Page 1

G a u t e n g

THE ROLE AND IMPACT

2016

THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

1

of the

COMMERCIAL PROPERTY SECTOR G a u t e n g

THE ROLE AND IMPACT

2016

THE ECONOMIC VALUE 1 of the COMMERCIAL PRIVATE PROPERTY SECTOR

of the

COMMERCIAL PROPERTY APPLICATION SECTOR PROCESSING REPORT THE ECONOMIC VALUE of the COMMERCIAL PRIVATE PROPERTY SECTOR APPLICATION PROCESSING REPORT

Pretorial

l Cullinan

Bronkhorstspruit

Tshwane

l

Metsweding

l Centurion

Midrand

l

l

Magaliesburg

Sandton

Muldersdrift l Randburg l l Krugersdorp l l Roodeport l

Johannesburg

West Rand

Soweto l

Johannesburg

Carltonville

l Bedfordview l l

Benoni

Boksburg

l

Springs

in partnership with

Ekurhuleni

l l

Heidelberg

Sedibeng Vander Bijl Park

l

Vereeniging

l

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THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

CONTENTS TABLE OF CONTENTS 6

SECTION ONE:

INTRODUCTION

6

1.1

Study Area

7

1.2

General Research Approach

7

1.3

Purpose of Report

8

1.4

Limitations

8

1.5

Report Outline

9

SECTION TWO:

9

2.1

Property Components as Elements of a Larger Economy

10

2.2

Components of the Commercial Private Property Sector

11

2.3

The Commercial Private Property Sector in Terms of the Relevant Economic Sectors

11

2.4

Relationship Between the Private and Public Property Sectors

13

SECTION THREE: CURRENT ECONOMIC VALUE

13

3.1

Economic Quantification: Approach

13

3.1.1

Economic Performance Projections

14

3.1.2

Economic Quantification of the Commercial Private Property Sector

14

3.2

Economic Performance and Main Representative Sectors

14

3.2.1

Overall Economic Performance

DEFINITION OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

16

3.2.2

Sectorial Composition in Context to Property Representative Sectors

18

3.2.3

The Construction Sector

19

3.2.4

The Business and Finance Sector

20

3.3

Value in Terms of Gross Domestic Product (GDP)

21

3.4

Value in Terms of Sustained Jobs

21

3.5

Value in Terms of Tax Revenue Generated

22

SECTION FOUR: BRIEF OVERVIEW OF THE ECONOMIC VALUE OF COMMERCIAL PRIVATE PROPERTY

LIST OF MAPS 6

Map 1

Gauteng Province

7

Map 2

Study Area

16

Map 3

GDP Contributions

LIST OF FIGURES 15

Figure 1

South Africa - Main Economic sectors

15

Figure 2

Cyclical Economic Performance, 2008-2015

16

Figure 3

Sectoral Composition of the Relevant Economies, 2015

17

Figure 4

Composition of the National Construction Sector, 2014

17

Figure 5

Composition of the National Business and Finance Sector, 2010

18

Figure 6

19

Figure 7

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Cyclical growth of the Construction sector, 2008 - 2015 Cyclical growth of the Business and Finance sector, 2008 - 2015

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THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

1

CONTENTS LIST OF TABLES Table 1

GDP Projections

13

Table 2

Employment and Tax projections

14

Table 3

Overall Projected Economic Value

15

Table 4

Construction sector GDP Values, 2015

19

Table 5

Composition of the National Business and Finance sector, 2010

20

Table 6

GDP Output - Commercial Private Property sector

20

Table 7

Jobs sustained by the Private Property sector

21

Table 8

Tax Revenue

22

LIST OF DIAGRAMS Diagram 1

Private Commercial Property Impacting Factors

7

Diagram 2

Report Outline

8

Diagram 3

Property Components defined according to Private and Public sectors

10

Diagram 4

Components of the Commercial Private Property sector

10

Diagram 5

Real estate sectors and activities

11

Diagram 6

Hypothetical situations of State and Private sector responsibilities during

12

construction Our thanks go to:

LIST OF ACRONYMS SAPOA – South African Property Owners Association CJMM – City of Joburg Metropolitan Municipality CTMM – City of Tshwane Metropolitan Municipality EMM – Ekurhuleni Metropolitan Municipality GDP – Gross Domestic Product SIC – Standard Industrial Classification SARS – South African Revenue Service SIC – Standard Industrial Classification

Published by SAPOA, Paddock View, Hunt’s End Office Park, 36 Wierda Road West, Wierda Valley, Sandton PO Box 78544, Sandton 2146 t: +27 (0)11 883 0679 f: +27 (0)11 883 0684 SAPOA publications are intended to provide current and accurate information, and are designed to assist readers in becoming more familiar with the subject matter covered. SAPOA published this document for a general audience in accordance with all applicable laws. Such publications are distributed with the understanding that SAPOA does not render any legal, accounting,

Compiled by:

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THE ECONOMIC APPLICATION PROCESSING VALUE OF THE REPORT COMMERCIAL PRIVATE PROPERTY SECTOR

CONTENTS TABLE OF CONTENTS 26

SECTION 1: INTRODUCTION

26

1.1

Study Area

27

1.2

General Research Approach

28

1.3

Purpose of the Report

28

1.4

Limitations

29

1.5

Report Outline

30

SECTION 2: THE REGULATORY ENVIRONMENT

30

2.1

Understanding the Spatial Planning and Land Use Management Act No 16 of 2013

33

2.2

National Legislative Framework

34

2.3

Provincial Legislative Framework

36

2.4

Metropolitan Legislative and Policy Framework

36

2.4.1

Overview of the Metropolitan Legislation in Gauteng

36

2.4.2

Metropolitan Economic and Development Planning Policies

42

2.4.3

The role of the Private sector in Municipal Planning Policies

SECTION 3: LAND DEVELOPMENT APPLICATIONS AND REGULATORY ENTITY 43

RESPONSIBILITIES

43

3.1

Types of Development Applications

43

3.1.1

Building Plan Applications

43

3.1.2

Land Use Management Applications

44

3.2

Regulatory Entity Responsibilities

46

3.3

Recent and Planned Transformations in Regulations

48

SECTION 4: DEVELOPMENT PLANNING AND APPLICATION ADMINISTRATION PROCESS

49

4.1

Land Use Management Applications

49

4.1.1

Pre-SPLUMA application processes

51

4.1.2

SPLUMA application processes

58

4.1.3

Summary of key changes in the LUM Application Process

61

4.2

Building Plan Applications

62

SECTION 5: APPLICATION TRACKING ANALYSIS

64

5.1

City of Joburg Metropolitan Municipality

64

5.1.1

Overall Municipal Application Benchmark Statistics

66

5.1.2

Application Case Study Analysis

70

5.1.3

Summary of Key Findings

70

5.2

City of Tshwane Metropolitan Municipality

70

5.2.1

Overall Municipal Application Benchmark Statistics

71

5.2.2

Application Case Study Analysis

73

5.2.3

Summary of Key Findings

73

5.3

Ekurhuleni Metropolitan Municipality

74

5.3.1

Overall Municipal Application Benchmark Statistics

74

5.3.2

Application Case Study Analysis

76

5.3.3

Summary of Key Findings

76

5.4

Public Sector Inputs on Application Delays

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CONTENTS

SECTION 6: PRIVATE SECTOR PERSPECTIVES

78

6.1

Approach

78

6.2

Key Limitations

78

6.3

Private sector Inputs on Application Delays

78

SECTION 7: RECOMMENDATIONS

80

SECTION 8: THE ECONOMIC IMPACT OF APPLICATION DELAYS

86

8.1

Approach

86

8.2

Quantifying the Economic Impact of Property Development

87

8.3

The Financial Impact of Delays in Processing of Development Applications

88

SECTION 9: CONCLUSION AND FINAL REMARKS

89

BIBLIOGRAPHY

91

LIST OF MAPS Map 1: Gauteng Province

26

Map 2: Study Area

27

Map 3: CJMM Draft Spatial Development Framework Concept 2016

38

Map 4: Ekurhuleni Spatial Development Framework 2016

39

Map 5: City of Tshwane RSDF Region 1

41

Map 6: CTMM Number of Applications 2011-2015

70

LIST OF FIGURES

62

Figure 1: Gauteng Province: Building Plan Contributions

64

Figure 2: CJMM Commercial LUM Applications 2013-2015

65

Figure 3: CJMM Rezoning and Township Establishment Applications 2013-2015

65

Figure 4: CJMM Land Use Consent Applications 2013-2015

65

Figure 5: CJMM Building Plan Finalisation Efficiency Ratio 2013-2015

66

Figure 6: CJMM Total Building Plan Submissions and finalised 2013-2015

67

Figure 7: CJMM Consolidation Processing Timeframe 2013-2015

67

Figure 8: CJMM Rezoning Processing Timeframe 2013-2015

67

Figure 9: CJMM Rezoning Application Breakdown

68

Figure 10: CJMM Subdivision Processing Timeframe 2013-2015

68

Figure 11: CJMM Township Establishment Processing Timeframe 2013-2015

68

Figure 12: CJMM Township Establishment Application Breakdown

69

Figure 13: CJMM Consent Use Processing Timeframe 2013-2015

69

Figure 14: CJMM Building Plans 2013-2015

71

Figure 15: CTMM LUM Applications 2011-2015

71

Figure 16: CTMM Building Plan Finalisation Efficiency Ratio

72

Figure 17: CTMM Consolidation Processing Timeframe 2013-2015

72

Figure 18: CTMM Rezoning Processing Timeframe 2013-2015

73

Figure 19: CTMM Subdivision Processing Timeframe 2013-2015

73

Figure 20: CTMM Township Establishment Processing Timeframe 2013-2015

73

Figure 21: CTMM Building Plans 2013-2015

74

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THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR APPLICATION PROCESSING REPORT

CONTENTS 74

Figure 22: EMM Rezoning and Township Establishment Applications 2014-2015

75

Figure 23: EMM Building Plan Finalisation EfďŹ ciency Ratio 2013-2015

75

Figure 24: EMM Total Building plan Submissions and Finalised (Germiston, Brakpan, Benoni)

75

Figure 25: EMM Rezoning Processing Timeframe 2013-2015

76

Figure 26: EMM Township Establishment Processing Timeframe 2013-2015

76

Figure 27: EMM Building Plans 2013-2015

LIST OF TABLES 50

Table 1: Application Process: Scheme Amendment/Rezoning

50

Table 2: Application Process: Township Establishment

51

Table 3: Application Process: Subdivision/Consolidation

53

Table 4: CJMM Scheme Amendment/Rezoning

54

Table 5: CJMM Township Establishment

54

Table 6: CJMM Subdivision/Consolidation

55

Table 7: CTMM Scheme Amendment/Rezoning

56

Table 8: CTMM Township Establishment

56

Table 9: CTMM Subdivision/Consolidation

57

Table 10: EMM Proposed Land Use Management Application Process

69

Table 11: CJMM Detailed Sample: Building Plans 2013-2015

76

Table 12: EMM Detailed Sample of LUM applications Reviewed

81

Table 13: Primary Reasons for Delays

88

Table 14: Development Scenario: Economic Impact per Annum

LIST OF DIAGRAMS 48

Diagram 1: Generic Application Process

49

Diagram 2: Application Process: Scheme Amendment/Rezoning

50

Diagram 3: Application Process: Township Establishment

50

Diagram 4: Application Process: Subdivision/Consolidation

51

Diagram 5: Application Process: Appeals

52

Diagram 6: SPLUMA Regulation 16

53

Diagram 7: CJMM Scheme Amendment/Rezoning

53

Diagram 8: CJMM Township Establishment

54

Diagram 9: CJMM Subdivision and Consolidation

54

Diagram 10: CJMM Appeal process

55

Diagram 11: CTMM Scheme Amendment/Rezoning

55

Diagram 12: CTMM Township Establishment

56

Diagram 13: CTMM Subdivision and Consolidation

57

Diagram 14: CTMM Appeals Process

57

Diagram 15: EMM Proposed Land Use Management Application Process

57

Diagram 16: EMM Appeals Process

58

Diagram 17: Summary of Scheme Amendment/Rezoning Application Process

59

Diagram 18: Summary of Township Establishment Application Process

59

Diagram 19: Summary of Subdivision and consolidation Application Process

60

Diagram 20: Summary of Appeals Process

61

Diagram 21: Building Plan Application Process

80

Diagram 22: Development Dilemma Metaphor

80

Diagram 23: Primary reasons for application delays

87

Diagram 24: EIA modelling process

88

Diagram 25: Development Scenario: Total Economic Injection

89

Diagram 26: Development process and application delay

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APPLICATION PROCESSING REPORT THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

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CONTENTS LIST OF ACRONYMS SAPOA – South African Property Owners Association CJMM – City of Joburg metropolitan Municipality CTMM – City of Tshwane metropolitan Municipality EMM – Ekurhuleni metropolitan Municipality DRDLR – Department of Rural Development and Land Reform LUM – Land Use Management SACN – South African Cities Network SDF – Spatial Development Framework RSDF – Regional Spatial Development Framework IDP – Integrated Development Plan MPT – Municipal Planning Tribunal AO – Authorised Official

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THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

SECTION ONE: INTRODUCTION

U

rban-Econ Development Economists was commissioned by the South African Property Owners Association (SAPOA) to embark on a detailed and comprehensive analysis of the private property industry in the Gauteng Province, with specific reference made to the City

of Tshwane Metropolitan Municipality (CTMM), Ekurhuleni Metropolitan Municipality (EMM), and City of Joburg Metropolitan Municipality (CJMM). This report is the first component of the “The Role and Impact of the Commercial Property Sector in the Gauteng Province� study. The objective of this report is to contextualise the size and overall economic contribution made by the commercial private property sector in the Gauteng Province in order to provide a foundation for cost calculations related to application and other administrative processing timeframes. The second component of the study supplements the first through analysing development application case studies in order to link processing timeframes to economic performance.

1.1. Study Area

District Municipalities. As indicated, this report makes specific reference to the three

The Gauteng province is located in the

metropolitan municipalities of the Gauteng

northern Highveld region of Southern Africa

Province. The CTMM is located in the northern

and contains two of the largest South African

region of the Gauteng Province. It is currently

cities namely, Pretoria and Johannesburg.

the largest municipality in the country and

The Gauteng Province consists of three

is also known as the administrative hub and

metropolitan municipalities and two District

capital of South Africa. In addition, the CJMM

Municipalities. The metropolitan municipalities

is located in the centre of the Province and

include the City of Tshwane Metropolitan

south of the CTMM. The CJMM is known as

Municipality

Ekurhuleni

the commercial hub of Gauteng due to its

Metropolitan Municipality (EMM), and the City

(CTMM),

the

vast economic and business activities. Some

of Joburg Metropolitan Municipality (CJMM).

of the major towns located in the CJMM

Furthermore, the two District Municipalities

include Sandton, Johannesburg, Midrand,

are the Sedibeng District Municipality and

and Soweto. Lastly, the EMM is located east

the West Rand District Municipality. Map 1

of the CJMM and south of the CTMM. The

indicates the context of the Gauteng Province

EMM is regarded as the transportation hub

along with its three metropolitan and two

of South Africa primarily due to the fact that

Map 1: Gauteng Province Source: ArcGIS, ESRI 2015

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THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

7

Map 2: Study Area Source: ArcGIS, ESRI 2015

the OR Tambo International Airport and the

calculations. For the purpose of this report

associated Aerotropolis region is located

only property-centred economic activities

within its borders. Map 2 illustrates the three

with a direct impact on the provincial and

identified metropolitan areas.

national economy are evaluated, in line

1.2 General Research Approach

with generic economic impact practises. The directly impacting factors analysed, illustrated by Diagram 1, are Gross Domestic Product

The general research approach describes the

(GDP), direct employment and tax revenue by

basic methodology implemented to measure

the private commercial property sector in the

the economic value of the private commercial

Gauteng Province.

property sector within the three metropolitan municipalities and the greater Gauteng

1.3 Purpose of the Report

Province. In essence all economic activity has to take place in a specific space or area,

The purpose of the first component of the

therefore all economic activities are related to

study is to quantify the commercial private

property either directly or indirectly. In order

property industry in terms of its value for

to measure the economic value of the private

the provincial economy. This will assist in

commercial property industry the relevant

developing a comprehensive understanding

activities within the specific sectors need

of the role and value that the private property

to be identified and evaluated according to

sector plays in the economic development

specific analysis factors which complies with

within the jurisdiction of the governing

standard case practise for economic impact

entities (public sector). It is important to note Diagram 1: Private Commercial Property Impacting Factors

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THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

that the report does not represent an asset

The

basic

limitation

audit of the commercial private property

quantification process is that data sourced for

industry. It presents a statistical evaluation

the economic analysis is reliant on statistical

of the total contribution that the private

publications

commercial property sector makes to the

most recent available detailed information

provincial economy in terms of the GDP,

pertaining to the national business and

employment and tax revenue.

finance sector is representative of 2010

from

to

the

reliable

economic

sources.

The

figures. Whereas the local (CTMM, EMM, Additionally, it is understood that “The Role

and CJMM) GDP and national construction

and Impact of the Commercial Property sector

industry figures are representative for 2014.

in the Gauteng Province� study will be used

Projections for up to the end of 2015 were

to obtain valuable information regarding the

therefore required.

civic administration of property development within the study area in order to quantify the

1.5 Report Outline

distinct role that the public and private sectors play in property development, particularly in

The report outlines the economic value of the

terms of timeframes. Through quantifying the

commercial private property sector according

economic value of the sector and applying the

to the various components of property

findings to estimated application processing

construction and management.

timeframes, one can determine whether

Furthermore, it illustrates the economic value

possible processing delays by the public sector

of commercial property construction and

or private sector might have any impact on

management on the basis of job creation,

the provincial economy.

economic

1.4 Limitations

production,

and

tax

revenue

generated. The report outline is illustrated in Diagram 2.

Due to the qualitative and quantitative nature

The remainder of the report will be structured

of the methodology a few limitations were

under the following sections:

noted during the research process. It is vital that the limitations are stated and recognised in order to have a contextual understanding of the results.

Section 2: Definition of the Commercial Private Property sector Private property is defined as part of the property components of a larger economy in order to identify the relevant economic sectors

Diagram 2: Report Outline

representing the private property sector. Section 3: Current Economic Value This section includes an analysis that illustrates the existing value of the private property sector in terms of economic production and growth, job creation and tax revenue generated. Section 4: Economic Value of Private Property in Brief Summary of the findings of the aforementioned analysis presenting the value of the private property industry in Gauteng, with specific reference to the three identified metropolitan municipalities.

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THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

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SECTION TWO: DEFINITION OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

P

rior to analysing the economic value of the commercial private property sector, its role needs to be defined within the larger economy. Typically, commercial property can be related to a variety of development types such as retail, industrial and office development,

and large-scale residential developments. Activities within the commercial private property sector can be grouped into two main categories, namely construction and management activities. These activities have been critically analysed to identify the economic sub and main sectors in which they operate. As with any economy the two main role-players are the public and private sectors. This applies to the property industry in the following way: Public property (also known as government or state land) can be commonly defined asthe land and improvements owned by the South African government or one of its agencies, divisions, or entities.1 It is commonly a reference to property regularly used by the general public, including basic and social infrastructure. Commercial private property is basically defined as land or buildings belonging to a private individual or company/group of individuals, rather than the government.2 In other words, the property owned by nongovernmental entities. Private commercial property for the purpose of this report, will specifically include retail, office and industrial buildings as well as large-scale residential property developments and not refer to individual private residences.

The successful growth and development of the commercial private property sector is dependent on the effective interaction and relationship between the private and public sectors. It is important that both sectors aspire to establish a good relationship that translates into outcomes based interactions which benefits both entities.

2.1 Property Components as Elements of a Larger Economy

infrastructure such as libraries, administration offices and other social facilities. The public sector therefore employs contractors and professionals from the private sector to

The commercial private property sector has a

undertake the construction of primary and

variety of components that form part of the

supporting infrastructure.

larger economic profile within the Gauteng Province.

divided

The public sector does not have any construction

between the public and private sectors each

These

implementing bodies in the state, as such

with its own role and responsibilities in terms

the private sector plays a dual role in terms

of property development and management.

of property construction. Private contractors

1

The public sector typically plays the role of

are responsible for both privately driven and

www.dictionary.cambridge.

the financier in property construction as well

public property construction activities. The

org, http://www.dictionary.

as the administrator in property management

responsibilities of the private sector in termsof

com and http://www.

and development application processes. The

property

thefreedictionary.com/

construction responsibilities of the public

activities such as sales and operation of privately

2

sector mainly includes the financing of primary

owned land. Recent trends indicate that

dictionary.cambridge.org and

roads and services, along with supporting

government departments are inclined to lease

http://www.dictionary.com

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components

are

management

mainly

relates

to

Obtained from http://

Derived from http://www.

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THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

Diagram 3: Property Components defined according to Private and Public sectors

private buildings rather than occupying their

sector. The commercial private property sector

own, in which case the private sector acts as the

components are summarised in Diagram 4.

property manager/landlord. Diagram 3 classifies all the components of property based on its

The primary components of the commercial

relevance to the public and private sectors.

private property sector is construction and management.

