November 30, 2006
By Anish Abraham
SOME R1,6-billion has been invested in Jozi's inner city, driven by the national government's urban development zone (UDZ) tax incentive. And this sum is expected to rise following amendments to the tax law allowing sectional title holders to also benefit from investing in the zone.
The City's Department of Economic Development hosted a breakfast for property investors, City officials and inner city ward councillors at the SAB World of Beer in Newtown on 29 November, where guests heard an overview of the changes in the legislation and the progress being made in the zone.
Senior City officials at the breakfast included the portfolio heads for finance and economic development, and development planning and urban management, Parks Tau and Ruby Mathang, and the executive director of the Department of Economic Development, Xolile George. There were about 100 guests in total.
"Whereas our inner cities have been associated with problems, those in the US, UK, Canada and places like Australia have been associated with gentrification," said Tshiwo Yenana, programme director in the department.
He explained that Joburg's inner city contributed significantly to the local, regional and national economy, and formed the core of one of the 40 largest urban areas in the world.
Tau also spoke about the area's importance. "Even though the inner city does not feature in the mayoral priorities this time around, it does not mean we have given less precedence to it. The inner city is still a major priority in the eyes of the mayor."
The guests at the breakfast function
The City would host an inner city summit in April 2007, an initiative championed by Executive Mayor Amos Masondo.
Tau said the summit was organised in response to Masondo's call to mobilise stakeholders, to find solutions to the problems facing the inner city and to ensure the city develops along the lines of its Integrated Development Plan and longer term Growth and Development Strategy.
Following the summit, the Office of the Executive Mayor would work with six stakeholder groups representing economic development, social development, transport, residential development, public space, urban management and safety and security.
In addition, the City was encouraging more black economic empowerment ventures and companies owned and headed by women to take part in the property market.
"The [Fifa 2010 Soccer] World Cup is just around the corner and we know the world will be looking at us. We have to ensure that the infrastructure, facilities and amenities are ready by then," Tau said.
Tax incentive
One of the main concerns regarding the UDZ tax incentive was that it did not allow sectional title holders to benefit – a concern that was raised by many following the City's UDZ summit held in August 2005.
However, the national government has changed the law and sectional title holders can now also apply for the incentive, providing they are constructing or refurbishing an area of more than 1 000 square metres.
Another concern involved buying a property, or part of a property, from owners or developers who had benefited from the incentive.
"We needed to expand access to the incentive," said Lebo Ramoreboli, project consultant for area regeneration in the department.
Since June, 41 projects worth R574-million were completed, while the total investment into the inner city since the zone came into effect in October 2004 stood at R1,62-billion – with the R1-billion mark passed in May.
"With this new amendment we are bound to attract more investors to shape conditions for accelerated local economic growth that is sustainable," Ramoreboli said.
She told investors - and potential investors - that most of the current investment was restricted to the inner city, Braamfontein and Newtown, but there were plenty of investment opportunities in other areas in the zone.
"These are just a fraction of the investment opportunities available and we urge investors to also look at other areas within the zone."
Areas that have yet to attract substantial investment, but fall within the UDZ, include inner city high-rise suburbs like Hillbrow, Berea and Yeoville, as well as the Greater Ellis Park area.
Confidence
A
progress report by the Johannesburg Development Agency,
Indicators of Progress in the Inner City 2006, has also shown a remarkable turnaround in the fortunes of the inner city.
"Our studies make use of information such as property market figures, crime figures, attendance figures at inner city entertainment venues and our own confidence index," said Yael Horowitz, the manager for planning and strategy at the agency.
"Vacancy rates have dropped, while average rental rates have increased. Structures such as city improvement districts have played a huge role in this turnaround."
There are five legislated and seven voluntary city improvement districts in the inner city. They are formed when more than half the property owners within a designated area decide to form a partnership to provide additional services to those provided by the council. These services include additional cleaning, security guards, branding and even marketing.
Horowitz said it was important to ensure that there were enough social and recreational facilities for inner city residents, pointing out that while tourist numbers to attractions such as Constitutional Hill and Museum Africa had soared, residents still travelled out of the city centre for their entertainment.
A sense of "new urbanism" was taking hold, with people rediscovering the atmosphere of inner city living. Residential units overlooking railway lines and the iconic Nelson Mandela Bridge, or providing a breathtaking view of the Johannesburg skyline were increasingly in demand.
"However, there is still a lot of work that has to be done in the eastern sector of the inner city. Some see the Carlton Centre as the dividing line between the two halves of the city. It is a massive task and can only be done in partnership with the private sector," Horowitz said.
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