Joburg’s inner city is in crisis. Infrastructure is collapsing, law and order is frequently absent. The area has been undermined by flight to the north for decades. Yet there are areas that are thriving, where people go safely about their daily business and entrepreneurs are making good money. There is talk of a substantial turnaround from various stakeholders — but such talk is not new.
Years of mismanagement, crumbling roads, water and electricity outages and crime have taken their toll. Political oversight has been lacking. The city has had nine mayors in the past five years.
It does not help that 30% of top management posts are vacant — or that from the level of skilled workers to senior management, the proportion of sick leave taken without a medical certificate ranges from 13% to 17%. Such statistics indicate a lack of management grip.
With close on 200 hijacked buildings in the inner city, no recovery plan has a chance until the issue is addressed. In this context “hijacked” refers to buildings that have been illegally occupied by criminal gangs or syndicates, which then offer space to people and collect rent from them. None of that money gets near the city’s coffers to support services.
Some buildings are overcrowded, dangerous slums, with no water, lights or sanitation because municipal bills are unpaid. Because eviction is legally difficult, many of the genuine owners of buildings have given up and walked away.
Even for those individuals and businesses who do pay their bills, the city has been plagued by interrupted water and electricity supply.
There are other severe daily irritants. The city says “80% of traffic light complaints are attended to within seven days” and “70% of pothole complaints within 30 days”. That means nearly a third of potholes are not repaired within a month of being reported, and some of them are car-wrecking craters that can make roads impassable, especially in heavy rain.
In the city’s annual report for 2023/2024, executive mayor Dada Morero admits that “challenges remain, particularly in reducing unauthorised, irregular, fruitless and wasteful expenditure, and ensuring compliance with supply chain management regulations. Improvements are also needed in revenue collection, billing systems and service delivery mechanisms”.
Apart from all those problems, residents might say sarcastically, everything is fine.
Despite its difficulties, Joburg is a magnet to migrants from the rest of Gauteng and elsewhere in the country and from the rest of Africa. The population of the city is estimated officially at 5.8-million, with 2.28-million households, up 63% from 1.4-million in 2011. These people make up 37% of Gauteng’s population and 9% of South Africa’s.
As acting city manager Tshepo Makola says, Joburg “wasn’t designed and developed to carry the current immigration patterns. Everybody believes that if you want general prosperity in life, you must be in Joburg, the City of Gold.”
He says the CBD can be salvaged. “The challenges in the inner city are not insurmountable, they can be resolved.”
The city produces 15% of South Africa’s GDP, yet its challenges are formidable. Municipal managers can be forgiven for feeling that as they keep trying to fill the bucket, more holes appear in the bottom.
About 80% of the population live in formal dwellings, with the housing backlog estimated at more than 430,000 and growing. Even more disturbing, in 2023 51% of the population were living below the poverty line, against 42% a decade earlier. Nearly a quarter of all residents had “inadequate or severely inadequate food access”, according to the city’s annual report.
President Cyril Ramaphosa says the city “is not a pleasing environment. I say this so that we can improve immensely.” He has called on the ANC-run city to deal with the issues, so as not to embarrass the country when the G20 summit is held here later this year.
At the same time the private sector and nonprofit organisations are trying to address the problems with an ambition and determination not seen before.
One of the leading initiatives is the Jozi My Jozi organisation, which has attracted more than 130 companies as members since it started two years ago. Financial contributions to date total more than R75m. CEO Bea Swanepoel says they started on a small scale, to “learn the lessons, make the mistakes”.
Jozi My Jozi was positioned as a “coalition of the willing”. It includes listed companies as well as nonprofits. It is backed by mining giant Anglo American and banks including Absa, FNB, Standard and Nedbank, along with consulting firm IQ Business, food retailer Nando’s, Wits University and the University of Johannesburg, and the Maharishi Invincibility Institute.
One of the guiding principles of Jozi My Jozi is that businesses take ownership of particular spaces. Absa, for example, has “adopted” the Nelson Mandela bridge, which crosses the railway yards linking Braamfontein with Newtown in the CBD. The sponsorship includes paying for the lights, upkeep and security. Crime has dropped and people are able to cross the bridge freely.
At the time Jozi My Jozi was launched, Irene Mafune, the city’s regional director of urban management, described the initiative as “a much-needed partner” and “a reassurance to the city that not all is lost”. Jozi My Jozi has a collaboration memorandum of understanding with both the city and the Gauteng provincial government.
What would move the needle in the city as a whole? Olitzki says if the private sector were to emulate what has been done in the Marshalltown area, creating safe zones, then “I’m pretty sure we could revive the city”.
