SIYABULELA MAKUNGA | Student housing crisis calls for joint regulatory action

The public outcry over the cost and regulation of student accommodation has become a matter of national importance, calling for a coordinated regulatory response.

Last week, the Competition Commission, together with other regulatory bodies, appeared before the portfolio committee on higher education to brief legislators on enforcement and regulatory interventions that may help resolve the problems.

The crisis has become one of the most visible barriers to access to higher education. For many students, finding a safe, decent, and affordable place to live is as important as securing a place at university or college.

The commission’s involvement in the issue has attracted considerable public attention, and there is a need to clarify what the commission can — and cannot — do.

The commission’s mandate includes investigating complaints, prosecuting prohibited anti-competitive conduct, assessing mergers, conducting market enquiries, and undertaking advocacy.

Our mandate does not extend to the regulation of the country’s student housing. Competent agencies and regulators are best suited to build university residences, determine National Student Financial Aid Scheme (NSFAS) allowances, accredit accommodation facilities, or manage student placements.

This distinction is particularly important because the commission is currently investigating a complaint lodged by the higher education and training department regarding alleged price-fixing among private accommodation providers serving NSFAS-funded students.

The allegation is that providers may have been charging similar rental rates, potentially amounting to collusion, which is prohibited price-fixing.

Similar prices do not automatically mean that businesses have colluded. We are, however, obligated to investigate the issue, establish facts, and apply the law without fear, favour, or prejudice.

The concerns brought before the commission cannot simply be dismissed, as they also allege long-term agreements between higher education institutions and specific accommodation providers.

In a pro-competitive market, accommodation providers should compete on price, quality and service. Universities and colleges should avoid arrangements that unnecessarily restrict competition or exclude legitimate providers.

The commission is using enforcement and advocacy to intervene in this sector. Its proposed Practice Note on Student Accommodation seeks to improve understanding of competition law among students, accommodation providers, universities, NSFAS and other stakeholders. It aims to prevent anti-competitive practices while promoting affordability, innovation, quality and broader participation in the market.

But competition law cannot solve the entire accommodation crisis, which sits at the intersection of several systems — higher education, public funding, housing, municipal planning, accreditation, private investment and competition regulation.

SA needs an integrated regulatory framework for student accommodation that brings together the higher education and training department, NSFAS, universities and TVET colleges, municipalities, relevant housing authorities, the competition commission, student representatives, and accommodation providers.

It should establish clear national standards for safety and quality; transparent accreditation and bed verification; reliable payment systems; a credible approach to determining accommodation allowances; effective monitoring of providers; and clear mechanisms for students to report problems.

Price-fixing, exclusionary agreements, and other prohibited conduct must be investigated and, where evidence supports it, prosecuted.

Legitimate accommodation providers need certainty. They should know the rules, understand their obligations and have a fair opportunity to participate in the market.

The commission cannot be expected to overreach and replace the responsibilities of other institutions.

The answer is to build a system in which every institution knows its responsibility and works with the others.

Safe, affordable and accessible accommodation should not depend on a student successfully navigating a maze of disconnected institutions. SA needs a coordinated response — one that combines funding, infrastructure, quality assurance, effective administration, and competition regulation.

[We need to build] a student accommodation system worthy of the young people whose futures depend on it.

—  Siyabulela Makunga, Competition Commission spokesperson

That is how we can move beyond managing the accommodation crisis towards building a student accommodation system worthy of the young people whose futures depend on it.

• Makunga is spokesperson for the Competition Commission of South Africa.