Real Estate Investor Magazine South Africa September/ October 2019 | Page 37

“We have seen improvements in billing and we are pleased
to see that that COJ is taking the issue seriously, but there are
questions to be asked around the future of inner–city property
investment when affordability of tenants are squeezed in this
way.”
To this end, TUHF Limited recently hosted a thought
leadership event or TUHF Talk addressing the Rising Council
Charges in Affordable Housing in the Inner–City.
Nic Barnes, Chairman of the Johannesburg Property Owners
and Managers Association (JPOMA) was one of the speakers
and used the illustration based on an average building that
members of JPOMA would own. A family with an average
household income of R12 000 is paying R3 988 for rent in
addition to R1 183 for municipal charges per month. That is
almost half of their total household income paying towards
rent and council charges. What is more alarming is the general
trend over the last 10 years. This makes inner–city housing
"unaffordable" and subsequently "un-investable".
33%
35%
collection. Ensure your property is correctly zoned and rated
for the purpose that it is used and that you are being charged
the right tariffs for commercial and residential areas. Ensure
that you are accurately metered and not connected to adjacent
properties’ metering.
Employee and tenant training
Tenants are less likely to wastefully consume electricity,
hot water and heating if they are pre-paying for what they
consume. Prepaid meters give tenants real–time control over
electricity and water consumption based on pre-purchased
electricity credits.
In addition, landlords can instil and drive a culture of low
consumption and encourage proactive reporting of wasteful
usage or leaks.
Regular maintenance
Dripping taps or pipes and lights left on during the day are
latent things that can increase your bill. Do an audit of our
properties to ensure that there are no leaks and consider
32%
30%
TABLE
Rooms 1
Area JHB CBD
Geysers Yes
15% Season Winter
10% Adults 2 - working
Children 1 - school
Elect Kwh p/m 400
Water Kl p/m 22
30%
25%
20%
15%
5%
0%
2008
Council Charges as a Percentage of Rental
Rental as a Percentage of Income
2019
The above illustration shows that landlords have maintained their increases in proportion to the household income,
The
above council
illustration
shows
that increased
landlords by
have
maintained
increases
in proportion
to the household income,
whereas
charges
have
100%.
Source: their
Average
of JPOMA
properties.
whereas council charges have increased by 100%. Source: Average of JPOMA properties.
installing
timers or motion
detectors
on lighting.
As a a panellist
panellist at at the the event,
event,
inner–city
entrepreneur
Nthabiseng
Mabasa,
Director
at Ratcom,
As
inner–city
entrepreneur
Consider
green
solutions
said
“The
City
[COJ]
increases
the
value
of
your
property
so
that
you
can
pay
higher rates and
Nthabiseng Mabasa, Director at Ratcom, said “The City [COJ]
Energy
efficiency,
rental, is
a long-term
with
this causes
tenants
increases
passed
on like
to property
them. They
are
already game
under
increases
the value fights
of your with
property
so that because
you can pay of higher
green
strategies
will require
an upfront investment
that
rates
and this causes
tenants budgets
because of and
increases
pressure
with fights
their with
monthly
cannot many
afford
these
consistent
increases”.
Pressage
will realise greater savings over months and years.
passed
on to
them. They
are already
under shared
pressure the
with same
Nyoni,
Liason
Officer
at TUHF,
sentiments saying “The rates also impact
While there are many different solutions and energy–saving
their
monthly budgets
and cannot
these consistent
landlords
who cannot
afford afford
to maintain
buildings devices,
and are
preventing
new to property
from
as an
owner you need
be sure you owners
choose the
right
increases”. Pressage Nyoni, Liason Officer at TUHF, shared the
entering the market.”
energy saving strategies for your building, as no two buildings
same sentiments saying “The rates also impact landlords who
are the same.
cannot afford to maintain buildings and are preventing new
What can Inner City Landlords do?
Consider replacing baths with showers to reduce excessive
property owners from entering the market.”
hot and cold water usage. Consider making deep basins
“We are taking the matter up with city councils,
but in elsewhere
the meantime,
need by
to hand.
be
available
for tenants landlords
who wash laundry
What
can Inner
do? with these rising
proactive
in the City
way Landlords
that they deal
charges,”
said will
Jackson.
Dual
flushing toilets
reduce the amount of water used per
“We are taking the matter up with city councils, but in the
flush.
meantime,
to be proactive
in the
way that they
Below landlords
is a list need
of actionable
steps
property
owners can consider:
Engage your networks
deal with these rising charges,” said Jackson.
Contact your local councillor to make him or her aware of the
Below
is a list
of actionable
property
owners can
Accurate
measuring
and steps
matched
billing
issues you are experiencing as a landlord and consider joining
consider:
property
networks
such are
as JPOMA
who lobby these
issues at
Check metering and rating standards for your area
to ensure
you
not overpaying
for rates,
Accurate measuring and matched billing
a larger
scale. is correctly zoned and rated for the
water,
electricity
and
waste
collection.
Ensure
your
property
Check metering and rating standards for your area to ensure
To download the presentations from the TUHF Talk, visit the
that it is for used
and electricity
that you and
are
being News
charged
the
right on tariffs
commercial
and
you purpose
are not overpaying
rates, water,
waste
& Insights
Section
the TUHF for
website
– www.tuhf.co.za.
residential areas. Ensure that you are accurately metered and not connected to adjacent
properties’ metering.
SA Real Estate Investor Magazine SEPTEMBER/OCTOBER 2019
35