City of Johannesburg councillor and United Democratic Movement (UDM) member, Yongama Zigebe, said the decision to amend the rates policy for the 2024/2025 financial year was undoubtedly a significant step that would have both immediate and long-term impacts on residents and businesses alike.
Zigebe said he understood concerns raised by property owners who felt that the new rates policy may be targeting them.
He, however, said It was crucial to clarify that the purpose of the policy revision was not to single out any specific group but rather to create a more balanced and equitable system that reflects the changing demands of the city and the need for sustainable revenue generation.
“That being said, it is essential to recognise that property owners play a significant role in the economic fabric of Johannesburg, and their contributions are vital for the City's development. However, we must also ensure that the rates policy is designed in a way that distributes the financial responsibility fairly across all ratepayers, without placing an undue burden on any particular segment,” UDM councillor added.
He continued to said if owners felt unfairly targeted, it was important that their concerns were heard and addressed.
“This is where transparency, dialogue, and consultation become crucial. The City listens and should open to reviewing where necessary, adjusting the policy to ensure it is not perceived as punitive, while also keeping in mind the need to balance service delivery and fiscal sustainability.
“I encourage property owners to engage with the City through public consultations,” said Zigebe.
His reassurance to property owners comes after the South African Multifamily Residential Rental Association (SAMRRA), which represents over 75 000 rental flats claimed that the newly rates were meant to target them.
SAMRRA said the change in policy would impact average buy-to-let investors, small and large residential landlords, social housing providers and housing developers – all of whom might need to pass costs on to tenants through higher rental or purchase prices.
According to Kevin van den Heever, of SAMRRA’s Rental Association, those who were battling hardest in this tough economy would be dealt a further blow.
Van den Heever said should the institutional landlords decide to absorb the costs instead of passing it on to tenants, the consequences would be felt by their shareholders, which in many cases were pension funds, so that pensioners, particularly those on fixed incomes,would suffer.
“This is anti-poor and goes against Government’s undertaking to deliver housing, a service in which the private sector has a crucial role to play.
“SAMRRA is concerned that CoJ is actively targeting the residential rental industry in an inequitable way.
“Differentiating a property for rates purposes based on its ownership as opposed to usage is clearly misguided.
“The rebate was a longstanding benefit on which investment decisions were made, and the summary cancellation of this without due public participation cannot be left unchallenged”.
He accused the City of misleading the public to state that the rate increase were only 3.8% when for the residential rental market it would cost R2 600 more per sectional title unit per year.
Van den Heever said the real increase was not only many multiples above what was communicated, but would place a massive burden on owners of multiple rental units.
Despite, the organisation’s concerns, Zigebe insisted that the decision to amend the rates policy for the 2024/2025 financial year was undoubtedly a significant step that would have both immediate and long-term impacts on residents and businesses alike.
“On one hand, it's important to recognise that the City is under immense pressure to balance its financial sustainability with the need to address critical infrastructure backlogs, improve service delivery, and manage rising operational costs.
“These changes in the rates policy reflect a broader attempt to expand the revenue base and ensure that the City can continue delivering essential services to all its residents.
“However, any policy shift of this nature must be carefully scrutinised to ensure it does not unfairly burden low-income households or small businesses, particularly in an already strained economic environment.
“Our concern is to ensure that the policy remains inclusive, providing necessary relief to vulnerable groups while maintaining fairness across the board,” He explained.
He furthermore said there was a need to ensure transparency in how the additional revenue would be allocated and that the public was adequately informed and consulted on the changes.
Zigebe said his focus as a councillor would be on ensuring that the City provides clear communication and support mechanisms for ratepayers, especially those who may struggle with the new rates.
“I will advocate for a responsive approach from the City, including potential rebates or phased implementations for those who qualify.
“In essence, while the revised policy aims to address some of Johannesburg’s financial challenges, it is crucial that it does not compromise the economic well-being of our most vulnerable residents, and as a councillor, I will remain vigilant in monitoring its rollout to ensure it delivers on its intended objectives fairly”.
Saturday Star