WHAT THE DEVELOPERS SAY
Saving hijacked buildings in Johannesburg's inner city and converting them into low-cost rental units is achievable if there is collaboration with the private sector and a clear plan that investors can follow.
That is the view of experts and private developers who have invested billions of rands in the area, and are now unhappy with the decay of what was once the economic heart of the city.
Mendel Goldman, a developer who has been investing in the inner city for 20 years, said: “Private developers can do it. They can go to the banks and borrow money. But the banks will only lend them money if there is a viable, sustainable plan from the city. Some banks are nervous about the inner city. When they do lend you money, it is at punitive rates because of the risks associated with the area.
The private sector can borrow the money and turn bad buildings into good buildings. But the city needs to play its part
— Mendel Goldman, inner city investor
“Of course, this can change. We just need to have a willing city to do its part and the private sector can borrow the money and turn bad buildings into good buildings. But the city needs to play its part,” Goldman said.
The mammoth job of rejuvenating the inner city has sparked debate after 77 people died when a hijacked building caught fire in Marshalltown on August 31.
This week, Gauteng premier Panyaza Lesufi released the terms of reference for the judicial inquiry established to investigate the incident. The inquiry, led by retired constitutional justice Sisi Khampepe, will be broken into two phases — the cause of the fire and the prevalence of hijacked buildings in the province.
City Power this week sent a team to disconnect the electricity in hijacked buildings. But only one building was successfully disconnected before angry residents living in the hijacked buildings in Jeppestown turned violent.
Goldman said the city’s slow pace in fixing hijacked buildings was affecting investment.
“These buildings are spilling crime into the area. We have massive vacancies which makes us lose massive amounts of rental income. This affects our ability to pay our bond.”
Goldman said the city must enforce bylaws to empower developers to take over dilapidated buildings.
“Problematic buildings are not paying rates. They are stealing water and electricity and provide no revenue to the city. The city should attach these buildings and sell them to developers,” he said.
He proposed that the city have different rates tariffs for different areas.
“You cannot have people living in affordable housing in Hillbrow paying the same as those living in townhouses in Sandton,” he said.
He proposed the introduction of a rental grant to subsidise qualifying poor people. This system was used in the US where government pays apartment owners to offer reduced rents to tenants with low incomes.
Solly Ramalamula, founder of Take Shape Property Management, has been investing in Johannesburg since 2002. His company owns 84 buildings in the inner city and surrounding areas such as Yeoville, Berea, Rosettenville and Turffontein.
Ramalamula has bought seven hijacked buildings.
“The challenge is that when you start the process of eviction, you can have a problem with human rights organisations opposing you in court. Even the municipality opposes the eviction because they do not have a place to relocate people living in the building.”
Ramalamula said that in his experience hijackers did not just come and threaten people living in old buildings to force them to pay them rent.
Instead, part of the hijacking syndicates were the tenants who had a lease agreement with the property owner.
“It starts with a few tenants who are not happy with the condition of the property or feel the rent is too high. This may be because the owner is not taking care of the building.
“People will then boycott the rent and services will be terminated by the municipality. The tenants then call a meeting and maybe among them is someone who can arrange for services to be illegally connected,” Ramalamula said.
Soon the people who called the gathering will be the ones collecting the rent and they will remove the security deployed by the owner, he said.
Angela Rivers, general manager at the Johannesburg Property Owners and Managers Association (JPOMA), said members of the organisation are still investing in the inner city despite the problems.
“It is more of an appetite of desperation because our members have invested R18bn in the inner city over the past 20 years. They pump in about R1bn every year. They don’t want to walk away but the city does not make it easy for them,” she said.
Association members own and manage more than 70,000 residential units in the inner city and house more than 350,000 inner-city residents.
WHAT THE CITY SAYS
Zanele Malusi, deputy director of inner city and urban cores in Johannesburg's human settlements department, said that in the past five years the city had helped in the removal of hijackers in 10 inner city buildings, and given these buildings to the private sector to develop into low-cost rental units.
Those evicted were taken to different temporary shelters at the Old Perm Building, Fraser House, 133 Albert Street and Wembley Shelter.