The

sub-components

of

The role of the commercial private property

construction includes the construction of

sector is discussed in more detail in the

privately owned and income generating

following sub-section.

property entities, along with the recruitment

2.2 Components of the Commercial Private Property sector

of private contractors and other professional services required. In terms of property management, it is mainly the private sector’s responsibility to exchange

The commercial private property sector is

private landby controlling the sales and leasing

made up of a number of components that

of property entities. In addition, the operation

contributes to the overall growth of the

of property includingmaintenance, cleaning

Diagram 4: Components of the Commercial Private Property sector

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THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

and security are also the responsibility of the

activities. Nonetheless, the professional services

private sector

components include architectural, engineering

2.3 The Commercial Private Property sector in terms of the Relevant Economic sectors

11

and other technical activities, which are categorised within the business and finance sector of the SIC. Commercial private property management pertains to all ‘real estate activities’ with owned or leased properties as well as per

Commercial activities associated with the private

fee or contract basis. Real estate activities also

property sector are related to the applicable

form part of the business and finance sector as.

economic sectors as per the Standard Industrial

classified within the SIC. Diagram 5 illustrates

Classification (SIC) as utilised by Statistics South

the sectors and activities that are relevant to the

Africa. This is done in order to identify relevant

commercial private property sector.

sectors that make up the industry and ultimately contribute to its value. The majority of the components within the

2.4 Relationship between the Private and Public Property sectors

commercial private property sector relate to the ‘construction activities’ sub-sector, as defined by

The relationship between the private and public

the SIC comprising of major activities such as

property sectors in Gauteng has a significant

site preparation,building construction, building

role in terms of property development. Apart

installation, building completion and renting

from the administrative function of the public

of building equipment. Hence, the economic

sector by means of processing development

construction sector presents the main indicator

applications, the public sector also has a

for performance and measurement of such

responsibility to provide guidance to the private Diagram 5: Real estate sectors and activities

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THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

sector through policies and strategic planning

approval, after which property management

initiatives. It is the public sector’s role to ensure

is totally within the competence of the private

that the development goals and visions are

sector. The scenario highlights the important

transpired to the private sector in order to

regulatory and administrative role that the

ensure that any property development that

public sector plays in private development.

takes place is cooperative. In addition, the

[

role of the private sector in terms of property

shows the development of government

development is largely pro-development and

administration offices in addition to supposed

investment driven. The private sector has a

infrastructure upgrades to the surrounding

strong development implementation function

roads. It emphasises the public sector’s role in

and is responsible for construction and

terms of financial provision for construction

submitting land use management applications

with all construction activities as well as

to the public sector for approval.

construction of major bulk services that are

The second hypothetical situation

outsourced to the private sector. Diagram 6 indicates the two hypothetical scenarios in order to illustrate an example of

The hypothetical situations assist with explaining

the responsibilities of the public and private

the role and value of the private sector in terms of

sector in a real-world situation

the construction of public sector developments. In addition, it also illustrates the importance of

[

The first hypothetical situation plots

the public sector’s administration and regulation

the development of a privately owned mixed

of private commercial property developments.

use development in which private contractors

In order to facilitate successful and sustainable

Diagram 6: Hypothetical

and professionals are responsible for the

property development, it is imperative that both

situations of State and Private

construction and preparation of specialised

the public and private property sectors execute

sector responsibilities during

applications to submit to local authorities for

their roles and functions in a cooperative manner.

construction

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THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

13

SECTION THREE: CURRENT ECONOMIC VALUE

T

he purpose of the following section is to investigate the value of the commercial private property sector within the Gauteng province. The economic value of the commercial private property sector refers to the contributions made towards the GDP, employment and tax

revenue of the Gauteng Province and the three identified metropolitan municipalities. The value of the commercial private property sector is measured by analysing the economic contribution made by the relevant economic sub-sectors and relating the findings to the total GDP output of the focus areas. Additionally, captured findings include information regarding the employment sustained and tax generated by the commercial private property sector.

3.1 Economic QuantiďŹ cation: Approach

[ Economic performance projections and cyclical analysis [ Identification of the main economic role-

The quantification approach illustrates the

playing sectors in the commercial private

methodology used in order to determine the

property sector in the Gauteng Province

current economic value of the commercial

[ Quantification of the economic value

private property sector in terms of construction

of the commercial private property sector

and management of buildings.Please note that

as derived from the main role playing

the approach was adapted according to the

economic sectors.

following limitations: 3.1.1 Economic Performance Projections [ Availability of recent statistical releases:

The cyclical performance of the overall economy

The most recent published economic

is analysed and the following projections are

figures for the identified geographic levels

made from the GDP figures: It is important to

are only available up to 2013. Projections,

note that the most recent available statistics were

based on historic statistical trends therefore

utilised for projection purposes. Published data

had to be made in order to acquire 2015

sources are presented unless otherwise indicated.

Table 1: GDP Projections

figures. [ Availability of detailed economic statistics: Comprehensive composition break-downs are only available on national level. [ All economic values provided are based on constant prices, with 2005 being the basic year. The methodology was developed based on a uniform distribution analysis technique, which collates projections based on the 2013 economic performance with the composition of relevant national economic sectors in order to present upto-date statistics for the Gauteng Province and the three identified metropolitan municipalities. A five year average annual growth rate was calculated and utilised to acquire the estimated 2015 economic performance figures. The

approach

consists

of

the

following

components:

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THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

3.1.2 Economic Quantification of the Commercial Private Property sector

3.2 Economic Performance and Main Representative sectors

The contribution of the private property sector to the provincial and local economy

Direct and indirect influences were taken into

is quantified by analysing the composition

account to determine the overall value of the

of the various economic indicators namely

private commercial property sector. The overall

construction, business, and finance.Economic

economic performance in South Africa is

quantification of the commercial private

measured by the growth and performance of

property sector is given in terms of the value

the main economic sectors. The main economic

of the following features:

sectors include agriculture, forestry and fishing; mining and quarrying;manufacturing; Electricity,

[

GDP generated

Gas and Water; Construction; Wholesale,

[

obs sustained

Retail and Trade; Transport, Storage and

[

Tax revenue generated

Communication; Finance,Insurance, Real Estate and Business services; Community, Social and

The detailed composition of the representative

Personal Services; and General Government.

sectors are only available on national level.

The primary economic sectors within South

Projections regarding the provincial and

Africa are illustrated in Figure 1.

metropolitan

contribution

to

the

GDP,

sustained jobs and tax are calculated by

3.2.1 Overall Economic Performance

applying a five year average growth rate

The overall performance or growth of the

to the relevant economies in 2013 for the

relevant economies serves as a proxy for the

construction sector as well as the business

subsequentperformance of the applicable

and finance sector. It is consequently assumed

property market and is illustrated in Figure 2.

that the contribution of the sub-sectors are in line with historic trends and therefore

All of the economies have experienced

represent current values.

stable growth rates for the analysis period, with a slight decrease between 2010 and

Table 2: Employment and Tax projections

The following projections are made for

2013. It is also evident that the provincial

employment and tax data gaps in addition to

and metropolitan economies have generally

the above stipulated GDP projections:

experienced similar growth patterns as the national economy. The South African economy experienced an average growth rate of 1.96% with the provincial average growth rate being 2.3%. This suggests that the economy of the Gauteng Province is growing at a faster pace than the national economy, as such the Gauteng economy can be classified as above average. The average growth rate of the metropolitan economies suggests that the EMM is growing roughly 1.8% per annum, followed by the CJMM with an average growth rate of 2.5%. Subsequently, the average growth rate of the CTMM economy is approximately 3.1%. Table 3 indicates the projected value of the relevant economies for 2015.

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15

Figure 1: South Africa - Main Economic sectors

Figure 2: Cyclical Economic Performance 2008-2015 Source: Quantec Easydata – Standardised Regional and Statistics South Africa data 2015

Table 3: Overall Projected Economic Value

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THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

Gauteng Province with roughly 39%, this is followed by the City of Tshwane with a total GDP contribution of 26%. Subsequently, the Ekurhuleni MM contributes approximately 25%. The remaining contribution is made by the West Rand District Municipality and the Sedibeng District Municipality with 4% and 6% respectively. 3.2.2 Sectorial Composition in Context to Property Representative Sectors In essence, any economic activity has to take place in a specific area, thus all economic

Map 3: GDP Contributions.

activities are related to property either directly According Gauteng

to

statistical

Provincial

projections,

economy

the

or indirectly. However, for the purpose of this

contributes

study only property-centred economic activities

roughly 36% of the national GDP, with a

with a more direct impact are evaluated.

total GDP contribution of approximately R

Figure 3 indicates the sectoral composition of

670 billion. The value of the Ekurhuleni MM

South Africa and the Gauteng Province along

is projected at R 163.9 billion, followed by the

with its three metropolitan municipalities.

City of Tshwane MM with a GDP contribution

Special attention should be given to the

of R 177.1 billion and ultimately the City of

contribution of the construction, and business

Joburg MM with a projected contribution of

and finance sectors which as these sectors

roughly R 263.6 Billion.

encompass the main role-playing activities in the private property sector. These sectors are

In terms of the provincial economic context Map

therefore, used as proxy for the commercial

3 illustrates the GDP contribution made by each

private property sector.

of the local economies in the Gauteng Province. Figure 3 indicates that the construction The

three

metropolitan

municipalities

sector contributes approximately 4% to the

have acombined contribution of 90% to

economic activity in the Gauteng Province.

the provincial economic performance. It

The supplementary business and finance

is evident that the City of Joburg MM has

sector drives approximately 29% of the

Part 1 Figure 3 the largest economic contribution to the

provincial economy which is significantly

Figure 3: Sectoral Composition of the Relevant Economies, 2015 Source: Quantec Easydata – Standardised Regional and Statistics South Africa data 2015

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17

Part 1 Figure 4

Figure 4: Composition of the National Construction sector, 2014 Source: Statistics South Africa Publication: The Construction Industry, 2014

higher than the national average of 25%.

economies, considering that similar activities

Furthermore, the economic contribution of

within the sectors relate to similar contributing

the business and finance sector for the EMM

sub-sectors. This assumption is made due

is roughly 23%, followed by CTMM with

to the fact that the data pertaining to the

27%, and ultimately the CJMM with 35%.

economic sectoral composition is only provided

It should be noted that only a portion of the

on a national level.

business and finance sector forms part of the commercial private property sector, whereas

Figure 4 and Figure 5 illustrates the national

the entire construction sector contributes to

composition of both the construction sector

its performance in a more direct way.

as well as the business and finance sector as provided in the most recent statistical

An in-depth analysis of the main economic

publications of South Africa.

sub-sectors is required in order to acquire a better understanding of the economic value of

In terms of the composition of the national

the private property sector. As indicated, there

construction sector it is evident that the

are certain data limitations that necessitate the

building of civil engineering services, as well

assumption that the composition of each of the

as the building of complete constructions or

main role-playing economic sectors are uniform

parts thereof take up the largest portion of the

Part 1 Figure 5 national, provincial, and metropolitan for the

construction sector with 30.5% and 36.8% Figure 5: Composition of the National Business and Finance sector, 2010 Source: Statistics South Africa Publication: Real estate, activities auxiliary to financial intermediation and business services industry, 2010

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THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

Figure 6: Cyclical growth of the Construction sector, 2008 - 2015 Source: Quantec Easydata – Standardised Regional and Statistics South Africa data 2015

respectively,

and

totalling

to

67.3%.

Furthermore, it is evident that the construction

The remaining activities include building

sector in the CTMM has experienced higher

installations (16.1%), building completion

growth than the CJMM and the EMM. The five-

(10.4%), renting of construction or demolition

year average growth rate of the construction

equipment (4.3%), and lastly site preparation

sector in South Africa is estimated at 2.8%,

(1.9%). As indicated, the real estate activities

which is lower than the provincial growth

make up 18.8% of the sector in the national

rate of 3.4%. The average growth of the

market, followed by legal bookkeeping and

CTMM is estimated at 5% per annum, which

business management activities with 16.7%.

is significantly higher than the CJMM and the EMM with 2.9% and 2.8% respectively. Table 4

3.2.3 The Construction sector

presents the projected value of the construction

Figure 6 indicates the comparative cyclical

sector for the relevant study areas in 2015.

performance of the construction sector in South Africa, the Gauteng Province, and its

Projections

indicate

metropolitan municipalities namely Ekurhuleni,

provincial construction sector contributes

City of Joburg and the City of Tshwane.

approximately

43%

that to

the the

Gauteng national

construction sector’s value of R 65 billion. From Figure 6, it is clear that, apart from a

In terms of the local construction sector

significant boom in the CTMM during 2008

contribution, it is evident that the CJMM

and 2009, the metropolitan construction

has the highest metropolitan contribution

growth rates have maintained a similar growth

of 16% to the national construction sector,

trend as its provincial counterpart.

followed by the CTMM with 12%, and EMM with roughly 10%. The construction sector contributions made by the Gauteng province and its metropolitan counterparts suggest that the value of the local construction sector is of great importance for the national economic growth as it takes up a significant portion of the national construction sector. Furthermore, the share of the provincial construction sector suggests that the three metropolitan areas make up the majority of

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THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

2015 GDP (Rand Millions, Constant 2005 Prices)

Share of National Construction sector

Share of Provincial Construction sector

South Africa

65 010

100%

-

Gauteng Province

28 218

43%

100%

Ekurhuleni Metropolitan Municipality

6 421

10%

23%

City of Joburg Metropolitan Municipality

10 622

16%

38%

City of Tshwane Metropolitan Municipality

8 129

12%

29%

Economy

19

Table 4: Construction sector GDP Values, 2015 Source: Quantec Easydata – Standardised Regional and Statistics South Africa data 2015 z

the provincial construction sector with EMM

similar growth trends as the metropolitan

that contributes a share of 23%, followed by

areas. Apart from a large spike in the CTMM

the CTMM with a share of 29% and ultimately

during 2008 and 2009, it is evident that the

the CJMM which contributes roughly 38% to

metropolitan areas have experienced similar

the provincial construction sector.

growth trends. Since 2013, the CTMM’s growth has been slightly higher than the

The building of civil engineering structures

CJMM and the EMM.

(infrastructure) accounts for more than a third (39%) of the economic activity recorded

The five-year average growth rate of the

within

sector.

business and finance sector in South Africa is

This is however not a representation of the

estimated at 2.8%, which is lower than the

private property sector as it is financed by the

provincial growth rate of 3.2%.

the

national

construction

public sector. The average growth rate on the CTMM 3.2.4 The Business and Finance sector

is calculated at 3.9% per annum, which is

Figure 7 illustrates the cyclical growth

slightly higher than the CJMM and the EMM

performance of the relevant business and

with 2.9% and 3.1% respectively.

finance sectors. Table 5 presents the projected value of the As indicated, the provincial and national

business and finance sector for the relevant

business

study areas in 2015. Projections indicate that

and

financesector

experienced

Figure 7: Cyclical growth of the Business and Finance sector, 2008 - 2015 Source: Quantec Easydata – Standardised Regional and Statistics South Africa data 2015

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THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

2015 GDP (Rand Millions, Constant 2005 Prices)

Share of National Business and Finance sector

Share of Provincial Business and Finance sector

South Africa

476 215

100%

-

Gauteng Province

191 313

40%

100%

Ekurhuleni Metropolitan Municipality

38 276

8%

20%

CJMM contributes roughly 48% to the provincial

City of Joburg Metropolitan Municipality

91 454

19%

48%

business and finance sector

City of Tshwane Metropolitan Municipality

47 588

10%

25%

Approximately 18.8% of the business and finance

Economy

and finance sector suggests that the three metropolitanareas make up the majority of the provincial business and finance sector with EMM that contributes a share of 20%, followed by the CTMM with a share of 25% and ultimately the

sector consist of the relevant real estate activities that isapplicable to commercial private property

Table 5: Business and Finance

the Gauteng provincial business and finance

sector, GDP Values 2015

sector contributes approximately 40% to the

Source: Quantec Easydata –

national business and finance sector with a

Standardised Regional and

value of R 476 billion. In terms of the local

Statistics South Africa data

construction sector contribution, it is evident

2015

that the CJMM has the highest metropolitan

The value of the commercial private property

contribution

management industries

3.3 Value in terms of GDP (Gross Domestic Product)

national

sector, in terms of GDP output, is measured

construction sector, followed by the CTMM

by applying the national GDP distribution to

with 10%, and EMM with roughly 8%.

the Gauteng province as well as the three

of

19%

to

the

metropolitan areas for 2015. It is assumed that The business and finance sector contributions

the composition of the relevant sectors within

Table 6: GDP Output

made by the Gauteng province and its

the provincial and local economies are in

- Commercial Private

metropolitan counterparts suggests that the

accordance with the national economy. Table

Property sector 2015

value of the local business and finance sector is

6 provides the resultant calculated GDP output

Source: Calculations based

of great importance for the national economic

of the commercial private property sector.

on Quantec Easydata:

growth as it takes up a significant portion of

Standardised Regional and

the national business and finance sector.

approximately R 49.4 billion to the Provincial GDP

Statistics South Africa data 2015

Furthermore, the share of the provincial business

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In 2015, the private property sector contributed of Gauteng creating a share contribution of 7.4%,

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THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

as well as a 2.63% share to the national GDP.

Gauteng Province, accounting for 7.84% of

On a municipal level it is evident that the private

all the jobs within the province. The Gauteng

property sector makes the largest contribution in

Province contributes approximately 2.31%

the CJMM, with a total of approximately R 21.3

of the national labour force. In the CJMM

billion in 2015. Furthermore, the CTMM and the

approximately 130 081 people are employed

EMM contributed approximately R13.3 billion

within the commercial private property sector

and R 10.4 billion respectively in 2015.

followed by the CTMM with 98 191 jobs, and

21

EMM with 77 925 jobs in 2015.

3.4 Value in terms of Sustained Jobs

Furthermore, private property management sustains 42 156 jobs in the Gauteng Province

The number of jobs sustained by the construction

in addition to the 304 060 employment

and management of commercial private property

opportunities

is derived from the national employment

construction activities.

distribution per major activity, which is applied to the total employment of the relevant regions. It is therefore assumed that the distribution of

sustained

by

property

3.5 Value in terms of Tax Revenue Generated

employment in the relevant sectors within the provincial and metropolitan economies are in

Tax revenue generated on production activities

accordance with the composition of the national

that are related to the commercial private

employment market. This is due to the fact that

property sector indicates the contribution

data pertaining to the detailed distribution of

made to state revenue by this sector. Tax

employment per major economic activity is only

revenue is a function of income generated

available on a national level. Table 7 presents the

and is therefore estimated by calculating the

Table 7: Jobs sustained by

value in terms of jobs sustained by the private

national proportion of production for each

the Private Property sector

property sector within the Gauteng Province and

relevant activity and equating it to total tax

Source: Calculations based

the three identified metropolitan municipalities

received by the construction, and business and

on Quantec Easydata:

finance sectors of the Gauteng Province and

Standardised Regional and

sector

the three metropolitan municipalities in 2015.

Statistics South Africa data

employs roughly 346 215 people in the

This calculation is based on the assumption that

2015

The

commercial

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private

property

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THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

Table 8: Tax Revenue

the GDP composition of the relevant sectors within

In terms of the private property sectors of

Source: Calculations based

the provincial and metropolitan economies are in

the

on Quantec Easydata:

accordance with the national economy, which in

contributes to 17.6% (R1.2 billion) of all tax

Standardised Regional and

turn presents the level of tax revenue generated

revenue generated, followed by the CTMM

Statistics South Africa

by the SARS. Kindly note that the tax calculations

with a tax revenue contribution of 16.2% (R

data 2015

present tax income of SARS and not the local

673 million) and the EMM contributes 13.8%

municipal tax revenue. Table 8 indicates the tax

(R538 million) to the tax revenue generated.

metropolitan

economies

the

CJMM

revenue calculations for the Gauteng Province along with the three metropolitan municipalities.

Furthermore, it is evident that private property management generated roughly R 1.5 billion

The

contributes

in 2015, which is significantly higher than

approximately 15.7% of tax revenue generated

private

property

sector

the R 1 billion tax generated by private

within the provincial economy (R 2.5 billion).

construction activities.

SECTION FOUR: ECONOMIC VALUE OF COMMERCIAL PRIVATE PROPERTY IN BRIEF

C

ommercial private property is essentially defined as land or buildings that belong to a private individual or company/group of individuals, rather than the government. In other words, the property owned by nongovernmenta entities. Private commercial property for the purpose

of this report, will specifically include retail, office, and industrial buildings as large-scale residential property developments and not refer to individual private residences.

The commercial private property construction

finance sector as its main economic role-player

performance is derived from the construction

with 18.8% of the main sector comprising of

activities subsector comprising 61% of the

commercial private property management related

construction main sector, with 8.9% of the

services. The estimated value of the commercial

business and finance sector also represented

private property sector is summarised as follows:

in the form of specialised services. The real estate activities of commercial private property

Gross Domestic Product - The private

management

property sector contributes approximately R50

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highlights

the

business

and

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THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

billion to the provincial economy (7.4%), with

from property construction and 54% (R 293

construction contributing approximately R 28

million) from property management activities.

billion and property management R 22 billion.

Furthermore, the tax generated in the CJMM

In terms of the metropolitan municipalities

in 2015 was R1.2 billion with 38% (R 455

it

6.4%

million) from property construction and 62%

(R 10.4 billion) of the EMM consists of private

(R 758 million) from property management.

property sector activities of which R6 billion is

Lastly, the CTMM generated approximately

attributed to property construction and R4.4

R 673 million from the private property sector

billion to property management activities.

in 2015, of which 40% (R 269 million) was

is

evident

that

approximately

23

from property construction and 60% (R673 On the other hand, the private property sector

million) from property management.

in the CJMM contributes approximately 8.1% (R21.3 billion) to the economy of which R10

From the analysis it is evident that commercial

billion is attributed to property construction

private property activities within the three

and R11.3 billion to property management

identified metropolitan municipalities currently

activities. Subsequently, the CTMM’s private

contributes

property sector contribution encompasses

provincial economy.

roughly

7.5%

(R13.3

billion)

of

significantly

to

the

Gauteng

the

metropolitan economy, of which R7.6 billion

In addition, it is evident that the commercial

is attributed to property construction and R5.7

private property sector in the Gauteng province

billion to property management activities.

is currently one of the fastest growing sectors in the province.

Jobs sustained – Private property sustains roughly 346 215 jobs within the Gauteng

It is clear from this analysis that the commercial

Province of which 88% (304 060 jobs) is within

private property sector currently contributes

the property construction sub-sector and the

significantly to the economy of the KwaZulu-

remaining 12% (42 156 jobs) in the property.

Natal province. The metropolitan and provincial

management activities. The CJMM has roughly

private property contributions in terms of GDP,

130 081 people employed in the private

employment and tax are significant if it is

property sector of which 86% (111 294 jobs)

considered that it surpasses the contributions

is within property construction and 14% (18

made by other major economic sectors, such

787) is occupied in the property management

as the mining, agricultural and utilities sectors

sub-sector. Lastly, the private property sector in

in their entirety on a provincial level. The ‘lost’

the CTMM employs 98 191 people of which

economic value/benefits of the property sector

89% (87 855 jobs) is attributed to property

due to delayed application processes are

construction and 11% (10 337 jobs) to

measured via an application tracking process,

property management activities.

which highlights the performance of the entities handling applications.

Tax generated – The Private property sector in the Gauteng Province generated R2.5 billion for the tax fiscus during 2015, of which 39% (R1 billion) was generated from property construction and 61% (R1.5 billion) from property management activities. In terms of the metropolitan municipalities it is evident that the tax generated from the private property sector in the EMM in 2015 is roughly R538 million of which 46% (R245 million) was

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THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

REFERENCES Cambridge Online Dictionary, 2014, http://www.dictionary.cambridge.org. Dictionary.com, 2014, http://www.dictionary.com. Quantec Easydata, 2014, Standardised Regional statistical database. Statistics South Africa Publication, 2011, The Construction Industry. Statistics South Africa, 2010, Real estate, activities auxiliary to financial intermediation and business services industry. Statistics South Africa, 2012, Standard Industrial Classification of All Economic Activities (Seventh Edition). The Free Dictionary, 2014, http://www.thefreedictionary.com/.

