Note to editors: Please find attached English and Afrikaans soundbites by Cllr Tjaart van der Walt and Sesotho by Cllr David Masoeu.
Mangaung Metropolitan Municipality residents and businesses are under increasing pressure due to annual increases in the cost of living, including property rates. The Mandatory Mangaung Financial Recovery Plan (FRP) prescribes an increase of 4.5% in property rates revenue in 2024/25. Furthermore, the Mangaung Integrated Development Plan identifies the Strategic Risk of Illegal building activities and illegal land uses as the first risk.
During the council meeting on 28 February 2024, we submitted a detailed proposal that must be incorporated into the draft IDP and budget for public participation in March and April. This proposal involves the addition of a new property rates category of “Illegal Use” or “Non- Non-Permissible Use”, including abandoned and derelict buildings.
The rate for this category is proposed to be equal to or 1.2 times that of the current business use rate. This rate will serve to ensure that the municipality does not lose out on property rates that should have been paid by illegal businesses usually operated from residential properties with normal residential rates. It also serves as a deterrent for illegal land use and encourages illegal businesses to legalise and formalise. Additionally, the extra income from this can be used to subsidise a 0% increase in residential and business property rates for 2024/25, which the DA is calling for.
The property rate category has been widely adopted in other metros and has already been tested in the Supreme Court of Appeal in 2021 and is a legal practice. Many of these illegal businesses cause major nuisances and other negative impacts on the surrounding neighbours and streets without any consultation with the affected parties.
Should Mangaung adopt our advice and successfully implement this proposal in the upcoming budget, 2024/25 after following the required public participation process, this could conservatively mean an increase in revenue of R120 million for the year.
This will give a welcome reprieve to our residents who are already stretched financially over the limit. Especially after the double increase in property valuations and property rates in 2022. We further urge that careful consideration should be given to the implementation process to prevent unintended consequences and ensure fairness.
In addition, we continue to pressure Mangaung for the appointment of critical vacancies in the Planning Department, including the General Manager, Head of Department, town planners, engineers and building inspectors as well as the digitisation of the building plans and land use management to ensure further improvement in the speed of building plan approvals. This is aimed at simplifying and speeding up land development applications and the legalisation of illegal businesses. The DA calls on the Mayor and City Manager to adopt the proposal, and not implement any increase in property rates for business or residential categories in the draft budget for 2024/2025.