Community schemes economic sector next in line for BEE shake-up

South Africa’s community scheme landscape, one of South Africa’s most successful and rapidly-growing privately-run sectors, is next in line for a BEE shake-up after the Minister of Human Settlements, Mmamoloko Kubayi’s warning that economic transformation must now take place in this multi-trillion-rand economy.
 
Speaking at the first Community Schemes Ombud Service (CSOS) Indaba for stakeholders in Johannesburg last week, the Minister noted the growth in community schemes and their importance in South Africa.
 
“South Africa has an estimated 70,000 community schemes and has also seen a growth 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.
 
“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.”
 
Transformation of managing agents also critical

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.
 
Minister Kubayi added: “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.”
 
Diversity needed within community schemes

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.
 
The Minister also committed to improving services, transparency and turnaround times at the CSOS.
 
The two-day CSOS Indaba was the first event of its kind, and was convened to educate stakeholders on community scheme governance, administration and management, as well as to outline common challenges and solutions, and best practice in community scheme management.