Jaffe adds: “We’re never going to get a Gucci shop, a Grill House or a Turn ’n Tender, but we’re not trying to. There are probably seven street-facing Capitec branches within one square kilometre. Street-facing retail does very well in the inner city.
“I always tell people we don’t have a single large law firm, but we’ve got more than 50 small law firms in our portfolio. People forget that the Joburg CBD is central. If you’re living anywhere outside the northern suburbs of Joburg, this is the most central place you can be.”
Jaffe illustrates this with an anecdote. “We have a Dis-Chem in our building and when they posted an advert on their internal jobs notice board to say 50 positions were available, within 24 hours they had more than 1,000 applications from existing staff members in Gauteng to relocate to this branch, because everyone travels through here.”
When the Passenger Rail Agency of South Africa restores the once busy commuter rail services, the inner city’s transport advantages will be further enhanced.
International buyers with nerves of steel are starting to pop up.
Italian property investor Michele Ciani Bollendorf lives in Dubai and has investments in Europe and the US. He recently bought the iconic Barbican building on the corner of Rissik and President streets. Built in 1931, it has been described as “a mix of eclectic classicism and Art Deco”.
Bollendorf was the only bidder in an auction for the Barbican. It had a R20m renovation by former owner Old Mutual before being auctioned. Bollendorf believes the Barbican precinct will be restored to its former glory and says it’s only a question of time until people wake up and see the potential of the city. He now rents the building to top local fashion designer David Tlale.
Bollendorf says the yields are high, given the low value of the South African currency and property prices.
“I fell in love with the centre of Joburg. As a small investor, it’s mind-blowing for me to be able to wake up in the morning and think: ‘Wow, I own a piece of history of one of the world’s biggest and most important cities.’” He says the Barbican price was so good that even if he had to lose everything on the investment, it wouldn’t mean a lot to his overall portfolio.
Bollendorf says he saw similar situations in New York in the 1990s and Miami in the 2000s. In Miami there was a dramatic decline in property values after the global financial crisis in 2008, leading to a significant drop in tax revenue at the same time that the city needed to spend more on eliminating urban blight. “All those places attracted extremely negative publicity, which is why they were so cheap in terms of real estate. I think that’s what’s going on with the Joburg CBD.”
There are grand old buildings in the city that are still in excellent repair. The Rand Club was founded in 1887 and so is only a year younger than the city itself. Its four-storey building, a block from the city hall on the corner of Fox and Loveday streets, was modelled on the grandest London clubs and built in 1903.
Brian McKechnie, a heritage architect and chair of the Rand Club, says the situation in downtown Joburg is not hopeless. “I think perception is such a big part of it. There are areas of the CBD that are safe, certainly the area around the Rand Club is safe. We’re lucky in that we sit in the southwestern improvement district, where they have private security and cameras that monitor the area.”
Not everyone is so enthusiastic about the inner city. There are still many no-go zones, and it is not easy for casual visitors to tell the safe havens from the badlands.
David van Niekerk, CEO of the Johannesburg Inner City Partnership, says the inner city is in a “massive crisis”.
“What you really need, and what we’ve been requesting for a very long time, is a national policy on precinct management. It’s the only way to systematically focus investment to create lasting impact.”
Van Niekerk says the city’s best chance of solving the issue of hijacked buildings is to work on one building that the city owns to determine a blueprint, then move to the next. Salvaged buildings need to be connected by what he calls walkable routes. These are targeted streets that allow people to reach various destinations, walking safely in a vibrant environment.
“There’s a mafia out there,” says Van Niekerk. “People have taken over buildings they don’t own. It requires a dedicated team from the private sector, civil society and government at all three levels, with a clear set of deliverables. And the cabinet needs to support them in removing any obstacles.”
Van Niekerk says one knows immediately if an area is well managed or not. “You’ll see the presence of security guards, you’ll feel safe. In the no-go areas, you’ll be clinging to your cellphone, you’ll be wanting to get out of there as fast as possible.
“Now, with the G20 coming, everyone is running around to fix the city for the visitors. But your plan cannot be the G20. The focus has been on political gain rather than protecting the city. Just get the basics right — infrastructure, bylaws, sanitation, potholes. Move all the city employees who are busy with other tasks to get these right.”
Another disillusioned investor is Carel Kleynhans, CEO of Divercity Urban Property Group, which he says has been the biggest investor in the CBD over the past few years.
“We’re not investing any more in the inner city, because of government failure to keep basic services going.”
However, his company already has Jewel City to the east of the CBD and Towers Main and another 3,000 apartments in various areas. “These work because we keep them alive, and other pockets work also because of private landlords.”
Jewel City is like a mini-city within a city, with private leases over public space and safe spaces for residents and visitors. It claims to be “the safest neighbourhood in the area, featuring 24/7 security, secure access controls and a variety of retail stores, dining options and schools”.
