Joburg’s inner city land audit, hijacked buildings to be converted into low-cost flats
THE CITY OF Johannesburg is to launch an initiative to convert hijacked buildings into low-cost residential rental stock.
City of Johannesburg Mayor Herman Mashaba confirmed last week that the city was conducting an extensive land audit of the inner city to identify and prioritise hijacked buildings that could be converted into rental stock.
Mashaba said these buildings would be made available to the private sector for development, with the city offering incentives to promote the development of residential rental stock. This formed part of a new plan launched by the city to reclaim the inner city that was focused on addressing the problem of hijacked buildings, Mashaba told a chief executive Global Awards dinner in Kempton Park.
The initiative has been welcomed by Indluplace, the first residential-focused real estate investment trust to list on the JSE, and Octodec, which has converted many office buildings into residential apartments in Johannesburg and Pretoria.
Mashaba said the city had a housing backlog of more than 300 000 units, and 158 000 people were on the waiting list for free housing. There was a net migration of 3 000 people a month into Johannesburg.
“The development of the inner city represents a great economic opportunity for private-sector investors… and has the potential to boost both economic growth and job creation,” Mashaba said.
He said proposals to develop hijacked buildings would be issued in a transparent and open system and would be available to anyone who met all the requirements. These requirements related to how much money would be invested, the number of residential units that would be built, the number of people who would be employed and trained during the construction phase, and the rentals that would be charged.
Mashaba said 18 percent of the city’s capital expenditure was allocated to the inner city, which demonstrated that it was serious about reclaiming the inner city.
Jeffrey Wapnick, the managing director of Octodec, welcomed the engagement with the City of Johannesburg with a view to understanding its proposals for the redevelopment of hijacked buildings in the central business district (CBD).
“We are already entrenched in the Johannesburg CBD and are willing to consider further investment on the basis that we are able to strike a balance between catering for the needs of the communities in which we operate by providing wellpriced quality accommodation, yet still providing reasonable returns to shareholders.
Indluplace chief executive Carel de Wit said his company was already invested in the inner city, and almost 2 500 families had their homes in the 25 buildings it owned there.
“Making the city your home requires more than the renovation and upgrading of buildings. One of the greatest challenges is to make renting or owning affordable. The city will have to look to dealing with the cost of rates and utilities – electricity in particular – the cost of which have escalated much higher than inflation and now constitute a large percentage of the monthly cost of accommodation,” he said.
Johannesburg Mayor Herman Mashaba says the redevelopment of the inner city represents a great opportunity for investors.