The huge cost of the MK Vets housing invasion

2018-11-07 06:02
Social Housing Regulatory Authority (SHRA) CEO Rory Gallocher say he is concerned about developments at Aloe RidgePHOTO: SUPPLIED

Social Housing Regulatory Authority (SHRA) CEO Rory Gallocher say he is concerned about developments at Aloe RidgePHOTO: SUPPLIED

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THE current unrest at Pietermaritzburg’s flagship social housing programme Aloe Ridge, where MK Vets have hijacked flats, could see the construction of similar projects discontinued. Due to the chaos, there is a real danger of Capital City Housing going bankrupt.

This is the warning issued by the Social Housing Regulatory Authority (SHRA) that funds and facilitates funding for social housing projects nationally.

“What is happening at Aloe Ridge sets a dangerous precedent and makes it difficult for developers to access funding for future projects,” said SHRA CEO Rory Gallocher.

“It also makes it extremely expensive to maintain social housing developments such as Aloe Ridge as companies owning the properties will be forced to put in place extra security measures.”

The number of flats which MK Vets invaded in March at the 950–unit complex has shot up to 242, with several groups that have no ties to the former soldiers having joined in the property hijacking frenzy.

“We are worried about the lawlessness currently taking place in Aloe Ridge. Of major concern is the fact that the people who have hijacked the flats are not even staying there; they are renting them out for a profit,” Gallocher said.

The biggest social housing project of its kind in South Africa, Aloe Ridge, owned by non-profit organisation Capital City Housing, has also become the target of private companies demanding cleaning, security and other contracts at the projects.

While social housing projects were expected to provide jobs and other economic opportunities to residents , Gallocher said the capacity to uplift local communities was limited: “Unemployment and poverty within communities where most of the developments are located is a serious challenge.

While the development of social housing projects such as the one in Aloe Ridge could go a long way into addressing some of the challenges, there is no way the developments could absorb each and every unemployed person in the community.”

Sixty percent of the funding for the Aloe Ridge project is from grants from the Department of Human Settlements, while 40% is funded through loans from the National Housing Finance Corporation.

Gallocher said it was likely that the invaders were misled into believing that the 60% grant from government meant that the property now belonged to the state.

“Aloe Ridge belongs to Capital City Housing...The reason why the government makes a contribution is because the housing developments offer discounted rentals to low income groups,” he said.

The implications of the Aloe Ridge chaos on future projects prompted the SHRA to convene an urgent meeting with Human Settlements Minister Nomandia Mfeketo.

“At the meeting it was agreed that government will attend to the housing needs of the war vets. As for the rest of the people who are currently illegally occupying flats, the law will have to take its course,” Gallocher said.

The illegal occupation of flats is costing Capital City Housing R800 000 a month and has resulted in the NPO defaulting on its mortgage repayments.

“If the situation is not addressed as a matter of urgency, then, there is a real danger of Capital City Housing becoming bankrupt. The bottom line is that short-term goals should not be allowed to defeat long-term development goals,” Gallocher said.

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