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In South Africa, residents worry as developers eye 'bad buildings'

Some properties in central Johannesburg have been hijacked by criminals who siphon off rent; squatters occupy others. Taxes aren't paid, and neighborhoods go downhill, thwarting revitalization plans.

July 20, 2011|By Robyn Dixon, Los Angeles Times
  • The Mutigo familys single room in a "bad building" in downtown Johannesburg, South Africa, is off a frigid basement corridor with no lighting. Turned-off utilities are often the first sign of impending eviction.
The Mutigo familys single room in a "bad building" in downtown… (Mujahid Safodien )

Reporting from Johannesburg, South Africa — Derek Mutigo's home is pitch black and as cold as a fridge. To reach it, he descends broken steps into a cavernous basement and edges along a corridor holding a small plastic flashlight, its pale beam revealing haphazard plasterboard walls that don't reach the ceiling.

Numbers are scrawled in black ink on rickety doors. Nothing's painted; everything looks as though it was filched from a building site.

"Warning, strictly no alcohol, smoking and fighting," says a scribbled sign on a wall. In a stairwell, young men in thin clothes huddle around a fire in a tin drum.

Mutigo's door opens just far enough to squeeze through. Inside, in a space about 5 feet by 10, his wife, Rose, squats in the dark. On the other side of a curtain wall, another family lives.

"It's quite small," says Mutigo, a father of two schoolboys who makes $12 a day collecting trash for recycling while his wife works as a maid in upscale Sandton. "At least we are together as a family."

Their apartment is in one of hundreds of "bad buildings" in Johannesburg's Mad Max downtown. Some have been hijacked by criminals who siphon off the rent. Others were taken over by desperate squatters after the owners abandoned them.

For the city, the result is the same: Taxes aren't paid, and neighborhoods go downhill, thwarting plans to revitalize the central business district.

Amid this squalor, a few brave entrepreneurial spirits see opportunity, a chance to buy bad buildings and make them profitable again.

For the illegal tenants, the first sign their building has a new owner is when the lights and water are turned off. That means they're about to be evicted.

Mutigo's building, where tenants haven't paid rent in years, has just been sold.

*

It takes a brave investor to buy a hijacked building.

One young former real estate agent is new at the game. He spent $1 million on such a building, intending to evict the tenants, renovate the 98 apartments and make a killing.

There's just one problem: He's afraid to visit his property, the Quartz Building on Plein Street, lest the tenants find out he's the new owner and beat him up or even kill him.

"Of course there's danger," says the businessman, Mark, who believes his life would be at risk if his last name was published. "If someone's collecting 100,000 or 200,000 rand in rent every month, obviously they're going to put up a fight," he says, referring to the rental income of $15,000 to $30,000 that someone — not the city — is raking in.

More city taxes were owed on the building than it was worth, so it was sold at auction. That's where Mark acquired it.

"If they know who I am or find out where I live, there could be a problem for me," Mark says. "There's always a risk in this business."

So he asks a black friend to visit the property and take photographs.

The Johannesburg City Council's slogan, "A world-class African city," blazoned on posters downtown, has an ad man's air of wishful thinking, despite successive efforts to revitalize the city since the early 1990s.

In 1999, Johannesburg launched the Bad Buildings Program, identifying 122 structures that had been abandoned by owners, hijacked or occupied by squatters and whose unpaid taxes exceeded their market value. The plan was to sell the buildings to recover part of the debt. Task forces were set up, the problem was shunted from one department to another, and little progress was made.

"It is filthy, it is teeming with lawless drivers … and its inner-city buildings are rapidly decaying and many of them should be condemned," property analyst Paddy Hartdegen wrote after a recent tour of the city. "I pass derelict building after derelict building, many of them showing signs of extensive fire damage. Some of them boarded up, others simply deserted. Wherever you move your gaze, you find degeneration."

There are two main kinds of problem buildings: those taken over by squatters who pay no rent, and those hijacked by criminals, who collect rent that should go to the owner. For the City Council, dealing with such situations is complicated by court rulings that said the council must find alternative housing for illegal tenants before evicting them.

Neil Fraser, a retired urban development consultant to the city of Johannesburg, says the problem is partly the consequence of the collapse of apartheid.

With the end of the infamous pass system that banned blacks from living in the city, the white owners of apartment blocks found themselves with new black tenants.

"Many of them took fright and disappeared," he says.

*

In room D75, several floors up from Mutigo's room, three unemployed friends named Never, Respect and Fortunate share a corner space dense with kerosene fumes. Two mattresses occupy almost all the floor space, and Fortunate Moyo, 25, spends winter mornings huddled under the blankets. Like Mutigo, the three friends are immigrant laborers from Zimbabwe, where life is even worse.

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