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G

2

C

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G a u t e n g

THE ROLE AND IMPACT

2016

THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

25

of the

COMMERCIAL PROPERTY SECTOR G a u t e n g

THE ROLE AND IMPACT REPORT APPLICATION PROCESSING

2016

1

of the

COMMERCIAL PROPERTY SECTOR THE ECONOMIC VALUE of the COMMERCIAL PRIVATE PROPERTY SECTOR APPLICATION PROCESSING REPORT

Pretorial

l Cullinan

Bronkhorstspruit

Tshwane

l

Metsweding

l Centurion

Midrand

l

l

Magaliesburg

Sandton

Muldersdrift l Randburg l l Krugersdorp l l Roodeport l

Johannesburg

West Rand

Soweto l

Johannesburg

Carltonville

l Bedfordview l l

Benoni

Boksburg

l

Springs

Ekurhuleni

l l

Heidelberg

Sedibeng Vander Bijl Park

l

Vereeniging

l

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APPLICATION PROCESSING REPORT

SECTION ONE: INTRODUCTION

T

he purpose of this report is to investigate the second component of the “The Role and Impact of the Commercial Private Property Sector in the Gauteng Province study. The first component contextualises the size and quantity of the private property sector in the Gauteng Province to

provide a foundation for the importance of the industry and specifically the value that it holds within the larger economy. Essentially the purpose of this section of the report is to supplement the first component of the study by analysing the development application processes of the three identified municipalities. Moreover, this report intends to provide a perspective on existing administrative processes, highlighting certain areas of concern and possible improvements where required.

1.1 Study Area

As indicated, this report makes specific reference

to

the

three

metropolitan

The Gauteng Province is located in the

municipalities of the Gauteng Province. The

northern Highveld region of Southern Africa

CTMM is located in the northern region of

and contains two of the largest South African

the Gauteng Province. It is currently the

cities namely, Pretoria and Johannesburg.

largest metropolitan municipality in the

The Gauteng Province consists of three

country and is known as the administrative

metropolitan

two

hub and capital of South Africa. In addition,

metropolitan

the CJMM is located in the centre of

municipalities include the City of Tshwane

the province and south of the CTMM.

district

municipalities

municipalities.

The

metropolitan

municipality

Ekurhuleni

metropolitan

and

(CTMM),

the

Municipality

The CJMM is known as the commercial

(EMM), and the City of Joburg metropolitan

hub of Gauteng due to its vast economic

municipality

the

and business Activities. Some of the major

two district municipalities are the Sedibeng

towns located in the CJMM include Sandton,

district municipality and the West Rand

Johannesburg, Midrand, and Soweto. Lastly,

district municipality. Map 1 indicates the

the EMM is located east of the CJMM and

context of the Gauteng Province along

south of the CTMM. The EMM is regarded

with its three metropolitan and two district

as the transportation hub of South Africa

municipalities.

primarily due to the fact that the OR Tambo

(CJMM).

Furthermore,

Map 1: Gauteng Province Source: ArcGIS, ESRI 2015

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APPLICATION PROCESSING REPORT

27

Map 2: Study Area Source: ArcGIS, ESRI 2015

International Airport and the associated

development lifecycle from an administrative

Aerotropolis region is located within its

point of view. Administration of the relevant

borders. Map 2 illustrates the three identified

development applications are dealt with in

metropolitan areas.

this report taking into consideration that this

1.2 General Research Approach

is a municipal function. Application processing proficiency is measured

The general research approach intends to

by utilising application tracking case studies

clarify the methodology and approach utilised

provided by the private and public sector

to measure the performance of the application

respectively, in addition an overall assessment

administration processes within the relevant

of the municipal development application

departments of the three identified metros.

database. However, in order to provide context,

The

sector

it is important to firstly provide clarity on the

comprises of various construction and property

private

commercial

property

regulatory environment in which the application

management activities as identified in Section

processes function, along with the general

2 of the first component of this study.

timeframes prescribed for administration.

As indicated the commercial private property

Subsequent to forming an understanding of the

sector consists of construction activities along

regulations and processes involved in building

with property management activities. Various

plan and LUM application administration, the

administrative processes are involved within

municipal benchmark over the past three years

the value chain of each of these activities.

is analysed to provide background in terms

For the purpose of this study it is impractical

of the total number of plans and applications

to measure administration efficiency within

processed by the municipality.

the entire development cycle. Therefore, this report identifies the administration of

Consequently the application tracking analysis is

development applications such as building

initiated by identifying a sample of applications

plans and Land Use Management (LUM)

provided by the private and public sector

applications as the central component of the

thereafter identifying any delaying factors

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APPLICATION PROCESSING REPORT

experienced by the private sector respondents

Role and Impact of the Commercial Private

on the one side as well as the municipal

Property Sector in the Gauteng Province�

respondents on the other.

study will be utilised to obtain valuable information regarding the civic administration

As per the Spatial Planning and Land Use

of property development within the identified

Management Act 16 of 2013 (SPLUMA),

study area in order to quantify the distinct

effective from 1 July 2015, all local

roles that the public and private sector plays in

municipalities are now responsible for the

property development, particularly in terms of

control and regulation of the use of land

timeframes. Through quantifying the economic

within their respective municipal areas. As

value of the commercial private property sector

such, all building plan and LUM applications

and determining the estimated application

are dealt with primarily at municipal level.

timeframes, the study provides insight on the level of impact that the development

Departments and government entities

application administration tempo has on the

consulted during the research process

provincial and local economies.

[ Department of Economic Development

1.4 Limitations

[ Department of Rural Development and Land Reform

Due to the qualitative and quantitative

[ Statistics South Africa

research methodology certain limitations

[ City of Tshwane metropolitan Municipality

were noted during the research process. It is

[ City of Joburg metropolitan Municipality

important that the limitations are stated and

[ Ekurhuleni metropolitan Municipality

recognised in the report to ensure that there

[ Gauteng Province Planning Division

is a contextual understanding of the results. The basic limitations to the research are:

1.3 Purpose of the Report

[ Primary data sourced is largely reliant on verbal communications by various

Ultimately the purpose of this report is to

government officials and private property

utilise existing application tracking scenarios as

professionals. For the sake of objectivity,

tools to measure the turnaround times of the

all

development applications

excluded in the research. The captured

detrimental

information

remarks

provides

a

have

been

multisided

in terms of timeframes prescribed by the

perspective based on the highest possible

relevant regulatory entity. It should be noted

representation of the private and public

that this report does not represent an audit of

sector respondents.

all development applications administered by

[

the three metros but rather, an evaluation of

provided by representatives of the private

application tracking case studies provided by

and public sectors. Inadequate responses

both the public and private sectors.

among the private and public sectors were

Primary data is reliant on information

noted mainly owing to capacity pressures.

1

This report was compiled subsequent to a

[

time of fundamental change in development

spatial component, timeframe, activity

1. planning legislation Therefore, not only does

and process, therefore the development

Each application had a unique

this report seek to identify factors influencing

applications

are

The SPLUMA came into operation

the development application processes and

comparable.

Informed

on the 1st of July 2015, resulting

timeframes, but it also intends to recognise the

were used to make the applications more

relevance of the transformed legislation.

comparable by sorting them according to

Furthermore, it is understood that the “The

basic representative features.

in a number of changes in the LUM application process

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not

all

identically

generalisations

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APPLICATION PROCESSING REPORT

[

It should be noted that the response

development planning application processes in

received from the application tracking

terms of each phase of the application and the

questionnaires

relevant timeframes.

that

were

distributed

29

to the private sector was insufficient, however

a

significant

number

of

Section 5: Application Tracking Analysis

interviews were completed as a means of

An overview of the number of applications

obtaining the required information.

processed by each of the local authorities as

[

The manner and approach in which

well as their efficiency rate. Applications are

each of the municipalities capture LUM

reviewed and assessed in order to determine

and building plan statistics vary and

the processing challenges and shortcomings.

therefore

a

comparable

analysis

of

timeframes and application processing

Section 6: Private Sector Perspectives

was not possible.

The purpose of this section is to outline the municipal performance based on the

All the limitations are addressed through the

experiences of the private sector in terms of

provision of a wide variety of case studies.

LUM and building plan application submissions.

The limitations are therefore, mitigated as far as possible in order to ensure that the report

Section 7: Recommendations

contains accurate results.

This section summarises the key problems and challenges identified in the analysis and

1.5 Report Outline

ultimately provides recommendations based on the issues identified in the preceding sections.

The report firstly investigates the policy and legislative environment in which development processes operate and secondly identifies the

Section 8: The Economic Impact of Application Delays

various application administration processes

The purpose of this section is to indicate

with

the estimated economic impact of delaying

regard

to

property

development

applications. Furthermore, it determines the

development

application

and

variables are processed into the economic

provides a number of recommendations and

impact assessment model in order to determine

guidelines in terms of improving the existing

the potential financial losses associated with

administrative functions of the metros. The

application delays.

administration

efficiency

application

processes.

All

following sections are included in the report: Section 9: Conclusion and Final Remarks Section 2: The Regulatory Environment

An overview of some final deductions and

The regulatory and legislative environment in

remarks based on the analysis conducted.

which application processing functions is outlined. Section 3: Land Development Applications and Regulatory Entity Responsibilities This section includes an analysis of the types of development applications and the regulatory responsibilities of local authority entities in terms of application processing. Section 4: Development Planning Application Process This section provides a summary of the

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APPLICATION PROCESSING REPORT

SECTION TWO: THE REGULATORY ENVIRONMENT

T

o be able to recognise and analyse the tempo and proficiency of the application administration processes within the three identified metros, it is important to obtain an understanding of the legislative environment that influences the application processes. This

section of the report therefore provides a perspective on the relevant national, provincial, and local legislation and policies in order to gain context and background, along with forming a basis from which application processes can be examined. The legal framework under which municipal

in South Africa. The legal basis for the

spatial planning functions in South Africa has,

origin of SPLUMA was prompted by the

since the 1994 elections, changed significantly.

constitutional court in which it found that,

Prior to 1994, planning was essentially

unlike the regulations stipulated in the DFA,

regulated according to the division of land

municipal planning is the exclusive function

through implementing racial segregation

of a municipal government in terms of LUM.

known as apartheid. As such, South Africa

SPLUMA was implemented on the 1st of

had distinct planning legislations for the

July 2015 along with additional legislation

then four Provinces as well as for the black

intended to ultimately provide a platform

homelands. Although much of the Apartheid

for sustainable and resilient development

planning legislation remained unchanged

planning in South Africa.

subsequent to the 1994 democratic elections, new legislation has been adopted as a means of reversing or mitigating the spatial injustices of the Apartheid planning administration. One of which was the Development Facilitation

2

2.1 Understanding the Spatial Planning and Land Use Management Act No 16 of 2013

Act No 67 of 1995 (DFA). The purpose of the Spatial Planning and The DFA was employed as an interim

Land Use Management Act No 16 of 2013 is

measure to deal with the spatial issues as

to essentially provid for a uniformed spatial

a result of the apartheid legacy. It should

planning system in South Africa that allows

be noted that the DFA was, at the time, the

municipalities to have the majority of control

only legislation that specifically dealt with

in land use management and development

spatial development principles and land

processes. According to the South African

use management. During 2010, the DFA

Cities Network (SACN) 20153 SPLUMA was

chapters that dealt with LUM were deemed

developed as a response to the following:

unconstitutional and were subsequently repealed along with a number of other

[ A need for clearly defining each element

planning related legislation that operated

of the planning system, from a strategic

parallel with the DFA. As a means of

spatial planning to management of land

Constitutional court of South

providing a single legislative, integrated

development, and specifying the links

Africa: City of Johannesburg

planning system for the entire country

between these elements.

Metropolitan Municipality v

thedepartment of Rural Development and

[ Legislating principle-led planning that

Gauteng Development Tribunal and

Land Reform (DRDLR) introduced the Spatial

gives normative guidance to the content and

Others CCT89/09 18 June 2010

Planning and Land Use Management Act No

intended outcome of planning mechanisms.

2

3

16 of 2013 (SPLUMA). Essentially, SPLUMA

[ Attempting to address the fragmented,

SACN, SPLUMA as a tool for

was introduced as a legislative instrument

unsustainable spatial development patterns

Spatial Transformation. 2015

to replace the DFA in terms of regulating

of South Africa.

spatial planning and land use management

[ Creating a single, integrated legal

SPLUMA Section 3 (a) “provide for a uniform, effective and comprehensive system of spatial planning and land use management for the Republic�

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system dealing with a uniformed approach

In addition, the enforcement of the sustainable

to planning.

and efficient use of land through cooperative

[Specifying the role of each governmental

governance ultimately results in enhanced

sphere with regards to the planning syste

opportunities and potential for increased

as a whole.

economic investment. The purpose of SPLUMA

31

outlines the intentions of National, Provincial The enactment of SPLUMA has a significant

and Local government to provide a socio-

role in terms of the socio-economic context

economic environment that is reflective of a

of South Africa. Apart from the provision

democratic society.

of comprehensive and sustainable planning systems, the purposes outlined in SPLUMA

It is important to have a comprehensive

is motivated by a strong need for social

understanding of SPLUMA and therefore to

and economic inclusion. As a result, many

have a contextual appreciation of the Act. The

of the poverty stricken and previously

Act has seven sections and is accompanied by

excluded areas should have the opportunity

the SPLUMA regulations which deal with the

to improve their socio-economic conditions

specifics of LUM and any other related general

and

matters. The sections contained in SPLUMA are

ultimately

contribute

towards

the

national economy. Section

1

Heading Introductory Provisions Development

2

Principles, Norms and Standards

3

Intergovernmental Support Spatial

4

summarised as follows:

Development Frameworks

Content The purpose of this section is to provide a set of definitions for terms used in the Act as well as stipulating the applications and objectives of the Act. Subsequently this section provides a brief overview of the spatial panning system as well as the categories of spatial planning.

Sets out the application and purpose of the development principles as well as the guidelines and directive for creating norms and standards.

This section indicates the role that each sphere of government has with regard to monitoring and providing support.

The purpose of this section is to provide guidance on the preparation of spatial development frameworks for each sphere of government. Furthermore, it indicates the content of each SDF.

Sets out directives for the following:

5

Land Use Management

Role of the executive authority; purpose, review, amendment and legal effect of land use schemes; alignment of authorisation; record of amendments; and enforcement of a land use scheme.

Land 6

Development Management

This section indicates the components of municipal land use planning as well as the establishment of municipal planning tribunals and their technical aspects. In addition, other related land development matters such as appeals and development applications that are of national interest are also included. The purpose of this section is to provide general provisions for ownership registration as well

7

General Provisions

as providing the directive to the Minister to develop regulations in line with the Act. This section also deals with exemptions in terms of the Act, delegations, offences and penalties, repeal of laws, and transitional arrangements.

Schedules

Content

1

The first schedule deals with all matters to be addressed by provincial legislation.

2

Sets out a list of land uses along with their definitions.

3

Indicates the laws that have been repealed by the Act.

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APPLICATION PROCESSING REPORT

SPLUMA

Purpose of the act > To provide a framework for spa0al planning and land use management in South Africa that provides for inclusive, developmental, equitable and efficient spa0al planning at the different spheres of government.

OBJECTIVES of the Act: ü Provide for a uniform, effec1ve and comprehensive system. ü Ensures that spa1al planning promotes social and economic inclusion.

SPATIAL PLANNING AND LAND USE MANAGEMENT ACT NO 16 OF 2013

may prescribe an alterna1ve or Sec1on 2(2) : No other legisla1on parallel mechanism, measure, ins1tu1on or system on spa1al planning, land use, land use management and land development in any way inconsistent with the Act. This makes SPLUMA the most relevant and important piece of legisla<on in spa<al planning.

CATEGORIES OF SPATIAL PLANNING Municipal

Control and regulate the use of land through IDP’s, Land use Scheme’s and SDF’s.

Provincial

Monitor compliance by municipali<es with SPLUMA Compile, approve and review Provincial SDF and other policies. Making and review of na<onal policies designed to monitor other spheres Compile, approve and review Na<onal SDF .

ü Provide for development principles, norms and standards. ü Provide for sustainable and efficient use of land. ü Provide for coopera1ve government and intergovernmental rela1ons. To redress the imbalances of the past and to ensure that there is equity. ü To

National

SP RES ATIAL ILIE NCE

N OD GO RATIO T INIS

ADM

dM Monitor it Support and Monitor Supportt and Municipal other spheres and provincial and municipal differen<a<on – each ac<vi<es and priori<se municipality is unique. priori<se na<onal provincial interests. interests.

SPATIAL SUSTAINABILITY

ALIGNMENT OF AUTHORISATION PROCESSES on policies and legisla0on impac0ng on land development applica0ons and decision making processes. MUNICIPALITIES AS AUTHORITIES OF FIRST INSTANCE. Reitera0on of the sole mandate of municipali0es where municipal planning is concerned. ESTABLISHMENT OF MUNICIPAL PLANNING TRIBUNALS AND APPEALS STRUCTURES by municipali0es to process land development applica0ons. PREPARATION OF RESPECTIVE SDF’S by all three spheres of government, based on norms and standards guided by development principles. by all three spheres of government, based on norms and standards guided by development principles. DEVELOPMENT OF A LAND USE SCHEME Single and inclusive for the en0re municipality with emphasis on municipal differen0a0on. Single and inclusive for the en0re municipality with emphasis on municipal differen0a0on. STRENGTHENED INTERGOVERNMENTAL SUPPORT through enforcement, compliance and monitoring processes. NEW DEVELOPMENT APPLICATIONS made in terms of SPLUMA and municipal by-laws.

Legislation repealed by SPLUMA

FREQUENLTY ASKED QUESTIONS

Removal of Restric<ons Act 84 of 1967 Physical Planning Act 88 of 1967 LLess Formal Township Establishment Act 113 of 1991

1.  What happens to pending old order Ordinance applica1ons now that SPLUMA has

Physical Planning Act 125 of 1991

been enacted as of 1 July 2015? Depending on which phase the applica<on is in, the municipality can either process the applica<on in terms of the old legisla<on and

Development p Facilita<on Act No 67 of 1995

transi<onal measures, or request that a new applica<on be lodged.

a)  Who can appeal? Any person whose rights are affected by the municipal tribunal decision

2.  What happens to the former Development Facilita1on Act applica1ons that have not

b)  What can be appealed? Appeal against (i) En<re decision, (ii) Condi<ons, (iii) Appeal based on process review applica<on, and (iv) failure to make a decision

applica<ons into their respec<ve municipality and these will then be handed over to

been finalised by the province? The Gauteng Province is categorising all DFA the municipality to process.

c)  How does one go about a_aining intervener status? Submit a pe<<on to the MPT with an affidavit proving that no collusions are evident. d)  When granted intervener status, pe<<on to intervene is lodged. When is intervener status granted to objector? When an applica<on is submi_ed an interested person can at any point in <me, but should apply within 7 days of becoming aware of proceedings, be granted intervener status by the tribunal or authorized official. e)  Theore<cally, how long does the appeal process take? Appeals are to be lodged within 21 days of decision. Pre-hearing process should be completed within 150 days of no<ce to appeal. Appeal is submi_ed within 14days ader comple<on of pre-hearing process.

3.  Can the municipality accept development applica1ons in terms of the old Ordinances

subsequent to the 1st of July 2015? The old ordinance remains in opera<on un<l the municipal by-laws have been adopted. However, development applica<ons shall be lodged in terms of the old Ordinance AND in accordance with SPLUMA.

Created by : Urban-Econ Development Economists

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33

SPLUMA Section 54 (1) “The Minister may, after public consultation, make regulations consistent with this Act”

In terms of Section 54 (1) in chapter 7 of SPLUMA,

Development Facilitation Act no 16 of 1995

the DRDLR is permitted to make regulations on

> prior to its repeal, the DFA intended to

any matter prescribed in the Act. The regulations

facilitate and speed up the implementation

were published by the DRDLR in July 2015. The

of

purpose of the regulations is to recommend the

programmes and projects in relation to land,

national norms and standards, policies and other

whilst providing general principles governing

directives as well as the implementation measures

land development throughout South Africa.

that pertain to spatial planning. Furthermore,

After the DFA was repealed, all applications in

the SPLUMA regulations indicate, inter alia, the

Gauteng were submitted in terms of the Town

procedures to be followed should a municipality fail

Planning and Townships Ordinance No 15 of

to adopt a land use scheme as well as procedures

1986 until the municipal by-laws (as stipulated

concerning land development applications. The

by SPLUMA) would be in place.

the

reconstruction

and

development

following diagram provides a summary of the key Spatial Planning and Land Use Management

components as per the SPLUMA:

Act 16 of 2013 > the mandate for national

2.2 National Legislative Framework

government indicates should

The

legislative

framework

under

as

stipulated

that

national

provide

support

by

SPLUMA

government and

assistance

which

tomunicipalities as well as monitor the

development planning on a national scale

compliance of municipalities and provinces to

operates is based on the following:

SPLUMA. In addition, SPLUMA stipulates that a national SDF should be developed in order

Constitution of RSA No 108 of 1996 > in

to guide development in all of the provinces.

terms of municipal planning the role of the Constitution of RSA is that of assigning municipal

National Building Regulations and Building

planning responsibilities to municipalities in

Standards Act No 103 of 1977 > essentially

terms of Section 156 of the Constitution of RSA

implemented forthe purpose of building control,

read with Part B of Schedule 4, in terms of which

the Act prescribes building standards and other

municipalities have both executive authority

related matters. All proposed building plans are

and the right to administer to the extent set out

submitted in line with this Act.

4

in Section 155. Municipal planning is therefore the constitutional responsibility of local and

Additional Acts that have relevance to

metropolitan municipalities.

development planning > [ South African National Road Agency

Municipal Systems Act No 32 of 2000

Limited and National Roads Act No 7 of 1998

> requires that local government prepare

[ Restitution of Land Rights Act No 22

Integrated Development Plans (IDP’s). The IDP is a

of 1994

comprehensive plan that should reflect, among

[ Restitution of Land Rights Amendment

other, the long term municipal development

Act 48 of 2003

vision within its area of jurisdiction, identify

[ Restitution of Land Rights Amendment

areas of highest need for basic municipal

Act 15 of 2014

services, as well as the municipal development

[ Housing Act No 107 of 1997

strategies accompanied by a detailed financial

[ Land Survey Act No 8 of 1997

plan. In addition, it is required that all IDP’s

[ Local Government Municipal Property

4

include a Spatial Development Framework

Rates Act No 6 of 2004

administers some 2.79 million

(SDF) which includes the basic guidelines for a

[ Subdivision of Agricultural Land Act No 70

hectares of Ingonyama Trust land

land use system within the municipality.

of 1970

in KwaZulu-Natal.

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The Ingonyama Trust Board

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APPLICATION PROCESSING REPORT

National Economic Policies >

Furthermore, it indicates the extent of such

The National Development Plan (NDP)

an assessment and ensures that an integrated

2030 highlights, among other, the need for the

environmental management approach is followed.

improvement of local township economies and employment creation, investing in infrastructure

Other specific environmental management Acts

and environmental sustainability, planning for an

that were promulgated to deal with specific

inclusive rural economy, and building a capable

methods of environmental management are

and developmental state.

listed below:

A summary of the directives announced in the

[ NEMA: Protected Areas Act No 57 of 2003.

NDP include, among others, the reversing of urban sprawl; sustainable human settlements;

[ NEMA: Biodiversity Act No 10 of 2004.

new urban development around transport and

[ NEMA: Air Quality Act No 39 of 2004.

economic nodes; creating township economic

[ NEMA: Integrated Coastal Management Act No 24 of 2008.

hubs; integrating townships into the wider economy;

informal

settlement

upgrades;

quality design of public space; and redirecting

[ NEMA: Waste Act No 59 of 2008.

towards more valuable investments.

