South Africa’s multi-trillion rand community schemes sector has to undergo economic transformation to give opportunities to emerging SMMEs, especially those from previously disadvantaged communities.
Community schemes, which include sectional title complexes, retirement housing schemes, and share blocks, make up almost 30% of the total value of residential property in the country.
Therefore, Minister of Human Settlements Mmamoloko Kubayi says economic participation should be broadly opened for all to participate.
Read our latest Property360 digital magazine
Speaking at the first Community Schemes Ombud Service (CSOS) Indaba for stakeholders in Johannesburg recently, she noted the growth in community schemes and their importance in South Africa, explaining that the country has an estimated 70,000 community schemes, and has seen a growth trend in gated communities. Twenty-seven percent (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.
“The services these schemes solicit – such as security and garden services, make the sector a huge contributor to job creation, mainly because 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. This collaboration, Kubayi said, must yield tangible results and CSOS “has to ensure that these emerging black managing agents are integrated into the sector”.
Transparency is also 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, she urged stakeholders to embrace diversity within schemes, and stated that 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.
“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.”
She said issues and conflict would be greatly reduced if people learn and accept that living together means embracing diversity. Embracing cultural and religious diversity “has to be made a necessary element of the good governance of community schemes”.
The Minister also committed to improving services, transparency and turnaround times at the CSOS.