Housing time bomb for poor

Published Oct 12, 2015


Durban - eThekwini is sitting on a housing time bomb that could see thousands of poor people who were given council flats at massive discounts lose their homes because they cannot keep up with the escalating levy payments.

Andre Grundler, a property expert appointed by a court to administer 10 former council blocks where the body corporates have failed, is taking the municipality and the provincial human settlements department to court to challenge the housing policy that sold the housing stock to poor people.

The matter will be argued on the opposed roll when a date is provided by the court.

Grundler said the way things stood at the moment, up to half of the 60 000 families who were given council-owned flats would lose their homes.

“Sectional title was never meant for poor people. Poor people just cannot afford to pay the common costs of running a building and the end result is that they will end up having their homes auctioned. That is what the law allows under sectional title schemes if someone cannot pay the levies,” he said.

Sayed Iqbal Mohamed, chairman of the Organisation of Civic Rights, said the government needed to urgently step in and subsidise the levies of those who could not afford them before they were faced with more homelessness.

Mohamed said he supported the government’s initiative to give poor people their own homes, but said sectional title ownership was not the way.

“The municipality and the national government have not stepped in to do something about the problem, despite the looming problems. They should set up a task team to investigate possible options,” he said.

Mohamed said many were bullied into taking ownership of the flats.

“That was not fair. There were no intensive workshops or induction into the implication into sectional title ownership. Sectional title is not there for the poor, it is for the middle class.

“It works well in Israel, Australia and some parts of South Africa. But not for poor people,” he said.

The result of non-payment of levies meant that many of the former council flats were in disrepair to the extent that the lifts in some buildings did not work, little to no maintenance was carried out on common property, and overcrowding was rampant. In some buildings the lack of management meant slumlords converted two-bedroom units into four bedrooms and leased them out to up to 16 people.

Several of the flats were under court administration and families had already had their homes auctioned because of levy debt. Many others had been summoned to court over unpaid levies and lived with the constant threat of foreclosure


Court papers reveal that the 9 607 “low rise” and 908 high rise buildings were sold as part of the extended discount benefit scheme.

The Daily News interviewed several people who own former council flats. They claimed they were bullied into buying their flats by council who told them if they did not, they would be moved as far away as Verulam. Others said they did not understand how sectional titles worked when they signed up and did not realise that levies would increase so rapidly.

“Many of the recipients were unable to pay their rent when they were council subsidised,” Grundler said.

“How did the city think they were going to pay their levies under a sectional title scheme? They gave them housing which they knew was going to fail. They basically washed their hands of their housing stock and left the poor high and dry,” he said.

He said while there were many who simply refused to pay, many others tried their best to pay levies despite their hardships.

“How are people supposed to pay levies of, say, R700 and pay for their lights and water bills with a social grant of R1 400?

“It will never work. It simply means that when these flats were given to people, it was not thought out long term,” he said.

The eThekwini Municipality did not respond to questions from the Daily News.

Mbulelo Baloyi, spokesman for the KZN Human Settlements Department said the MEC, Ravi Pillay, was attending the ANC’s national general council meeting in Johannesburg from Thursday and would only be available for an interview on Monday.

However, opposing court papers filed by the department against Grundler’s court challenge to the housing policy that gave poor people council-owned flats, gives a glimpse into the government’s view.

An affidavit by Visvanthan Moodley, an executive manager at the department, outlines the government’s argument: that the purpose of the benefit scheme was to promote ownership and ensure individuals realised their right to home ownership.

He argued that proper functioning of sectional title development was for individual owners to co-operate with each other and pay the levy contributions.

He said poorly run, badly managed and poorly funded body corporates were a reality but should not detract from the benefits of ownership in property.

“I deny that sectional title ownership is unsuitable for housing delivery for the poor. I respectfully submit that within the range and legislative options for ownership, sectional title ownership is the most suited and, in fact, the only option...”

Kevin Fredericks looked out into the courtyard of the 13-storey Flamingo Court block of flats in Umbilo and choked back the tears.

“Pensioners like us,” he said, pointing to neighbour, Anne Nel, “have to choose every month between paying our levy or eating.”

Fredericks, who has lived in Flamingo Court for more than 20 years, is R32 000 in debt over unpaid levies.

He has been threatened with legal action by the court-appointed administrator of the building and is at his wits end on how he will survive.

Nel, who has lived here for 21 years, is R11 000 in debt.

Frederick earns a pension of R1 100 from Old Mutual and has to pay a levy of R1 600 on his former council flat which was converted to sectional title units in 2006.

