City of Joburg pulled 'con job' on residents

The City of Joburg has pulled a "con job" on its poorest residents. This is the opinion of the inner city Property Owners' and Managers Association (POMA) and the Johannesburg Inner City Business Coalition (JICBC).

The new tariffs and valuation roll have brought a host of problems for landlords and tenants, and now the two organisations are threatening the city with legal action if it fails to resolve the issues.

The main problems are:

  • The city announced new stepped tariffs for electricity in July, meaning that the more electricity people consume, the more they pay.

    However, the city did not realise that blocks of flats, which are not sectional title properties and don't have individual meters, are now being billed collectively, resulting in them being charged at the most expensive punitive tariffs.

    Property owners are being forced to pass these higher costs on to their tenants. POMA and the JICBC claim that this has resulted in increases of up to 54 percent. They claim that they are losing many tenants because of these huge increases.

  • Pikitup is now charging every unit for a bin, adding further costs for tenants. According to the new tariffs, if a building has 300 flats, there should be 300 bins, which is not the case.

  • Yet another problem is the zoning of inner-city buildings that have been converted from office space to residential units and are still being charged higher business rates. The city undertook to deal with this by December 1, which has not happened.

POMA spokesperson Brian Miller said the city, by adding these costs, was forcing people back into slum buildings, where they lived in unhygienic conditions.

This was not only contrary to the Inner City Charter, but also to central government policies.

"The mayor wants 75 000 affordable houses by 2014. This is not going to happen if this continues.

"The city has promised over and over to resolve this, but we are into our sixth billing cycle and the tenants have been forced to pay punitive rates.

"Why are these utilities destroying the mayor's vision?" he asked.

Tenants most affected are those earning between R3 500 and R7 500.

"We have up to 50 people a month leaving. This is unprecedented. They can no longer afford to live in our units, which are supposed to be affordable accommodation.

"These added costs are over and above the credit crunch.

"Furthermore, they (the tenants) don't understand how the system works and so they believe we are extorting money from them," he said.

POMA and the JICBC have negotiated with City Power, which undertook to divide the collective charge between each unit and charge them at the lower rate.

But, said Miller, they had had no confirmation of this in writing.

Another complication is that if City Power eventually refunds landlords, they would probably not be able to trace the tenants who were overcharged to refund them in turn.

"At the end of the day, the tenants lose out and we, as landlords, lose out. Who is going to compensate our losses?" he said.

Miller said the private sector had contributed billions of rands to affordable residential accommodation, but with the current problems, these companies were questioning whether to continue doing so.

The city has strongly rejected the claims, saying it was negotiating with the property owners.

Mayoral committee member responsible for infrastructure and services Ros Greeff admitted there was a serious problem, but said the property owners and City Power had reached an interim agreement whereby the buildings would be charged the lower rate and would not be cut off.

"We are taking this matter very seriously and have had several meetings with the developers.

"We have set up a special working group to tackle these issues," Greeff said.

"Unfortunately, the tariffs cannot be changed mid-year.

"This will be done later this year when we announce the new budget.

"There is no immediate solution, but the interim agreement, which has been approved by the mayoral committee, should grant property owners some relief."

She added that some property owners were still billing tenants at the higher rate despite the interim agreement.

  • This article was originally published on page 7 of The Star on January 15, 2009

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