Malusi said the metro had revamped six buildings in the inner city in the past 10 years. All these buildings had been in a “bad condition”. Over the past five years the city had also emptied 10 privately owned buildings which had been illegally occupied.
She said there were now 50 private court eviction matters in which the city could be expected to provide alternative accommodation.
Malusi said the delay the private sector was complaining about was caused by insufficient temporary emergency accommodation (TEA) for those evicted. The city is required to provide alternative accommodation for every person evicted who has no place to go.
“TEA is fully funded by the city. Year in and year out there is limited funding. So far we have developed nine facilities. The city has done what it can with the resources it has. The supply of temporary emergency accommodation is a challenge. The number of matters in court are too many. We are being joined into litigation left, right and centre.
“If you go to our TEA facilities, people have not transitioned. People are living for free, so they will never transition. They do not want to transition even when they can afford to because it is free accommodation.
“Other people see temporary emergency accommodation as a mechanism to jump the queue because once the people get into these facilities, they don’t want to move out.
“We are actually subsidising criminals. A person has broken the law by illegally occupying another person’s property. It is like a reward. A person who has decided to erect a shack in an informal settlement has to wait longer to be helped by the government as opposed to a person who has broken the law.”
Malusi said the city was now targeting funding from the emergency housing programme in the national department of human settlements.
“The city does have a plan. The inner city housing implementation plan was approved by the mayoral committee in 2017. All the buildings we have cleared over the years are basically in line with this plan. The major challenge is resources to provide alternative accommodation.”
The plan entails converting dilapidated buildings into low-cost housing and student accommodation. With more buildings being revamped, the city plans to gradually reverse decay.
JOBURG'S INNER CITY SUCCESS STORIES
ELGIN COURT
Seasoned developer Solly Ramalamula came up with a creative way to get the 800 hijacker tenants out of a building he bought in 2006.
Instead of going to court to get an eviction order, he enticed them with money and jobs.
After buying Elgin Court, on the corner of Jeppe and Delvers streets, Ramalamula decided to meet the people who lived in the building to persuade them to go. He paid R1,500 to each of the original 66 lease holders who lived in the building. These lease holders had subdivided the building to bring in more tenants and generate more cash.
When the lease holders took the payment, they used their influence to compel the rest of the people to vacate the building.
“To further appease them, we had to offer the people jobs during construction because they said they were not working and it would be difficult for them to find a place to stay,” Ramalamula said.
He hired 15 people who had been living in the building. At the end of the project, he had to build 12 rooms on top of the building for those tenants who could not afford to stay in the renovated building. He said he spent R11.4m on the project.
Today, Elgin Court has 79 bachelor units which are safe and well maintained.
Among its tenants is Mel Banda, 48, who lives with her husband and their three-year-old child.
“I work in town selling data on the streets. Staying in this building enables me to do my trade without worrying about transport money. My husband also works here in town. He runs a business fixing cellphones. It is convenient for us to be here.
“The building is also safe. You don’t see strangers moving around. Security ensures that there is tight access control,” Banda said.
Banda has lived in the building since 2020 and pays R3,500 a month in rent, though this varies slightly depending on how much water she uses.
133 ALBERT STREET
The formerly hijacked building in Marshalltown is owned by the city and was renovated between 2012 and 2014 at a cost of R30m.
It now houses about 400 people who were evicted from different buildings in the city. Very few of them work. None pay rent but a committee of residents runs the building with precision.
Residents take turn cleaning the building, entrance is strictly controlled and the committee is in constant contact with the city about the management of the block.
Committee member Siyabonga Mahlangu told the Sunday Times security was vital.
“Most of the people here are not working. A few are security guards, some are informal traders while others depend on social grants,” he said.
Sex workers outside the building were a problem but the committee came up with a creative way to keep the pavement clear.
Residents raised R3,500 to install a small pipe on the roof the building’s balcony. When security guards spot the sex workers, they open the tap which releases water, chasing away the women.
“Our problem was that they get drunk sometimes and then break glasses on the wall,” Mahlangu said.
He said residents work hard to ensure there is access control.
