The eThekwini Human Settlements unit has come under intense scrutiny for its proposed 10% rental housing tariff increase for the 2025/2026 financial year.
In a report presented to the eThekwini council on Monday, the committee stated that the formal housing Department of the Human Settlements unit manages approximately 4 581 rental housing units. This is spread across three regions of eThekwini, namely, South, Central, and North, excluding hostels.
Inkatha Freedom Party (IFP) Councillor Dr Jonathan Annipen was concerned that the tariff increases for rentals, which appeared on the council agenda, only listed rental units from Ward 48 in the Phoenix suburbs of Rainham, Greenbury, Clayfield, and Stonebridge.
Annipen considered this report to be disingenuous and very misleading.
He said: “This suggests that the action is racially motivated.”
The committee said that the monthly rental within the rental housing properties ranges between R50 and R2 500. It stated that the revenue collection in this regard does not meet the budgetary requirements needed to operate rental facilities, adding that the financial sustainability of residential development is seriously threatened as tariffs are reviewed annually.
The committee stated that while the review is undertaken, the tariff structure will provide sustainable and affordable rental housing stock to qualifying beneficiaries and ensure that the facilities are kept in good working order through maintenance.
Annipen said that the IFP has demanded an immediate investigation into how this colossal injustice was allowed to feature on the council agenda without detection by officials.
“The draft budget tabled before eThekwini Municipality and opened for public consultation is done so with grave inaccuracy and with falsified information, deeming it invalid. The setting of tariffs must be done in the form of a draft resolution and must accompany an annual budget.
“In this case, the requirement seems only to be met by applying tariff increases through racial profiling and in a prejudicial manner. This budget will remain invalid if the increases in housing rental tariffs are imposed only in Ward 48 and not across all three regions where housing rental units are occupied,” Annipen said.
The IFP has written to the heads of department to produce proof that proposed tariff increases are reviewed to be implemented across all three regions should the budget be passed at the end of May 2025.
Annipen said the IFP does not support any tariff increases at this stage until the public consultation has been concluded and a report has been presented to the council.
“It is highly irregular, unconstitutional, and illegal to apply these tariff increases only to a select group of residents to fulfil the obligation of fully funding a budget. If our suspicions are found to be true, it will render the vote taken at the council meeting invalid,” Annipen said.
Meanwhile, since 2005, the municipality spent more than R1 billion on the upgrading and construction of 4 878 new family units in hostels.
The operating expenditure for providing property management services for the last financial year 2023/24 was R654.6 million, of which R468.4 million was for water and electricity.
The estimated operating expenditure for the 2024/25 financial year is R652.1 million. The rent receivable for the 10 hostels is R50.6 million for the 2024/25 financial year.
However, less than 5% is being received. The municipality is also proposing a 10% increase in the tariffs for the 2025/ 2026 financial year. The proposed increases will be taken for public participation.