A R21 million-rand – and growing – refuse removal bill is at the center of a court application brought by the Johannesburg Property Owners and Managers Association (JPOMA) against the City of Johannesburg and its contracted refuse collector Pikitup this week. The punitive amount was arrived at by a recalculation of refuse backdated to 2018 on 93 different accounts, which JPOMA and its legal team believe to be both invalid and unlawful in terms of COJ’s own bylaws.
“This is the tip of the iceberg – these back-billed charges continue to grow month on month as more members are coming forward when they see this on their accounts. Instead of engaging our members to find an equitable resolution, the COJ is employing strong-arm tactics to bully owners into signing admissions of debt or face disconnection of other services, unrelated to refuse collection.” So says Angela Rivers, General Manager of JPOMA, a non-profit organisation which represents the interests of property owners and managers and well over 150 000 tenant households in Johannesburg, which collectively pay over R80 million to the City every month.
“Our members’ accounts affect 7 333 separate dwellings in the inner city that house lower- and middle-income tenants, many of whom are economically vulnerable and in no way able to settle three and a half years’ worth of questionable backdated fees,” Rivers elaborates.
The recalculations emanated from a “Revenue Enhancement Project” initiated by the City of Johannesburg, through its Legogo Team. It resulted in the affected properties’ classification being changed without consultation with the owners, or due and consistent consideration of how properties and their refuse requirements are differentiated. JPOMA believes that this resulted in blatantly incorrect classification in many of the cases, with vague, or no substantiation offered. Properties valued at less than R350 000 are not liable for these fees, yet the City is attempting to attach a cost to every single unit, regardless of value, and to backdate claims for refuse that was already removed and paid for.
“It is the City’s duty in terms of the Constitution to provide democratic and accountable governance for local communities, to provide municipal services in a way that is financially and environmentally sustainable and to involve communities in matters of local governance while promoting social and economic development,” states JPOMA in its application. “Users of these services should be treated equitably in the application of tariffs, and poor households should have access to at least basic services that cover no more than operating and maintenance costs.”
The properties in question are all multi-unit residential buildings, inhabited by tenants ranging from the most vulnerable to middle income earners; all people who are sensitive to price shocks, especially in the wake of the National State of Disaster declared in response to the COVID-19 pandemic on 23 March 2020. As COJ completes its backdating process more and more of these tenants will be presented with refuse bills that they cannot pay, severely compromising the affordable rental market.
Most of the affected buildings fall within the Urban Development Zones (UDZs) that were demarcated for tax incentives by the minister as part of the national economic policy initiative designed to invigorate inner city nodes. JPOMA’s members have been active participants in the City Improvement Districts which were formed in the mid-90s to stave off the degradation and dilapidation that plagued the inner city. “Instead of valuing our members doing the work that COJ should be doing, it is trying to squeeze more water from the stone,” says Rivers. She notes, for instance, that their members voluntarily contribute over R630 000 per month to private companies to clean and secure the public spaces in the inner city, which the City has failed to do over a number of years.
In its application, JPOMA highlights a number of irregularities which suggest that the decision to impose these increased, backdated tariffs was taken with an ulterior motive, namely, to target and mulct entities that can nominally pay, with increased and artificial municipal accounts in order to cover shortfalls in the city’s collection process. “It suggests that certain types of owners were targeted, while the City and Pikitup customers are in fact primarily the tenants, not the owners,” states JPOMA.
The result of this action by the City is that owners are held accountable for the past accounts of tenants who in many instances have since moved out of the various properties, which means costs cannot be defrayed.
The affected JPOMA members, which include several emerging black entrepreneurs, all run businesses with very small margins and in many cases will be forced into either down-sizing or liquidating should the retroactive charge go through, states the application. “The knock-on effect will be that there will be a reduction in quality housing supply in the inner city, limiting Johannesburg residents’ ability to work and live in close proximity, as was the explicit intention behind creating the UDZs in the first place,” says Rivers. “This short-sightedness will lead to the City actually losing paying tenants, as these people will move to informal accommodation where no services are paid for. No-one wins in this situation.”
