In 2007, driving through Langebaan towards Club Mykonos for the first time in ages, I was horrified by the huge housing estates — many Tuscan — that were primarily second/holiday homes which were empty for a large part of the year.
I’ve seen this over and over again in towns all over South Africa. Municipalities are keen for new development because it adds to the rates base, but few realise that residential development on its own is not sustainable. Residential municipal rates are insufficient, in most cases, to cover the cost of maintenance and repairs that will be required.
Those running our municipalities (and other utilities like electricity and water) just don’t understand the imperative of maintenance. Look at Port St Francis’ roads. Or look at Eskom’s woes, or the unrest around Thohoyandou in Limpopo over demands for a new municipality. Much of that stems from inadequate water supplies. The huge Nandoni dam was built years ago with pipelines to nearby villages. The pipelines were never maintained and stopped working. People believe that having their own municipality will resolve their problems when, as far as water is concerned, it’s just a matter of maintaining pipelines.
As more and more homes become self-sufficient for their energy needs (thanks to Eskom’s inability to provide a reliable service), municipalities will lose out even more because the electricity they resell to consumers subsidises all other municipal services. That means less money to provide basic services.
In towns I’ve visited, like Mossel Bay, Cape St Francis, Port Alfred and many others, I’ve asked about the occupancy of the resorts, golf estates and seaside villages, and it seems that only 16-18% of these areas are occupied by permanent residents. That has a huge impact on the economy of the towns — providing services services that are only used during peak periods, not to mention a retail and hospitality economy which hardly sustainable and certainly not set for growth.
At Pinnacle Point outside Mossel Bay, looking at all the empty houses on the golf estate, I commented on this challenge to fellow participants of the Point of Human Origins tour. An Irish visitor responded that, in Ireland, second homes are taxed to hell and back. And I recalled that I’d just read that Londoners are being prohibited from purchasing weekend properties along the southern English coast because they were pushing property prices up to a level where locals couldn’t afford to buy in their own towns. (Now that must be a difficult one to implement!)
So… should we be thinking about something similar here? South Africa is facing massive challenges that needs game-changing plans.
Empty houses contribute little to the economy of a town.
What if second houses were taxed and those taxes were ringfenced to fund growth in tourism and local economic development? It would be a disaster if this was done at national level but could be implemented very successfully by municipalities — providing those funds were allocated to a private sector-managed/public sector supported Non-Profit Organisations.
And if property owners find the levy a burden, they could always allow agents to let their properties out while they are not there, which would also add to the tourism value of the town. But more importantly, it could diminish the trend to holidays houses and encourage South Africans to become tourists again and start travelling.
Much has been made of the minister of tourism’s statement in Parliament about the drop in domestic tourism. (I’m not entirely convinced that this is true, but I am convinced that most of SA’s national, provincial and local government doesn’t have the first clue about how to drive tourism or what it actually is. I’ll address that in other posts.)
There is a precedent to achieve this. City Improvement Districts (CIDs) in the City of Cape Town are funded by a small levy on the property rates account which are ringfenced, and which fund the CID organisations and the work they do. These organisations are one of the reasons why Cape Town is streets ahead of other SA cities as far as cleanliness and management is concerned.
Tourism is the only way that South Africa will grow environmental quality and better cities, towns and villages… and create large numbers of additional jobs which provide the skills to be upwardly mobile. And it can do that faster than anything else.
Join the debate!