Johannesburg
The historic core of Johannesburg, the Inner City has become the center of economic activity in the Metropolitan Area due to regeneration efforts led by the private sector over the last two decades. Four hundred thousand people reside in the area, and about 1,000,000 people pass through the Inner City everyday. It also hosts many small businesses and local retailers, owned mainly by the lower income segment.
The Inner City, however, had experienced severe decline beginning in the early 1950s, when the City Council decided to move to an outlying neighborhood. In the1960s, the parking regulations changed to restrict the usage of cars without any corresponding improvement in public transport, forcing businesses to relocate, hurting the city’s tax base, and leaving many buildings vacant. Years later, after the establishment of democracy, new residents from faraway townships moved into the Inner City. Some of these in-migrants squatted in abandoned buildings, while the Inner City experienced continued decline of public spaces, lack of service delivery, high crime rates, and a subsequent sharp decline in investment.
Until the 1980s, there were few efforts to regenerate Johannesburg’s Inner City. The first attempt to create a plan for revitalization was launched in 1986 by the Johannesburg City Council. While the initiative stalled for political reasons, a small booklet was published that proposed private sector regeneration.
In early 1991, the Inner City’s private sector occupants planned a multi-sector, multi-stakeholder workshop on urban issues, which resulted in the publication of a vision document entitled “Strategic Initiative for Central Johannesburg”. It suggested the creation of a tripartite partnership between the public sector, the private sector, and the community as well as an independent, non-profit development agency. The latter institution was established in 1992 and was called the Central Johannesburg Partnership (CJP).
Until 1995 the non-democratically appointed City Council hindered CJP’s work, so the institution instead engaged in research on urban regeneration. After the establishment of a democratic government in 1995, the tripartite arrangement was altered; the community’s interests were represented by the newly-established Johannesburg Inner City Community Forum (JICCF), the public sector was represented through the city council, and the CJP represented private sector interests through its management of the private, non-profit Johannesburg Inner City Business Coalition (JICBC).
The main impact of the CJP was the introduction in 1993 of Business Improvement Districts or, as they are called in South Africa, City Improvement Districts (CIDs). Five such districts were established voluntarily by 2000. The CJP also had a major impact in crafting a “vision” for the City. However, the Johannesburg Inner City Development Forum (JICDF) took over the CJP’s visioning initiative in 1996, creating the “Johannesburg: The Golden Heartbeat of Africa” vision that called for a city that would be “livable, safe, people-centered, accessible, dynamic, well managed”. The strategies outlined in the vision were focused on environmental upgrades; development of infrastructure; reducing crime, congestion, and homelessness; and improving public services through public–private partnerships. The implementation phase of this vision was slowed by political and budgetary impediments, including a lack of centralized decision-making powers.
The provincial and local governments started initiatives to revive the Inner City in 1994. Consequently, the Executive Committee of the Gauteng Province initiated an urban renewal strategy for the Inner City. This plan focused on three pillars, including local economic development, residential development, and social development.
The provincial government called for a summit in 1995 to move this strategy forward. The CJP helped form a new business coalition to represent the private sector, which insisted on long-term planning measures. The private sector committed to allocating human and financial resources to the regeneration in exchange for a public-private policy-making partnership.
In 1996, the Provincial Government led the development of a four-point plan for the regeneration of Gauteng Inner Cities, including Johannesburg. Based on this plan, a work plan was developed to establish a city fund, create a partnership framework, support key instruments, and facilitate and monitor projects.
Given the JICDF’s lack of implementing authority and resources, an Inner City Committee was established in 1998, which commissioned a report on the future of the Inner City and recommended the establishment of an organization with a similar mandate to the Urban Development Corporations (UDC) in the United States. Subsequently, an Inner City Office (ICO), later named the Johannesburg Development Agency (JDA) was established in 1998 as a specialized project management arm of the greater Johannesburg Metropolitan Council. The responsibilities of this office were to coordinate all activities and projects related to the Inner City, and to implement the Inner City strategy developed by the JICDF.
The first major plan for the Inner City was the “Inner City Regeneration Business Plan”, developed by the Economic Development Unit of the City of Johannesburg in 2004. The Plan was based on five pillars: Addressing sinkholes, undertaking intensive urban management, maintaining and upgrading infrastructure, promoting ripple pond investments, and supporting economic sectors. However, due to lack of funding many elements of the plan were not realized.
