Demand for inner city living on rise (Johannesburg)

THE inner city is gentrifying, as more and more people choose to live among the skyscrapers.

October 13, 2005

By Lucille Davie

PEOPLE increasingly want to live in the inner city, and a "vibrant residential mix" is helping to create a sustainable, lively city.

These are just some of the findings of the 2005 Trafalgar Inner City Report, produced annually by Trafalgar Property and Financial Services, which manages 2 500 inner city units.

"Once a beleaguered and desolate place with little or no nightlife and a reputation for endemic crime and grime, the inner city is gentrifying with a vengeance," states the report, which also looks at Tshwane (Pretoria) and eThekwini (Durban).

Joburg has an inner city residential population of about 230 000 people, with one million people entering the city each day to work, and 800 000 people commuting each day through the city centre.

Trafalgar reports that a year ago 100 leases a month were concluded; so far this year that has jumped to 140 leases a month. The trend is so positive that late last year Trafalgar opened an inner city agency.

The report finds that demand for accommodation is strong, leading to "rocketing rentals", but "increasingly savvy tenants" are also making their demands: that property owners, management agents and city authorities deliver improved service.

Property owners are reporting zero vacancies in their buildings, with more and more former office buildings being converted into residential space, with very few new residential developments. Brickfields in Newtown is the exception, providing a housing model for the future, says the report.

With demand outstripping supply, rentals will continue to rise. "Compared with just two or three years ago, rentals have certainly doubled and in some cases tripled."

Bachelor flats are at an all-time high of R1 850 a unit, excluding service charges (priced at R300 to R400 three years ago). One-bedroom flats are fetching R2 100, two-bedroom R2 500 and three-bedroom R2 700.

And, tenants are less likely to default on rents.

On the other hand, revival efforts in the inner city are constrained by several factors: "...inadequate social and support infrastructure for these inner city neighbourhoods, and freeloading property owners who want to reap the benefits of urban revival without sharing the risk, all pose a constraint to regeneration efforts".

Previously, when buildings became overcrowded and unmanageable, property owners neglected their responsibilities and often disappeared. Slumlords were able to take over and overcrowd buildings, charging high rentals, which they pocketed.

Now, with urban revival taking hold, the report says these owners are showing an interest again in their buildings - but are not always willing to invest in the structures, while reaping the benefits of increased rentals.

"If every property owner implemented effective building management systems, the burden of distressed properties could be dramatically lightened."

The inner city is administered by Region 8, which has created the Inner City Task Force, a body that has closed down about 150 slum buildings. The task force has put pressure on property owners to fix and maintain their buildings by means of issuing notices and imposing fines, and if these measures fail, taking legal action.

Property owners are concerned about the enforcement of by-laws and efficient urban management. City officials are looking at the need to create healthy inner city communities, which means providing for schools, medical facilities, and sports and recreational facilities.

"The focus is on mixed-income developments that play a positive role in urban revitalisation," states the report.

There is a downside to gentrification of the city - it poses a threat to the urban poor as it displaces them. It is a problem faced by all South Africa's cities, and threatens the revival of the inner cities.

Property sales
The rental market is booming, but so are property sales. Trafalgar sold a two-bedroom flat in Berea this year for R85 000, a seven-fold increase in the price over the previous year. It was bought by the owner in 2004 for R12 000.

In Troyeville, the average price per unit in 2000 was R62 500; it dropped to R26 200 in 2001, but recovered in 2005 to R95 000.

Yeoville seems to be an exception and therefore provides buyers with worthwhile opportunities - the average price for a unit is still low, around R60 000 per flat. Ian Fife, the property editor at the Financial Mail, estimates that in three years, flats in Hillbrow will sell for R100 000 or more.

Neville Schaefer, Trafalgar's chief executive, concludes, "There are still problems, of course, but there is a palpable sense of commitment on the part of cities to tackling these [problems].

"Although there are criticisms levelled at municipal management, city officials at the executive level are conscious of the problems and are willing to tackle them - but skills at the administrative levels are sometimes lacking."

This article published courtesy of the Johannesburg News Agency:

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