February 26, 2007
By Neil Fraser
THE economic development stakeholders' working group (SWG) was held last week and completes the first round of such sessions leading to the mayor's Inner City Summit and Charter.
I don't intend to provide details of every session – each of the six sectoral SWGs meets four times, making 24 workshops in all. But I did think I should cover the first session of each SWG, or what I called the "dumping session". Thereafter we prioritise issues and move on to finding solutions.
The dumping session gives all participants the opportunity to get what is on their minds on to the table. So, this will be the last report of a first session. I have covered safety, security and urban management; arts, culture, heritage and public spaces; transportation; social development and residential issues.
Professor Francois Viruly of the University of the Witwatersrand, helped to set the economic scene, starting with an economic vision for the city: "A city economy that plays a role as the key economic hub on the continent, and a national economic growth leader, by ensuring sustainable shared growth that benefits all." Neat.
He then went on to paint the following picture:
Currently the costs of doing business in the inner city are high:
- Transportation costs (bold steps are required – free public transportation is an issue)
- Location costs are high
- Regulatory burdens and lengthy processes hinder investment.
In terms of land economics, the highest office vacancies are usually found where there is no retail or quality lifestyle within urban areas.
We must understand that there is such as thing as a commercial ladder as well as a residential ladder.
The built environment can play a critical role in economic development – look at flexibility of space, providing smaller retail space for smaller shops, smaller offices and clusters to create economies of scale.
There will be a negative effect on inner city retail as a result of the new retail malls being built in the former townships.
Regarding office to residential conversions, the inner city is structured as an office node, with no amenities for high density residential use. How do we create this?
Who is going to live in the inner city? The income level of the market we attract has very different implications in terms of economic development.
The property market delivers – it can either be done in a planned, organised manner or not. Either way, it delivers.
Gautrain has implications. It could be a positive intervention for the inner city; it could also move people out of and away from the inner city as it gives fast, easy access to other nodes.
Institutional investment in the inner city has been reduced from 10 percent to 1 percent. At this level, what sort of commitment can we expect from institutions in the future?
We need to explore the use of space in terms of economics. Can we use vacant space to start businesses? Can we use space as a commodity, as venture capital? The inner city vacancy rate is 20 percent to 25 percent and is stable. Decentralised nodes are sitting at 2 percent vacancy rates. Lower rentals in the inner city are still an opportunity.
The City is shifting from A, B, C and D grade office space towards offering only B, C and D grade.
The concept of sustainable development provides the inner city with an opportunity – environmental impact assessments make greenfield development very expensive and problematic. As a result, developers may turn towards brownfield development opportunities.
The following are some of the comments received from stakeholders:
| Parking |
There is currently a lack of affordable parking in the inner city. We need to look carefully at where the parking should be located. How can we employ more people and attract people to the inner city if we cannot accommodate more employees with private vehicles? |
| Gautrain |
The area around Hoek Street and Park Station is a huge problem in terms of movement and grime. Gautrain will also have an effect on this area and one wonders if the Gautrain designers are aware of the current problems. |
| Connectivity |
It is also important to remember the interconnectedness between different economic sectors. How can we integrate these sectors in a positive way, rather than looking at sectors in silos? This is especially important in terms of policy. |
| Culture and regulation |
We are still living in a country where the makers of the laws in the City have not come to terms with the users of these laws. We must encourage those involved in planning to become more familiar with the lifestyles, economics and cultural ways of the people who live in the city. These ways are often only visible in the rural areas but are invisible in an urban context. We seem continually to be trying to bring back people from the north and from the suburbs while those already living in the inner city seemingly don't exist. We need to be more open hearted and open minded about whom we are making the city for. If we're serious about creating an African environment, let's not fuzz it by using words like "global" and "international". Stop glamorising the city around Western values. What is it that attracts the majority of city users to come to the city? We must be more ready to consume indigenous African culture. We are still not bringing together the diversity of the users of our city. |
| Diversity |
We must avoid any "one size fits all" thinking. The richness of South Africa and of Johannesburg's inner city lies in diversity. Each sector has complexities and a range of issues. There also may be issues for each rung of complexity. Thus, we need to understand the complexities before we can deal with the issues effectively. We must also respect that some people are happy sitting on the lower rungs of the economic ladder and some aren't. |
| Policy differentiation |
Avoid the separation of policies into those for the first economy and those for the second economy. |
| Bandwidth |
The issue of access to bandwidth is critical. Business cannot deal with or afford Telkom lines constantly failing – this has a significantly negative effect on business. If adequate bandwidth is not available in the city, business will move to where it is. |
| A plea to "do the basics" |