In order to inject new energy into the regeneration process, in 2006 the executive mayor announced that an Inner City Summit would be held in 2007 to “mobilize stakeholders toward a refocused agenda for regeneration, agree on the critical issues of concern and develop a program of solutions”. After months of intense stakeholder consultations, a Charter was published that envisioned a regenerated Inner City. It called for a review of all past programs to identify lessons learned. The Charter committed City of Johannesburg and the JDA to scope the development of a major intermodal transport and activity center. It addressed the issue of derelict buildings in the Inner City, committing the JDA to develop an Inner City Housing Action Plan. It also suggested that the City would develop “Partnership Places” – public amenities that could be developed and managed jointly as a Public-Private Partnership (PPP). The private sector was assigned a major role with regard to inclusionary housing. Finally and most importantly, the Charter recommended scoping a spatial development plan for the Inner City as a whole. Despite the comprehensive nature of the Charter, it has received criticism due to the lack of enforcement mechanisms and its failure to realize all of its stated aims.
In 2013, the City of Johannesburg released the Final Draft of its Inner City Transformation Roadmap. The Roadmap aimed at transforming the inner city of Johannesburg based on five overarching pillars of short and long-term goals to be achieved through initiatives and partnerships. The Inner City Roadmap provided the framework for the City of Johannesburg to roll out the Growth and Development Strategy 2040 for the Inner City.
There is a multitude of institutions, actors, and sectors involved in regeneration efforts of the Inner City. After democracy was established, the existing municipalities were dismantled and the new City of Johannesburg Metropolitan Municipality was instated in 2000. It was established as a single-tier municipality with committees and an Executive Mayor. One of the most effective institutional changes that impacted the Inner City was that the city fell under the jurisdiction of a single municipal council. The new municipal structure was significant in that it created three sets of service delivery entities: Utilities, agencies, and municipal corporations. A core administration entity was in charge of the three sets of delivery entities, while also overseeing 11 regional administrations. All of these new functions were under the umbrella of the new political governance system.
A key entity in private sector regeneration is the Johannesburg Development Agency (JDA), which was created in April 2001 with the aim of reviving economic activity in the city, supports the City’s Growth and Development Strategy, Joburg 2030, and Joburg 2040.
To maximize participation from all of the relevant players, various sectors and institutions collaborated with each other within an institutional framework developed in the 2004-2007 business plan. The plan divides tasks among five institutions to encourage inter-agency cooperation:
• The Metropolitan Council: The Council includes members from various entities, including the city of Johannesburg, the Inner City Task Force, the Economic Development Unit, the City Manager’s Office, the Planning Department, the Finance Department, the Johannesburg Metro Police Department, the Housing Department, and the Contract Management Unit.
• The Private Sector: This includes the Johannesburg Inner City Business Coalition (JICBC), Central Johannesburg Partnership (CJP), Property Owners and Managing Agents Association (POMA), and project-specific stakeholders.
• Utility companies, agencies, and municipal-owned corporations: This includes City Power, Joburg Water, Pikitup, the Johannesburg Development Agency, the Johannesburg Property Company, the Johannesburg Roads Agency, and the Metro Trading Company.
• The Provincial Government: This includes Blue IQ, an investment agency for strategic economic infrastructure, and Provincial departments.
• The Community: This includes the Johannesburg Inner City Community Forum, and the Association of Social Housing Associations.
JDA’s capital budget is supplied by the City of Johannesburg local government, grants from other government departments, the National Treasury, the Department of Public Works, and public and private options defined with regard to specific development initiatives. The JDA draws its operating budget from a 5 percent fee on all projects, including on the capital budget of the City of Johannesburg, and a transfer received from the City to accommodate JDA’s non-development based operations. The private sector regeneration initiatives in the Inner City were significantly financed through private sector involvement.
The implementation of interventions in Johannesburg’s Inner City overlapped with the planning process. The first stage of operation on these initiatives lasted from 2001 to 2006 and aimed to attract new investment to the Inner City. The second stage of operation, from 2006 to 2011, made the logical connection with the 2010 International Federation of Association Football (FIFA) World Cup. At present, in its third developmental phase, the JDA is working to implement the “Joburg 2040” plan, and support the development of Corridors of Freedom, which are well-planned transport arteries linked to interchanges featuring mixed-use development. Several JDA-led initiatives aimed at boosting private sector participation are outlined below.
Area Based Initiatives
These initiatives targeted rehabilitation of neighborhoods that were strategic to the regeneration of Inner City as a whole. These interventions were done in an ad-hoc manner according to various visions and strategies. The JDA followed a property-led regeneration model, investing significant public funds allocated to particular areas in the Inner City. These initiatives achieved a decline in property vacancy rates from 40 percent in 2003 to 17 percent in 2008 and a concomitant jump in property transactions. The leverage ratios of these investments were as high as 1:363.
