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Gugulethu residents fight eviction

Cape Town Community Housing Company says residents owe money

By Laura Bratton and Nomfundo Xolo

9 October 2017

Photo of two people outside a house
Nomvuyo Louw, chair of Luyoloville Housing Committee, outside her home with Nomana Lubu, another committee member. Louw plastered the house and made repairs with her savings. They say their houses were not delivered in a habitable state by the Cape Town Community Housing Company. Photo: Laura Bratton

Residents in Luyoloville, Gugulethu, are disputing eviction letters that have been issued to about 160 of them. The Luyoloville Housing Committee met three weeks ago to discuss their ongoing struggles with the Cape Town Community Housing Company (CTCHC), which built 256 houses in the area. The company says residents owe money, but the residents say they have been unfairly charged, and were delivered substandard houses.

CTCHC was set up as a joint venture between the City of Cape Town and the National Housing Finance Corporation in 1999 to build houses for people entitled to a national housing subsidy. As issues with the project mounted, the City ended its partnership with CTCHC in 2009 and is no longer part of the project.

CTCHC built villages in Gugulethu, Mitchell’s Plain, Hanover Park, Newfields, Philippi, Woodbridge, and Heideveld. The plan was that residents would receive a state subsidy, and a loan from CTCHC would cover the balance. The loan was to be paid back over four to five years in monthly installments.

CTCHC says some residents have not paid the full amount owed, and legal action will be taken against them.

The Luyoloville Housing Committee said that CTCHC had not kept its promises. The committee has been in dispute with CTCHC for 17 years on issues relating to the costs, management of the project, and the quality of the houses.

Residents say the actual installments demanded by the company were double or even triple what they were led to believe they would pay. A 21% interest rate was charged on their loans. Most stopped paying.

Residents also complained of missing ceilings, unplastered walls, and a lack of plumbing. Because single roofs were built for semi-detached houses, neighbours can access each other’s homes through the ceilings. Residents have invested their own finances, including their savings and pensions, to repair their houses.

Liebenberg & Stander, an engineering consulting company, prepared an independent report for the City Manager in February 2002. The report provides independent verification of the company’s lack of compliance with statutory building standards, and the poor management and administration of the project. Also, a report by a City official in 2001 describes multiple problems with the structures, describing them as “inferior” and “substandard” with “unapproved plans”.

In 2013, the Western Cape High Court heard further evidence of mismanagement of CTCHC’s project. The case arose after CTCHC attempted to evict five Luyoloville residents, one of whom is disabled and lives on a grant. The court ruled that the evictions be dismissed, because the CTCHC had failed to record Instalment Purchase Agreements at the Deeds Office and were therefore not entitled to any payments.

After the company then recorded Installment Purchase Agreements in 2014, it returned to efforts to evict residents.

Residents say some beneficiaries who have paid the CTCHC in full have not been issued title deeds. Nomvuyo Louw, chairperson of the Luyoloville Housing Committee, says that she is only aware of two people in Luyoloville who have received title deeds, though eight have paid up.

But in response CTCHC said: “To date a total of 1,531 beneficiaries have received their title deeds. A title deed is only issued by the Deeds office once a transfer happens and this can only happen once the loan is paid off.” (It appears CTCHC’s statistic refers to areas beyond Luyoloville.)

Thabile Nodada, a resident, said: “When the project was first introduced, we each were required to create a savings account for six months in order to qualify for occupancy. We were given options … Those opting for a one bedroom [home] were to pay R50 per month, a two-bedroom R150 per month, a three-bedroom R250 per month, and those opting for a three-bedroom free-standing house would pay R350 per month. We were invited to view three show houses in Heideveld and were told that they would be similar. After these arrangements and agreements were made, what was promised was not delivered. Instead, only three bedroomed semi-detached homes were built and they failed to provide the other promised options”.

CTHC however told GroundUp: “The houses that were communicated to beneficiaries was the
houses that were built and occupied. In this development it was only the three-bedroomed unit.”

CTCHC said that all details of the project, including the 21% interest rate, had been explained to the beneficiaries before the houses were handed over. The company said, “It should be noted the prevailing prime interest rate around that time was very high, +/-17%.”

The company said it dropped interest rates to 12% in 2004.

However, copies of minutes of meetings on 2 April 2003 and 24 July 2003 between the Luyoloville Committee, Luyoloville residents, the CTCHC, and representatives of the City of Cape Town, would seem to indicate that the community first learned of the 21% interest rates charged on their loans in April 2003. Residents also say they were rushed into signing the housing agreements.

CTCHC said further that “all beneficiaries were required to attend mandatory workshops before houses were handed over to them.” The workshops, conducted by the Home Loans Guarantee Company, explained the details of the project and the “rights and responsibilities of both parties”.

According to the company, “financial obligations were explained in detail”. The company said it had offered residents the chance to sign an affordability agreement in 2004 that extended the loan terms to 12 years at reduced interest rates and installments.

In its renewed efforts to secure evictions, CTCHC has sent letters notifying residents that they have canceled their agreements. The letter demands that residents “vacate the property within 30 days, failing which legal action will proceed against [them]”.

Speaking for the Luyoloville residents facing eviction, Louw said, “We’re now receiving warning letters and might soon be evicted. It isn’t fair but we’re not moving.”

Gemma Paine has been assisting the Luyoloville residents since 2000. She accuses the City and CTHC of playing into the “stereotype of lazy communities who want something for nothing.” But she says, “These are people who have, from day one, said they are willing to pay but who have had the strength to insist that they be treated fairly and justly.” She said that their grants, savings and often pensions are invested in the houses. “Losing these houses is their worst nightmare. They have approached a string of officials and political leadership in an effort to get help sorting this out so that they can pay what they owe and receive their title deeds.”

In the meantime, the Minister of Human Settlements has committed to help resolve problems with the project and secure residents’ title deeds.


Published originally on GroundUp .

© 2017 GroundUp. Creative Commons License
This article is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.

You may republish this article, so long as you credit the authors and GroundUp, and do not change the text. Please include a link back to the original article.