6 March 2021

Social enterprise non-profit, Communicare will exit its operations in Ruyterwacht after 83 years of owning and managing property in the Cape Town suburb.

All property in Ruyterwacht is being sold. This includes freestanding houses as well as flats, group housing, and townhouses. The momentous decision creates an opportunity for the tenants in the free-standing houses to become home-owners.

Communicare is encouraging tenants of free-standing houses to purchase their properties. These houses will be sold below market value. Communicare will discount the property taking the condition of the house and the value of the property listed in the 2018 City Council roll. This is a once in a lifetime opportunity for tenants to own a house. Communicare will make attractive offers and facilitate other options with banking institutions and government agencies to enable tenants to purchase their homes.

Flats, group housing and townhouses are being sold to property investors to take over the management of the rental apartments. It is anticipated that the investors would include smaller investors from previously disadvantaged backgrounds, a move that will facilitate, some much-needed transformation in the property sector. Some of the interested buyers are new black entrants into the sector. The new owners will take over lease agreements and the management and maintenance of the properties.

Since the1980s Communicare has had several sales campaigns to facilitate the sale of the free standing houses it owned in Brooklyn and Ruyterwacht. This has already facilitated home ownership for 1 500 former tenants. These are the last 271 houses in Ruyterwacht that will be sold.

Apart from the free-standing houses, all town houses, group housing and 21 blocks of flats will also be sold.

Ruyterwacht is not social housing

Built in 1938, the suburb of Ruyterwacht benefitted the poor white community who could not afford other housing in Cape Town. The suburb was designed as a low-density development with large erf sizes, public open spaces, a community hall and other public amenities. It had high operating costs for Communicare because of its design.

Today, higher density, compact developments are recognised as best practice in South Africa and the world when planning and developing affordable housing. Such developments are preferred as they reduce costs allowing property owners to keep rentals affordable.

Currently these Ruyterwacht properties do not generate enough revenue from rental income to cover all expenses of managing the properties. Communicare subsidises the costs of operating Ruyterwacht, currently contributing about R4 million annually. There is no government subsidy to cover the shortfall. It is unsustainable and the organisation has taken the decision not to continue to bear the cost in these properties.

To ensure long-term sustainability, Communicare is reviewing its entire property portfolio and will densify its properties when it is feasible as it has done in Musgrave Park in Diep River and Bothasig Gardens. Some properties may be completely redeveloped such as Welverdiend in Rondebosch. This will allow the organisation to achieve high-density properties that take advantage of the economies of scale to reduce costs.

Some properties will be sold to help fund these initiatives. This will accommodate more Cape Town residents in better quality housing. With this strategy Communicare seeks to serve a much broader and inclusive part of society, unlike in the past where only the white population had benefited. This solution contributes towards reducing the housing crisis while ensuring the organisation’s success for another 90 years.

Facilitate home ownership

Communicare has encouraged home ownership over the years as it allows tenants to invest in an appreciating asset. House values in Ruyterwacht have risen over time.

Homeownership unlocks opportunity and allows for social and economic mobility. Tenants will be able to use the house as security to borrow from the banks. They will be able to secure their long-term residence in an area with close access to jobs and decent schools.

Communicare has engaged government agencies and banking institutions to ensure that they make several options available for tenants to purchase these homes. Tenants will also be able to use the support of their children or family members to buy their homes.

Special arrangements made for elderly and vulnerable

The sale of the houses will benefit both the tenants and Communicare. However, we are aware, despite all efforts and good intentions some tenants will not be able to purchase their homes and may need to consider alternatives.

Tenants who opt not to, or who cannot purchase have a few alternatives:

Older tenants and pensioners can be accommodated at our other facilities suitable for their needs. Communicare has such facilities in neighbouring Pinelands and is also in negotiations with organisations who specialise in such facilities.
Tenants can consider alternative accommodation provided by Communicare in its other properties in Bothasig Gardens, Brooklyn, Wynberg, Diep River and others.
Qualifying tenants can be accommodated in the new social housing development opening in Bothasig Gardens later in 2021.
Communicare is in negotiations to donate property to establish an old age home in Ruyterwacht.

Future investment in sustainable homes

The income generated from the sale of property will be used to build affordable housing using tried and tested sustainable models for such developments.

The individual houses will be priced at below market valuations, while the row houses and flats, will be sold to investors at market prices. In this way the profits generated from the investor sales will fund the discounts to the individual home buyers who are likely to be more vulnerable. This clearly demonstrates the concept of social enterprise, which is what Communicare is.

“It’s a once in a lifetime opportunity for tenants to own their homes. Tenants have the opportunity to invest in a valuable asset while Communicare can invest in suitable housing to cater for more people in Cape Town from diverse communities. I’m pleased with the opportunities we have created to make ownership a reality, but also the creative and innovative options we’ve devised for tenants who choose to opt out,” said Thabo Mashologu, General Manager of Property Development and Investments at Communicare.

Eight decades after it was built, Ruyterwacht turns its legacy on its head and opens a new book for all South Africans to buy a home of their own where they can live with pride, dignity and hope for the future.

END

Notes to editor:

1. Zoom media presentation is available here:

https://drive.google.com/drive/folders/1eofES3Lr0tZICjaCr5OfNaVu04cL0UBT?usp=sharing

(Powerpoint presentation and Zoom presentation with sound)

2. Drone footage of blocks of flats, townhouses and cottages:

https://www.youtube.com/watch?v=93rS8KRuHIU

https://www.youtube.com/watch?v=YDfT6qldYH0

https://www.youtube.com/watch?v=sQgutDY542I

3. Communicare currently managers 271 free-standing housing,166 units in flats,146 units in row houses and 34 cottages in Ruyterwacht.

4. The organisation pays for security, maintenance and all operating cost including the upkeep of a community hall and all public facilities in the suburb.

5. Some of the financing options available to tenants that Communicare has negotiated with banking institutions and government agencies include:

· Finance Linked Individual Subsidy Programme (FLISP)

· Non-Finance Linked Subsidy

· Rent2Buy programme

· Family support

END

 

The following link has a press release (also below), media presentation in Zoom and Powerpoint slides on the sale of property in Ruyterwacht:
https://drive.google.com/drive/folders/1eofES3Lr0tZICjaCr5OfNaVu04cL0UBT?usp=sharing
Media covering this story are advised to listen to the presentation.