Inner city development shows a renting success

By David Pincus

© Saturday Star 2005-07-02

Non-payment of rent has almost become a cult among some in South Africa. We have written about this on several occasions in these columns recently, and the Sunday Times recently carried a report about a tenant from hell who refused to pay rent and eventually set her flat on fire.

But there is a way to ensure that tenants don't default, Taffy Adler, CEO of the Johannesburg Housing Company (JHC), a Section 21 Company that is helping redevelop the inner city by offering affordable housing, told a recent Temple Emanuel adult education meeting.

Basically, it's founded on what a Scottish landlady told a new lodger she saw unpacking a bugle, "one toot an' yer oot".

The JHC makes sure they comply with all its requirements, and that they behave decently.

It makes sure they earn enough to pay for their accommodation, explains the house rules to them very, very carefully and makes them understand the one toot an' yer oot concept.

In addition they have to pay two months' rent upfront as a deposit, and if they're seven days late the building supervisor hands them a letter of demand, "and talks to them on a daily basis after that until they pay".

As a result, said Adler, "there has been no culture of resistance, as there is in the townships".

The JHC adopts an understanding attitude, but if there are no mitigating factors and they haven't paid when their two-month's deposit is used up, "we ask them to leave, and they usually do without causing problems.

If they don't and we go to court and explain our case it issues an eviction order, and we're not obliged to find alternative accommodation".

Other landlords haven't been that lucky. Many were so happy to find tenants that they didn't take adequate precautions, and found when their tenants defaulted they were skilled in using the law as it is to stay on, virtually for as long as it suited them.

The JHC has obligations to its tenants and upholds them. All maintenance problems are attended to within 24 hours, emergencies within an hour, and it acts on valid complaints made in its annual customer satisfaction survey.

A spin-off of this approach, and its rigid enforcement of security and access control, which it uses as a weapon against over crowding, is that very few cases go to court, and none of its units is empty.

It is not a welfare operation. It operates on a value-for-money basis.

"People, even the lowest income-earners have the right to choose," says Adler, but fact is, if they can't afford a JHC unit they must look elsewhere.

Those who rent rooms in its Douglas Development, for example, many of whom are single mothers, must prove that they earn enough to pay R500 a month for a single room, and R270 a month each, if they want to leave their children in the adjoining créche while they're at work. They'll have to pay more in a year's time. JHC does increase its rents "reasonably" on an annual basis.

It regenerates old buildings and builds new ones. When Adler delivered his address the JHC had 20 building in which there were 1 857 units and 810 units were under construction. Most of those are in its Brickfield project, to the west of the Nelson Mandela Bridge, which will cost R121-million and house 8 000 tenants when completed.

The private sector contributed 42,5% of that in the shape of loans, equity and grants, R77,3-million came from the public sector, and it (the JHC) invested R1,5-million, which it can now afford. Its assets are worth R220-million and its rental income is R35-million a year.

Those who do not qualify for housing subsidies will have to pay R1 445 to R3 100 a month for units in the Brickfield project, and those who do get subsidies will have to pay between R1 100 and R1 410.