JPOMA featured on Special Assignment; Heart of The City, which aired on 19th October 2021.
The episode highlights the tariff and service delivery issues in the inner city. JPOMA (represented by Nic Barnes, Solly Ramalamula and Peter Deane), Schindlers Attorneys and MES were all interviewed for this episode.
Following JPOMA’s public condemnation of CoJ tariff increases (see press release HERE) the following coverage has appeared in the media;
eNCA The Johannesburg Property Owners and Managers Association warns that planned water, sewerage and electricity hikes will be devastating for ratepayers. For more, Gareth Edwards speaks to the association’s general manager, Angela Rivers. Courtesy #DStv403 Watch the interview HERE
BusinessTech The Johannesburg Property Owners & Managers Association (JPOMA) says that proposed council tariff increases facilitated by the City of Johannesburg highlights a complete and utter disregard of the harsh reality faced by inner-city and greater Johannesburg residents during one of the gravest economic downturns in recent memory. Read the full article HERE
The proposed council tariff increases facilitated by the City of Johannesburg highlights a complete and utter disregard of the harsh reality faced by inner-city and greater Johannesburg residents during one of the gravest economic downturns in recent memory. This is only set to be worsened by the unjustifiable and exorbitant increases in utility charges – electricity, rates, refuse, water and sewer.
The Johannesburg Property Owners & Managers Association (JPOMA) believes that the needs of vulnerable communities residing within high-density residential properties in the inner city and surrounding areas are being blatantly ignored. “Our organisation represents families living in self-contained and communal affordable housing, with a total monthly income that falls between R4 500 and R15 000, and the proposed increases will severely negatively impact these residents’ lives, as well as acting as significant anti-investment” says JPOMA General Manager, Angela Rivers.
Even before the onset of the COVID-19 pandemic, the economy was in sharp decline, resulting in increased unemployment and high levels of poverty. This was particularly evident in the poor and vulnerable communities, which fall outside of the City’s Expanded Social Package. Now, after the ravaging effects of the pandemic, at least another one million permanent jobs have been lost in the country, with South Africa predicted to recover from this economic crisis only by 2024 at the earliest.
In 2021, approximately 24% of tenants’ living expenses are made up of council charges and up to 40% of rental flowing to operating costs. As it stands, the proposed 2021/2022 tariff increases are all significantly above the average inflation rate, currently sitting at 3.88%. Water and sewer charges are going up by an average of 6.7%, waste charges by 4.3% and electricity charges by up to four times more than inflation. Shockingly, these numbers don’t even tell the full story of these astronomical increases throughout the years.
From 2008 to 2021, water charges have increased by 288%, sewer charges by 267% and electricity charges by 394%. This means that total council charges over 13 years have increased by a whopping 329%, while the average household income has only increased by 119% in that period. While the tariffs have drastically increased, service delivery and basic maintenance have deteriorated across the city, due to inadequacies, inefficient processes and mismanagement of funds accrued by the municipality.
These latest proposed increases will devastate the quality of life for those already living in disadvantaged conditions in terms of financial instability, the elderly, the disabled and people affected by comorbidities. This is evidenced in poor high-density communities, specifically in the Johannesburg CBD and immediate surrounds.
The tariff increases compounded with the already fragile economic state of the country adds insult to injury to those already struggling within their means. Not only do residents and tenants suffer but investors and landlords are also feeling the burden of not being able to find viable tenants to take up leases. This goes on to affect investment in the city, ultimately being a death knell in any possible economic recovery.
“JPOMA is committed to tangible progress of Johannesburg as both an investment opportunity and a home for all its residents. We believe progress comes with great responsibility; this responsibility being our duty to ensure the communities within the inner city and its surroundings are provided with safe, secure, clean and affordable accommodation. We use our voice and platform to support the vulnerable communities who are most often overlooked and taken advantage of due to financial burdens,” concludes Rivers.
JPOMA calls on the City of Johannesburg to revisit its intended tariff increase and to consider the devastating and irreparable effect that it will have on the city and its community if it proceeds with its tabled proposal.