Cape council’s tenants in R596m debt

Tenants of the city council’s almost 40 000 houses and flats, collectively owe the municipality R596 million. And only about 17 000 people, who rent property from the council, paid their rent in December. The city council’s portfolio committee on finance heard on Monday that the municipality only receives about R4.9m of what it is owed each month. The collection rate of the total monthly rental of R13.2m owing to it, was only around 37 percent. According to a report considered by the finance committee on Monday, the poorest collection rates are in the city’s most impoverished areas of Khayelitsha and Nyanga where it is less than 10 percent. In Gugulethu, Mfuleni and Atlantis, the collection rate is less than 15 percent. Legal action is currently pending against 17 336 debtors.

The city council’s standard rental charge is R8.60 per square metre, excluding water, and R12.31 where water is included. The city council is considering a proposal to charge more economic-related rental. Yagyah Adams, of the Cape Muslim Congress, said many people think they have the right to stay in council property if their parents had lived there. “People in low cost housing won’t move. There are an enormous number of people who can pay, but choose not to pay,” he said. The city council subsidises households with a monthly income of below R3 200. It also allows for a one-time write-off of all housing arrears upon the approval of an indigent grant. The city council provides indigent grants to 9 568 of its tenants, to the value of R3.5m a month. Tenants who occupied the city council’s rental property in 2007, receive a 20 percent subsidy on their rental.

In an effort to improve debt collection, the city council has awarded a commission-based tender for door-to-door collection of outstanding rental. Almost 9 000 homes were visited during December. Wayne Muller, of the city council’s finance directorate, said the focus was on people who are unwilling to pay, rather than those who cannot afford to. The city council has also started restricting water supply to council properties which have individual meters in cases where tenants are not paying their rent. The ANC’s Luvuyo Zondani said it was futile for the city council to expect people who had grown up in city council property to move out when they are adults. “Maybe in well established areas where people understand, you can try. “But in Langa and others, people will never leave those houses. They will never move. Let’s not waste our time (discussing the issue),” he said. The DA’s Lisa McBride said a lifestyle audit should be carried out to determine what people could afford. Backyarders were living on city council property she said, and the city council tenants pocketing the money.

The city council charges a surcharge of between8-10 percent for tenants whose monthly income is between R3 500 and R10 000. Thereafter, 25 percent is charged. McBride said the city council’s rental approach was creating a system of dependency. “We need to move away from a handout approach and empower people,” she said. But the ANC’s Fiona Abrahams said people were reluctant to pay their rent because the city council was not doing any maintenance work on the properties. “If the council did maintenance it would make the people proud of where they live,” she said. But McBride was of the view that like people who rent private property, tenants should be encouraged to do some of the repair work themselves. She cited an example of new gates on a block of flats in Atlantis, that were broken and torn down within two months of being installed.