The Phoenix Tenants and Residents Association has filed court papers asking for the sale of complexes in the area intended for social housing, set aside. (Delwyn Verasamy/M&G)
Residents of 11 housing complexes in Phoenix, Durban, have gone to the high court to have their sale by companies owned by the late ANC funder Jay Singh, to third-party developers, declared unlawful and set aside.
Residents belonging to the Phoenix Tenants and Residents Association (PTRA) have also asked the court to declare the complexes as social housing facilities — their original purpose — and to compel the developers to give them the option to buy them as the eThekwini Metropolitan Council had initially intended.
The complexes were built on city infill sites as part of a programme to provide affordable, rent-to-buy housing for residents of the predominantly Indian township by the eThekwini municipality, in conjunction with the human settlements ministry, which began in 2000.
They house about 8 000 people, most of whom earn between R7 000 and R8 000 a month. They have been battling rental increases and evictions by third-party developers to whom the properties have been sold on by Singh-linked companies including Woodglaze Trading and Cascade Home Trust.
In court papers, Kissoon Sahadeo, the chairperson of the PTRA and a resident of the Clayfield housing complex, said that they had brought the application to compel the city, the housing department and the developers to adhere to the municipal resolutions and agreements under which the flats were built.
Sahadeo, a pensioner, said that the flats were built by Woodglaze and Cascade from 2002 onwards using the government’s Finance Linked Individual Subsidy (Flisp) and a discount benefit scheme, with tenants to be offered a rent-to-buy option.
In terms of the agreements between the city and the developers, the flats were not to be sold on without permission from the municipality and without tenants being given the option of first refusal.
They were supposed to benefit subsidised tenants “that is, people in the position of the applicants and the other affected residents of Phoenix living in these housing units as tenants, and not private companies to make profit of the housing stock through rental arrangement permanently”. The flats could be sold to people who were eligible in terms of the council policy, which included first-time owners who had no other properties and who qualified for state subsidies, Sahadeo said.
The developers were prohibited from “alienating, ceding or assigning any of the rights or obligations in terms of the agreement or any portion thereof without prior written authority of the eThekwini municipality” and could only sell to pre-approved beneficiaries in terms of the eThekwini municipality housing scheme.
Sahadeo said most residents, including the applicants, had applied for flats via Woodglaze, which was “looking for people earning between R3 500 and R7 000 per month, and who are first-time owners”.
They were called to Woodglaze’s offices, where they signed a lease agreement and were given a one-page document with a municipality logo, which they were told to sign and initial.
After paying a deposit and fees for registering water and electricity meters in their names, the residents were shown their flats and were given their keys.
“They then started to pay rent to Woodglaze. They were told by an official from Woodglaze that after five years, the properties will be offered to them by way of a sale agreement,” Sahadeo said, adding: “Woodglaze sold the housing stock. They were not told about the sales.”
Sahadeo said the city had then abandoned its commitment to providing social housing, halting subsidy applications for the projects and allowing the sale of the properties to private companies to continue.
He said the residents had held marches and rent boycotts and approached the city, the province and political parties, including the ANC and the Democratic Alliance, for assistance but none had been forthcoming.
“Currently, we stay on these properties as tenants with no security of permanent tenure, as most of us are vulnerable to evictions,” he said.
Sahadeo asked that the sales be set aside by the court and that the properties be declared “part of the infill housing programme which was undertaken for the benefit of beneficiaries qualifying under the Flisp and or institutional housing programme and discount benefit scheme”.
He further requested that the court declare the continued use of the properties for rental purposes only and the failure to make them available for purchase to the intended beneficiaries as “unlawful, unreasonable and unconstitutional”.
Should the order be granted, Sahadeo and other residents want the city and the developers to assess the soundness of the properties — some of which were built without plans being passed by the city — within three months.
They also want the city to draft a list of the Phoenix infill housing beneficiaries and make the properties available to them for rental and eventual purchase.
Several of the complexes are at the centre of a probe by the Special Investigating Unit (SIU) into R400 million paid in subsidies to Gralio Precast and Woodglaze, which was concluded last year.
The SIU report, which makes several criminal and disciplinary referrals and one referral for asset seizure, has been given to the presidency and the eThekwini municipality, which has also been instructed to take remedial action.
Last week members of the PTRA held a protest march to demand that the report be made public and that action be taken against those identified as having abused state resources.
At the march, residents spoke to the Mail & Guardian about their plight.
Des Pillay moved into a three-bedroom home in the Cardham complex, owned by KZN Social Housing Company, five years ago.
“When we first went to sign, we were told it was rent to buy and that we would be able to make an offer within five years.
“Then, in 2021, they sold off 15 homes without giving us any notice. We got no advice from the office or from anybody else,” he said.
Since then another 50 units have been sold, with some of them being sold on again to individual buyers at up to R1.2 million a unit.
Pillay said rent had been increased from R3 700 a month to R4 600 for the three-bedroom units and from R1 900 to R4 800 in some cases.
“Some people have moved out because they can no longer afford it and because they are scared of what is going to happen to them. They have totally violated our rights by not allowing us to become buyers or to apply for ownership,” Pillay said.
The application is due to be heard in the Durban high court on 20 July.