2.3 Provincial Legislative Framework

The New Growth Path (NGP) 2011 advocates

The

the creation of jobs largely in the private sector and

government lies first and foremost in the

highlights the need to address unemployment,

Constitution of RSA in which it states that the

poverty and inequality.Furthermore, the NGP sets

Premier performs executive, policy, legislative,

a target of creating five million jobs by 2020. This

intergovernmental and ceremonial functions

target is projected to reduce unemployment from

in the province. Furthermore, the provincial

25% to 15%.

government must be capacitated and positioned

state-funding from non-strategic investments

mandate

of

the

Gauteng

provincial

so as to effectively provide leadership, oversee ENVIRONMENTAL RELATED LEGISLATION

functional administration processes, and provide

On a national level there are also a number

long term planning and policy coordination.

of

and

On a provincial level the primary regulatory and

legislations that influence LUM and building

legislative frameworks are directly related to

plan applications, which are listed as follows:

the municipal management of development

environmental

related

policies

applications in the three identified metros. National Environmental Management Act (NEMA) 107 of 1998 and associated Acts

The

> although primarily related to environmental

development planning on a provincial scale

matters,

operates is based on the following:

NEMA

also

contains

certain

legislative

framework

under

which

principles relating directly to planning where

5

Repealed by SPLUMA 6

(Kidd, 2014)

the environment may be affected. The Act

Development Facilitation Act no 16 of

requires sustainable development, i.e. where

5 1995 > Prior to its repeal it became apparent

there is an integration of social, economic

that the provisions of the DFA were applicable

and environmental factors in the planning,

on

implementation and evaluation of decisions,

(including upmarket housing estates and golf

so as to ensure that development serves

courses) and therefore could be processed

both present and future generations. The Act

through the DFA and mandated by provincial

provides for the establishment of regulations

government. The effect of this was that many

and listing activities that require a suitable level

â&#x20AC;&#x2DC;municipal planningâ&#x20AC;&#x2122; decisions were being made

of environmental assessment.

by the provincial development Tribunals (the

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property

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APPLICATION PROCESSING REPORT

authorising bodies established by the DFA) and

Gauteng

not by municipalities, whose approval processes

Development Strategy

were disdained by developers in favour of the

other, a transformation of the provincial

6

quicker, cheaper DFA processes.

Employment

Growth

35

and

highlights, among

economy through shared, sustainable and inclusive economic growth, protecting and

Spatial Planning and Land Use Management

enhancing the natural environment, and to

Act 16 of 2013 > the mandate for provincial

stimulate economic growth in communities.

government is to essentially provide support

Furthermore, the strategy not only highlights

to municipalities as well as assisting in any land

the need for stimulating economic activity and

development disputes. Furthermore, SPLUMA

being responsive to the existing settlement

stipulates that provincial government should

patterns, but also indicates that there should

strengthen the capacity of municipalities in

be a re-investment into existing infrastructure

order to implement an effective system of LUM.

systems within the province.

SPLUMA came into effect on the 1st July 2015. Importantly, SPLUMA does not have the legal right

The Gauteng 10 Pillar Programme of

to repeal any provincial planning legislation or

Transformation,

national planning legislation that was assigned to

Re-industrialisation

the provincial sphere. Any provisions in provincial

10-pillar strategy for the transformation of

legislation that are inconsistent with SPLUMA will

the Gauteng Province. With the ten pillar

7

however be of no effect.

Modernisation (2015)

and

proposes

a

programme, the Gauteng Province pledges to take active steps to make the province an

Gauteng Planning and Development Bill

integrated city region that is characterised by

2012 > the primary objective of the Bill is

social cohesion and economic inclusion.

to provide guidance for any planning and development within the Gauteng Province.

The ten pillar programme consists of four

In addition, the Bill intends to provide for

transformation, four modernisation, and two

intergovernmental

industrialisation strategies namely:

coordination

of

land

development policies as well as providing for the regulation of municipal land use and land

[Radical economic transformation

use management schemes. Moreover, the Bill

[Decisive spatial transformation

stipulates that municipalities are the primary

[Accelerating social transformation

decision makers in land use management

[Transformation of the state of

and land development applications.

governance [Modernisation of the economy

Gauteng Removal of Restrictions Act No

[Modernisation of public service

3 of 1996 > the Act aims to empower the

[Modernisation of human settlements

authorised local authorities to amend, suspend

and urban development

or remove restrictions or obligations. In other

[Modernisation of public transport

words, the Act provides for the removal of

infrastructure

certain clauses in the relevant title deed and

[Re-industrialise Gauteng

requires a formal application procedure.

[Lead in Africaâ&#x20AC;&#x2122;s new industrialrevolution

Subsequent to SPLUMAâ&#x20AC;&#x2122;s promulgation on the 1st of July 2015, and if a municipalityâ&#x20AC;&#x2122;s by-laws

The draft Gauteng Spatial Development

are not in place, applications will be submitted

Framework (2030) proposes a spatial concept

and accepted in terms of the Gauteng Removal

that allows for improved connectivity and

of Restrictions Act. However, if the municipal

creating a network of spatial concentration.

by-laws are in place applications should be finalised according to the municipal by-laws.

In addition, the GSDF 2030 stipulates that

Provincial Economic Policies >

increased diversification, promoting liveable

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The

7

SALGA

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APPLICATION PROCESSING REPORT

settlements and protecting sensitive environments

development planning processes in the domain

are of significant importance for the future

of the local municipality. As a means of providing

development of the province. The Gauteng

a uniformed development application approach,

Province intends to accomplish these objectives

SPLUMA stipulates that each municipality is

through spatial and economic targeting and

responsible for the establishment of a municipal

identifying catalytic projects for development.

planning tribunal or any other authority to mandate land development decisions. SPLUMA

Management

indicates that local municipalities must develop

Perspective (2014) provides a management

an SDF, IDP, and land use scheme. According

tool for provincial and local government to

to SPLUMA, each municipality should also

manage the growth and development within

develop municipal planning by-laws that are in

the municipal area. Among other, growth

line with the regulations stipulated in the Act.

management targets for the province should

The municipal planning by-laws will replace

ensure that new growth is directed towards

the old ordinance legislation and as such,

strategic locations.

provide

The

Gauteng

Growth

new

and

refined

development

application processes. In addition, emphasis should be placed on increasing transit orientated development,

Town Planning and Townships Ordinance

creating sustainable communities, reducing

8 No 15 of 1986 > the mandate for local

the establishment of new settlement areas,

government

and creating sustainable Peri-urban towns.

development planning processes in the realm

2.4 Metropolitan Legislative and Policy Framework

is

to

fundamentally

place

of the local municipality. The Ordinance sets out procedures, through the municipal town planning schemes, according to which township establishment, subdivision, rezoning,

2.4.1 Overview of the Metropolitan

and other LUM applications should adhere to.

Legislation in Gauteng Prior to the promulgation of SPLUMA, the

2.4.2 Metropolitan Economic and

legislative framework in which development

Development Planning Policies

planning operated was based on the former

The purpose of the economic and development

town planning schemes as stipulated by former

planning policies of each of the identified

planning legislation as well as the Town Planning

metropolitan municipalities is to provide

and Townships Ordinance No 15 of 1986.

strategic direction in terms of economic growth

Essentially, the Town PlaWnning and Townships

and the intended spatial course.

Ordinance intended to control planning in the Gauteng Province.

The Ordinance stipulates

Typically, policies on economic development are

specific guidelines with regard to development

based on the exclusive economic needs of the

planning application processes and the role that

municipality, but are also viewed in the context

provincial and local government plays.

of the provincial and national economy. In

The following legislative entities can be

addition, development planning policies provide

identified in the municipal planning context:

guidance in terms of the desired growth patterns of the municipality. Legislative requirements

8

Repealed by SPLUMA in July

Spatial Planning and Land Use Management

from

2015, however still in operation in

Act 16 of 2013 > the mandate for local

provide local municipalities with the mandate

cases where municipalities have

government

is

to

fundamentally

provincial

and

national

government

place

not proclaimed municipal by-laws. Land development applications are made in terms of the Ordinances and SPLUMA.

SAPOA - South African Property Owners Association

GDP report GAUTENG 2016 .indd 36

â&#x20AC;&#x153;SPLUMA will have various implications on the future operations of both Municipalities and Provinces in terms of their current responsibilities and functions as per existing town planning and related development legislationâ&#x20AC;? DRDLR and Gauteng ProvinceDevelopment Planning Division."

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APPLICATION PROCESSING REPORT

to work alongside local communities to identify

Economic

sustainable methods of meeting the needs of the

Strategic Framework 2008 was developed.

communities along with improving the lives of all

The

citizens.9 The following section summarises the

the need for the provision of social and

economic and development planning visions for

economic infrastructure and services within

each of the metropolitan municipalities.

local communities along with deepening

strategic

participatory a. City of Johannesburg Metropolitan

Development

Policy

framework

programmes

37

and

emphasises

between

local

communities and government.

Municipality (CJMM) In addition, the strategic framework highlights "Johannesburg – a World Class African City

the

of the Future – a vibrant, equitable African

absorbing economic growth to ensure long-

City, strengthened through its diversity; a city

term sustainable employment opportunities

that provides real quality of life; a city that

and

9 provides sustainability for all its citizens ; a

achievement of New Partnerships for Africa’s

resilient and adaptive society” CJMM Growth

10 Development (NEPAD) . Interestingly the

and Development Strategy 2040

strategic framework includes information

importance

of

contributing

accelerating

to

the

labour

successful

on niche sectors within the municipality The CJMM prides itself in being a first

and provides a synthesis on the strategies,

class African city as well as being the most

programmes and key drivers of the identified

powerful commercial centre on the African

sectors.These include Finance and Business

continent. As such, the CJMM has a number

Services; Information and Communication

of economic, and development planning

Technology; Business Process Outsourcing;

policies and frameworks that specifically

Manufacturing;

provide for increased and organised economic

Industries; Freight and Logistics; Mining and

growth in the metro.

Beneficiation; and Agriculture and Agri-

Trade;

Tourism;

Creative

Processing sectors. These policies include the following: The strategic framework continues by identifying The Joburg Growth and Development

specific locations and nodes within the metro

Strategy

where the majority of these sectors function.

2040

(GDS)

highlights

six

primary principles that provide a view of the

to

As a means of presenting the spatial planning

development. The principles identified include

municipality’s

policy of the municipality the City of Joburg

eradication of poverty in the municipality

Spatial Development Framework 2010-2011

through, inter alia, providing better and

highlights the following key spatial objectives:

more

affordable

desired

access

approach

to

municipal

services as well as providing affordable

[ Supporting an efficient movement

rental housing opportunities. Furthermore,

system;

the

[ Ensuring strong and viable nodes;

GDS

highlights

the

principles

of

9

The white paper on Local

building and growing an inclusive economy

[ Supporting sustainable environmental

Government 1998

along

management;

10

[ Implementing corridor development;

strategic framework for pan-

[ Increasing densification and

African social development and

environmental sustainability, achieving social

managing urban growth; and

provides unique opportunities for

inclusion and promoting good governance.

[ Facilitating sustainable housing

African countries to work together

In order to provide some context and guidance

environments.

towards their development

with

settlements. include

building The

ensuring

sustainable

remaining resource

human

principles

security

and

in terms of economic development within the municipality, the City of Johannesburg

JUNE 2016

GDP report GAUTENG 2016 .indd 37

NEPAD is an African union

agenda. For more information,

At the time of this research the Spatial

please visit www.nepad.org

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38

APPLICATION PROCESSING REPORT

Development Framework for 2016 was still Map 3: CJMM Draft Spatial Development Framework

being drafted and its final spatial objectives

b. Ekurhuleni Metropolitan Municipality (EMM)

could therefore not be accessed. “We have a vision of being the smart,

Concept 2016

However, the CJMM did provide a draft concept

creative and developmental city – that is our

of the spatial vision for the municipal area. Map 3

destination”Executive Mayor EMM.

illustrates the draft spatial concept for the CJMM. The EMM is one of the largest municipalities in Map 3 noticeably indicates areas prioritised for

the Gauteng Province and the fourth largest in the

re-urbanisation, diversification and economic

country The primary policy principles identified by

development as well as identifying possible and

the municipality include, inter alia, good governance,

existing regional and local nodes.

urban renewal, poverty alleviation, local economic development and employment creation.

In order to achieve the objectives identified in the economic and development planning policies it

The EMM acknowledges that, like most

is crucial that the private sector recognises the

municipalities in South Africa, it is spatially

spatial vision for the municipality and aspire to

fragmented

develop according to the guidelines provided

the economic and development planning

in the CJMM SDF and other policies.

policies

and

adopted

inequitable, by

the

however

municipality

aims to work toward creating equitable Other policies and frameworks that impact on

and

economic and development planning within the

enhanced

metro include:

economic benefits. Some of the key economic

integrated

communities

opportunities

and

with

maximised

and development planning policies include [Strategic Integrated Transport Plan

the following:

Framework 2013

SAPOA - South African Property Owners Association

GDP report GAUTENG 2016 .indd 38

[Johannesburg Tourism Strategy

As stated in the Ekurhuleni Growth and

[State of the Environment report

Development Strategy 2025 (GDS) the vision

[Integrated Development Plan 2016-2021

is to create a smart, creative, and developable

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APPLICATION PROCESSING REPORT

city that is strongly guided by the principles of 11.

increased

tourism

activities,

promoting

The GDS is not intended to be a

investment, and creating an inclusive wealth

municipal policy document, but should rather

generating economy. The purpose of the Draft

be viewed as a platform that builds a common

Ekurhuleni Spatial Development Framework 2015

vision and purpose between the public sector,

(SDF) is essentially to provide guidance in terms

private sector and civil society.

of the spatial vision and expected growth of the

Batho Pele

39

municipal area. The strategic objective highlighted The GDS provides a framework and point of

in the draft SDF includes, inter alia, the following:

reference for all policies and plans within the EMM. In terms of spatial development, the

[Develop a well-defined system of

GDS highlights the following imperatives:

activity nodes;

11

Batho Pele is a â&#x20AC;&#x2DC;people firstâ&#x20AC;&#x2122;

[Promote the development of a compact

approach and its principles are

[The prevailing pattern of outward urban

urban structure;

formerly adopted in the White

growth and expansion will be redirected

[Create a sustainable and functional

Paper on Transforming Public

inwards. No urban development will

open space network;

Service Delivery in 1997. http://

be allowed outside the urban edge as

[Optimise job creation capacity of the

www.dpsa.gov.za/dpsa2g/

demarcated in the Ekurhuleni SDF.

formal economy;

documents/Acts&regulations/

[Infill development will be promoted

[Integrate the disadvantaged

frameworks/white-

at all times, especially in and around the

communities into the urban fabric;

papers/transform.pdf

urban core areas.

[Actively promote sustainable public

[Accessibility to the urban core areas will

transport;

be improved.

[Promote sustainable livelihoods development;

[Incentives will be provided for private

[Promote sustainable development; and

development within the identified core areas.

[Optimise the comparative advantages of the EMM.

Ultimately, the GDS identifies that the greatest needs

in

the

municipality

are

economic

diversification, job creation, skills development,

JUNE 2016

GDP report GAUTENG 2016 .indd 39

Map 4 illustrates a section of the spatial

Map 4: Ekurhuleni Spatial

concept for the EMM:

Development Framework 2016

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40

APPLICATION PROCESSING REPORT

Other policies and frameworks that impact on

categories of economic development such as

economic and development planning within

nodes and corridors indicating that development

the municipality include:

should be targeted at these areas.

[Integrated Development Plan 2013/14-

More recently, the City of Tshwane 2055

2015/16

Vision emphasises the role of the CTMM as 12

[City Development Policies

a metropolitan government and highlights

[Ekurhuleni Densification Framework

the importance of being a strategic partner

[ [Residential Densification Strategy 2008

in

[ [Ekurhuleni Local Economic Development

spatial transformation aspirations of the

Framework

municipality. The CTMM Vision 2055 is

supporting

the

socio-economic

and

anchored on the Freedom Charter Clause: c. City of Tshwane Metropolitan

“The people shall govern” .

Municipality (CTMM) As such, extensive stakeholder consultations “When a city creates and sustains an

were held during the process of formulating

atmosphere of ‘civic collaboration’ that

the vision. In terms of economic development,

balances the ability to ‘get things done’; and

the CTMM Vision 2055 identifies priority

becomes a global destination for a skilled

investment sectors and economic growth areas

workforce, a place where people want to

13 within the metro . Ultimately and in terms of

live, work and play, then, a city has become

spatial development, the strategic objectives

successful” City of Tshwane – MSDF 2012

identified by the Tshwane Vision 2055 include:

The CTMM is known as the capital city of

[Creating a resilient and resource efficient

South Africa, and is also recognised as the

city;

administrative sea of national government.

[Growing an inclusive, diversified, and

The CTMM boasts a very active and vibrant

competitive local economy; and

commercial property sector, with some of the

[Ensuring quality infrastructure

country’s largest property development firms

development.

located in the municipal area. The CTMM is directed at developing a resilient and resource

The objectives identified in the CTMM Vision

efficient city. It should be noted that the

2055 is central to the municipality’s agenda

CTMM has tracked the build environment and

of employment creation, poverty eradication,

application trends over a number of years and

and creating better living environments for

uses this information to improve spatial

all citizens. In terms of the spatial vision

The city development policies

planning within the municipal area as well

for the municipality the City of Tshwane

are summarised in the Ekurhuleni

as aligning the bulk infrastructure with the

Metropolitan

market related development trends.

Framework 2012 (MSDF) identifies a number

12

Development Guide 2010. These

Spatial

Development

of strategic objectives for the development of

policies provide specific guidelines for the development

The Growth and Development Strategy

the municipality.

of among other, residential,

of the City of Tshwane 2006 (GDS) is

educational, industrial land uses.

not a municipal policy directive, however it

http://www.ekurhuleni.gov.za/455-

highlights a number of strategic objectives for

development-guide-2010-highres/

the development of the CTMM. The objectives

[provide basic services, roads and

filewhite-papers/transform.pd

include among other, providing access to

stormwater;

quality

infrastructure

[ob creation and economic growth;

13

basic

services and

These objectives include, inter alia, the following:

The City of Tshwane Vision

throughout the municipal area as well as

[Clean, healthy and safe sustainable

2055 can be accessed from www.

promoting accelerated and shared economic

communities; and

a

growth. The CTMM GDS also identifies spatia

[Promoting good governance.

tshwane.gov.z

SAPOA - South African Property Owners Association

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APPLICATION PROCESSING REPORT

The

essential

purpose

of

the

Tshwane

of state owned land by cultivating property

Map 5: City of Tshwane RSDF

MSDF is to reflect the spatial realities of

investment

Region 1

the municipal area as well as to provide a

identifies existing and potential incentives

clear spatial vision for future development.

that are offered by the municipality in order

opportunities.

The

framework

41

to attract development on public owned In addition, the CTMM includes the Regional

land. According to the Framework, incentives

Spatial Development Frameworks for

and investment are utilised as government

each of the 7 regions in the municipal area.

tools to attract and promote investment that

These frameworks provide detailed guidelines

ultimately transpires into economic growth

in terms of the nature of developments that

and employment opportunities. The City of

will be supported in the municipal area. The

Tshwane recognises the following incentive

RSDF can be an extremely valuable tool for property investors and developers as it clearly

a.

include

indicates the envisioned development of each

- Grants, and

development site/erf in the municipality. As such, any prospective land use applicant can refer to the RSDF as a means of obtaining

- Low interest loans b.

- Tax rebates,

application would be supported by the

- Tax holidays, and

municipality or not. Map 5 illustrates a section Region 1 in Tshwane

14.

The RSDF maps are

available on the CTMM website and provide

Indirect fiscal incentives, which include:

preliminary confirmation on whether the

of the RSDF map for the southern part of

Direct financial incentives, which

- Subsidised and/or reduced service costs c.

Other non-fiscal incentives, which include: - Technical and/or business support on the part of government

extensive detail in terms of the CTMMâ&#x20AC;&#x2122;s development vision. Prior to submitting a

2.4.3 The role of the Private sector in

development application, it is important that

Municipal Planning Policies

14

All RSDF maps can be accessed

from http://www.tshwane.gov.za/

all property developers consult and familiarise

The Gauteng Province boasts a dynamic and

sites/Departments/City-Planning-

themselves with the RSDF maps.

efficient private property development sector

and-Development/Pages/RSDF

Along with the private sector, the CTMM has

with a number of high profile and well known

15

drafted the City of Tshwane Incentive

property development specialists. Importantly,

of Tshwaneâ&#x20AC;&#x2122;s incentives framework

Framework aimed at the rapid development

the extent of the impact of economic and

visit www.tshwane.gov.za

JUNE 2016

GDP report GAUTENG 2016 .indd 41

For more information on the City

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42

APPLICATION PROCESSING REPORT

development

policies

will

essentially

be

existing government policies and frameworks.

determined by the degree to which the existing

Only then, can a collaborative approach

private sector embraces it. The economic and

towards sustainable development be enforced.

development planning policies within the Gauteng Province are pro-development and as

When the private sector and public sector

such, align themselves with the private sector’s

collaborate

approach to business and development.

relationship can be established, with the

The function of the private sector is rooted in

public sector enabling a stronger private sector

profit generation and therefore private sector

through accurate regulation and investment

developers regularly identify innovative ways

structures, while the private sector generates

of providing new commodities and production

economic innovation that ultimately assists the

methods. The private sector is renowned as a

public sector in fulfilling its policy objectives.

critical stakeholder and partner in economic

The role of the private sector in economic and

development, a provider of income, jobs,

development planning policies is summarised

effectively,

an

indispensable

as follows: “There is generally broad agreement in development thinking and practice that a

[Private sector should ensure they actively

dynamic private sector plays a crucial role

participate in the public participation

in the economic development process as

processes of the municipality when policies

it is an engine of investment, innovation,

are formulated;

and growth and offers an effective way

[Public policies indicate where

to create employment, incomes, and prosperity” Reiner and Staritz (2013)

development will be supported, therefore, private developers should adhere to the spatial development guidelines within municipal policies in particular, the Spatial

goods, and services to enhance the lives of communities.

16

Both the public sector

Development Frameworks; [Private sector firms should align their

and private sector have a shared interest in

development objectives to the respective

economic growth and development, that

municipality’s vision for the future

being said, both entities should ensure that

development of the municipal area;

development implementation is rooted in

16

International Finance

Corporation-International Finance Institutions and Development through the Private Sector, 2011

SAPOA - South African Property Owners Association

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APPLICATION PROCESSING REPORT

43

SECTION THREE: LAND DEVELOPMENT APPLICATIONS AND REGULATORY ENTITY RESPONSIBILITIES 3.1 Types of Development Applications

must satisfy both the requirements of the Act and any other applicable laws pertaining to issues relating to the environment, heritage,

There

of

planning etc. According to the Act building

development applications addressed in this

are

two

distinct

categories

plan applications includes - the alteration,

report. These are building plan applications and

conversion, extension, rebuilding, re-erection,

Land Use Management (LUM) applications.

subdivision of or addition to, or repair of any

Typically, building plan applications have to

part of the structural system of any building.

adhere to a specific set of standards, whereas LUM applications tend to be more complex.