“We’ve made it impossible for anyone to hijack the building. Nothing happens here without the knowledge of the municipality. Anyone who brings a visitor to spend the night must tell us in advance.”
Another resident, Zanele Vilakazi, 49, lives with her four children, the youngest of whom is 10.
“This area is not safe. There are sex workers who are a target of robbers. Those robbers also pounce on some of the people who live in our building. The presence of sex workers is unsettling. We don’t even send our children to the shops because we don’t want them to be exposed to what the ladies are doing on the streets,” said Vilakazi, who makes a living selling snacks and fruit outside the building.
“Finding low-cost rental for an unemployed person like me is difficult. Property owners want payslips and deposits, which we do not have.”
PLATINUM PLACE
One of the biggest transformations in the inner city is a block of five properties in Doornfontein — some which had been hijacked — that were privately renovated into what is now an impressive housing development of 475 units, with free Wi-Fi, DStv and a free shuttle service to Bree and Noord taxi ranks.
Tenants pay between R1,800 and about R2,500 a month.
The developer did not want to comment but JPOMA's Rivers said the project had been long and difficult.
It took about five years to get a court order, evict the people and start revamping the buildings. About 2,000 people lived there, mostly women and children. The hijackers placed a few foreigners into one section of the property. The city provided alternative accommodation for the occupants after eviction.
“It was one of the worst buildings I had ever seen. In the basement, the sewage was knee deep. There was no water or electricity but tenants paid R600 a week, which was expensive.
“They had removed all inside walls and put up little shacks made of cardboard to create walls. It was so dark inside. The developer spent R800,000 just on removing the rubbish in the building,” Rivers said.
The building, at 38 Van Beek Street, cost the developer R15m-R20m to develop.
During a tour of the building, Sandile Phiri told the Sunday Times he had rented a unit for his two sons aged 13 and 18 who are in grade 7 and 12 respectively. Phiri lives in Durban but wanted his sons to be in Johannesburg to improve their chances of a big breakthrough in their soccer careers.
“My sons have been living here since last year. They have not complained about anything in this building. The building is perfect for them because they are at school and there is free Wi-Fi. My sons are able to take care of themselves.”
Phiri pays R2,500 a month for the flat. Previously he paid R5,400 for each of them at a soccer academy in Mayfair. The boys’ flat is a bachelor with two beds, a small kitchen and a communal bathroom.
Another tenant, Busile Ndlovu, originally from Mpumalanga, moved into Platinum Place in 2020. She lives in one of the units with her 22-year-old son.
“This place is perfect for me. It has hot water, security is tight and there are cameras all over. I have privacy here. I can take a shuttle for free to Bree taxi rank when I go to work,” said Ndlovu, who works in Northriding and pays R2,500 rent a month.
SKOSANA COURTS
Skosana Courts was renovated and launched by human settlements MMC Mlungisi Mabaso in November. It is still empty but tenants are due to begin moving in soon.
All 136 units have been rented for between R650 and R2,500 a month.
The city spent R40m renovating the hijacked three-block building, near the Jeppestown hostel.
It offers bachelor flats which come with DStv, a stove and fitted wardrobes. Zanele Malusi, deputy director of inner city and urban cores in the human settlements department, said the building had been a “hijacked slum”.
The city obtained an eviction order against those living in the building. The illegal tenants were then spread across the city's nine TEA settlements. Skosana Courts had shacks on all its floors and even on the roof.
During a tour of the development, a staff member who did not want to be named said: “We are now just preparing the building so when the tenants come everything is working. We are checking every tap and bulb to make sure it is ready,” he said.
Malusi said the building will be available also to those who were evicted who can afford to pay the rent.
“We are busy with the selection criteria. The way it will work is that 50% of the tenants will come from the ward, 20% will be people from TEAs and the rest will be people from elsewhere. We have recognised that the only way we can clear people out of TEAs is to provide affordable rental where shack farmers are thriving. That ward has a huge backlog of people living in unsafe buildings,” Malusi said.
Skosana Courts is at the beginning of Jules Street, which links the inner city with the eastern part of Johannesburg. Not far from the building is a well maintained park.
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