Jhb targets 'bad buildings' - 18 January 2006

jhb targets 'bad buildings'

johannesburg - the city has kicked its better buildings programme up a gear, to target far more buildings in the cbd in need of rejuvenation.
through a number of "project packages", it is hoped that over a three-year period up to 1 000 buildings will be refurbished.

previously the programme focused on high-rise, high-density buildings mostly in hillbrow, berea, joubert park and the cbd; it will now include areas like the greater ellis park precinct and smaller, freestanding buildings and houses, in a "broader, more general approach".

the programme is managed by the johannesburg property company (jpc). it focuses on "bad" buildings - ones where the amount of arrears owed in rates exceeds the market value of the building - with the aim of turning them into "better" buildings.

bad buildings come about when buildings are "invaded" by slum landlords and tenants, becoming overcrowded and rapidly deteriorating when its amenities cannot cope with the demands placed on them.

the owner often absconds when these conditions become overwhelming, leaving huge amounts of unpaid rates owed to the city, and tenants living in unhealthy conditions.

the city has moved in on such buildings, in cases expropriating them, offering them to investors who will refurbish and pay the outstanding rates.

there are several hundred bad buildings in the inner city. but there are also a number of buildings that can be classified as "not so bad" or even "good" that have accrued large debts with the city.

refurbishing the buildings is a protracted process. since april 2003 94 buildings have been placed in the better buildings programme, with 19 refurbished so far and 48 expropriated and acquired by new investors.

to date the value of refurbishments stands at r320m, with r260m in rates write-offs granted.

it is hoped that this process will encourage a "ripple effect" of "increased investor confidence" in the inner city.

and it seems to be working: there are an estimated additional 100 buildings being renovated without intervention from the better buildings programme, says the department.

estimated costs of the improved programme come to r49.17m over the three-year period. this includes specialist legal, management and revenue staff, security, cleaning, expropriation and demolition costs.

it is estimated that initial benefits indicate that writing off about r660m over three years could probably unlock some r1.1bn in investment in the inner city. this takes into account declining write-offs over time, as well as declining levels of investment per building over the period.