3.1.2 Land Use Management Applications According

to

the

Gauteng

Growth

3.1.1 Building Plan Applications

Management Perspective (2014) LUM is the

The purpose of a building plan application is

legislative mechanism through which new

to permit the new construction of buildings

development is approved and managed, and is

in order to comply with the minimum

therefore an implementation tool for municipal

construction standards and specifications, as

spatial development frameworks. Depending

specified in the National Building Regulations

on how it is implemented, LUM can be

and Building Standards Act No. 103 of 1997.

utilised as an effective supporting mechanism

According to the Act, any new or additional

for growth management. The types of LUM

alteration to the existing structure of a building

applications that exist as per SPLUMA, the

is to be approved by the local municipality. The

Gauteng Planning and Development Act No

Act requires that any building plan application

3 of 2003, and the Gauteng Planning and

Category 1 Applications

Category 2 Applications

All category 1 applications and all opposed category 2 applications must be referred to the Municipal Planning Tribunal

All category 2 applications that are not opposed must be considered and determined by the authorised official

The establishment of a township or the extension of the boundaries of a township.

The subdivision of any land where such subdivision is expressly provided for in a land use scheme.

The amendment of an existing scheme or land use scheme by the rezoning of land.

The removal, amendment, or suspension of a restrictive or obsolete condition, servitude or reservation against the title of

The consolidation of land.

The simultaneous subdivision and consolidation of land.

the land.

The amendment or cancellation in whole or in part of a general plan of a township.

16

The consent of the municipality for a land use purpose or departure or deviation in terms of a land use scheme or existing scheme which does not constitute a land development application.

The division of a piece of

land into two or more portions (SPLUMA Regulations Schedule 5(4)) 18

The joining of two or more

The subdivision1 and consolidation2 of any land other than a

pieces of land into a single entity

subdivision or consolidation which is provided for as a category 2 application.

Permanent Closure of a public place.

Any consent3 or approval required in terms of a condition of title, a condition of establishment of a township or condition of an existing scheme or land use scheme.

Any consent or approval provided for in a provincial law.

(SPLUMA Regulations The removal, amendment or suspension of a restrictive title condition relating to the density of residential development on a specific erf where the residential density is regulated by a land use scheme in operation.

Schedule 5(4)) 19

A land use right that may be

obtained by way of consent from the municipality and is specified as such in the land use scheme. (SPLUMA Regulations Schedule 5(4))

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APPLICATION PROCESSING REPORT

Development Bill 2012 are summarised in the

The amendment or cancellation in whole

following section. All LUM applications are

or in part of a general plan of a township

carried out in terms of the Spatial Planning

> Applications for the phasing or cancellation

and Land Use Management Act 16 of 2013.

of an approved layout plan for the subdivision

SPLUMA

and

or the development of land. Such applications

land use applications into category 1 and 2

normally occur when a developer has had

applications. The following category 1 and 2

second thoughts on a particular township

applications can be made at the three identified

development and wants to phase or stagger

metros in the Gauteng Province:Some of the

such development and/or alternatively wishes

above mentioned land use applications are

to modify the layout plan over a portion of the

defined as follows:

original township area. (MILE, 2013).

The establishment of a township or the

The subdivision and consolidation of

extension of the boundaries of a township

any land > Subdivision normally refers to

> The establishment of townships is where

the subdivision of a parent erf into a limited

land is subdivided into individual land parcels

number of portions of the original erf and

or erven for various land uses including roads

each portion is so designated. Consolidation

and public places (open space).

occurs

divides

land

development

when

a

number

of

erven

are

consolidated into one newly designated erf The amendment of an existing scheme or

with a new erf number.

land use scheme by the rezoning of land (Rezoning) > zoning assigns certain rights to

(MILE, 2013) Permanent Closure of a public

a property (it normally specifies what the free

place > Applications for the permanent closure

entry, consent and prohibited land uses are and

of open space or roads. Closure of such land

sets out the limitations and bulk factors for the

has often, been closely associated with the

zone). The initial zoning is usually undertaken

consolidation and re-subdivision or relayout

by the municipality when a scheme is prepared

of land and where it is incorporated into the

and an applicant seeks to amend the scheme

proposed new township.

and/or rezone the land in question. Cases may however exist where properties fall outside a scheme and an initial zoning is sought by an

3.2 Regulatory Entity Responsibilities

applicant for the landâ&#x20AC;&#x2122;s incorporation into a scheme (MILE, 2013).

In order to have a comprehensive understanding of

application

types

and

The removal, amendment, or suspension of

processes, it is important to understand where

a restrictive or obsolete condition, servitude

the responsibility of application administration

or reservation against the title of the land

lies.

> Applications submitted due to obligations

both

or restrictions which are binding on the owner

(LUM) as well as Building Plan applications.

of the land by virtue of a restrictive condition

In terms of development applications, the

or servitude registered against the land,

legal framework is evolving swiftly, local and

condition of approval for the amendment to the

provincial governments are engaging in a

municipalityâ&#x20AC;&#x2122;s scheme; a condition of approval

law reform process to ensure that all land use

for the subdivision or consolidation of land;

planning activities can function accordingly. The

a condition of approval for the development

following section provides an overview of the

of land situated outside the area of a scheme;

regulatory entity responsibilities as stipulated by

or a condition of approval for the phasing or

planning law. Land Use Management Applicat

cancellation of an approved layout plan.

ions SPLUMA will have various implications on

SAPOA - South African Property Owners Association

GDP report GAUTENG 2016 .indd 44

development

Development land

use

applications management

consist

of

applications

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APPLICATION PROCESSING REPORT

the future operations of both municipalities

Local Government > responsible for the control

and provinces in terms of their responsibilities

and regulation of land. SPLUMA indicates in

and functions within the existing legislative

section 20(1) that “the municipal council of a

environment of development planning. Of

municipality must by notice in the Provincial

significant importance for all provinces and

Gazette adopt a municipal spatial development

municipalities is the finalisation of all appeals,

framework for the municipality” and in section

and land use and development applications

20(2) that “the municipal spatial development

which have been submitted in terms of

framework must be prepared as part of a

legislations preceding SPLUMA.From a spatial

municipality’s integrated development plan in

planning

stipulates

accordance with the provisions of the Municipal

the roles and responsibilities of each sphere

perspective,

SPLUMA

Systems Act”. In addition, SPLUMA section 24(1)

of government. According to SPLUMA the

requests that all municipalities should adopt and

roles and responsibilities of each sphere are

approve a single land use scheme within 5 years

as follows:

of the commencement of SPLUMA. All land use

45

management applications, including appeals, National Government > should monitor

will be processed by the local municipality.

and support provincial and municipal spheres of government whilst prioritising national

As

interests. In addition, it is the responsibility of

are

national government to establish and review

responsibilities in terms of spatial planning

national development policies that are designed

and land use management. First and foremost,

to monitor other spheres of government.

all local municipalities are required to develop

Furthermore, SPLUMA Section 13 indicates

municipal by-laws in terms of SPLUMA. The

that (1) “The Minister must, after consultation

purpose of the municipal by-laws is to give

with other organs of state and with the

effect to ‘Municipal Planning’ as contemplated

public, compile and publish a national spatial

in the South African constitution and thereby

development framework”.

laying down and consolidating development

a

result

mandated

of

SPLUMA, with

municipalities

significantly

more

application processes and procedures. Provincial for

Government

monitoring

the

>

compliance

responsible of

local

municipalities with SPLUMA.

In addition, the municipal by-laws is intended to facilitate and make arrangements for the implementation of land development and land

Furthermore, SPLUMA Section 15 indicates

development applications, spatial planning and

that (1) “The Premier of each Province must

land use schemes according to SPLUMA.

compile,determine and publish a provincial spatial development framework for the Province”

Building Plan Applications

and (2) “A provincial spatial development

Building plan applications are regulated by the

framework must be consistent with the national

National Building Regulations and Building

spatial development framework.”

Standards Act No 103 of 1997. The Act stipulates

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46

APPLICATION PROCESSING REPORT

that approval is required from the respective

regulations in July 2015, the CJMM initiated

local municipality prior to the construction

the process of developing the draft municipal

or alteration of any buildings. As such, local

planning by-law. As a result of the by-law, some

municipalities undertake all decisions made

changes in the local planning environment

on building plan applications. All building

of the CJMM can be expected. The municipal

plan application appeals are dealt with by

planning by-laws is written in terms SPLUMA

the national review board which is set up by

which, among other, sets out the development

the Minister.

principles that apply to all organs of state

3.3 Recent and Planned Transformations in Regulations

and other authorities responsible for land use regulation and management. The CJMM draft by-laws provides information concerning the following municipal functions:

It is important to note that the regulatory environment in which land development and

[Provisions and principles that shall guide

planning operate is undergoing tremendous

land development;

reform. The legislative measures that used to

[Land use schemes (General provisions,

govern planning and application processes

processes, public participation, content,

have changed and the following section intends

replacement and consolidation);

to highlight some of the key changes and

[Development of Spatial Development

their development implications. The building

Frameworks;

plan application process remains unchanged,

[Municipal Planning Tribunals;

however with the proclamation of SPLUMA many

[Application procedures;

changes are evident in the land use management

[Engineering services and contributions;

processes. The following key changes include:

and [Appeals.

[All provincial ordinances inconsistent with the Act are repealed, or otherwise

The draft municipal planning by-law was

amended through provincial legislation.

tabled in June 2015 at the council and sent

Laws repealed by SPLUMA include the

out for public comment in January 2016. The

Removal of Restrictions Act No 84 of 1967;

closing date for public comments was at the

the Physical Planning Act No 88 of 1967;

end of February. Subsequent amendments will

the Less Formal Township Establishment

be made and promulgation can be executed.

Act No 113 of 1991; the Physical Planning

The processes outlined in the municipal

Act No 125 of 1991; and the Development

planning by-laws are slightly different from the

Facilitation Act No 67 of 1995.

former legislations and will affect a number of

[Comprehensive and uniform planning

municipal functions including, among others, the

system - SPLUMA stipulates that no

application processes, appeals and the roles and

legislation not repealed by the Act may

responsibilities of the decision making bodies etc.

prescribe to an â&#x20AC;&#x2DC;alternative or parallel mechanismâ&#x20AC;&#x2122; on spatial planning, land

City of Tshwane Metropolitan Municipality

use, land use management and land

Land Use Management By-Law 2016

development inconsistent with the Act.

Following the formal release of the SPLUMA

[The development of municipal planning

regulations in July 2015, the CTMM initiated

by-laws as a way of stipulating the new

the process of developing the draft land use

development application processes.

management by-laws. As a result of the bylaws, substantial changes in the local planning

City of Joburg Metropolitan Municipality

environment are to be expected. Municipal

draft Land Use Management By-Law 2015

functions that will be affected include, inter

Following the formal release of SPLUMA

alia, application process, timeframes, public

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APPLICATION PROCESSING REPORT

participation process, arrangement of plans,

being submitted within the jurisdictional area of

appeals process, categorisation of applications,

the CTMM must be submitted in terms of the

roles and responsibilities of decision making

by-law. Furthermore, applications submitted in

bodies etc.

terms of the Tshwane town planning scheme

47

2008 (revised 2014) must still be submitted The purpose of the by-law is to “give effect to

in terms of the said scheme, read with the

Municipal Planning as contemplated in the

provisions of the CTMM by-law 2016.

Constitution of South Africa, 1996 (Act 106 of 1996) and in doing so to lay down and consolidate

Draft Ekurhuleni Metropolitan Municipality

processes and procedures, to facilitate and make

Land Use Management By-Law 2016

arrangements for the implementation of land

The EMM initiated the process of developing the

development and land development applications,

draft spatial planning and land use management

spatial planning and a Land Use Scheme within

by-law at the end of 2015. Once passed, the

the jurisdiction of the City of Tshwane, in line with

by-law will regulate the build environment in

the Spatial Planning and Land Use Management

a manner that is systematic, coherent, simple,

Act, 2013 (Act 16 of 2013); to provide for the

effective

establishment of a Municipal Planning And

City Planning Department of the EMM, the

Appeals Tribunal and to provide for matters

enforcement of the by-law will provide an “equal

incidental thereto.” (City of Tshwane, 2016)

foundation for social and economic interactions

and

efficient.

According

to

the

20 and transaction” .The EMM draft LUM by-law

The CTMM draft by-laws provides information

provides information concerning the following

concerning the following municipal functions:

municipal functions:

spatial

[General rules and regulations pertaining

development frameworks in terms of its

to operational office hours, submission of

drafting, reviewing and amendment;

development applications, applicable fees

[Land use schemes (general provisions,

and cost of advertisement, and guidelines on

processes, public participation, content,

submitting objections and other petitions;

replacement and consolidation);

[Development principles, public participation

[Land development application categories

processes, and intergovernmental relations;

and processes;

[Municipal

[Transitional arrangements – with regard

Frameworks and Land use schemes;

to applications lodged prior to SPLUMA and

[The

municipal bylaws;

administration of land use management

[Municipal Planning Tribunals;

applications;

[Provision of engineering services; and

[Provision of engineering services; and

[Appeals.

[Offences, law enforcement and penalties

[Development

of

municipal

Spatial

consideration,

Development approval

and

relating to land use management. The CTMM by-law is a workable document that clearly outlines all the development planning

Subsequent to the promulgation of the LUM by-law,

functions of the municipality. The application

all land development applications being submitted

processes outlined in the by-law are practical,

within the jurisdictional area of the EMM must be

making it a comprehensible document that can

submitted in terms of the LUM by-law. In terms of

be used by any individual that desires to take

the transitional measures presented in the LUM

part in lawful property development.According

by-law, it should be noted that any development

to the CTMM, the 2016 by-law was approved

applications, pending decisions or other matters

by council on the 28th of January 2016

before the Mayoral Committee or Council, National

20

and proclaimed on the 2nd of March 2016.

and Provincial sphere of government may be

Ekurhuleni metropolitan

Therefore, all land development applications

determined in terms of the LUM by-law.

Municipality 2016

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SECTION FOUR: DEVELOPMENT PLANNING AND APPLICATION ADMINISTRATION PROCESS Commercial private property is an exceedingly valuable commodity within the province and property development processes should therefore be treated with utmost scrutiny in order to warrant economically sustainable property development and sector growth. As a result of the high economic value of property development, the development application processes are somewhat complex. Although the stakeholders within the property development process have different motives, it is important to recognise that all stakeholders, albeit the private sector or public sector, equally aspire to finalise property development processes. Diagram 1 summarises, theoretically, the various components of the generic land development process, including LUM and building plan applications. It should be noted that this is a generic process, the detailed processes are outline in the remainder of this section. Diagram 1 indicates that the land development

for a period as specified by the municipal by-

application

of

laws. During the public participation process,

crucial components. Before an application

process

has

a

number

the application is inspected by the municipality

is submitted it is important that the local

to ensure that all of the required documents

municipality is consulted by the applicant

are correct and included in the application.

in order to determine firstly, whether the

Subsequently the application is circulated to

application is in line with the municipalityâ&#x20AC;&#x2122;s

all relevant internal and external departments

spatial development framework, and secondly

for comment. I some cases departments will

what documentation is required as part of the

request that the applicant conduct further

proposed application. When the application is

research based on the impact of the proposed

submitted the public participation process can

development prior to providing their comments.

commence. The public participation process

Process

consist of advertisements in local newspapers

!"#$%&'(%)"#"*(+(#,% -../01"2%%

Diagram 1: Generic Application

!"#$ %&'()*+,+-&'. /-+0.1)'-%-!,*. &22-%-,*(.3

()41-((-&'.&2. *)1.,!!*-%,+-&'3

!)4*-%. !,"+-%-!,+-&'3 ,89:;<=>?@3

&4D#%+-&'(3 !)4*-%. 0#,"-'C3

As a result of the public participation and

()!!*#1#'+,"5. ,',*5(-(. "#6)-"#73

2-',*. ,!!*-%,+-&'. 7#%-(-&'3

%&11#'+(3

5#(3

,!!#,*3

,1#'71#'+(3

+;EFG.-HIEGJ.(JK8LM3 #?9>;N?H:?JEO.(JK8LM3 1E;P:J.(JK8L.:JGQ3

,!!*-%,+-&'. -'(!#%+-&'3

4)*A.(#"B-%#(. ,C"##1#'+.,'7. ,!!"&B,*3

,((#(1#'+.45."#*#B,'+. 7#!,"+1#'+(3

,1#'71#'+(3

!"#$%&'(%)**+,-).%")/%0##$%1+)$2#34%2"#%5,..,67$1%7$5,+8)9,$%/",:.3%0#%;,8*.#2#3%672"7$%<=%8,$2"/%,5%)**+,-).%>75%)**.7;)0.#?@% % 3(:$7;7*).72A% B**.7;)$2% % !! !(*"2%-$+4#% !! ;<%=4"*/"+%% !! 50#$460#'%07%8',"924':+(#,%% % !! ;4,(%=(1(20.+(#,%>2"#%% % ()41-((-&'.&2. 2-',*.4)-*7-'C. !*,'(3

(%")+-'53

2-',*.4)-*7-'C. !*,'.7#%-(-&'3

%&11#'+(3

,1#'71#'+(3

!

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APPLICATION PROCESSING REPORT

application circulation process, objections can

In order to have a good understanding of

be lodged against the application.

the change in the legislative environment

49

it is important to look at the relevant Before the application can be processed, the

processes that have undergone significant

objections need to be heard at a public hearing

change as a result of SPLUMA. The processes

where the applicant may be requested to

that are largely influenced by SPLUMA are

make certain amendments to the application.

applications for the following:

Subsequently, the final application decision can be made. When no appeal has been lodged against

[Amendment of the Town Planning Scheme;

the final decision on the application, the post

[Township Establishment;

approval process of 12 months can commence.

[Subdivision/Consolidation ; and

The post approval process involves role players

[Appeals.

21

from both the public and private sectors. It is the responsibility of each entity to ensure that the

Before SPLUMA, these applications were submitted

post approval requirements are met within the

according to the Town Planning and Townships

designated timeframes. If the requirements cannot

Ordinance No 15 of 1986. The ordinance describes

be met, the applicant may apply for an extension

the following application procedures for the

of time. Once all of the requirements are met, the

aforementioned types of applications:

building plan application process can commence. Diagram 2 illustrates a generic overview of a It should be noted that for the purposes of

rezoning or scheme amendment application

this study, the LUM and building application

in terms of the old Ordinance. Furthermore,

processes are analysed independently. In other

Table 1 indicates a more detailed outline

words, the analysis does not evaluate the post LUM approval period, but rather analyses the process from the submission of the application to a decision made on each of the respective application processes. The following sections intend to provide detail in terms of the building plan and LUM application processes as currently implemented by the local municipalities along with the proposed processes as per the newly drafted municipal by-laws.

4.1 Land Use Management Applications

Diagram 2: Application Process: Scheme Amendment/ Rezoning

As previously indicated, the legislative environment in which the LUM application process operates has

of the process along with the expected

changed significantly. Former LUM applications

number of days it generally should take from

were submitted in terms of the Provincial

application submission to a decision made

Ordinances or in terms of the Development

on the application in terms of its approval or

Facilitation Act No 67 of 1995. With the

rejection. As indicated, the application process

promulgation of SPLUMA, all processes according

can get somewhat lengthy in particular when

to the former legislation have been repealed and

hearings are required. Although the Ordinance

21

new processes are being put in place.

stipulates certain timeframes with regard to

Corporation-International Finance

each of the steps, it should be noted that

Institutions and Development

in reality the application processing timeline

through the Private Sector, 2011

4.1.1 Pre-SPLUMA application processes

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APPLICATION PROCESSING REPORT

Steps

Table 1: Application Process: Scheme Amendment/Rezoning

Submit Application

1

Day 1

2

Applicant Gives Public Notice

14

Day 2- Day 15

3

Local Authority Distributes to departments for Comments

1

Day 15 - Day 16

4

Comments Received by all Departments

60

Day 17 – Day 77

5 6

Diagram 3: Application Process: Township Establishment

Number of Days

1

Applicant Forwards Response to Comments Local Authority Determines Whether Hearing is Required and notifies all parties

28 14

Day 78 – Day 106 Day 107 – Day 115

7

Public Hearing

60

Day 116 – Day 176

8

Application is Considered Approved/Rejected

30

Day 177 – Day 207

Total

A pplication D ocs 1

Completed application form.

2

Cover letter.

3

Application Fee.

4

Title Deed.

5

Company Resolution (if

6

Power of Attorney.

7

Motivating Memorandum.

8

Bondholders Consent.

9

Zoning Certificate.

10

All applicable maps.

11

Date of public notice.

applicable).

208 days

often deviates from what is prescribed as a result of a number of delaying factors and issues explored in the remaining sections of this report. The Ordinance does not stipulate the public hearing timeframe, therefore a timeframe assumption of 60 days was applied With regard to the Township Establishment application process, Diagram 3 illustrates that this process is significantly more complex than

the

scheme

amendment/rezoning

application process. The reason for this is that a township establishment is a legal process regarding significantly large portions of land and therefore have a greater impact in terms of development scale and cost. Similar to the aforesaid application process, the timeframes do not necessarily reflect the reality in practice. It should be noted that the Ordinance does not stipulate the public hearing timeframe, therefore a timeframe assumption of 60 days was applied. Diagram 4 indicates the former application process with regard to the subdivision or consolidation of land parcels. The

application

for

subdivision

or

consolidation is typically a shorter process than many of the other application processes and does not necessarily require extensive circulation and public scrutiny. Table 3 provides further detail in terms of the expected number of days to process the application from submission to approval, as well as the necessary documentation to be included in the application. Diagram 4: Application Process: Subdivision/

Section 139 of the Town Planning and

Consolidation

Townships Ordinance (15 of 1986) provides

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Steps

Number of Days

A pplication D ocs

1

Submit Application

1

Day 1

2

Applicant Gives Public Notice

14

Day 2- Day 15

3

Local Authority Distributes to departments for Comments

1

4

Public Objections Received

5

Comments Received by all Departments

6

1

Completed application form.

2

Cover letter.

3

Application Fee.

Day 15 - Day 16

4

Title Deed.

5

Company Resolution (if applicable).

28

Day 15 – Day 43

6

Power of Attorney.

60

Day 15 – Day 75

7

Motivating Memorandum.

8

Bondholders Consent.

Local Authority Submit Comments to Applicant

7

Day 75 – Day 82

9

All applicable maps.

10

Date of public notice.

7

Applicant Forwards Response to Comments

30

Day 83 – Day 113

11

Diagram.

8

Local Authority Determines W hether Hearing is Required and notifies all parties

14

Day 114 – Day 128

9

Public Hearing

60

Day 129 – Day 189

60

Day 190 – Day 249

10

51

Table 2: Application Process: Township Establishment

Subsequent to approval the Local Authority issues the following (roughly adding an additional 60 days to the process):

Application Approved Report and Conditions of Establishment are prepared Total

2

Section 125 Zoning Scheme

3

Section 101 Certificate

4

Section 82 Certificate

275 days

Steps

Number of Days

A pplication D ocs

1

Submit Application

1

Day 1

2

Applicant Gives Public Notice (when applicable)

14

Day 2- Day 15

3

Local Authority Distributes to internal departments for Comments

28

Day 15 - Day 43

4

Comments Received by all Departments

30

Day 15 – Day 45

5

Local Authority Inspects Application and approves/rejects it

60

Day 46 – Day 106

Total

Table 3: Application Process: Subdivision/Consolidation

1

Completed application form.

