‘High rates will scare off potential developers’
THE South African Property Owners Association (Sapoa) has lamented that the worsening infrastructure challenges in eThekwini, and the metro’s “unsustainable” municipal rates increase were likely to negatively impact any new development and investment.
Sapoa, established in 1966 by leading and large property investment organisations, aims to unite commercial property role-players to create a powerful platform for investors.
Neil Gopal, Sapoa CEO, said its members represented investments and developments which generated billions in rates, taxes, and service payments for the city.
He said the metro’s belief that increasing rates on fixed property and vacant land would spur developers into action was “misplaced”.
“Developers will relocate their capital elsewhere or simply not go ahead with their developments,” he said.
Gopal said eThekwini was a port city and that logistics played a major role in its economy.
“Therefore, this sector should be facilitated and not penalised with higher property rates.
“It is not fair and equitable to categorise these properties as industrial,” he said.
“The latest draft rates policy also does not highlight the rates ratios for all the categories, and we urge the metro to list these ratios to give
investors some degree of clarity.”
Gopal said due to the metro’s lack of services such as proper roads, water, sewerage and electrical infrastructure, it was impossible to develop some of the vacant land.
“This results in certain certificates not being approved due to insufficient infrastructure capacity.
“Therefore, owners of properties affected by this should not pay the same rates as those who own vacant land that is serviced or could be serviced.
“Furthermore, it is a grave misconception that high property rates will encourage the development of vacant land.
“The development of property is driven by demand, but high property rates will chase potential developers away, while owners of vacant land will be left ‘trapped’, as they won’t be able to sell their land due to insufficient demand,” he said.