Improved Public Spaces
The JDA partnered with the private sector in order to develop and improve public spaces using simple interventions such as greenery, lighting, and sidewalks. The Inner City Regeneration Charter targeted a minimum of five percent of the space within the Inner City Urban Development Zone to be developed as public space.
Urban Development Zones
To promote private sector participation in urban renewal and accelerate the pace of regeneration, the Ministry of Finance launched a national tax incentive program in 2003 to allow municipalities to designate Urban Development Zones (UDZ) around Areas of Priority identified in integrated plans. The tax incentive takes the form of an accelerated depreciation from eligible taxpayers’ taxable income if this income is a result of erection, extension, improvements of, or an addition to an entire building or part of a building within the CBD that is at least 1000 square meters. The incentive also applies to the purchase of buildings within the CBD with certain restrictions.
City Improvement Districts
Generally, a City Improvement District (CID) is a geographic area in which property owners agree to pay for supplementary services and improvements of the urban environment, including security measures, urban area upgrades, litter collection, and design and upkeep of public spaces. CIDs are established for an initial period of three years, but can extend indefinitely unless members file for changes. The Central Johannesburg Partnership (CJP) first introduced the concept of City Improvement Districts (CIDs) to Johannesburg in 1993 as a response to declining public services.
Crime Prevention Measures
In order to curb crime, Johannesburg developed a multi-agency crime prevention strategy that included a private sector-funded entity called Business against Crime South Africa (BACSA), a non-profit company with a Board of Directors comprising local business leaders. The company, which was established in 1996, runs on tax-deductible donations from businesses that benefit from a secure Inner City.
Informal Trade Management
The CJP created a joint venture with the Metropolitan Trading Company in order to manage informal trading in City Improvement Districts. The CIDs provide “Top Up” services that include partnership development, marketing, landscaping/ maintenance and safety. However, CIDs could not provide these intensive “Top Up” management services in public spaces without overlapping with informal trade management; this led to the establishment of the joint venture.
Housing Provision
After the fall of Apartheid regime, a series of policy decisions led to a lack of residential maintenance in the Inner City, and banks redlined the district for mortgage lending. In light of this, entrepreneurial developers started to move into the Inner City with the intention of taking advantage of the new demand for rental accommodations. At the same time, the Trust for the Urban Housing Foundation (TUHF), which grants loans to buy or improve residential property, was established in 2003 to fund refurbishment of the Inner City. From its inception until 2011, the TUHF allocated more than R 1.2 million in loans for 17,000 apartment units. Since commercial banks have been reluctant to invest in the Inner City, the TUHF relies on the South African National Housing Finance Corporation for funding. The TUHF is also involved in mixed-use developments in the Inner City.
Better Buildings Program
The Better Buildings Program (BBP) was approved by the mayoral committee and the Economic Development Unit in 2003 to replace a previous program that had experienced only limited success. The main purpose of the new program was to facilitate the expropriation and sale of derelict buildings in the Inner City to private sector entities, which had the capacity and capital to rehabilitate and manage them.
The core of the visioning process for the Inner City started in 1996 and has lasted until the present with a series of layered visioning, planning, and implementation processes. The most important outcome of these processes was the development of a variety of structures that activated responsible stakeholders, including:
• The Inner City Development Forum
• The Inner City Office, later to become the Johannesburg Development Agency
• The Region 8 Directorate and office, including the Inner City Task Force.
These structures then developed various tools to take the vision forward, including:
• The Inner City Spatial Framework and Inner City Economic Framework
• The initial Inner City Strategy
• The 2003/2007 Inner City (5-Pillar) Strategy
The most obvious impact of the regeneration efforts in Johannesburg can be observed in the strength of the property market. As a result of JDA’s efforts in regenerating the Inner City, the private sector has invested an estimated R 4.5 billion in upgrading properties. When combined with new property development, the private sector has invested a total of R11 billion in Inner City properties since 2000.
Overall, the establishment of CIDs has been a great success in transforming the Inner City. Using private funding, they have contributed to urban management and services. Crime in areas managed by CIDs has decreased by as much as 85 percent. However, some argue that the whole Inner City should be covered under one large CID in order to decrease competition among adjoining neighborhoods and aim for a more coordinated effort to revitalize the Inner City. Similarly, the Urban Development Zones have been very successful in absorbing private sector funds.
One major criticism of the regeneration process in Johannesburg’s Inner City has been the lack of provision for displaced residents. In 2003, 39 percent of Inner City residents were unemployed and at least 10 percent relied exclusively on the informal sector to survive. The initial regeneration efforts in the early 1990s did not include social justice measures to address extreme poverty in the Inner City. The resettlement of poor urban residents to the periphery has been a source of many violent encounters between the City and its residents.