In addition, he supports his unemployed son and his 3-year-old granddaughter.

He has been served with notices to appear in court because of his levy debt and has been warned he may lose his home should he not clear it.

He is not alone.

The majority of Flamingo Court’s residents, many of them pensioners, have racked up debt in unpaid levies because their pensions do not cover the full cost of living.

Four doors down from Fredericks, Landiwe Thusi, 68, was summoned to court over a levy debt of R37 805.

Like Fredericks, she has lived in Flamingo Court for more than 20 years and was excited when she was given the title deeds to her flat.

Residents paid between R600 and R780 for their flats.

Thusi said she had no idea the levies would one day exceed her pension.

When she moved into the council-subsidised flat, she paid R200 rent.

“Now it’s over R1 000 and that is besides lights and water. How can we live on what we have? Had we known that it would be like this one day, we would have told them we do not want to own and rather rent. It was better when the municipality ran the building,” she said.

Nel agreed.

“We all thought it would be wonderful to own our own homes but, for many of us, it was never properly explained what will happen when we move into sectional title units. We are all stuck now,” she said.

Like much of the former council housing stock that was converted into sectional title units after 1994, Flamingo Court has fallen into disrepair. In addition to the building being in need of painting, only one of the two lifts works and most of the windows in the communal areas are broken and have not been fixed for years.

Andre Grundler, the court-appointed administrator who has been tasked with turning around the finances of the building, is taking the municipality to court, challenging its housing policy and accusing it of abandoning the poor in neglected high-rise buildings.

He wants to hold the city and human Settlements Department financially accountable for the “inevitable consequences of a poorly-executed housing programme” through which tenants in council housing bought their flats and were then forced to manage “elitist and unsustainable” sectional title schemes – which he believes are not for the poor.

Recently, Grundler and the residents of Flamingo Court scored a major victory when eThekwini Municipality agreed to write off R8.7 million of debt owed for water.

The municipality also agreed to install individual water meters in each of the 200 flats. Had the owners been forced to foot the bill, it would have cost them each R95 000 and special levies of R900.

When Yvonne Smith, 75, bought her council-owned flat on Durban’s South Beach for R2 200, she believed her life and that of her mentally disabled son’s would change for the better.

But 13 years on, the dream of being home owners and no longer council-subsidised renters has turned into a nightmare.

The cost of living on government grants, coupled with escalating levy and utility bills, means Smith and her son live hand-to-mouth.

“Most days we don’t eat,” she said.

“It was never easy when we rented the flat from the council, but at least we could eat for the month. Back then the lifts worked, the building was maintained and we felt secure. Now, 90% of our money goes to paying the levy, for lights and water and what we have left over gives us food for only three days,” she said.

“What makes it even worse, pensioners like me who live on the upper floors and can no longer walk down the stairs are trapped in their flats because the lifts don’t work.”

Smith, with the other 140 owners of Elwyn Court along Mahatma Gandhi (Point) Road, bought their flats under the government’s extended benefit scheme that saw municipalities give discounts to indigent people to convert their council housing to stock flats to sectional title units.

At Elwyn Court, the lifts have not worked for seven years, many windows have been broken and the building is cracking in places.

In Smith’s flat on the sixth floor – where she has lived for 35 years – her cupboards are bare and her bedroom window is covered by a sheet that only goes half way. She shares a double bed with her 50-year-old son who was born brain damaged. Their only income is a government pension and a disability grant which amounts to R2 820.

Because she had fallen behind on her levy over the years and, with the threat of having her flat auctioned from under her, Smith has committed to pay R2 250, which includes her current levy of R657, every month to catch up. With her utility bills averaging R500 a month, it leaves them with less than R100 for food.

“It is very hard. We can only eat for three days before the food runs out. But that’s what we have to do,” she said.

Ester Nel, the building supervisor at Elwyn Court, said she felt for families like Smith who, despite their meagre income, paid their levies.

She said that when the municipality offered the flats to people in 2002, they “dumped the people in the deep end”.

“They did not take individual people’s situation into account to determine who could and could not afford sectional title living. All they said was that if you do not take up this offer, we will move you to Verulam, Phoenix or Umlazi. People were basically forced to take up the offer, even if there were no chance they could afford it,” she said.

Nel said that of the 140 units in the building, only 25 owners regularly paid their levies.

“The building is in ruins because of this. But look,” she said, pointing to the satellite dishes on the outside of individual flats. “Some can afford DStv, but not the levy.”

Daily News

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