The problem is that most of the successful islands created by the likes of OPH and Divercity have yet to be joined up fully, so that the inner city can achieve a critical mass where the thriving parts outweigh and come to cancel out the dangerous areas.
Stephen du Preez, founder of LocalAbode and partner of Jozi My Jozi, says: “There have always been these pockets of excellence across the city, but with these weird no-go zones in between. And the districts can only be as big as the funders they’ve got behind them. Our goal is to push out the bad between the districts, and learn from the property owners what they’ve done to achieve the successes they’ve had, to see if we can replicate these across the city.”
Mike Moriarty, one of the DA’s local government veterans, is chief whip of the DA in the Gauteng provincial legislature. He served as a city councillor and then as chief of staff for former DA mayor Mpho Phalatse in 2022/2023.
He notes that when a co-ordinated effort is made by the city, single-purpose projects can be successful in the CBD — such as the successful hosting last year of the big rugby Test between the Springboks and the All Blacks at Ellis Park.
But overall, says Moriarty, from the city “there is intent, there is policy, there are regulations. Yet it all falls down because the actual people who’re supposed to be there, to carry out what needs to be carried out, are either not employed or not empowered. That’s the story of the failure of Joburg.”
Joburg’s problems may seem intractable, but they are not unique. There is no shortage of models on which to base a realistic and large-scale recovery project. Some of the world’s major cities fell into far greater disrepair than Joburg, yet were able to recover and are now thriving.
Two examples demonstrate what can be done with long-term planning, fiscal probity, public-private partnerships, philanthropy, community consultation and — above all — efficient civic leadership and administration.
Detroit, in the US state of Michigan, was once known as Motor City. It produced 100-million cars in the first half of the 20th century, especially from the “big three”: Ford, General Motors and Chrysler.
However, the US motor industry decline began in the 1960s and resulted in steady and huge job losses. Middle-class residents moved to the suburbs, reducing the tax base in the inner city. It’s estimated that from 1950 to 2020, inner Detroit lost more than 60% of its population, with thousands of homes and buildings abandoned. By 2013, the city owed more than $18bn and filed for bankruptcy.
A decade on, Detroit’s regeneration is visible and sustainable. Unemployment was 28% in 2009 — now it’s 6%. The city has the lowest crime rate in half a century, partly through the formation of community groups to fight violent crime. Detroit is regarded as a leader in adaptive reuse of buildings.
From the municipal side in Detroit, generous tax concessions were offered to entice businesses back to the city. The city’s leadership has been stable, with mayor Mike Duggan in office since 2014. Entrepreneurs such as Detroit-born billionaire Dan Gilbert, founder and chair of Quicken Loans and owner of the Cleveland Cavaliers basketball team, have invested heavily.
In the UK, cradle of the Industrial Revolution, many cities have gone through a cycle of prosperity, decline and decay, and rejuvenation.
Bristol, the leading city in the West Country, was a major port and a thriving manufacturing hub. But as larger ships were built in the late 19th and 20th centuries, the Bristol docks became unsuitable because access was on the relatively narrow and winding River Avon.
By the 1970s, much of inner Bristol had sunk into social deprivation and economic stagnation, with derelict docks, housing and infrastructure.
In the 1990s the Bristol city council began planning for long-term regeneration. It helped secure private funding. It was empathetic and swift when businesses needed planning permission to relocate or expand.
A key project was to convert the old docks and industrial waterfront into a mixed-use space with housing, offices, shops and cultural venues. Thousands of new jobs were created, particularly in the creative arts and fintech industries, with emphasis on new public spaces and pedestrian-friendly zones.
So there is no shortage of precedents for workable solutions. It is encouraging that the Joburg authorities have been picking up the signals.
The city has in the past three months reviewed deployment of resources across its seven administrative regions. It is now focusing the workforce on Region F, which includes the inner city. We want “to get maximum output”, says Makola.
The city is now actively looking at alternative accommodation for those living in hijacked buildings. “We need to make sure the rightful owner of the building is the one who gets paid, so that they reinvest in the maintenance and upkeep of the city, and we are able to get rates and taxes,” says Makola.
The city itself is starting to redevelop buildings. Makola, who has been acting manager since December, says the problems require multiple approaches. The city needs national support, especially from the Gauteng province, the South African Police Service and the departments of home affairs and trade, industry & competition.
“The intervention now and the support we are receiving from the presidency will help us to accelerate the work that we are already doing.” The presidential working group dealing with the city’s turnaround began in March.
The Joburg Property Co (JPC) says it is looking at a “precinct development approach” that will focus on safety and security, partnerships and collaborations, and bylaw compliance. The city’s group audit committee says: “There is a need to take a long-term view on the infrastructure challenges and service delivery” and “make hard trade-offs and choices”, with “training and development of city staff a priority”.