There are many lessons to be learned from interventions that have already taken place in the inner city. These lessons in a way contribute towards the "treasury of the inner city". One major corporation in the inner city reported that it had run into immense problems with certain utilities, agencies and corporatised entities (UACs) on a major construction project. The UACs did not perform when the company embarked on construction after very adequate notice and constant reminders (to which there were never acknowledgements). Here we have an example of the private sector having to step in and provide for and upgrade what they City has failed to do and yet still be hampered by the inefficiency and lack of competence in City departments. These UACs caused 30 to 40 days' delay during construction, costing the company more than R650 000 and recourse will be sought against them. The City just needs to do the basic job for which it is being paid. |
| Planning |
The planning process is a disaster. This chases potential developers away. People stop development because of the costs and inefficiencies of infrastructure such as power and roads. There are also problems around building management and inspection. Developers that could be building in the inner city are building in Midrand because of the easier conditions. An interesting study to undertake would be: "what does the inefficiency of the City of Johannesburg cost the City every month?" |
| Conference facilities |
Another international corporation stated that it was excited about the potential. It required global conferences and meetings. But these all usually take place outside the inner city as there are no adequate facilities available. |
| The devil is in the detail |
Work that has already been done in the inner city is fantastic. The big picture is in place and is good. But the detail is failing - it's not working. The transportation, or lack thereof, is totally unacceptable. Bad attitudes need to be resolved. Problems with the Metro Police are increasingly becoming an issue. We need to be able to distribute people effectively and efficiently as well as pay attention to sustainability issues and climate change. |
| Mechanisms and institutions |
Do we have the correct mechanisms and institutions in place? Or do we have an institution delivering the wrong mechanisms? The macro vision of the city is okay but we seem to be getting stuck on what we're doing with respect to this. Also, we must be careful of favouring tax incentives over other issues. Tax incentives are the cherry on the top, a "nice to have". We need to ensure that we get all the other things (the basics) right and in place so that people in the inner city can live and work effectively. Then we must use the tax system as an added bonus. We must not use tax to compensate for inefficiency that is already being paid for. |
| Provincial capital |
The institutions already exist. Perhaps they need to be improved or should improvise more. Their operations seem to be missing the target. The rigidity of those working in the institutions around what their goals and objectives are, is not acceptable. For example, the Johannesburg Development Agency materialised "its" visions but were these the correct visions? Were they open enough? The Johannesburg Roads Agency seems to not be able to break out of the pattern in which it has operated for a number of years. Johannesburg is now a provincial capital and yet spatially it does not look like one. We need boulevards and public open spaces. But no capital is being spent to give the city status. Street traders should be viewed as creating the city, not destroying it. Don't clog them up in markets. There is nothing "normative" about the way in which we make our cities. Rather than chasing away the users of the city, change the public realm to accommodate their activities. Shift the focus away from trying to attract Sandtonites back into the city. Recognise that those in the city actually do have money. |
The following issues were distilled and clustered from the input received:
1. The City must deliver on what it is being paid to do.
This refers to various City departments and utilities, agencies and corporatised entities being inefficient, not delivering, not communicating, with very slow turnaround times, and complex, expensive processes for investors and developers.
There is a notion that the City is hindering the location and expansion of business and investment in the inner city rather than helping and facilitating.
2. The movement and congestion of people, goods and services in the inner city inhibits economic growth.
This refers to the shortage of parking in the inner city, which only the private sector seems to be addressing.
There is a lack of accessibility within the inner city – access between places and key land uses.
Congestion at certain nodes is a concern, particularly the Park Station / Hoek Street / Noord Street node, as well as congestion of pavements by street traders.
There is a need for efficient and effective public transport in the inner city.
3. There is a need for more bandwidth in the inner city.
This is a problem and business will move elsewhere if it cannot get more bandwidth.
4. Institutional arrangements must be reviewed.
Are the current institutions and the mechanisms that they deliver correct or should the status quo be reviewed and changed so that it becomes more focused and efficient?
The big picture in terms of inner city regeneration that has already been put in place is good and works. But attention needs to be paid to the detail in between, which is not working.
5. Make available existing research and information.
Information is not available to stakeholders, which is an institutional barrier to investment.
6. Embrace diversity and complexity.
Diversity and complexity are unique advantages for the inner city and must be embraced and enhanced.
7. Recognise that the built environment can facilitate economic development.
Start with a quality, enabling built environment.
So, it was another interesting session. The second round of SWG workshops, which have already begun, will start to focus on those five or six critical issues that will really make a difference, and start to seek solutions.
Cheers, Neil
Walking and bus tours by the Parktown and Westcliff Heritage Trust
The costs below are for members and non-members respectively. Booking must be done at Computicket on 011 340 8000 or through the Computicket website. For more information, phone 011 482 3349 in the mornings only.
Saturday, 3 March: Northwards, a house tour, with raconteur Neil Viljoen. Meet at 21 Rock Ridge Road, Parktown at 2pm. Tickets are R65 and R85 and the tour lasts three hours.
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