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The social costs of inner city regeneration

Kate Tissington is a researcher at the Socio-Economic Rights Institute of South Africa (SERI).

The City of Johannesburg needs to step up and address the social costs of inner city regeneration. Despite years of litigation and a host of progressive court judgments that have substantially contributed to the constitutional right of access to adequate housing, municipalities like Johannesburg are still failing to fulfil their constitutional duties in relation to the provision of alternative accommodation to those rendered homeless by evictions in their jurisdiction.

According to two new research reports launched by the Socio-Economic Rights Institute of SA (SERI) yesterday, neither property owners nor municipalities have fully come to terms with the significant paradigm shift in the law related to evictions. The first of these reports – Evictions and Alternative Accommodation in South Africa: An Analysis of the Jurisprudence and Implications for Local Government – identifies the range of legal principles governing the rights, duties and obligations of the various parties involved in eviction proceedings, particularly local government.

In inner city Johannesburg, private-led evictions have intensified since the City’s regeneration strategy was launched ten years ago. The City’s response to its constitutional obligations – as determined by the Constitutional Court in 2011 – has been to place people in homeless shelters with strict house rules, including daytime lockouts and the separation of husbands, wives and children. After 6 to 12 months people are removed from the shelter. The City hopes that during this period people will be able to “transition” to better employment and higher wages, and be in a position to afford accommodation on the rental market. Wishful thinking, to say the least.

According to the 2011 Census, almost half the households living in the inner city – consisting of approximately 122,000 people – earn less than R3,200 per month (city-wide over half of all households earn below this amount). These inner city households – which include car guards, domestic workers, cleaners, taxi drivers, informal traders, security guards, painters etc – can afford rent of R900 or less per month. Other inner city residents choose to live there because of the opportunities for piecework, and transport costs are kept low.

However, there are few formal housing options available to low-income and poor inner city residents. The second SERI report – Minding the Gap: An Analysis of the Supply of and Demand for Low-Income Rental Accommodation in Inner City Johannesburg – shows the huge gap between the demand for and the supply of low-income rental accommodation in the inner city. Poor and low-income households are forced to live in squalid conditions in so-called ‘bad’ buildings or overcrowded flats.

The private rental market does not supply anything that is affordable to them. While there are a few institutions in the inner city providing social housing at lower rentals than the private suppliers, these institutions are extremely oversubscribed and there is almost no social housing actually available or affordable. Social housing is, by its own definition, not targeted at poor households. It is focused on the R3,500 to R7,500 household monthly income range.

The City argues that poor and low-income residents can and should access informal accommodation in shared units at cheaper rentals. This is despite taking action against people who do exactly this. Quite apart from such inconsistency, this informal accommodation is still unaffordable to many people. It is also in short supply. Rooms to rent range from R800 to R1,400 per month while rooms to share, or portion of rooms, rent at a range of R100 to R800 per month per “space”. An enclosed balcony of a flat can go for around R600 or more per month. A “bed-sharing” arrangement of between R450 and R550 per month is probably the cheapest option available to people. However, these living arrangements are overcrowded with a lack of privacy and without security of tenure.

This is “the gap” to which the SERI research refers. This gap is a crisis, repeatedly acknowledged by the City, but one which has not been addressed to date. This is despite a number of plans and interventions aimed at dealing with ‘bad’ buildings over the years, including the the Seven Buildings Programme, Bad/Better Buildings Programme, Inner City Housing Action Plan, Bad Buildings Strategy, and the latest Inner City Property Scheme (ICPS).

So why is the City so resistant to deal proactively with the crisis at hand? Perhaps the chief reason is a lack of political will. The City is focused on the people it wants to live in the inner city, not the people who already do; on so-called ‘bad’ buildings themselves, not on the needs of the people living in them. A further reason for the lack of action around addressing the gap is that the City prefers to sell off properties, rather than to explore a low-income rental housing strategy and develop new models that address some of the historic shortcomings of public rental housing.

An example of this is the City’s flagship ICPS, which involves the transfer of a portion of inner city properties (including municipal-owned properties, expropriated properties, properties acquired through sales in execution and privately-owned buildings) to a private consortium via a series of structured sale transactions. The City places a requirement on the consortium to ensure that at least 30% of units developed are social housing. The first phase of the ICPS formally commenced with the earmarking of 30 buildings for development. Of this a total of 2 buildings – comprising 309 social housing units – will be developed, aimed at those earning between R3,500 and R7,500. Less than 100 of these units will be aimed at the lower end of the low-income bracket. This is less than 10% of the total ICPS portfolio – a drop in the ocean, and still too expensive for the 31% of inner city households that earn below R1,600 per month.

A radical programme of urban regeneration in the inner city is underway, as witnessed by the revival of precincts like Braamfontein and Newtown and the creation of Maboneng. Instead of carrying the social costs of a regeneration drive that is welcomed by wealthy groups, as a public authority should, the City is shirking its responsibilities and attempting to narrow its obligations as much as possible. Its “Operation Clean Sweep” campaign, which sought to remove all informal traders from inner city streets, perhaps comes close to showing its real attitude towards certain groups working and living in the inner city.

The City’s urban regeneration policies actively promote the eviction of poor people from urban slums, assuming that alternative housing options exist. This is a false assumption, and the City is simply not acting to provide viable alternatives to slum conditions for the urban poor.

The most significant intervention the City should be making is an affordable, accessible rental housing programme that responds to the needs of the majority of residents. This can be done. And the City has the mandate. In 2014 the human settlements function will officially be assigned to metropolitan municipalities, including Johannesburg.  In his budget speech this week Minister Pravin Gordhan announced a new grant to assist metropolitan municipalities to manage this new function.

The City also has the resources. There are about 34,000 households living in the inner city earning less than R3,200 per month. Assuming that each of these households requires a unit that costs R125,000 to build or refurbish (the maximum amount available under the national public rental housing subsidy), the capital costs of eliminating the inner city housing problem altogether is, at its highest, R4.250 billion. This is just less than the City’s current budget surplus, which is R4.9 billion and projected to increase over the next few years. The municipality also receives substantial funding from the Urban Settlement Development Grant, which seeks to support the development of sustainable human settlements for low-income households in large urban areas. A percentage of this should be allocated to address “the gap”.

Obviously, the aim is not to solve the crisis overnight, but to at least put in place a plan and measures to progressively deal with the lack of supply of low-income rental housing for close to half of the households currently living in the inner city. Using a fraction of its budget surplus, the City could, in the next few years, cover the capital costs of eliminating the inner city housing crisis. There is a need then to consider operating subsidies for the ongoing management and maintenance of low-income rental housing stock. The City does not need to do this alone and can, where appropriate, utilise the skills of communities, NGOs and the private sector.

Low-income housing development close to the inner city is also welcomed, provided that affordability levels are maintained and travel costs kept to a minimum. If Mayor Parks Tau’s much vaunted “Corridors of Freedom” initiative is to be worth its hype, it would need to cater to the majority of households in the city that earn below R3,200 per month.

We are used to hearing about the intractability of social problems, the endlessness of poverty and the inability of the state to do anything about it. However in inner city Johannesburg at least, providing housing to every poor and low-income household living there is an achievable, affordable goal within the next few years. The City just has to want to do it. DM

Kate Tissington is a senior researcher at the Socio-Economic Rights Institute of SA (SERI).


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