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Sapoa welcomes 75% rates rebate for worst riot-damaged properties in Durban

But voices concern over ‘construction mafia’ ahead of rebuilding efforts in unrest-hit areas.
The rioting and sabotage in KZN reportedly resulted in around R20 billion worth of damage and looting-related losses in the city of Durban alone. Image: Sibonelo Zungu/via Reuters

An announcement by the eThekwini Municipality that property owners worst affected by riots and vandalism that gripped greater Durban in July stand to get a rates rebate of up to 75% has been welcomed by the South African Property Owners Association (Sapoa).

Reacting to the news this week, Sapoa CEO Neil Gopal said it is a positive step, but he took the opportunity to raise a warning that the ‘construction mafia’ in KwaZulu-Natal may take advantage of the rebuilding efforts in the province.

Read: The scale of the destruction

eThekwini Mayor Mxolisi Kaunda announced business support measures last week that include rates relief to assist companies and property owners affected by the unrest in greater Durban.

The rioting and sabotage has reportedly resulted in around R20 billion worth of damage and looting-related losses in the city of Durban alone.

Counting the cost

Source: Sapoa

Durban and Pietermaritzburg in KwaZulu-Natal were the worst-affected cities by the recent unrest, however parts of Gauteng (largely in Soweto and Vosloorus) and Mpumalanga were also hit.

“In terms of rates relief to property owners where the building is non-functional completely, a 75% rebate will be awarded for a period of six to 12 months,” eThekwini Municipality said in a statement.

Read: Unrest: Rates relief available for severely damaged property

“A multi-disciplinary team will assess applications based on individual merits. Criteria for rebates are stipulated on the application forms. Reconnection fees will also be waivered and there will be special provisions for building plan submissions in respect of properties damaged during the unrest.”

The municipality noted that the “rapid implementation” of the business support measures is part of the mayor’s 10-point plan, which was approved by council on August 5 as part of the 2021/22 budget process.

It said this plan “will drive the support for businesses to re-start” – in both the formal and informal sectors. “Several interventions will be to be prioritised in response to the devastation caused.”

“It is reassuring to note that the multiple engagements with business, including business formations, post the unrest have given resounding support to work with the municipality in a bid to rebuild,” said Kaunda.

The municipality’s rates rebate announcement comes after Sapoa sent letters to eThekwini’s mayor as well as KwaZulu-Natal Premier Sihle Zikalala, asking for pertinent support for landlords affected by the destruction to property.

Sapoa also sent a similar letter to Gauteng Premier David Makhura and made recommendations during an organised business meeting with President Cyril Ramaphosa following the unrest in July.

Read:
SA unrest: Ramaphosa’s message to organised business
Despite uncertainty Toyota SA to resume production at its Durban plant

The Durban Chamber of Commerce and Industry and Business Unity South Africa were also part of the discussions, which included some 90 CEOs, executives and government ministers.

“We are encouraged by the announcement by the eThekwini Municipality around rates rebates for hard-hit property owners. The letter we sent and meetings we held with the mayor [are] seeing some fruitful results,” Gopal told Moneyweb.

“We do however want to see a more concerted effort put into dealing with the construction mafia …

“We cannot allow the lawlessness and threat of violence and intimidation of these groupings to continue as this will hamper appetite for investment and the rebuild efforts,” he said.

Read:
How the construction ‘mafia’ business model jumped to other sectors
The construction mafia moves to the townships

“Rates relief is part of short-term measures, but this needs to be coupled with medium-to-long-term goals so as to encourage investment again.”

Meanwhile, eThekwini has also offered relief to bed and breakfast establishments, which will now be granted an extension of rates rebates for a further three months commencing on July 1.

This rebate will amount to 29%, while the previous rebate was 35%.

“Tenants of council-owned properties that are non-functional due to the unrest will be given a rental holiday and informal traders will have a three-month rental holiday as of 01 July 2021,” the municipality added.

“Apart from revenue loss, it is anticipated that the unrest has placed several planned investments in jeopardy, tarnishing business and consumer confidence. The city is working on an intensive marketing campaign to rebuild tourism and attract investment.”

Listen to Fifi Peters’ interview with Gopal (or read the transcript here):

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If you cannot generate any income from a property, it’s value goes to zero, so rates should go to zero. Othwise it is like a vacant land tax.

It is part of the city duties to protect property and property vales.

So why am I paying rates on my residence here…

Because it’s occupied Oink

But I am not generating any income from it. So the value goes to zero. So the rates should go to zero.

Plaas logic. You really didn’t think this through. At all. Classic Africa.

Also the possibility arises to leave certain riot-damaged infrastructure “as is”…..like a monument that reminds future generations what our current generation of fathers (and mothers) did to existing industrial & commercial infrastructure.

When we cling to Robben Island for historic purposes, why not keep destroyed infrastructure intact?

(Just walk past old SA railyards, or closed gold mines…..these things should be left as monuments, to illustrate the past achievements of our fathers)

I am not paying to visit a burnt out Makro but I love the idea.

End of comments.

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