2

Cover letter.

3

Application Fee.

4

Title Deed.

5

Company Resolution (if applicable).

6

Power of Attorney.

7

Motivating Memorandum.

8

Bondholders Consent.

9

Zoning Certificate.

10 All applicable maps.

105 days

11 Date of public notice.

guidelines in terms of appealing against a decision made by the local authority. Any decision made by the local authority in terms of the Ordinance could be appealed through this process. Diagram 5 illustrates the appeals process.. The timeframe of an appeal process varies per application and is greatly dependent on the number of objections raised as well as the nature of the objections raised. The final decision on the appeal is made by the board and is done soon after the public hearing. In terms of the aforementioned application

process

it

is

important

to

Diagram 5: Application

emphasise that as a result of SPLUMA these

4.1.2 SPLUMA application processes

processes will change for each of the local

All local municipalities are legally mandated

and metropolitan municipalities. Apart from

by SPLUMA to develop municipal planning

a number of logistical issues, the primary

by-laws in order to indicate the development

concerns with the processes outlined in

application

the former Ordinances was that the local

application processes should be in line with

authorities did not have complete control

the

over decisions on land use management

outlined

applications.

in

the

application SPLUMA

these

processes regulations.

now

Chapter 3 of the SPLUMA regulations makes provision for land development and land

and authority to process and decide on all

use application processes, categories and

LUM applications without any regulatory

timeframes. According to regulation 14(1) local

interference from provincial government.

municipalities must determine the following:

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SPLUMA

development

Importantly

provides municipalities with the means

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process.

Process: Appeals

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[The ‘manner and format’ in which LUM

The next phase is the consideration phase, in

applications are submitted, including the

this phase the MPT or AO makes a decision on

applicable fees to be paid;

the application and may undertake investigations

[Subject to regulation 16 – determine the

if required. According to SPLUMA, if no decision

timeframes for each application;

is made within 3 months the applicant may report

[The public participation process as well as

the ‘non-performance’ of the MPT or AO to the

the inter-governmental participation process;

municipal manager, who subsequently reports it

[Procedures for site inspections and

to the municipal council and mayor. On the other

application amendments;

hand, if an applicant fails to provide the required

[Location for application submission; and

information to the municipality, the application

[Procedure for dealing with incomplete

may be deemed to be refused and resubmission

applications.

will be required. In addition, if no comments are received by any of the departments which the

Diagram 6 indicates the application timeframe as

application was circulated to, it will be accepted

per regulation 16 of SPLUMA. According to the

that the respective department has no objection

regulation, all application processes shall consist

to the application. The municipality may allow

of three phases.

a time extension for the comment period however, may also report the ‘non-performance’ of department to the executive authority and Minister. The final phase of the application process is the decision phase in which the MPT or AO either approves or refuses the application. Based on the aforementioned processes the local municipalities have initiated the process of drafting their own municipal planning by-laws. The following section provides detail in terms of some of the application processes highlighted in the draft municipal planning by-laws.

Diagram 6: SPLUMA

The first phase is the administration phase

Regulation 16

during which all public participation notices

a. City of Joburg Metropolitan Municipality

are published and responded to, all parties are

All land development application processes

informed and the intergovernmental participation

within the CJMM are defined in the Municipal

process finalised. The application is then referred

Planning Draft by-law of the municipality.

to the Municipal Planning Tribunal (MPT) or

For the purposes of this study, the following

Authorised Official (AO) for consideration.

application processes are highlighted: [Amendment of the Town Planning Scheme; [Township Establishment; [Subdivision/Consolidation; and [Appeals. An application for the amendment of the land use scheme, otherwise known as a rezoning application is completed by following the process illustrated in Diagram 7.

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53

Table 4: CJMM Scheme Amendment/Rezoning

Apart

from

a

few

changes,

the

application process for the amendment

Diagram 7: CJMM Scheme Amendment/Rezoning

of the town planning scheme is more or less similar to the former process. Table 4 indicates the number of days and required documentation for the respective application process. According to the CJMM municipal planning bylaws, the application process for the amendment of the town planning scheme should take approximately 160 days excluding a hearing, and 220 days including a hearing. Depending on the circumstances of the application, the hearing can take longer than 60 days. When applying for approval of a township establishment within the CJMM the process indicated in Diagram 8 should be followed. According to the municipal planning by-laws of the CJMM, the application process for a township

establishment

should

roughly

take 229 days, excluding a public hearing and approximately 289 days with a hearing. The timeframes are used as guidelines to

handle

the

township

establishment

allocation, but this does not necessarily reflect what is transpired in practice. Table 5 indicates some detail in terms of the township establishment application process.

Diagram 8: CJMM Township Establishment

In terms of applying for a subdivision or consolidation application the process indicated in Diagram 9 applies. The subdivision and consolidation application process outlined in the

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Table 5: CJMM Township Establishment

Diagram 9: CJMM Subdivision and Consolidation

CJMM municipal planning by-laws is not intended to be a complex one. The intention of the CJMM, is to provide ease in terms of the application process rather than complicating it. The subdivision and consolidation application process is proposed to be processed in roughly 75 days for approval. Table 6 provides further detail in terms of the application process. SPLUMA stipulates that any person has the right to appeal a decision made on any development application to the council. The CJMM by-laws provides guidelines in terms of the appeal process as well as indicating the procedure for public hearings. Diagram 10 illustrates the appeal process as per the municipal planning bylaws of CJMM. As indicated, any appellant has 28 days after the local authority decision to make an appeal. This provides an additional 7 days to the process outlined in SPLUMA. Furthermore, the executive authority has roughly 90 days to make a decision on the appeal subsequent to reviewing the appeal report. a. City of Tshwane Metropolitan Municipality All land development application processes within the CTMM are defined in the municipalityâ&#x20AC;&#x2122;s LUM by-law. For the purposes of this study, the following application processes are highlighted: [Amendment of the Town Planning Scheme; [Township Establishment; [Subdivision/Consolidation; and [Appeals. Diagram 10: CJMM Appeal

When applying for the amendment of the

process

town planning scheme or rezoning within

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55

Table 6: CJMM Subdivision/ Consolidation

Table 7: CTMM Scheme Amendment/Rezoning

the CTMM, the following process should be followed: Prior to the municipality processing the application, the applicant has 28 days in which they can respond to the municipality before the application can be processed. It is required that a site notice is placed for a period of 14 days and not 21 days as per the former process. Category 1 applications are sent to the municipal planning tribunal, and Category 2 applications are sent to the authorised official. Table 7 illustrates the number of days for each of the application steps as well as the required documentation for the respective application process. When applying for approval of a township establishment within the CTMM the process indicated in Diagram 12 should be followed. Due to SPLUMA, the new township establishment application process is longer than the former process. Among other changes, it is proposed that the municipality has 28 days after the applicant submits the application to advise whether there is any outstanding information. The applicant has a further 28 days to rectify any outstanding information. Table 8 illustrates the number

Diagram 11: CTMM Scheme

of days for each of the application steps as

Amendment/Rezoning

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Table 8: CTMM Township Establishment

well as the required documentation for the respective application process. In terms of applying for a subdivision or consolidation application the process indicated in Diagram 13 applies. Some differences are evident with regard to the subdivision and consolidation application processes as a result of SPLUMA. Table 9 provides further detail in terms of the expected number of days to process the application as well as the necessary documentation in the application. The CTMM draft by-law offers guidelines used with regards to the appeal process as well as procedures that should be followed for public hearings. Diagram 14, indicates the appeal process as per the municipal planning by-laws. The overall timeframe of an appeal process is approximately 45 days. However, the timeframe depends on the number and nature of objections as well as the circumstances of Diagram 12: CTMM Township Establishment

Steps

Number of Days

1

Submit application

1

Day 1

2

Municipality determines if application is complete

28

Day 2- Day 30

3

Applicant can correct the application

28

4

Applicant gives public notice

5

Application is approved/ rejected Total

A pplication D ocs 1

Title Deed.

2

Company Resolution (if applicable).

3

Power of Attorney.

Day 31 - Day 59

4

Motivating Memorandum.

5

Bondholders Consent.

14

Day 60 â&#x20AC;&#x201C; Day 74

6

Zoning Certificate.

60

Day 75 â&#x20AC;&#x201C; Day 135 71 days

7

All applicable maps and sketch plans.

8

Date of public notice.

Table 9: CTMM Subdivision/ Consolidation

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57

Diagram 13: CTMM Subdivision and Consolidation

Diagram 14: CTMM Appeals Process

the application. Due to the effects of SPLUMA

b. Ekurhuleni Metropolitan Municipality

there are certain small changes to the appeal

The

process, namely; the appeal is now made

land use management by-law provides a

within 21 days in terms of the by-law, and

generic application process for all land use

the department responsible for Development

management application types. The process is

Planning should within 28 days provide the

outlined in subsection 34 of the by-law.

EMM

draft

spatial

planning

and

record of proceedings. A report is submitted to the Appeal Authority as well as the applicant

Diagram 15 indicates the proposed land use

to which they will have 14 days to respond.

management application process for the EMM.

Subsequently, the appeal authority determines

As indicated, the application process essentially

whether a hearing is required, after which a

involves somewhat similar processes to that of the

decision can be made on the appeal.

former application processes of the ordinances.

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Table 10 indicates the proposed timeframes for the land use management application process. It should be noted that this process is intended to apply to all of the types of land use management applications within the EMM. Diagram 16 indicates the appeals process at the EMM. The EMM draft by-law provides some guidance for the appeal process, however does not describe the process in great detail. As per the SPLUMA regulations all appeals should be made within 21 days in terms of the by-law, and the department responsible for Development Planning should subsequently

notify

all

parties

involved

of the appeal as well as keep a record of all proceedings. Diagram 15: EMM Proposed Land Use Management Application Process

Table 10: EMM Proposed Land Use Management Application Process

4.1.3 Summary of key changes in the LUM Application Process The following section provides a comparative summary of the key changes identified in the draft municipal by-laws in terms of the aforementioned application processes. Diagram 17 illustrates a timeline of the application processes in terms of the old Ordinance as well as the processes outlined in the by-laws of the three metropolitan municipalities. [The CTMM allows for a 28 day period after application submission, in which it notifies the applicant of any outstanding information. The applicant then has 28 days to rectify any outstanding information. Diagram 16: EMM Appeals Process

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[The CJMM added another 7 days for the site notice to be displayed on the respective

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59

Diagram 17: Summary of

application site. Therefore, instead of 14

obtains the comments from the relevant

Scheme Amendment/Rezoning

days for public notice, it will be 21 days.

department before the application can be

Application Process

[The EMM extended the advertisement

considered.

period to 28 days.

[Applications in the EMM are categorised

[All municipalities amended the applicant

into either 4 month or 12 month

response period from 28 days to 14 days.

consideration periods.

[In cases where no hearing is required, the CTMM provides approval in principle

Among others, the following key changes are

within 28 days.

identified in terms of the scheme amendment

[In cases where no hearing is required,

application process as per the municipal by-laws:

the CJMM provides its decision on the

Diagram 18 illustrates the combined application

application within 60 days.

processes

[According to the CTMM by-law,

applications.

for

township

establishment

if departments do not provide their comments within the prescribed

The following key changes are identified

timeframe, and if the municipality insists

in terms of the township establishment

Diagram 18: Summary of

that the comments are essential, the

application process as per the municipal

Township Establishment

municipality may request that the applicant

planning by-laws:

Application Process

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[The CTMM allows for a 28 day period

The following key changes are noted in terms of

after application submission, in which it

all subdivision and consolidation applications:

notifies the applicant of any outstanding information. The applicant then has 28 days

[The CTMM allows for a 28 day period

to rectify any outstanding information.

after application submission, in which it

[The EMM extended the advertisement

notifies the applicant of any outstanding

period to 28 days.

information. The applicant then has 28 days

[All municipalities amended the applicant

to rectify any outstanding information.

response period from 28 days to 14 days.

[The EMM extended the advertisement

[In cases where no hearing is required, the

period to 28 days.

CTMM provides approval in principle within

[The CJMM proposes that no public

30 days.

notice is required as per the former process,

[In cases where no hearing is required,

however a notification letter should be

the CJMM provides its decision on the

provided to all adjoining property owners.

application within 90 days.

On the other hand, the CTMM proposes to

[According to the CTMM by-law, if

continue with the public notice process for

departments do not provide their comments

two weeks prior to referring the application

within the prescribed timeframe, and if

to the Municipal Planning Tribunal.

the municipality insists that the comments

[In cases where no hearing is required, the

are essential, the municipality may request

CTMM provides approval in principle within

that the applicant obtains the comments

60 days.

from the relevant department before the

[The EMM amended the applicant

application can be considered.

response period from 28 days to 14 days

[Applications submitted to the EMM

[In cases where no hearing is required,

are categorised into either 4 month or 12

the CJMM provides its decision on the

month consideration periods.

application within 30 days. [Applications submitted to the EMM

Diagram 19: Summary of

In terms of the subdivision and consolidation

are categorised into either 4 month or 12

Subdivision and consolidation

application process, Diagram 19 illustrates the

month consideration periods

Application Process

subdivision and consolidation processes.

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Diagram 20: Summary of Appeals Process

Lastly, the process to be followed when lodging

Standards Act No 103 of 1997. All building

an appeal against a decision made by the

plan applications require land use management

municipality is jointly summarised in Diagram 20.

clearance prior to processing the application. Diagram 21 illustrates the generic building plan

In terms of the municipal planning by-laws of the

application process subsequent to land use

three metropolitan municipalities, the appeals

management authorisation.

process is proposed to change significantly. The following changes are noted: [According to SPLUMA the appellant has no more than 21 days after the local authority has made a decision, to lodge an appeal in writing. [Importantly, all parties have to be notified of the appeal and provide any comments within 21 days of the notification. [According to the by-laws, the municipalities are responsible for compiling a report

Diagram 21: Building Plan

and submitting it to the executive appeals

Application Process

authority within 30 days of the appeal.

Typically, the building plan inspector evaluates

[The appeal is proposed to be reviewed by

the plans in accordance with the Act as well as

the executive appeals authority within a 90

the town planning scheme of the respective

day period for both the CTMM

municipality. The plans will also be circulated

and CJMM.

to various city departments for comment and

[Once the municipality has compiled

approval. In terms of the building plan application

the report and submits it to the executive

timeframe the Act indicates the following:

authority the prehearing process of approximately 150 days can commence.

4.2 Building Plan Applications

[Where the architectural area of the building is less than 500m² - the local authority shall grant, or deny approval within 30 days after the receipt of the application.

The building plan application process is legislated

[Where the architectural area of the building

through the National Building Regulations and

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is more than 500 m² - the local authority

As part of the evaluation process, the application

shall grant, or refuse to grant approval within

may be circulated to a number of departments

60 days after the receipt of the application.

for comment. Subsequent to the application

[Where an application is refused, the reasons

evaluation, the application is recommended

must be provided in writing. The applicant

either for approval or rejection.

may within 12 months of the application being refused, re-submit the application ‘anew’ with

Once approval has been granted the applicant is

no additional costs, subject to the necessary

notified, and the plan is available for collection

amendments having been made.

from the building control offices. The applicant

[It should be noted that, only if all the

can then commence with construction and

necessary documentation is correct and

should ensure that the building inspector is

accompanied with the application, the

notified to, as mandated, inspect the process.

application is regarded as a ‘complete

Upon completion of the building construction or

submission’, and can then be assessed in

alteration, the applicant is issued with a certificate

a ‘fast track’ process and approved within

of occupancy confirming that the building has

22

24 hours.

been built in accordance with the approved plan.

NBRS Act Section 5 – “Any application in respect of which a local authority refused in accordance with subsection (1)(b) to grant its approval, may, notwithstanding the provisions of section 22, at no additional cost and subject to the provisions of subsection (1) be submitted anew to the local authority within a period not exceeding one year from the date of such refusal a. (i) if the plans, specifications and other documents have been amended in respect of any aspect thereof which gave cause for the refusal; and b. (ii) if the plans, specifications and other documents in their amended form do not substantially differ from the plans, specifications or other documents which were originally submitted; or (b) where an application is submitted under section 18”

NBRS Act Section 14 – “Certificates of Occupancy in Respect of Buildings (1) A local authority shall within 14 days after the owner of a building of which the erection has been completed, or any person having an interest therein, has requested it in writing to issue a certificate of occupancy in respect of such building.

In the case of an application being refused,

22

As previously indicated, the building plan

the applicant would be notified in writing.

application process can only commence once

As provided for in the Act, the applicant,

LUM approval has been granted. The building

having amended, corrected or modified the

plan application is submitted to the building

application, may re-submit the application at

control

respective

no additional cost. When an applicant desires

application fee prior to its consideration. During

to make an appeal against the decision made

this process the application is scrutinised in order

on the application, such an application may

to ensure that all the required documentation

be made to the high court. Any person who is

is correct and accounted for. The appointed

aggrieved by the refusal of the local authority

building control officer evaluates the application

to approve a building plan application or

and inspects the attached title deed, the

who disputes the interpretation of a national

approved general plan, any pre-proclamation

building regulation or by-law may appeal to

conditions, and the approved site development

the review board in terms of section 9 of the

plan. All building plan applications are strictly

National Building Regulations and Standards

evaluated by the regulations set out in the Act.

Act 103 of 1997.

CJMM, A Citizen’s Guide to

Planning in Johannesburg. 2009

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office

along

with

the

NBRS Act Section 9 – (1) Any person who (a) Feels aggrieved by the refusal of a local authority to grant approval referred to in section 7 in respect of the erection of a building; (b) Feels aggrieved by any notice of prohibition referred to in section 10; or (c) disputes the interpretation or application by a local authority of any national building regulation or any other building regulation or by-law, may, within the period, in the manner and upon payment of the fees prescribed by regulation, appeal to a review board (2) The review board referred to in subsection 1 shall consist of(a) A chairman designated by the Minister; and (b) Two persons appointed for the purpose of any particular appeal by the said chairman from persons whose names are on a list compiled in the manner prescribed by regulation.

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63

SECTION FIVE: APPLICATION TRACKING ANALYSIS The Gauteng Province has seen a number of commercial property development in the last few years, indicating that the commercial private property market is actively participating in the provincial economy. Figure 1 indicates the fiscal contributions made during 2015 in terms of the value of building plans passed by some of the larger municipalities in the Province. As indicated, the value of building plans passed in Gauteng during 2015 is approximately R38 million, which is a 1.2% increase from the previous year and takes up an estimated 38% of the national building plans value with 24% apportioned to commercial private property. Based on the high value of building plans passed in the Gauteng Province, it is vital to ensure that development application processes

function

efficiently

and

without

delay. In order to identify whether there are any complications or difficulties with the application processing system a comprehensive analysis is

Figure 1: Gauteng Province:

required. As such, the purpose of this section is

to essentially determine the timeframe applicable

Building Plan Contributions

to offer the application tracking measurements as

to make a decision on a land use management

Source: StatsSA, 2015

a means of identifying the key challenges within

or building plan application at the identified

the application system. Information is provided for

metropolitan

each of the identified metropolitan municipalities

application sample analysis will determine and

and is outlined as follows:

interpret the administration proficiency of the

municipalities.

The

municipal

three metropolitan municipalities of Gauteng. [Overall Municipal Application Benchmark

For the purpose of this analysis, all building plans

Statistics (Building Plans and Land Use

and LUM applications for developments above

Management Applications).

R5 Million in value and from 2013-2015 were

[Municipal Application Sample Analysis

requested and analysed accordingly. In cases

(Building Plans and Land Use Management

where the information was not available as per

Applications).

the criteria, all other applications were analysed.

[Key observations.

The actual timeframes achieved to finalise the applications are compared to the maximum

The overall application benchmark statistics

timeframes outlined in the relevant legislation. In

indicate the application processing efficiency

reference to the â&#x20AC;&#x2DC;maximum timeframeâ&#x20AC;&#x2122; it should

within the three metropolitan municipalities in

be considered that municipalities have limitations

terms of the finalisation of building plans and

associated with application delaying factors that

land use management applications. This provides

are outside of their control and therefore, in

an overview of the generic shortcomings in

practice the legislative responsibility cannot be

terms of adhering to the timeframes provided by

placed on them entirely.

planning legislation. Subsequently, the municipal application sample analysis provides greater detail

In terms of the analysis, the following key

in terms of the application processing system

limitations are identified:

within the municipalities. For the purpose of this investigation a three year analysis period was

[Significant delay in obtaining information

utilised from 2013-2015.

for Building Plan Applications along with lengthy processes in gathering of data.

The purpose of the application sample analysis is

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[Limited application files available for

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5.1 City of Joburg Metropolitan Municipality 5.1.1 Overall Municipal Application Benchmark Statistics Land Use Management Application Tracking Prior to identifying the key challenges within the application processing system, an

analysis

of

the

overall

application

benchmark is determined. The information is presented for both land use management and

building

plan

applications.

In terms of the land use management applications the following should be noted: â&#x20AC;˘

The database received by the CJMM does not include all LUM applications

Figure 2: CJMM Commercial LUM Applications 2013-2015

the time period requested (2013-2015).

however, includes only some commercial

Furthermore, the majority of the application

type applications with a property value

files received were incomplete.

of no less than R 5 million.

[Substantial delays in receiving application

â&#x20AC;˘

benchmark statistics for both building plans and LUM applications. [The

information

application

management applications â&#x20AC;˘

contained

benchmark

in

statistics

the

The database consists of 130 land use The time period of the respective applications are between 2013-2015.

were

incomplete.

Figure 2 indicates the number of commercial

[In cases where examples of commercial

LUM applications and their respective average

property could not be provided, other

processing times. As indicated, the number of

land use applications such as large-scale

applications finalised has increased tremendously

residential developments were used.

since 2013 with roughly 13 applications.

It should be noted that due to the fact

Furthermore, the number of applications

that each municipality has varying forms

finalised in 2014 with the aforementioned

of collecting and producing data, the

specifications amounts to 29 applications,

application tracking analysis for each of

followed by 2015 with 88 applications.

the identified metropolitan municipalities is presented separately. As such the information

The number of applications finalised in-time

is not presented in similar formats. Some

in the sample suggests that there are certain

of the information is presented in terms of

constraining factors that result in the delay of

quarters per annum and other information

application processing. The average number

is presented on an annual basis. The

of applications finalised in time in 2013 is

presentation of the data is solely based on the

estimated at 15%, however in 2014 the

availability thereof and as provided by each

efficiency of application processing increased

respective municipality. The information was

to 35% and ultimately lowered again in 2015

obtained from the building control and land

to approximately 32%. The average processing

use management divisions of the identified

time during 2013 is estimated at 16 months,

metropolitan municipalities.

followed by 2014 with roughly 35 months and 2015 at 19 months. The data shows that there is an inconsistency in the number of applications finalised and the average processing time.

