Tenants’ associations want regulator to enforce its cap on eThekwini social housing rentals. (Getty Images)
A Durban residents’ organisation is preparing to go to court to force social housing companies to stop overcharging tenants of flats built on city owned land for rent.
The Phoenix Tenants and Residents Association wants the owners of politically connected social housing companies to stop charging residents of their complexes — which are subsidised by the Social Housing Regulatory Authority (SHRA) — rentals of up to R4 000 a month.
Rents for the properties — mainly in previously Indian areas of Durban — are meant to start at R350 a month for the lowest-earning tenants and are capped at a maximum of R2 250 for the highest-earning category.
However, residents of a number of complexes in Phoenix in north Durban are being charged R4 000 a month and are being evicted for failing to pay.
The tenants’ association has also approached the SHRA to enforce its own regulations on companies benefitting from the city’s social housing programme and to take action against those who are exploiting tenants.
It has also presented the Special Investigating Unit (SIU) with information regarding the transfer of the council land to the companies, among them Gralio Precast, Woodglaze Trading and First Metro, which were allegedly moved irregularly and in some cases double-funded.
The SIU probe into the 21 companies — some owned by the late ANC-linked tenderpreneur Jay Singh — began last year following a proclamation by President Cyril Ramaphosa and aims to recover more than R400-million paid in subsidies by the SHRA.
The SHRA funds housing projects that provide tenants earning between R1 500 and R15 000 with rental housing, mainly on municipal land which has been released to developers for this purpose.
The SIU’s mandate for the investigation dates back to 2012, when the city began its infill housing programme to provide land for social housing, and includes probing “maladministration” by the city in releasing the land to Singh and others “contrary to the objectives of the municipality’s housing programme”.
Singh, a funder of the ANC’s eThekwini region, was targeted by the Asset Forfeiture Unit over irregular land transactions during 2013, and more than 1 200 flats he had built in Phoenix were seized.
Singh died in 2020 but his wife and son now run his companies, which continue to do business in the low-cost housing sector.
Mervyn Govender, chairperson of the residents’ association, said that while they waited for the outcome of the SIU investigation, they were approaching the SHRA and the courts to halt the exploitation of tenants.
“We are asking them to enforce their own regulations and ensure that the social housing companies charge tenants in line with the gazetted rates. We have decided to approach the courts as people are being overcharged heavily and are being evicted for being unable to pay rentals, which are illegal,” Govender said.
“People are being evicted for nonpayment of illegal rentals that they can’t afford; they’re having to pay lawyers to go to court to get access to their homes. The social housing companies are not adhering to the rental structure and the SHRA is failing to do anything about it.”
Govender said that the social housing companies secured land at beneficial rates from the city and had construction and bulk infrastructure subsidised, but were still not willing to adhere to the gazetted rental structure.
“What is happening wrong. We are intervening as our main aim is to ensure that people are charged rentals they can afford,” Govender said.
In a letter to the SHRA last month, Govender requested a meeting with the regulatory body to discuss the rentals issue and alleged corruption by the companies, along with details about the R235-million they had received in subsidies.
“The initial beneficiaries have been given a raw deal as they were vetted for the income strata of R3 500 to R7 000 and are now being charged rentals of up to R4 000, which is unaffordable as Phoenix is a low-income township and majority of the dwellers seek jobs locally in the community earning meagre salaries,” he wrote.
Govender asked the SHRA to “mediate this issue” to try and avoid lengthy and expensive legal action that the residents’ association could not afford.
However, in response, SHRA legal manager Tshidi Molefe said that the organisation would not disclose any information relating to the complexes or rentals as this was “personal information”.
Neither the SIU nor the SHRA had responded to queries from the Mail & Guardian at the time of writing.
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