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SAPOA’s National Council meets to address the industry’s concerns

SAPOA’s National Council recently held its first meeting for 2022 to receive reports from the various regions and sub-committees focusing on the different aspects of the property industry, chaired by newly elected President of SAPOA, Malose Kekana.

SAPOA’s National Council meets twice a year with the Chairpersons from all eighteen of its committees. These committees meet four times a year and collectively constitute 270 individual members representing member companies who hold over 100 meetings annually at SAPOA.

The various regions reported several challenges that are faced by SAPOA’s members which include the decision by municipalities to increase rates substantially as well as vacant land rates without improvement in service delivery; threats to development posed by the construction mafia; the need to accelerate the implementation of large infrastructure projects as a catalyst for private developers to continue investing in new developments; the need to find solutions for the red tape and delays in the municipal approval processes and the various municipalities that are experiencing water shortages.

The National Council noted that large amounts of investment in new developments is being held back due to the dysfunction of many municipalities, which in the process, hampers job creation during construction and thereafter.

Kekana conveyed his concerns, highlighting that SAPOA should continue to develop key relationships with the local authorities: “We must continue to develop strategic relationships with local government and the property sector to endeavour to find solutions to red tape, the magnitude of challenges being experienced and delays in the municipal approval processes and procedures to increase development in the respective cities.”

The Property Developers Committee also voiced its concern regarding amendments to the NHBRC Act. There are attempts to introduce the levy to cover residential alterations. SAPOA will be engaging relevant stakeholders to introduce a tiered levy approach with defined compensation and reimbursement provision. It was noted that the NHBRC is sitting on R7.5 billion in cash reserves and members need to be reassured that the funds are being used correctly.

Other concerns arose from the Sustainability Committee which highlighted regulations for commercial buildings in South Africa requiring to submit and display an Energy Performance Certificate (EPC) or risk a R5 million fine, five years in prison, or both. The regulations were gazetted on the 8th of December 2020 and will take effect from the 7th of December 2022, meaning that building owners who have not yet acted have just over two months left to comply.

The committees have engaged the Department of Mineral Resources to ask for the extension of Energy Performance Certificates by three years. One of the sticking points is the standard of measurement used to define the net floor area. SAPOA’s method, and that of SANS 1544, differ. There is also no capacity to meet the December 2022 deadline due to the limited pool of accredited inspection bodies in South Africa. The industry cannot by any measure certify approximately 500 000 buildings with only 6 accredited inspection bodies approved by SANAS.

The biggest issue facing the property industry is the disconnect between the government’s gazette which increased the limit of embedded generation without NERSA generation license from 1MW to 100 MW. There are still embedded generation requirements from Eskom and municipalities that needs to be adhered to before connecting to the grid,” said Kekana.

A letter was written to the Presidency to drive the amendment of the existing approval criteria. In light of the ongoing loadshedding crisis, government’s lack of common approach and responsiveness is disappointing and worsening the crisis.

The National Council also noted the water shortages which are facing various municipalities. It observed that membership of SAPOA has remained stable following a drop during Covid-19 due to cancellations mostly by individual and small professional firms. The trend is now reversing.

Kekana called for SAPOA to pursue various avenues to hold government accountable and support government where there are capacity challenges. “In this regard, SAPOA will be engaging with relevant Parliamentary Committees and will forge a broad frontier with other business organisations including BUSA to ensure that business environment is improved,” he added.  

SAPOA’s CEO, Neil Gopal also emphasised that whilst Solar PV remains the easiest and cost-effective way to reduce one’s carbon footprint and deal with ongoing loadshedding which is escalating, he cautions that “the ongoing delays from Eskom and local authorities to obtain embedded generation approval continues to be a risk to landlords.”

Kekana also took the opportunity to welcome new National Council members from FNB, Nedbank, Standard Bank, Transnet, Attacq and Old Mutual who have joined some of the committees.