Neil Fraser
October 28, 2002
For years we received little to no interest from investors, I'm excluding the committed providers, JHC, Cope and others, who are at one end of the spectrum, or slumlords on the other, relative to the provision of residential accommodation in the inner city. Red lining, lack of ability to raise finance, problems with tenants, inability to make sense of returns on conversions of buildings from commercial/industrial to residential. Residential development in the city, are you nuts?
Now if a day passes without us receiving at least one query in regard to some aspect of housing, will be a miracle. Where, what level, what mix, how, how much? How do I get involved in the Better Buildings Programme?
This week an agent advertised a loft apartment in the heart of the city and had over 40 replies. Gerald Olitzki told me this week that he had let the last of his roof-top 'loft' spaces. The doyen of inner city pad-in-the-sky-living, Richard Yell, has attracted a good deal of media interest this year which in turn has increasingly attracted inquiries as to how, where and how much?
His own pad in the sky provides a spectacular view overlooking the city and particularly Newtown to the west.
Comments he has received include the following:
"Can you please furnish me with more info about moving back into the city. I think JHB CBD in a few years time will be back to its former glory and hopefully a city that can provide the same hustle, bustle and atmosphere as any large city overseas."
"I am glad to see that I am not the only one who gets all sentimental about Joburg's CBD and the rich heritage of our city. I work in stale Rivonia and every evening make my way back to Illovo - the closest I can get to city living at the moment. At least once a month I do find myself either driving or walking through the streets of Joburg town - I can't get enough of the architecture and the unique vibe of Jozi."
"I' m looking to buy an apartment in downtown Joburg"
"I have long been keen on the idea of buying a renovateable building"
"I have been thinking of the possibility of buying a building and converting it into a number of apartments"
"I have been wanting to find a place in the city for a long time"
"I am looking for a place to buy and am very interested in moving into a top floor apartment in the CBD"
I think we are on the brink of a housing explosion that will strengthen the strong current upswing in property interest in the city. And it is a move from lower-end housing to much needed middle income.
It also appears that mixed income housing is becoming an important feature of urban redevelopment in US cities. An article in 'Urban Land' earlier this year detailed how blending subsidised and market rate housing is avoiding the concentration of poverty found in past projects of purely subsidised housing.
The article states that whilst the mix of incomes varies by project, the current target should be one-third low income, one-third tax-credit range (low to moderate income) and one- third market rate - "this proportion provides a graduated income mix that has shown a greater degree of success in mixed use developments."
The article also puts its finger firmly on the most critical factor in inner city housing - professional management. "Professional management is considered crucial to the success of mixed-income communities - including effective safety measures and consistent security implemented by on-site staff, security guards or electronic surveillance. Also important are timely maintenance, noise control and a clear set of rules that are enforced quickly and routinely for all tenants. It is critical that management be on top of every issue and it is essential that everyone is treated the same," comments one developer.
Sounds like home to me! In fact, in recognition of the critical role that management needs to play, a new organisation the Property Owners and Managing Agents Association has very recently been established in the Inner City and already has some 20 members. More about them at a later stage.
Paul Grogan and Tony Proscio in their book, "Comeback Cities: A Blueprint for Urban Neighbourhood Revival", published a couple of years ago, pointed out that at the core of the revivals they had documented were what they called" a surprising convergence of positives". Just some of the positives they recorded were public-private partnerships with banks, foundations, corporations and government agencies to build thousands of housing units; the slow return of business to abandoned business districts; lower crime rates than ever before and the unshackling of inner-city life from giant bureaucracies.
This last issue is still of concern and the much publicised poor performance of Council relative to rates and service charges must not be allowed to dampen the opportunities and interest that housing is engendering.
I like that phrase, "a surprising convergence of positives" although in our case it is hardly surprising, it's a convergence that has been waiting to happen.
See ya in the city!
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