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65

It should be noted that the CJMM only accepts and considers applications that are complete and that are accompanied by the relevant and required reports. As such, the application process is divided into the administrative phase and the consideration phase. The administrative phase involves the collection of all relevant information required by the municipality in order to consider the application. Based on the information obtained from the department it is evident that more than 70% of the applications received are incomplete applications in other words they have issues

This suggests that the application processing

Figure 3: CJMM Rezoning

with the administrative process (advertising,

administration within the department is

and Township Establishment

bond holder consents, title deed problems,

relatively efficient. Figure 4 indicates the CJMM

Applications 2013-2015

power of attorneys, objections) or insufficient

land use consent applications processing

planning content (poor motivations, inadequate

efficiency between 2013 and 2015.

engineering reports or none submitted, contrary As

to planning frameworks and policies).

indicated,

the

average

processing

timeframe has decreased slightly from 1.7 2

months in 2013 to 1.5 months in 2015. This

includes the process before and during the

suggests that the application processing

municipalityâ&#x20AC;&#x2122;s consideration and therefore

administration within the department is

is

becoming more efficient. Based on the

The

information

not

indicated

reflective

of

in

the

Figure

municipalityâ&#x20AC;&#x2122;s means

information obtained from the department

of identifying the overall administrative

it is evident that on average, 76% of

efficiency of the municipality, all internal

the land use consent applications are

land use consent, rezoning and township

considered within the target timeframe of

establishment records were obtained from the

the municipality.

administrative

efficiency.

As

a

municipal office. Based on the information it is evident that The LUM department at the CJMM measures

the rezoning and township establishment

Figure 4: CJMM Land Use

its application processing efficiency from the

applications are much more complex than

Consent Applications

time when an application is complete and

consent use applications.

2013-2015

accompanied by the approved and required information from the relevant departments. The processing target for the LUM department for all rezoning and township establishment applications is 5.5 months and 2.5 months for land use consent applications. Figure 3 indicates the all of the CJMM rezoning and

township

establishment

applications

processing efficiency between 2013 and 2015. As indicated, the application average processing timeframe has decreased significantly from 4.8 months in 2013 to 3.5 months in 2015.

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Figure 5: CJMM Building Plan Finalisation Efficiency Ratio 2013-2015

Building Plan Application Tracking

Figure 6 indicates the total number of building

In order to measure the effectiveness of the

plan submissions and finalisation during the

building plan applications processes, the

analysis period. The city received a total of 39 247

efficiency ratio is calculated for the CJMM. The

building plan applications from the first quarter of

efficiency of each of the metropolitan building

2013 to the fourth quarter of 2015 of which 32

control offices is measures by determining the

948 were finalised.

finalisation efficiency ratio. Figure 5 indicates the efficiency ratio for the CJMMâ&#x20AC;&#x2122;s Building

The applications finalised make up 84% of all the

Control processing from 2013-2015

submitted applications. Based on the information

As indicated, the finalisation efficiency ratio

received from both the land use management

for the CJMM has decreased from 78% in the

and building control divisions it is evident that

1st quarter of 2013 to 32% in the first quarter

there are some complications and inconsistencies

of 2015. The finalisation efficiency ratio has

within the processes. In order to determine the

however increased significantly from 32% in

reasons for these inconsistencies a more detailed

the 1st quarter of 2015 to 59% in the 3rd

and comprehensive analysis is required. As such,

quarter of 2015. This indicates that there has

the following section provides a breakdown of

been significant improvement in the municipal

the land use management and building plan

administration proficiency of the department.

application processing system at the CJMM.

The CJMM finalisation efficiency ratio indicates that on average, more than half (55%) of all

5.1.2 Application Case Study Analysis

building plan submissions are processed within

The municipal application tracking analysis

the prescribed time periods. It is important to

provides a collection of findings pertaining

note that a number of building plan applications

to the administration efficiency of the

Figure 6: CJMM Total Building

within the municipality are unresolved. Unresolved

CJMM. Due to the nature of the records of

Plan Submissions and finalised

building plan applications refer to any application

application administration at the city planning

that has been submitted but not finalised.

department, the approach followed in the

2013-2015

application tracking analysis is different for each of the metropolitan municipalities. In cases where the application records/files were incomplete, interviews with the relevant departments were conducted as a means of analysing the efficiency of the application administration process. Land Use Management Application Tracking The following section provides the processing timeframes for commercial property development

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Figure 7

67

Figure 7: CJMM Consolida3on Processing Timeframe 2013-2015

800

700

applications in the CJMM. The processing timeframes are provided for all commercial

600

consolidations rezoning, subdivisions, township the municipality. The information was obtained from the municipalityâ&#x20AC;&#x2122;s application database as

500 Days of Process

establishments, and consent use applications in

400

300

provided by the city planning department. The 200

data is presented in terms of (i) time from date

176 days 105 days

of submission to date of approval, (ii) Processing

100

time median (average number of days), and (iii)

0

23.

the maximum timeframe as per legislation

1

2

3

4

5

6

7

8

9

Time from date of submi/ed to date approved

Figure 7 indicates the processing Figure 8 time for the sample of consolidation applications at the

10

11

12

13

14

15

16

17

18

19

Consolida>on Applica>on Sample Processing Time Median

Maximum Timeframe

Figure 8: CJMM Rezoning Processing Timeframe 2013-2015 Figure 7: CJMM Consolidation Processing Timeframe 2013-2015

Â

municipality from the period 2013-2015. As indicated, the processing time median

2000

across the sample is approximately 176 days which is roughly 6 months. Roughly 70% of the sample applications were The maximum timeframe indicated (105 days) is from application submission to

Days to Process

processed within the legislated timeframe.

1500

1000

receipt of the initial decision made on the application.

Applications

that

exceeded

612 days 500

the maximum timeframe were referred to

208 days

the public hearing process which can take approximately 60 days to complete.

0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 Rezoning Applica>on Sample

In

terms

of

the

rezoning

application

processing timeframes Figure 8 indicates

Time from date submi/ed to date approved

Processing Time Median

Maximum Timeframe

Figure 8: CJMM Rezoning Processing Timeframe 2013-2015

that the processing time median for the sample of rezoning applications is nearly 600 days which is approximately 20 months (nearly two years). The desired timeframe according to the former legislation, including a public hearing is roughly 208 days. This suggests that on average the rezoning application process takes three times longer than the maximum time 24 outlined in the former legislation ., However,

it should be noted that in some cases public hearings are prolonged for a substantial period of time depending on the circumstances of

Figure 9: CJMM Rezoning Application Breakdown

the application. As indicated in the preceding section, the application process is based on the administrative phase and the consideration phase. As a means of identifying in which

24

phase the delays are occurring, additional

Ordinance No 15 of 1986

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Town Planning and Townships

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10 Figure 10: CJMM Subdivision Processing Timeframe 2013-2015

1000

data was obtained from the CJMM. Figure 9

900

indicates the processing time breakdown from

800

a sample of 18 rezoning applications.

Days to Process

700

As indicated, the majority of the sample

600

applications

500 400

significant

delays

68% of the application processing time is spent

319 days

300

during the administration phase, whereas 32%

200

is during the consideration phase. Figure 10

105 days 100 0

experience

during the administration phase. On average,

illustrates the application processing timeframe 1

2

3

4

5

6

7

8

9

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

for the sample of 28 subdivision applications.

Subdivision Applica>on Sample

e 11

Time from date submiIed to date approved

Maximum Timeframe

Processing Time Median

Figure 11: CJMM Township Establishment Processing Timeframe 2013-2015

As indicated, the processing time median across the sample is approximately 320 days

Figure 10: CJMM Subdivision Processing Timeframe 2013-2015 Â

(11 months), which is about three times longer

4000

than the maximum timeframe of 105 days. It Days to Process

3500

should be noted that the maximum timeframe

3000

includes the number of days from application submission to receipt of the initial decision.

2500 2000 1350 days

1500

timeframes Figure 11 indicates that roughly

1000

40% of the sample of 41 applications were 275 days

500 0

In terms of the township application processing

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 Township Establishment Applica>on Sample Time from date submiIed to date approved

Maximum Timeframe

Processing Time Median

Figure 11: CJMM Township Establishment Processing Timeframe 2013-2015

processed within the maximum timeframe of 275 days. The maximum timeframe includes a public hearing of roughly 60 days, however it should be noted that public hearings can extend the process due to the application circumstances. As a means of identifying in which phase the delays are occurring additional data was obtained from the CJMM. Figure 12 indicates the processing time breakdown for a sample of 12 township establishment applications. The majority of the sample applications experience

significant

delays

during

the

administration phase. On average, 87% of the application processing time is spent during the administration phase, whereas 13% is during the consideration phase. This suggests Figure 12: CJMM Township Establishment Application Breakdown

that the administrative phase of township establishment applications require extensive information collection processes prior to

25

When the building plan application is rejected by the department, the applicant has 12 months to

consideration by the municipality.

rectify any mistakes on the plan and can subsequently resubmit the application. This step is included in the processing time and therefore has resulted in a high processing time median.

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Lastly, in terms of consent use applications

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69

Figure 13

1000

Figure 13 indicates that processing time median is roughly 349 days which almost amounts timeframe is intended to be approximately 105 days, depending on the circumstances of the

800 Days to Process

to 12 months. The maximum processing

application.

600

400

Building Plan Application Tracking

200

Figure 14 represents the sample of the building

105 days

plan processing timeframe for the CJMM in

0

relation to the maximum prescribed timeframe

2

3

4

5

6

7

Time from date submiIed to date approved

that the processing time median is approximately

8

9

10

11

12

13

14

Maximum Timeframe

Processing Time Median

Figure 14: CJMM Building Plans 2013-2015

Figure 13: CJMM Consent Use Processing Timeframe 2013-2015 700

Although this figure suggests that the processing

1

Consent Use Applica>on Sample

of 60 days. The sample of 58 applications shows Figure 14 240 days.

349 days

time

median

is

significantly

600

processing

building

plan

applications

it

should be noted that the sample applications

Days to Process

higher than the legislated time period for 500

400

includes applications that have been received and accepted by the building control office, but require either amendments from the applicantâ&#x20AC;&#x2122;s

25

side ,

or

are

still

pending

26

LUM approval . According to the CJMMâ&#x20AC;&#x2122;s

300 240 days 200 60 days 100

building control department, a significant majority of the sample applications fall within this category. In order to prove this, further

0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 Building Plan Applica>on Sample Time in days from last sebsequent resubmission to date approved

Maximum Time Frame

Processing Time Median

Figure 14: CJMM Building Application Type

Days from Submission to Capturing the Application

Days from Submission to Approval

1

New Building

17

29

2

Additions

6

5

3

New Building

8

43

4

New Building

8

243

5 6

New Building

0

24

Additions

14

23

7

New Building

6

168

8

Additions

23

5

9

Alterations

6

105

10

New Building

27

15

11

Internal Alterations

6

203

12

New Building

6

4

Plans 2013-2015

Reason For Delay (if applicable)

Table 11: CJMM Detailed Sample: Building Plans 2013-2015

Applicant was notified within 38 days of outstanding information. Information outstanding includes: Site Development Plan, Zoning, plan also does not indicate access to the property.

Applicant was notified within 62 days of outstanding information. Information outstanding includes: Proof of contributions paid, fire approval required, Town Planning comments. Applicant was notified within 19 days of outstanding information. Information outstanding includes: Home-owners consent and engineering signature on the plan. Applicant was notified within 32 days of outstanding information. Outstanding information includes: new area not shown on plans, building line relaxation required, title deed required, town planning approval required.

26

LUM approval is required prior

to building plan approval, in many cases building plan applications

13

Additions

7

79

are submitted without taking

14

New Building

34

64

cognizance of the town planning

15

Internal Alterations

7

4

16

Additions

2

28

17

New Building

29

34

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scheme. This lengthens the building plan application process significantly.

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APPLICATION PROCESSING REPORT

investigation was done on the building plan

the required information is included as part of

sample obtained from the CJMM building

the application package.

plan division. The overall response from the private sector It is important to understand that the CJMM’s

interviews with regard to the CJMM’s building

building control division has a methodical

control division was largely positive. Based

application processing system. Before the

on the interviews and the case study analysis

applicant submits his/her application the

it

‘pre-scrutinising’ process takes place. During

functioning effectively.

is

evident

that

the

department

is

this process the plans examiner reviews the application, in the company of the applicant,

5.1.3 Summary of Key Findings

to ensure that all the information is correct.

Based on the applications case study analysis

Subsequently, the application is captured by

the following observations and key findings

the admin staff and a decision can be made

are evident:

regarding its approval. Once approved the

The application files in the LUM section

applicant is notified within 1 week of the

do not contain all of the information

decision made. The research team requested

and documents involved in processing

a total of 17 building applications that were

the application. For example, not all

analysed in greater detail. Table 11 indicates

correspondence between the applicants

the information for each of the applications

and departments are recorded and

that were analysed.

filed appropriately. ●

From the detailed sample it is evident that

incomplete (additional information is

about 4 of the applications experienced delays. It is also evident that the primary reasons due

to

for

the

application

outstanding

delays

information

required from the applicant). ●

was

or incorrect, prolonging the application

the applicant. The average processing time

process. ●

suggesting that the municipality’s ability to process the applications is relatively efficient,

Supplementary application documentation are either incomplete

from

of the detailed sample is roughly 63 days,

Building plan submissions are often

Delayed comments from external departments.

Delayed responses from the building

however the delaying factors suggest that the

control division have indicated some

onus lies with the applicant to endure that all

capacity issues, however, many interviews

Map 6: CTMM Number of Applications 2011-2015

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APPLICATION PROCESSING REPORT

71

with private sector stakeholders have indicated that the department is functioning up to standard. ●

Incomplete statistical or data records of the data processed, in particular processing timeframes and departmental efficiency rates.

5.2 City of Tshwane Metropolitan Municipality 5.2.1 Overall Municipal Application Benchmark Statistics

Figure 15: CTMM LUM

The following section provides an analysis

efficiency ratio represents the total number of

of the overall applications processed by the

in-time finalised building plan applications at

CTMM. Similar to the former sections the

the CTMM. Figure 16 indicates the efficiency

information is presented for both land use

ratio

management and building plan applications.

for

the

CTMM’s

Building

processing from 2013-2015.

28

Control

As indicated,

Applications 2011-2015

27

Source: City of Tshwane

Development Trends 2012-2013,

the finalisation efficiency ratio for the CTMM

City of Tshwane metropolitan

Land Use Management Application

has decreased from 80% in 2013 to roughly

Municipality

Tracking

66% in 2014 and then 46% in 2015. 28

In terms of the land use management applications the following should be noted: ●

It should be noted that all of

It should be noted however that the number of

the findings stipulated in the

processing

applications finalised has increased significantly

finalization efficiency analysis were

data obtained from the CTMM does

from approximately 1679 in 2013 to roughly

derived from the information

not indicate the relevant processing

3407 in 2015. The lowering of the efficiency

provided by the Building Control

timeframes for all of the regions

ratio can be ascribed to the rapid increase

Department at the City of Tshwane

as there is no available record of

in applications finalised during this period,

metropolitan Municipality.

this information.

resulting in possible capacity constraints.

The

overall

application

The time period of the respective applications is from 2012-2015.

In order to determine the reasons for building plan application delays a more detailed

Map 6 illustrates the number of applications

and comprehensive analysis is required. In

processed by the CTMM during 2012-

addition, the unavailability of processing time

Figure 16: CTMM Building Plan

information for all of the LUM applications at

Finalisation Efficiency Ratio

27

2015 . As indicated below, the regions with the highest number of applications are Region 6 and Region 4 with 2 646 and 1981 applications respectively. Figure 15 indicates the total number of applications processed in all of the regions from 2012-2015. As indicated the number of applications have increased over this period, suggesting that there has been an incline in terms of property development in the municipality. Building Plan Application Tracking In terms of the building plan submissions, the

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APPLICATION PROCESSING REPORT

Figure 17 Figure 17: CTMM Consolida3on Processing Timeframe 2013-2015

Land Use Management Applicat ion Tracking

900

The following section provides the processing

800

timeframes

Days to Process

1000

for

commercial

development

applications in the CTMM. The processing

700

timeframes is provided for all commercial 600

consolidation, rezoning, subdivision, township

500

446 days

establishment, and consent use applications in the municipality.

400 300

The information was obtained from the

200

105 days

100 0

municipalityâ&#x20AC;&#x2122;s

application

database

as

provided by the city planning department. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Consolida>on Applica>on Sample Time from date submiIed to date approved

Maximum Timeframe

The data is presented in terms of (i) time from date of submission to date of approval, (ii) Processing time median (average number of

Processing Time Median

Figure 17: CTMM Consolidation

the CTMM suggests that there is a need for

days), and (iii) the maximum timeframe as

Processing Timeframe

further investigation. As such, the following

per legislation

2013-2015

section provides a further breakdown of the

29

land use management application processing

Figure 17 indicates the processing time for the

system at the CTMM.

sample of consolidation applications at the municipality from the period 2013-2015.

Town Planning and Townships Ordinance 1986

29.

5.2.2 Application Case Study Analysis

As indicated, the processing time median

The municipal application tracking analysis

across the sample is approximately 446 days

provides a collection of findings pertaining

(14.8 months). The timeframe (105 days)

to

the

indicated is from application submission

CTMM. Due to the nature of the records of

to receipt of initial decision made on the

application administration at the city planning

application. Applications that exceeded the

departments, the approach followed in the

maximum timeframe followed the public

application tracking analysis is different for

hearing process (which can take up to 60

each of the metropolitan municipalities. In

days to complete). In terms of the rezoning

cases where the application records/files

application processing timeframes

the

administration

efficiency

of

were incomplete, interviews with the relevant Figure 18: CTMM Rezoning

departments were conducted as a means of

Figure 18 indicates that the processing time

Processing Timeframe

analysing the efficiency of the application

median for the sample of rezoning applications

Figure 18

Figure 18: CTMM Rezoning Processing Timeframe 2013-2015

2013-2015

is nearly 436 days which is approximately 14

administration process.

months. The desired maximum timeframe

1500

according to the former legislation, including a public hearing is roughly 208 days (6.9

Days to Process

1300

months). This suggests that on average the

1100

rezoning application process takes twice as 900

long as outlined in the former legislation. However, it should be noted that in some

700

cases public hearings are prolonged for a

436 days

500

substantial amount of time depending on the 300

circumstances of the application. Figure 19

208 days

illustrates the application processing timeframe

100

-100

1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 81 85 89 93 97 101 105 109 113 117 121 125 129 133 137 141 145 149 153 157 161 165 169 173 Rezoning Applica>on Sample Time from date submiIed to date approved

Maximum Timeframe

Processing Time Median

for the sample of subdivision applications. As indicated, the processing time median across the sample is approximately 291 days (10

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APPLICATION PROCESSING REPORT

73

Figure 19 Figure 19: CTMM Subdivision Processing Timeframe 2013-2015

1000

longer than the maximum timeframe of 105

900

days (3.5 months). It should be noted that the

800

maximum timeframe includes the number of days from application submission to receipt of

Days to Process

months), which is slightly below three times

initial decision made.

700 600 500 400

As such, applications that have taken significantly longer than the prescribed timeframe typically

200

includes a public hearing of roughly 60 days. In

105 days 100

terms of the township application processing timeframes

Figure

20

indicates

that

291 days

300

0

the

1

5

7

9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 Subdivision Applica>on Sample

processing time median is 614 days (20 months). Figure 20 The maximum timeframe of 275 days (9 months) includes a public hearing of roughly 60 days,

3

Time from date submiIed to date approved

Maximum Timeframe

Processing Time Median

Figure 20: CTMM Township Establishment Processing Timeframe 2013-2015

Figure 19: CTMM Subdivision Processing Timeframe 2013-2015

however it should be noted that public hearings

1600

can sometimes take longer depending on the

1400

circumstances of the application.

1200

Figure 21 represents the sample of the building plan processing timeframe for the CTMM in relation to the maximum prescribed timeframe

Days to Process

Building Plan Application Tracking

1000

800 614 days 600

of 60 days. The sample consists of 69 building

400

plan applications. The sample shows that the processing time median is approximately 98 days. This indicates that the processing time median is

0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Township Establishment Applica>on Sample

roughly 38 days more than the legislated time

Figure 21 period for processing building plan applications. This suggests that, apart from a few exceptions,

275 days

200

Time from date submiIed to date approved

Maximum Timeframe

Processing Time Median

Figure 21: CTMM Building Plans 2013-2015 Figure 20: CTMM Township Establishment Processing Timeframe 2013-2015

the processing time for building plan applications

800

is relatively good. The City of Tshwane’s building control department has regular meetings in order

700

to discuss a number of high value applications 600

administrative processes. 5.2.3 Summary of Key Findings Based on the applications case study analysis the

Days to Process

as well as identify ways of standardising the

500

400

300

following observations and key findings are evident: ●

Bulk Services are not always available on the application site and therefore delays are

200 98 days

100

60 days

caused due to service agreements that need to be finalised or services that need to be provided. ●

The application files in the LUM section does not contain all of the relevant information,

0

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 Building Plan Applica>on Sample Time in days from date submiIed to date approved

Maximum Time Frame

Processing Time Median

Figure 21: CTMM Building Plans 2013-2015

therefore the analysis was largely based on interviews held with the department.

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74

APPLICATION PROCESSING REPORT

the EMM was not available for analysis. The administrative record keeping process at the EMM requires immediate and urgent attention, this was evident during the research process as the municipality was unable to provide information that reflected the total number of application submissions for all of the regions within the municipal area. However, some information was obtained from the EMM with regard to the total number of township establishment

and

rezoning

applications

received and dealt with at the head office of the EMM. Figure 22: EMM Rezoning

and Township Establishment Applications 2014- 2015

● ●

● 30

Town Planning and Townships Ordinance 1986.

The CTMM indicated that a number of applications submitted to the department

Figure 22 illustrates that the number of

were either incomplete or contained incorrect

applications

or outdated information.

number of applications dealt with are

Delayed comments from internal and external

significantly different. During 2014, the

departments.

number

Applicants do not refer to the Town Planning

approximately 588, and the number of

Scheme and Regional Spatial Development

applications dealt with was roughly 354.

Frameworks.

Furthermore, in 2015 the total number of

Insufficient consultation and communication

applications received by the municipality

between applicants and relevant

was

departments.

dealt with.

of

about

received

compared

applications

325

of

to

the

received

which,

206

was

were

Delayed response from building plan department in terms of obtaining the

Building Plan Application

requested statistical information on

Tracking The efficiency of each of the metropolitan

application processing

building

5.3 Ekurhuleni Metropolitan Municipality

control

offices

is

measured

by

determining the finalisation efficiency ratio. The EMM is administered by a number of sub-offices. Each sub-office is responsible for a specific region within the municipal region. It should be noted

Figure 23: EMM Building Plan Finalisation Efficiency Ratio 2013-2015

5.3.1 Overall Municipal Application

that the building plan information as received

Benchmark Statistics

by the municipality is representative of three (3)

Land Use Management Application Tracking

of the sub-offices namely Germiston, Benoni,

The

overall

and Brakpan. Figure 23 indicates the finalisation

municipal application benchmark statistics for

efficiency ratio of the aforementioned sub-offices.

information

indicating

the

The finalisation efficiency ratio has increased from 65% in 2013 to 80% in 2014, however has decreased to 71% in 2015. Furthermore, the overall average finalisation efficiency ratio is estimated at 72%. The finalisation efficiency ratio indicates that a large majority of the building plan applications are processed in the desired timeframes, suggesting that the building plan administration process is functioning well, however there is much opportunity for the improvement of these processes.