The trouble is that the city is long on plans and short of cash. As the FF Plus points out, it “does not even have enough money to finance its own capital projects or settle debt”.
The city’s 2023/2024 financials show that the year ended with a net deficit of R277m, on revenue of R74bn. Its outstanding short-term debt rocketed from R17bn in June 2023 to R23bn a year later.
The city is trying to raise revenue through huge increases in rates valuations, but many individuals and businesses can’t pay. Moriarty says: “They just haven’t got the capacity in the city’s billing and revenue department, which is where these things fall down.”
Supplies of water and electricity remain major headaches.
The city reported in 2024 that the value of water losses had increased because “investment in infrastructure is lower than the required rate of replacement due to budget constraints. The value of physical losses for the year to June 2024 amounted to R2bn against R1.7bn in June 2023.”
The report continues: “Total electricity loss is R4.9bn. Nontechnical losses are mainly due to theft and bypassing of meters, illegal calibration of meters and damaged meters, and faulty voltage and current transformers.”
There are more symptoms of dysfunction. The Joburg Development Agency (JDA) reports that “poorly performing contractors and professional service providers remained a key risk in the delivery of capex projects — mainly because of their inability to resource the projects financially and with competent personnel”.
The JDA also reports the “inability of contractors to pay community-based SMMEs timeously due to cash flow issues, which has disrupted several projects that are at construction stage. The city’s cash flow challenges became worse in the fourth quarter — for instance, for half of the quarter, there was no cash flow allocation received from the city.”
The JPC, another entity that is crucial to regeneration, reports “ongoing challenges” including the illegal occupation of buildings, “bad and unsafe” buildings, vandalism and land invasions.
There is little doubt that all stakeholders want a city that functions and thrives. The global experience is that private sector involvement and philanthropy are necessary for urban renewal, but not sufficient. The engine has to be the political and administrative civic leadership.
The crucial position of city manager of Joburg has now been advertised. No CEO or COO in South Africa holds such an important job. This appointment will demonstrate how serious the ANC is, as the dominant party locally and nationally, about fixing the country’s most important city.
Solar lights and closed-circuit TV cameras have been installed in parts of the city, which has helped curb crime. Michael Varney, chief commercial officer of security system supplier Vumacam, says there are at least 210 cameras in the inner city, with more being installed as part of the Jozi My Jozi initiative.
Since this intervention, crime has dropped. In the period from October to December 2024, compared to the same quarter the year before, contact crime was down 12.5%, common robbery 20%, motor vehicle theft 24% and drug-related crime 12%.
Vumacam is also able to detect unusual behaviour and incidents through an AI analytic system. For instance, says Varney, “we’re able to pick up a fire in a building — smoke is noticed as unusual behaviour”.
Some businesses have stayed in the city all along and prospered, having recognised that a new approach was needed, rather than trying to bring back the past.
Gerald Olitzki is the founder and executive chair of Olitzki Property Holdings (OPH). He had dreamt of a turnaround of old Joburg from the 1970s, when he was an articled clerk working in a building looking down on the bus station at Van der Bijl Square (now Gandhi Square). He bought his first building overlooking the square in 1989, and approached the city council with proposals for regeneration.
On behalf of a consortium of property owners, this lawyer-turned-property investor obtained private title rights over streets and squares. OPH manages various areas in the southern part of the city, having invested millions. Part of the agreement with the city was to declare these areas no-trading zones.
As the OPH website describes it, “the square was just the start of Olitzki’s plans”. He conceived the idea of a west-east spine, running from the magistrate’s court in the west, along Main Street, through Gandhi Square and up Fox Street to the Carlton Centre.
This is now called the Gandhi Square Precinct, with 250,000 people passing through daily. “Nearby buildings, which were once derelict and occupied by homeless people living in horrendous conditions, are now busy, well-run office blocks. Though they have a modern feel, they have been restored with consideration to their heritage.”
Anton Jaffe, commercial director of OPH, says the city never died. “It’s a very different city, but it doesn’t mean it’s not vibrant and active. There are people here every day. The private sector players that have been able to cater for them have done very well. It’s all about the market that is here, and not trying to hark back to the old days — that’s gone, times have moved on.”
OPH’s work has paid off “massively”, says Olitzki. “There is a very substantial part of the city that has been gentrified. It’s safer and nicer than Rosebank.
“Clearly for me it was also a business opportunity. The big institutions — the Old Mutuals, the Liberty Lifes — they were throwing their buildings away. They literally wanted to give me their buildings for next to nothing, and I was very happy to catch them.” OPH’s retail space is more than 99% occupied and its office space has higher occupancy than the national average.
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