Service cuts foil Jo’burg ‘renewal’

Eyethu House in Maboneng — the Johannesburg district which in 2009 became the face of the inner city’s revitalisation — is all concrete and slick lines. A copy of Johannesburg Style: Architecture and Society 1880s-1960s, Clive M Chipkin’s 1993 book on the city’s history of urbanisation, sits on a table in the building’s air-conditioned waiting room.

The building stands in stark contrast to its immediate surroundings, Johannesburg’s graffitied rough-edges that are no doubt part of its appeal to people seeking affordable housing close to the city centre.

Last week, the water was cut off at Eyethu House, allegedly without warning. But according to a group of Johannesburg-based landlords, the incident was just one of many unwarranted disconnections that have left them on the verge of divesting.

Following the disconnection of water and electricity to a number of inner-city properties last week, the Johannesburg Property Owners and Managers Association (JPOMA) released a statement saying it is fed up with the “abysmal accounting and draconian enforcement of by-laws” by the City of Johannesburg.

The association’s members, who say they pay the City of Johannesburg in more than R80-million a month in rates and utilities, are responsible for more than 60 000 affordable housing units in the inner city.

At the heart of their fight with the City are allegedly perpetual billing irregularities, which have led to properties being disconnected from services — despite a 2011 court order prohibiting the City from doing so when a complaint of overcharging has been made.

Sitting in a boardroom at Eyethu House, the association’s general manager, Angela Rivers, told the Mail & Guardian that she currently has about 280 account disputes on her books, some of which she has been trying to resolve for years. 

Rivers said attempts at help from staff at the City’s revenue department are undermined by the council’s changing processes, which has made resolving these disputes “a total mess”.

According to Rivers, rentals at association-affiliated properties range from R2 000 to R6 000.

In February last year, the City adopted its inclusionary housing policy, which requires private developers to dedicate a minimum of 30% of new housing developments to low-income and low-middle-income households.

Justin Blend, director of Africrest Properties, said the company has been “harassed” by the City of Johannesburg, which last week disconnected the electricity to a property in Bramley amid an ongoing dispute over a large penalty on its account.

“How many people are actually developing in Johannesburg at the minute?” Blend said. “In the last 24 months, we have spent R700-million and will spend another R300-million by the end of 2020.”

He said the situation is “very demoralising. I can’t say I’m going to throw in the towel, but it is definitely demotivating.”

Solly Ramalamula, managing director of Take Shape Properties, said investors are already trying to “run away” from the inner city because of the disconnections. Take Shape manages more than  3 500 residential units in the city centre.

He said: “The only way to get a matter resolved — which still never gets resolved — is by taking the municipality to court.”

Building a case: Newly developed buildings in the Jo’burg inner city have comprehensive security. The Johannesburg Property Owners and Managers Association has issued a statement saying it is fed up with the City’s billing irregularities. (Paul Botes/M&G)

The disconnections make buildings in the inner city susceptible to being hijacked, as tenants become fed up with paying rent and not receiving services, Ramalamula added. “So how do you survive?”

“Especially in the City of Johannesburg, it is difficult … It is very, very difficult to survive in the property industry now,” he said.

Ramalamula added: “And you must remember, we are representing the majority of people staying in the city. Even if they go and disconnect the electricity in the city, I don’t stay there. I’ve got 500 tenants staying in a property and at least for that night they won’t be able to cook. … It’s those people who suffer … We don’t stay in the city. We stay out there.”

Vincent Labuschagne, the general manager of Zahavi Estates, said inner-city property developers have had to become “resilient”.

Labuschagne said investment in inner-city revitalisation, such as that seen in the Maboneng’s heyday, “has definitely slowed down”.

“For the past five years, we’ve been doing two to three projects a year. And as I said, this year, there is nothing on the table. And there’s nothing on the horizon for 2021 either.”

In response to queries from the M&G, revenue department spokesperson Stan Maphologela said the City is “surprised by the allegations that JPOMA has made”. 

According to Maphologela, the City’s “steady relationship” with the association included deploying an team of experts to assist inner-city developers and property-management companies to resolve long-outstanding billing issues at an open day last year.

“There is no malicious intent or unfair treatment from the City’s side whatsoever,” he said.

As for the disconnection of Eyethu House last week, Maphologela said some of the accounts were in arrears and were settled only in January 2020. 

“Finally, it must be noted that the City generates much of its revenue through the levying of rates and consumption charges … However, the City faces severe budget constraints as a result of increased expenditures and costs on one hand and decreasing levels of payment for services provided on the other,” Maphologela added.

“Indeed, the debt burden is threatening all service-delivery initiatives still to be undertaken in the future. This makes effective credit control imperative for the City.”

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