Debt sinks Tshwane CBD social housing, residents face homelessness

The first Tshwane non-profit social housing company once seen as a beacon of hope for low-income households, is now threatened by crippling debt.

The company has been placed under business rescue after struggling to service a debt of over R130-million.

Yeast City Housing (YCH) was established by the Tshwane Leadership Foundation and its eight partner churches with a mandate to ensure decent and affordable housing and contribute to urban regeneration as well as social inclusion through well-managed social housing.

YCH lets low-cost residential apartments and houses in a number of buildings it owns in the inner city.

Business rescue practitioners have been roped in to save the company with a portfolio of 11 blocks of flats and houses.

It leases units for R1 500 and R1 800 per month to people who possibly earn close to R6 000 per month.

Its management entered into voluntary business rescue in May in an attempt to resolve the debt.

Metro spokesperson Lindela Mashigo said the situation at YCH is due to non-payment of rentals by the Thembelihle social housing tenants, which is in contravention of their signed lease agreements.

“This has a possibility of impacting negatively on other Social Housing Projects in the city, leading to more people remaining homeless for longer periods,” Mashigo said.

The boycott of rent during the Covid-19 pandemic at Thembelihle managed by YCH has been blamed as a contributing factor to its financial woes.

Mashigo said the city has worked with YCH to attend to tenants’ issues and engaged Thembelihle on the billing matter and long outstanding services accounts.

“Unfortunately, there has not been an agreement as yet on this matter and thus the accounts remain outstanding, and the electricity is still off as the tenants are not paying rental.”

Mashigo said YCH is also in business rescue as it was unable to pay creditors due to the protracted rent boycott at Thembelihle, “a process in which the city is not involved”.

“Tshwane, however, has various plans for affordable and social housing, which include the Affordable Rental Housing Strategy and Implementation Plan (ARHSIP) to attract more social housing institutions into the city to ensure increased levels of housing for low- to middle-income households.”

Mashigo said the business rescue is an attempt to return the company to solvency.

He said the city is also working on capacitating the Housing Company of Tshwane to deliver more social housing opportunities.

“The metro also assists social housing institutions by making city-owned land available at a nominal cost through long-term leasehold agreements, ensuring the availability of bulk infrastructure services, supporting the application to waiver the bulk contributions, fast-tracking of township establishment approvals and with a letter of support to the Social Housing Regulatory Authority (SHRA).”

Mashigo told Rekord that through the development of the ARHSIP, the metro is working to include various incentives to attract Social Housing Institutions.

“The municipality also works with the Gauteng Partnership Fund to revise the Memorandum of Understanding to develop and fund further Social Housing Projects in the city.”

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