Joburg - Johannesburg ratepayers will collectively be paying millions more every month for the privilege of living in South Africa’s most fractious metropole, which last month appointed its eighth mayor in two years.
The rates and services increases that kick today have been the subject of much high-level discussion since the 2023/2024 budget was proposed in March.
This caused many individuals and civic organisations to submit well-considered objections to the City of Johannesburg (COJ).
The Johannesburg Property Owners and Managers Association (Jpoma) believes that regrettably, these all fell on deaf ears as the city council approved the budget.
“This was against the better judgement of so many who are deeply invested in Johannesburg’s success and survival,” they said.
The Jpoma’s members provide affordable housing to around 250 000 inner-city residents, as well as 125 000 square metres of retail/commercial space, of which a significant portion is occupied by small businesses that provide for their families’ basic needs.
Jpoma’s general manager, Angela Rivers, said: “The deleterious effects that these increases will have on these families cannot be underestimated in the bitterly tough current economic situation.”
Jpoma members contribute around R80 million a month in utility charges and taxes to the City’s revenue, and have in many respects been propping up the failing infrastructure in the inner city with ongoing additional investment, effectively operating as miniature municipalities.
“Our focus is on the provision of clean, safe, functional and affordable accommodation and business premises to residents and the many small business owners and entrepreneurs who service the high-density affordable housing market in the inner city,” she said.
“We also address the built environment around the buildings, often in conjunction with City Improvement Districts (CIDs), to which our members contribute significant funding. This funding allows for the provision of services for the public areas around the buildings, services which the City has failed to adequately provide over many years, yet it continues to punish our members and other property owners with punitive annual rate increases.”
Rivers said the city “is in a dire state with basic services having almost collapsed and infrastructure deteriorating at an alarming rate”.
“Jpoma’s concern is that ratepayers and residents will not see any improvement in service delivery despite forking out more, and that the extra income generated by the higher rates will disappear into the bottomless pit of poor management and corruption that increasingly plagues the city.
“Even before this increase, municipal costs increased between 152% and 169% in the last 10 years. In 2023 around 23% of tenants’ living expenses are made up of council charges. Inflation is currently around 7%, so why the COJ feels it is workable to wring more water out of the stone in every service category is beyond understanding.”
Water up by 9.3%, sanitation up by 9.3%
From 2013 to 2023 water charges have gone up by 328% and sewer charges by 172%, compared to household income that’s only increased by around 56%.
Electricity: 14.97%
Prepaid electricity has gone up by 145% from 2013 to 2023, and post-paid by 137%.
While Nersa approved the 18.65% increase from Eskom, it was opportunistic of City Power to also increase service charges and capacity charges by the same percentage, 3.5 times more than inflation, saidthe association.
Refuse: 7%
Rivers said that it was evident from walking the streets of Johannesburg that cleanliness levels were at an all-time low, and filth and squalor had become the norm.
“COJ fails to provide even basic services such as functional dustbins, culminating in refuse being disposed of in the street,” she said.
“The City’s inability to enforce its own bylaws means that informal traders are neither serviced nor do they contribute to COJ’s refuse-collection services, with the result that traders simply resort to illegally dumping their waste in the streets.”
She added that similarly, the waste generated in hijacked buildings was illegally dumped in the street.
Property rates: 2%
The increase in property values as a result of the General Valuation Roll (GVR) conducted every five years required a drop in the ratio applied to the value in order to deliver an inflation-based annual increase in the property rates levied, Rivers explained.
She said this was an internationally accepted practice and was applied in Johannesburg until the 2008/09 GVR but in the 2013/14 GVR, the factor was not rebased but was instead increased from the 2012/13 factor, resulting in a significant annual increase that year.
“The factor has increased year on year and now COJ has once again increased the factor at the same time that it increases property values, thereby inflating its coffers by ‘double-dipping’.
“In addition, COJ’s decision to simultaneously reduce the Residential Value Exclusion from R350k to R300k represents a triple whammy to residential property owners.”
Rivers added that the association was seeing rising vacancies as people on the lower end of the market are increasingly unable to afford formal accommodation.
“The City appears set to fleece its residents to financial doom. It is refusing to acknowledge the disaster should we lose those who pay the rates to fill COJ’s coffers. It is not only anti-poor and anti-small business, but has lost sight of both its customers’ means and the value of the service it provides.”
She insisted that COJ maintain these basic services to allow for the disposal of waste by pedestrians, culminating in waste being disposed of in the street.
“It is unacceptable that the charge for sewage and sanitation services for a dwelling on a single erf up to 300 square metres and a unit in a block of flats are the same, R336.01 including VAT, before the increase.”
Rivers said the size of an affordable housing unit in the inner city hardly exceeded 50 square metres and yet they were being charged the same as a free-standing house in a suburb. “Jpoma strongly believes that sewer charges should be billed on the basis of usage and not a fixed charge. This is particularly important given that property owners are required to pay the fixed charge regardless of whether a tenant occupies the unit or not. This therefore is extremely punitive during times of increased vacancies.
“The city council of Joburg voted against the better judgement of many advisers, including the providers of affordable inner city housing.”
In summary, here is how much more COJ residents will be paying from July 1:
Property rates: 2%
Electricity: 14.97%
Water: 9.3%