JOHANNESBURG - Millions of rands is being invested into the regeneration of Johannesburg’s inner city district, especially in Hillbrow and Berea where urban decay and criminal elements have turned pockets of these suburbs into derelict slums.
The project is being run by the government-owned Johannesburg Social Housing Company (Joshco) with the City of Johannesburg (COJ) as its sole shareholder.
Joshco currently manages more than 8 000 units spread across 22 projects in the inner city and the greater Johannesburg, providing low-cost accommodation for around 25 000 tenants.
The company does this by acquiring run-down buildings, refurbishing and transforming them into affordable housing units.
One of the landmarks in Hillbrow’s glory days that has benefited from a lick of paint and a bit of panel beating is the Chelsea Hotel in Pretoria Street. Situated at the top of Nugget Hill, the hotel was a popular hangout but was one of the first casualties of urban decay, eventually turning into a drug den and criminal hideout.
The Chelsea now has 80 communal units with separate ablutions for men and women and kitchen facilities. The rental ranges from R675 to R982 per month.
Among the buildings that have been refurbished in the vicinity of Hillbrow and Berea are the MBV, the Casa Mia, La Rosabel and Lynotex in Doornfontein.
Joshco CEO Rory Gallocher says there is room for private investment in the form of partnerships.
“If there are developers than can see it in their interest to invest in the inner city in affordable product, … who don’t necessarily want to grow a big corporation in real estate but (hit) the right market, then we’re very interested in partnerships.”
Gallocher says Joshco’s main aim is to build a portfolio that is large and diverse enough to produce income-generating rental housing to recover the cost for providing low-cost housing to the poor.
“Our corporate objective is to break even through our mixed portfolio. We are getting there. Currently we have a shortfall of about R11m a year (which is) fortunately being subsidised by the City of Jo’burg – but only for the next two or three years, then we must break even.”
Under R15m was spent on refurbishing the La Rosabel while it cost R13m to turn the former Lynotex factory in Doornfontein into emergency accommodation in the event of a disaster.
The accommodation available ranges from rooms, to bachelor pads and one and two-bedroom units with varying amenities. Rentals range from between R600 to just over R2000 a month. This includes cleaning services and security which is closely monitored.
Gallocher says the key to maintaining these buildings is through strict control and tight management. Each building managed by Joshco has a tenant handbook spelling out the house rules which must be adhered to.
The company does not mince its words when it comes to overcrowding which is a common problem in built up areas like Berea and the inner city. The handbook states: “Joshco is very strict with overcrowding and will not hesitate to give you notice if you overcrowd or sublet your unit.”
Joscho’s goal is to ultimately manage 15 000 housing units in the inner city and the greater Johannesburg. It believes there is still considerable scope for development as there are still around 130 so-called bad buildings in the area. Rehabilitating them could boost the accommodation supply in the inner city.