Section 10 of the Housing Act, starts as a delegation and ultimately leads to an assignment. The framework provides for continuous strengthening of local government through the delegation of the housing function and authority, and ultimate transfer of those functions to municipalities. The framework also acknowledges the need to tailor the terms and conditions of the assignment to individual circumstances and the varying capacities of municipalities, and in so doing takes into account the principle of subsidiarity by endorsing the use of an agreement as an appropriate manner of the assignment. While the above is encouraging, rural municipalities have high levels of backlogs in electricity, water and sanitation which are the priority of the current government; while lack of housing is a significant challenge in urban municipalities hence prioritisation of urban municipalities for the Accreditation and Assignment Programme. Furthermore, unlike their urban counterparts who face urban sprawl issues, an ever-increasing need for housing which they can generate property rates from and capacity building to strengthen their somewhat solid capacity further, rural local government will require more capacity building initiatives (in comparison to urban areas) to be implemented before they can take up the Section 10 route. This will mean their uptake of the accreditation and assignment programme will take place at a much later period, lagging behind their urban counterparts.

At present, it is difficult to assess the practice as there has not been sustainable implementation of accreditation and delegation programmes to serve as a precursor to the assignment or formal transfer of the housing function to local government. It is only fair and rational to give the (revised) Accreditation and Assignment programme an opportunity for implementation. There is a desire to move towards a time where municipalities are empowered to carry out the housing function and deliver houses to communities on a sustainable basis. Steytler revealed that ‘initially national government was keen to undertake the accreditation and assignment of housing to municipalities, however, provincial government was not as keen due mainly to political resistance and the loss of funding attached to the housing function.’[14] Harrison noted that ‘provinces were responsible for housing, but now most of the responsibility seems to be shifting to local government. Provinces are now putting mega housing projects in the city peripheries, which have cheaper land, but in doing so, provinces are pushing cities into a corner to expand service delivery to the periphery. If cities were in control, this would enable them to plan land use and spatial planning much better. Accreditation is not in the Constitution, so to avoid assignment, there is level one and level two accreditation.’[15] Taking the above into account, for the successful implementation of the Accreditation and Assignment Framework to take place the national and provincial departments responsible for housing will have to ensure that there is continued strengthening of municipal capacity; that the national and provincial departments warm up to transferring functions to local government; and that poor governance is removed.

In light of the above, some municipalities list ‘housing – top structure subsidies’ in their MFMA Medium Term Revenue Expenditure Framework Report Table A10, indicating that they administer the housing function. This table records a municipality’s basic service delivery measurement. It should be noted, though, that this may not mean that the function has been formally assigned. Along with listing the function, municipalities indicated that they had spent monies on housing top structures over and above what provinces had allocated as subsidies.[16]

References to Scientific and Non-Scientific Publications

Legal Documents:

Constitution of the Republic of South Africa, 1996

Housing Act 107 of 1997

Municipal Structures Act 117 of 1998

Municipal Systems Act 32 of 2000

Municipal Finance and Management Act 56 of 2003

Local Government Supply Chain Management Regulations of 2005

Municipal Public-Private-Partnership (PPP) Regulations of 2005

Department of Human Settlements (DHS), ‘Revised Draft Accreditation and Assignment Frameworks for Municipalities to Administer National Human Settlements Programmes’ (2017) <> accessed 20 January 2020

National Treasury’s Municipal Services and PPP Guidelines

City of Johannesburg v Blue Moonlight Properties 2012 (2) SA 104 (CC).

Government of RSA v Grootboom 2001 (1) SA 46(CC).

Occupiers of 51 Olivia Road v City of Johannesburg 2008 (3) SA 208 (CC).

Scientific and Non-Scientific Publications:

Centre for Applied Legal Studies (CALS), ‘Evaluating the Efficiency and Effectiveness of Municipal Entities as Municipal Service Delivery Mechanisms – A Legal Assessment’ (CALS 2010)

De Visser J and Christmas A, ‘Reviewing Local Government Functions’ (2007) 9 Local Government Bulletin 13

Dullah Omar Institute, ‘Civic Protest Barometer’ (2018)

Kitchin F, ‘Consolidation of Research Conducted on Municipal Entities in South Africa’ (2010)

Makwetu K, ‘Local Government Audit Report 2017/18’ (Auditor General 2019)

Municipal Demarcation Board (MDB), ‘Assessment of Municipal Powers and Function’ (National Report, MDB 2018)

The South African Breweries (SAB), ‘2025 Sustainability Goals’ (The South African Breweries) <> accessed 20 January 2020

Statistics South Africa, ‘General Household Survey 2017’ (Stats SA 2018)   <>

[1] Schedules 4B and 5B – electricity and gas reticulation, municipal planning, municipal public transport, water and sanitation services, refuse removal, street lighting are services that are pertinent to and attached to housing.

[2] Dullah Omar Institute, ‘Civic Protest Barometer’ (2018).

[3] Department of Human Settlements (DHS), ‘Revised Draft Accreditation and Assignment Frameworks for Municipalities to Administer National Human Settlements Programmes’ (2017)                            <> accessed 20 January 2020.

[4] Sec 153 of the Constitution provides for the developmental duties of municipalities.  See also Sec 4(2)(j) of the Municipal Systems Act.

[5] Government of RSA v Grootboom 2001 (1) SA 46(CC); Occupiers of 51 Olivia Road v City of Johannesburg 2008 (3) SA 208 (CC); City of Johannesburg v Blue Moonlight Properties 2012 (2) SA 104 (CC).

[6] Sec 10 of the Housing Act 107 of 1997.

[7] Sec 10(2) and (3) of the Housing Act.

[8] Sec 10(3) and (4) of the Housing Act.

[9] Department of Human Settlements, ‘Breaking New Ground – A Comprehensive Plan for the Development of Integrated Sustainable Human Settlements’ (2004) Part B, Sec 5.2.

[10] DHS, ‘Revised Draft Accreditation and Assignment Frameworks’, above.

[11] ibid.

[12] ibid.

[13] ibid 20 (Principles of Accreditation, Principle 8).

[14] Interview with Nico Steytler, Professor, Dullah Omar Institute, University of the Western Cape (15 April 2021).

[15] Interview with Karen Harrison, City Support Programme, National Treasury (12 April 2021).

[16] For example, City of Johannesburg, ‘Medium-Term Budget 2018/18 to 2020/21’ (May 2018) 39; Overstrand Municipality, ‘Budget Report 2018/19’ 45; Stellenbosch Municipality, ‘Medium Term Revenue and Expenditure Framework 2018/19 to 2020/21’ 41.