Local municipal elections are particularly important for property owners, investors and developers, argues Bill Rawson, chairman of the Rawson Property Group.<\/p>\n
And now that the dust has settled on the elections in August and most of the new town and city councils are up and running, the property group explains why.<\/p>\n
The main reason, according to Rawson, is that property owners are the backbone of local economies. \u201cThe huge bulk of the revenue earned \u2013 and spent \u2013 by SA\u2019s municipalities comes from those who own land, homes, offices and factories within their boundaries and pay property rates and fees for services such as water and electricity supply, rubbish removal, public transport and the maintenance of local roads, parks and streetlights.<\/p>\n
\u201cThese owners thus have a very strong right to expect that their \u2018partners\u2019 in the towns and cities that they finance manage things in such a way that the value of their properties and businesses will at least be sustained, but preferably actually enhanced by local economic growth, job creation and property demand.<\/p>\n
\u201cOf course they also have a great deal to lose when this is not the case, as the properties they have worked so hard to pay for and the businesses they have established can lose value very rapidly when local authorities are mismanaged or municipal revenue is misappropriated,” said Rawson.<\/p>\n
Rawson said that when potholes don\u2019t get fixed, for example, or public areas become littered and overgrown, water and electricity grids fall into disrepair, accounts don\u2019t get sent, arrears don\u2019t get collected and services become increasingly unreliable, a town soon becomes a less-than-pleasant place to live or work.<\/p>\n
\u201cThis will cause housing demand to drop, usually at exactly the same time that an increasing number of homeowners are trying to sell in an attempt to recoup at least some of the money they have invested, and prices will fall.<\/p>\n
\u201cThen very soon there will be far fewer residents with less money to spend and the local economy and rates base will go into decline, meaning that there is even less revenue available to provide services to anyone and it becomes increasingly difficult to halt a spiral of deterioration.\u201d<\/p>\n
Unfortunately, he noted that there have been all too many instances of poor municipal management and financial administration in recent years, with corruption and the lack of capacity in this sphere being most clearly evidenced by the fact that only a small percentage of local authorities have been able to achieve clean audits.<\/p>\n
\u201cThe June report of Auditor General Kimi Makwetu showed, for example, that only 54 out of 272 municipalities audited (19.8%) were able to achieve clean audits for the 2014\/15 financial year \u2013 despite several major initiatives to improve financial discipline at this level of government.<\/p>\n
\u201cThe AG\u2019s department also noted that those municipalities with clean audits accounted for only 39% of a total municipal budget of R347-billion in 2014\/15 \u2013 which means that there were question marks attached to the expenditure of billions of rands contributed by the ratepayers \u2013 the property owners \u2013 in four out of every five SA municipalities.\u201d<\/p>\n
And it is in such situations, noted Rawson, that local elections take on a particular importance for such property owners, \u201cbecause they provide a peaceful and economically viable opportunity to dismiss those who are mismanaging your town or city and replace them with people you believe will do a better job of building up the local economy – and of protecting your interests and investments in the process.<\/p>\n
\u201cWell-run municipalities should be able, for example, to attract new industries and corporations and also create the conditions for entrepreneurs and existing local businesses to flourish. This will not only increase employment but also the demand for all sorts of property, from rental apartments to family homes, shops, offices and land for new housing or industrial estates.<\/p>\n
The value of those properties will then start to rise and that will stimulate even more investment, development, job creation and property demand,” Rawson said.<\/p>\n
You can rent-to-own property in South Africa \u2013 this is how it works<\/strong><\/a><\/p>\n Is it worth it to furnish your rental property?<\/strong><\/a><\/p>\n