Lessons from Cape Town
The City of Cape Town provides some useful insight as to how South African cities can initiate innovation and investment. The Cape Town CBD’s infrastructure and service delivery have improved drastically over the last 10 years. The increasing value of both commercial and residential property attests to this vast improvement. But, as most Durbanites might have noticed, Umhlanga appears to be moving in a similar direction. But how?
Collaborating with the Private Sector
The Cape Town Central City Improvement District (the “CCID”) is an example of a Private-Public Partnership (“PPP”) which provides complimentary urban management services in certain parts of the CBD.
“A City Improvement District (“CID”) collects a CID levy from the ratepayers in the area over and above the normal rates charges. The money collected, unlike the rates, is a dedicated levy which can only be spent in the specific CID area and is used to provide “top up” services according to an approved Business Plan. These services provided by the CID are supplementary to those provided by the City of Cape Town, which continues to provide normal service.” 
Importantly, this PPP does not replace services provided by government but provides services over-and-above what is provided. The State of Cape Town Report (the “Report”) indicates almost R2bn was invested in the CBD during 2015 alone and the Report predicts approximately R8bn to be invested in the CBD over the next (5) five years.
Safety and Security
Businesses in the Durban CBD highlight the safety of employees, customers and stock as their main concern. So how did the CCID address this issue in Cape Town?
The CCID introduced visible policing, reaction units, policing of traffic infringements, ATM fraud detection, regulation of informal trading, event security, public assistance, vehicle breakdown assistance and security forums. The city is divided into precincts each with a responsible CCID manager. Streets and public spaces are monitored on a daily basis by 200 security officials and CCTV. Furthermore, CCID managers receive regular report-backs on defects within the precincts. Regular meetings are then held with local authorities with the aim of developing urban management solutions. The above inputs have resulted in an 85% drop in crime in the CBD over the last 15 years.
The CCID provides a dedicated top-up cleansing service, making use of previously unemployed people, in the central city. Streets and public spaces are kept clean and graffiti-free by 65 dedicated cleaners around the clock.
This team takes care of the general maintenance of the city. They ensure the streets, sidewalks and drains are clean. Furthermore, the CCID works together with various NGOs, such as Straatwerk, on both urban management and social development projects.
Coca-Cola recently conducted a beach clean-up in Durban-North, illustrating a willingness by corporations to engage in some sort of social responsibility in the Durban area. PPPs are able to really push social and economic development. CIDs would assist the City of Durban as platforms for facilitating further PPPs.
How do we designate parts of Durban CBD as CIDs?
Section 22 of the Municipal Property Rates Act 6 of 2004 provides for “Special Ratings Areas” (“SRAs”). By designating an SRA, the municipality is able to levy higher rates for the purpose of improving the area. According to the official CID website, the community “always” has to initiate an SRA, not the City. Therefore, Durban is going to need a few community members to push the agenda. There are currently (3) three CIDs in the Durban area. All three areas are run by the UIP and the Umhlanga area is run by Urban MGT.
But, is this enough?
Step 1: Business plan
A business plan must be created and presented to the community. This plan must indicate how the improvements will be achieved. Thereafter, property owners are lobbied for their support. A majority of more than 50% has to give written consent to the formation of an SRA.
Step 2: Application to the City of Durban
A steering group must submit the business plan as well as a motivation report and implementation plan, as an application to the City of Durban. The proposal will be advertised in the media for comment (30 days). The City then considers the application and any objections.
Step 3: Incorporating a Non-Profit Company (“NPC”)
After approval, an NPC is set up (a former section 21) and a board is elected. This must occur before the City of Durban is able to bill the property owners and pay over the levies to the SRA. Importantly, certain persons can be exempted from the hike in rates (senior citizens etc).
Who manages the SRA?
The NPC manages the SRA through its elected board and a management team appointed by the board. The City of Durban will not be involved in their day-to-day operations, but merely exercise financial oversight and legal compliance. Importantly, the SRA manages its own finances and appoints its own auditors.
A CID is a practical solution to a decaying Durban CBD. The Constitution requires municipalities to provide “basic services” but major metros require more than “basic services.” Providing property owners with a direct say in the management of the designated area is a key driver behind the success of the CCID. Without direct input in management and finance, businesses will not fully embrace similar initiatives.
Asakhe eThekwini | Let us build Durban