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APPLICATION PROCESSING REPORT

75

Figure 24 indicates the total number of building plan submissions and finalisations in terms of the analysis period for the three identified sub-offices. As such a more detailed and comprehensive analysis is required. The following section provides a breakdown of the land use management and building plan application processing system at the EMM. 5.3.2 Application Case Study Analysis The municipal application tracking analysis provides a collection of findings pertaining to Figure 25 the administration efficiency of the EMM.

Figure 24: EMM Total Building Figure plan25: Submissions and Finalised (Germiston, Brakpan, Benoni) EMM Rezoning Processing Timeframe 2013-2015 1800

Land Use Management Applicat ion Tracking The application tracking information received from the EMM includes all of the major industrial, commercial and business rezoning and

township

establishment

applications

approved since 2011 to date.

1600

1400

1200

1000

800

As a result of the tremendous economic impact that these developments could have

600

499 days

400

on the local economy, the EMM keeps a list of major applications as a means of monitoring

208 days 200

them and ensuring that they are processed

0

1

2

3

4

timeously. The data is presented in terms of (i) time from date of submission to date ready for report and date finalised, (ii) Processing time

5

6

7

8

9

10

11

12

13

14

15

16

17

18

Ready for Report to Finalisa>on (days)

Applica>on Submission to Ready for Report (days)

Average Time between received and ďŹ nalised

Maximum Time Frame

19

20

21

Figure 25: EMM Rezoning Processing Timeframe 2013-2015

median (average number of days), and (iii) the 30 maximum timeframe as per legislation .

phase of the application. The EMM indicated that in many cases these applications

In

terms

of

the

rezoning

application

have

outstanding

information

including

processing timeframes Figure 25 indicates

comments from external departments, and

that the average processing time of the

outstanding Traffic Impact Assessments and

major rezoning applications is roughly 499

Environmental Impact Reports.

days (16 months). The maximum timeframe is roughly 208 days (6.9 months). This

In

indicates that there are a number of delays

processing timeframes Figure 26 indicates

within the system. The major rezoning

that the average processing time is roughly

application processes can also be analysed

1135 days (38 months). The maximum

in terms of two distinct phases. The first

timeframe

phase is from the application submission to

establishment applications is approximately

it being ready for report compilation, and

275

the second phase is from report compilation

timeframe includes a public hearing of

to finalisation and submission for decision

roughly 60 days, however it should be noted

making purposes. It is evident that most

that public hearings can sometimes be

of the applications within the sample have

longer depending on the circumstances of

experienced significant delays during the first

the application.

JUNE 2016

GDP report GAUTENG 2016 .indd 75

terms

days

of

the

for (9

township

processing months).

The

application

township suggested

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ure 26

76

APPLICATION PROCESSING Figure 26: EMMREPORT Township Establishment Processing Timeframe 2013-2015

3500

3000

2500

This suggests that the applications experience administrative delays to the lack of relevant

2000

application information and comments from internal and external departments.

1500 1135 days

Table 12 indicates a detailed analysis on

1000

some of the application files at the EMM. As indicated, two (2) of the applications in the

275 days

500

detailed sample were processed within the required timeframe of 208 days (6.9 months).

0 Ready for Report to Finalisa>on (days)

Figure 27

The reasons for delay in most cases is due to

Applica>on Submission to Ready for Report (days)

Average Time between received and ďŹ nalised Figure 27: EMM Building PlansMaximum Time Frame 2013-2015

external departments not responding to the

Figure 26: EMM Township Establishment Processing Timeframe 2013-2015

request for comment timeously.

Days to Process

1000 900

Building Plan Application Tracking

800

Figure 27 represents the sample of the building

700

plan processing timeframe for the Ekurhuleni

600

metropolitan municipality in relation to the

500

maximum prescribed municipal timeframe of 60 days. The sample shows that the processing

400

time median is approximately 146 days (4.8

300

months) which suggests that on average the

200

146 days 60 days

100 0

building plan application process takes more than double the number of legislated days.

1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 81 85 89 93 97 101 105 109 113 117 121 125 129 133 137 141 145 149 153 157 161 165 169 173 177 181 Building Plan Applica>on Time in days from last sebsequent resubmission to date approved

5.3.3 Summary of Key Findings

Maximum Time Frame

Processing Time Median

2013-2015

Based on the application case study analysis the following observations and key findings are evident:

Figure 27: EMM Building Plans

It is evident that the majority of the major

Delayed comments from internal and external

township

departments.

establishment

applications

experience delays during the first phase which

â&#x2014;?

Applications are either incomplete

is from application submission, to when the

or incorrect resulting in the need for

application is ready for report compilation.

continuous amendments to be made.

Table 12: EMM Detailed Sample of LUM applications Reviewed

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Insufficient consultation and

lies with the applicant to ensure complete

communication between applicants and

compliance and to adhere to the regulations

relevant departments.

pertaining to the respective legislation.

77

The existing administrative and management system is unable to follow

[Content

a standardised process across the sub-

memorandums. In the form of incorrect

offices within the municipality.

information and references. In some cases

Poor reporting on the administrative

memorandums appear to have followed

efficiency of both LUM and Building Plan

a mere copy and paste approach with no

divisions.

consideration of the unique information

errors

on

motivating

that is site specific. Should the application

5.4 Public Sector Inputs on Application Delays

be

incomplete

or

incorrect

municipal

capacity is ineffectively utilised and this leads to unnecessary delays.

Interaction

with

municipal

application

timeframes

officials

on

delays

has

[Private sector delays to timeously respond

provided insights with respect to reasons

to amendment requests on content errors

for application delays from the perspective

in both LUM and building plan applications.

and

of the municipality. The application tracking analysis highlighted the fact that even though

[Poor communication between the various

the identified municipalities have different

departments required to comment on the

administration

applications resulting in inefficient timeframes

processes

and

operate

in

different circumstances, the challenges they

to provide comments.

face are similar. As such, municipalities can work together to find sustainable solutions to

[Ineffective

communication

these identified challenges.

management

and

relevant

between department

officials have resulted in confusion and The purpose of this section is therefore, to

misunderstandings often leading to delayed

provide a collective overview of some of the key

processes and response times.

challenges faced by the public sector in terms of processing applications based on interactions

[Indirect or poor communication between

with all three metros.

the applicant and the relevant department. In many cases the applicants make use 31

The challenges were identified through two

of a ‘runner ’ to obtain information

processes, the first being an analysis of a

or to provide the municipality with the

sample of application files obtained from the

outstanding information. This middle-man

relevant department; and secondly discussions

approach is often not effective as it results

held with various departments at the identified

in a loss of direct communication between

metropolitan municipalities. It should be noted

the applicant and the department. The level

that in cases where the application files were

of accountability is often poor among the

incomplete or unavailable, the information was

‘runners’ resulting in low priority to address

solely based on interviews with the relevant

problems pertaining to the application.

department. Based on these interactions, the following main challenges were identified:

[The

deficiency

of

municipal

self-monitoring systems to assess application The

progress decelerates the application process

31

outstanding information on key aspects of

and limits the potential for development

and planners typically appoint

the application results in significant delays

(i.e. the developer or owner cannot meet

runners to do some of the smaller

in the application process. The responsibility

their

administrative and logistical tasks.

[Incomplete

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Applications

development

objectives

due

to

Private sector developers

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78

APPLICATION PROCESSING REPORT

processing delays). Furthermore, the lack of

rendering similar services in their private capacity.

suitable selfmonitoring systems result in an

The impact of this has resulted in their municipal

unawareness of the severity of delays and the

functions being negatively impacted on and

inability to improve on their required planning

contributes to the uneccesary delays within the

capacity. Existing technology and electronic

application process.

monitoring systems are available, however these are not employed to their full potential.

[Applicant does not refer to TPS or SDF. Prior to applying for any development rights

[Physical inter-departmental distribution and

it is important that the applicant refers to

handling of applications results in distribution

the applicable town planning scheme and

and logistical delays and often misplacement

relevant spatial development frameworks

of application files.

in order to identify whether the applicaton is aligned with the municipality’s spatial

[Staff leave planning and administration.

vision. More often than not, applicants

When the relevant official required to

submit LUM applications that are not

comment on an application is on leave

aligned with these documents this either

without the application being delegated, no

leads to delays such as a request for an

progress is made on the application during

application amendment or re-submission.

the leave period. Should the application file be situated in the office of the official that is on

[Other reasons for application delays

leave, no other department can comment on

include:

the application in the interim. ●

Objections received leading to

Public Hearings.

Late preparations of application

[Capacity sharing with private work activities

advertisements by the applicants.

(i.e. conflict of interest). Some municipal officials

The lack of EXCO and Mayoral

[The work overload within these departments.

whose core function is to deal with LUM and

Committee attendance by either the

building plan applications are also involved in

applicant or the objector.

SECTION SIX : PRIVATE SECTOR PERSPECTIVES The purpose of this section is to outline the perspectives of the private sector on the LUM and Building Plan application processes. Essentially, the purpose is to investigate the views of private sector on application processing.

6.1 Approach The

approach

followed

6.2 Key Limitations to

obtain

the

Key limitations to the private sector application

information includes two sources. The first

processing

analysis

include

the

lack

of

source involves the circulation of an application

response from the private sector consultants

tracking questionnaire to a large group of

to complete the questionnaires. The interviews

private sector development firms thatoperates

conducted with private sector firms proved to

in the identified study areas including all

be extremely valuable and compensated for

members of SAPOA. The second component

the non-response to questionnaires.

includes extensive interviews with some of the key private sector role players in the

In addition, the interviews instigated open-

Gauteng region.

ended discussions on the challenges faced by the private sector. It should also be noted

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APPLICATION PROCESSING REPORT

that at the time the research was conducted

projects which will significantly contribute

the commercial private property sector was

to the economy and advancement of the city

under high pressure to meet deadlines with

whilst maintaining fairness not to neglect

respect to financial year end and therefore due

smaller application types. Depending on the

to time constraints the required number of

circumstances of the application, it is evident

questionnaires could not be completed.

that applications that are of political higher value

79

tend to be prioritised and fast-tracked through In addition, some of the interview respondents

the application process as means of pushing a

were reluctant to provide feedback owing to

political agenda. Although contentious, this

a fear of being losing their anonymity to the

issue has resulted in the delay of many smaller

municipalities, and perceivably resulting in future

valued applications. This challenge is evident in

discrimination. The interviews were informed

both LUM and building plan applications.

by twenty (20) high profile private commercial property specialist respondents that operate

[Municipal

within the identified metropolitan municipalities.

commitment not to deviate from or neglect

Respondents were approached as a means of

the consistent enforcement of own policies. In

obtaining information on the administrative

practice, local municipal policies are not aligned

efficiency of application processing.

with implementation models to ensure that

6.3 Private sector Inputs on Application Delays

self-accountability

and

development rights pre-imposed to specific development zones are realised. [Policy inconsistencies - Some private sector

The following section indicates the issues and

property developers have experienced this

challenges highlighted by the private sector

aspect through LUM decisions being taken

analysis with regard to application processing:

contrary to what has been approved within the various policies. Added to this, municipal

[Poor

inter-departmental

communication

planning divisions in some instances do not

resulting in poor information dissemination

enforce development policies appropriately,

regarding priority and merit of applications. If

which ultimately perpetuates private developers

communication is effective, it should logically

to develop outside of the municipal defined

accelerate the processing of applications.

parameters.

[Poor inter-departmental relations and trust in

[The

the capacity and capabilities of the associated

municipalities when processing applications

technical departments resulting in delays due to

often has negative implications as it does not

â&#x20AC;&#x2DC;uncertaintyâ&#x20AC;&#x2122; factors.

consider the application merit in terms of the

checklist

approach

followed

by

economic benefit for the community or public [Lack of clear direction and buy-in by both

or practicality in adhering to the conditions for

politicians and technical officials. This challenge

development. This is of particular concern when

manifests in applications not being viewed in

a bylaw, or authorised official is absent and the

a coherent fashion at different levels within

application cannot progress due to this absence.

the municipality. In most instances these are assessed through a subjective and fragmented

[Lack of understanding the development

approach resulting in loss of a big picture view

importance. A perception exists among the

for sustainable and effective development.

private sector that public sector officials are not aware of the importance of fast tracking

[Application Prioritisation.

the development process, in particular the

A balance is required for effective prioritisation

application process, as a means of economic

of large scale high impact development

expansion and growth. In addition, urban design

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APPLICATION PROCESSING REPORT

and spatial planning skills are not adequately

has continued for a number of years adding to

provided for within municipalities.

the processing backlog burden. Private sector respondents attributed this to an insufficient

[Time and coordination delays in application

amount of properly capacitated and experienced

handling and distribution between departments.

personnel.

[Comments from internal departments exceed

[Lack of Responsibility and Management.

the alllocated timeframe resulting in staggered

This factor manifests when there is a lack of

delays to progress beyond responses of

management control and the responsibility of

internal departments with regard to providing

making comments or processing applications is

comments on applications. The majority of the

shifted from one official to another, ultimately

private sector respondents indicated that this is

resulting in delays in processing the applications

not a new challenge, but rather an issue that

as well as overexertion of certain individuals.

SECTION SEVEN : RECOMMENDATIONS The preceding application processing analysis has provided valuable insights in terms of the delaying factors within the application processing system albeit within the responsibilities of the private or public sector. Apart from the issues that have already been identified, it is evident that there is a particular development dilemma within the property development sector that speaks to the relationship between the public and private sector. The development dilemma is metaphorically best described as the relationship between a divorced couple with a child.

Diagram

development

In this metaphor the private sector represents the

dilemma metaphor. The relationship between

22

illustrates

the

father, and is therefore particularly focussed on

Diagram 23: Primary reasons

divorced couples (private and public sector) are

creating profit and providing swift and accurate

for application delays

often accompanied by regular confrontations

responses to the market. On the other hand,

and frustrations that result in a negative impact

the public sector, represented by the mother,

on the child (market).

also needs to respond to market needs but has a different approach towards development. She needs to be more cautious in terms of planning and development as it has a great deal of responsibility and commitment towards the market needs. The market, represented by the child, is greatly dependant on the way in which the private and public sector engages with one another. The application tracking analysis highlighted a number of issues that restrict the application process.

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81

Table 13: Primary Reasons for Delays

In order to ensure that the shared development

processing.The challenges identified include

vision is realised, both entities should take on

administrative problems with applications

the responsibility of ensuring that the designed

submissions, circulation, and processing.

processes are followed justly and accordingly. The purpose of the following section is to provide a

The functioning of administrative systems within

summary of the primary delaying factors identified

the identified municipalities ought to improve

in the analysis.

following the implementation of SPLUMA and the new municipal by-laws. Nevertheless,

Diagram 23 illustrates a summary of the primary

the

delaying factors identified in the application

made

tracking analysis. Although the degree to which

administrative systems:

delaying factors vary is somewhat different in

1.

following as

a

recommendations

means

of

are

improving

the

The municipality should actively promote

each of the metropolitan municipalities, the

and enforce the submission of quality and

reasons for delay is presented collectively for all

complete applications through continued

three of the metropolitan municipalities.

engagements with the private sector property developers.

The following recommendations apply to all of

2.

The

pre-consolation

process

should

the identified metropolitan municipalities as well

be properly facilitated by the relevant

as the private sector stakeholders. It should be

departments within the municipality.

noted that the recommendations highlighted in

3.

Ensure that all departments and sub-

this section are intended to guide municipalities

offices involved in the processing of LUM

and

towards

and building plan applications follow a

administration

comparable approach when processing

private

improving process.

sector

the Both

stakeholders

application the

municipalities

(public

applications. This will enable effective and

sector) and the private sector stakeholders should endeavour to positively respond to the

accurate evaluation of performances. 4.

Information on the application processes

presented recommendations and should also

and requirements should be more visible to

explore alternative methods of improving the

the private sector as a means of ensuring

application administration process.

that applications submitted are complete. In addition, applicants should be notified 32

Application Administration Public Sector Recommendations

timeously of incomplete applications . 5.

Improvement

in

the

circulation

32

The City of Tshwane has

included this approach in

of

the Tshwane draft Land Use

The analysis indicated a number of challenges

applications files between departments.

Management By-Laws. See section

within the administrative system of application

Accurate records should be kept with

4 of this report.

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6.

regards to where the files are located and

set out in the relevant town planning

in cases where the files are misplaced or

schemes of each municipality are adhered to.

lost the respective department should be

4. If amendment requests are issued,

held accountable.

quick responses to the requests is required

The improvement of records management,

to ensure the process is not unnecessarily

in particular application files, should be

delayed.

implemented across all municipalities.

5. Records of all application documentation

The possibility of replacing hard copy

including

application files with electronic files should

municipalities and other entities should be

be explored by working in partnership with

accurately kept.

correspondence

with

local

the private sector. 7.

With regards to the post-approval process,

Interdepartmental Relations and

the municipalities should ensure that the

Communication

conditions of establishment are clearly and well written as a means of avoiding any

Public Sector Recommendations

confusion and unnecessary delays.

The

processing

of

LUM

and

building

applications involves extensive engagements Private Sector Recommendations

between various departments within the public

In terms of the administration of applications

sector as well as engagements with the private

by the private sector it is important that all

sector (applicants). In order to ensure that the

applicants

responsibility

engagements are productive it is important that

to ensure that the process of submitting

the following recommendations are considered:

applications is done in a manner that

1) During the processing of applications,

contributes

the responsible official should be in

recognise

towards

their

the

improvement

of the overall administrative process to

continues

benefit the entire property development

applicant as well as the departments that

sector. The following recommendations are

the application is circulated to. This can

made in terms of improving the application

easily be done through actively engaging

administration processes:

through existing communication methods.

communication

with

the

2) In cases where problems with the 1. Make use of pre-submission consultation

application have been identified it is

methods with the public sector in order

important that communication to the

to

applicant is done timeously.

have

a

complete

understanding

of the technical requirements of the

3)

application. Pre-consultations with the

communicating in a manner that is

municipality enables interaction between

understandable to all parties involved in

private property professionals and public

the processing of the application.

sector officials before the submission

Private Sector Recommendations

Avoid

misunderstandings

by

of applications and payments of the 33

Transformation pertaining the

33 respective fees .

In terms of the private sectorâ&#x20AC;&#x2122;s role in terms of

technical requirements of the

2. Ensure that the information submitted

improving relations and communication the

application is available on the

as part of the application is accurate

following recommendations apply:

should

1. Private sector firms should take active steps

City of Joburg:

be well written and include all of the

to continuously improve their relationship with

www.joburg.org.za;

relevant information in order to avoid

the local municipalities through continuously

City of Tshwane:

any misunderstandings. It is vital that no

enhancing communications methods.

www.tshwane.gov.za;

information is omitted from the application.

2. Applicants should respond timeously to

Ekurhuleni:

3. All applicants should ensure that an

requests made by the local municipalities with

www.ekurhuleni.gov.za.

accurate understanding of the requirements

regards to their applications.

municipality websites.

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and

updated.

Memorandums

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Decision making procedures

Furthermore, it is recommended that SAPOA

A number of challenges were identified

commits to offering relevant basic training to

based on the decision making procedures of

the public sector at a reasonable rate in order

the respective municipalities. These include,

to facilitate capacity and general knowledge of

delayed responses from internal and external

the property sector. Added to this, SACPLAN

departments as well as the prioritisation of

needs to play a role in terms of ensuring that

certain applications at the expense of others.

qualified town planners are well versed in

These procedures have resulted in significant

property related matters. Furthermore, SAPOA

application processing delays and therefore the

members need to arrange an interactive

following recommendations are made:

workshop with the executive managers of

1. Processes of application circulation should

the planning and building control divisions in

be examined and improved.

order to discuss all submission and procedural

2. Regular meetings between the relevant

concerns pertaining to the application process.

83

internal and external departments should be held with the respective municipality as a

Accountability and Management

means of identifying ways of fast-tracking

Public Sector Recommendations

processes.

The operation and management of the application processing departments perform

Capacity Issues

a crucial role in the efficient functioning of

Public Sector Recommendations

application processes. Based on the analysis

The outcome of the analysis indicated that there

the following recommendations are made in

are capacity issues in a number of application

terms of the management of development

processing departments. The outcome of these

application processes:

capacity issues results in significant application

1) Individuals in management positions

backlogs within the administration process.

within the relevant departments should actively promote a work environment that

The

following

recommendations

should

is encouraging, uplifting and has a pro-

therefore be considered by all of the identified

development approach.

municipalities:

2) Establish a monitoring and evaluation

1) Conduct an in-depth evaluation on possible

mechanism to determine (a) the efficiency

staff shortages in all departments and in

of the application processing system and

response increase staff capacity where needed.

(b) the alignment between development

2) Increasing the involvement of students

approvals

and interns as a means of ensuring a

frameworks.

long-term contingent of well trained and

3) Establish a performance based incentive

experienced personnel.

strategy for departments that implement

3) Provide continuous training opportunities

measures

for personnel. Training should include

applications.

project management and administrative

4)

organising skills.

eliminated as means of ensuring that those in

Private

and

to

spatial

fast-track

work

activities

development

development should

be

management positions are always available Private Sector Recommendations

to perform their managerial responsibilities.

In terms of the private sectorâ&#x20AC;&#x2122;s role in enhancing capacity

issues

within

the

municipalities

Private Sector Recommendations

the private sector could possibly provide

It is important for the private sector to engage

sponsorship to local municipalities in terms

with the municipalities in cases where a

of training municipal officials or providing

municipal official or any other individual is

additional resources with the aim of improving

being corrupt or is not following protocol.

the knowledge and skills.

Whistle blowing is an important factor that

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update all town planning schemes within

CRITERIA FOR WORKABLE MUNICIPAL BY-LAWS:

the municipalities

● Clearly written, uncomplicated and user-friendly

3.

● The spatial planning by-laws should include all relevant information

Develop a land use management turnaround strategy as a means of ensuring

with detailed guidelines in terms of the application process

a uniformed understanding of the

(timeframes, required documents, relevant departments etc.)

new application processes and guiding 34

development implementation

● The information and guidelines contained in the by-laws should

4.

remain consistent as a means of avoiding confusion

Provide practical information sharing mechanisms that can be utilised by the

● Easily accessible to all stakeholders

private sector as a means of obtaining any

● Appropriately distributed and implemented across all departments

new and relevant amendments made in terms of the regulatory environment (i.e. notices on website, newsletters etc.)

can assist the management of the application

5.

Land use management decisions should

processing divisions in providing a better

reflect the development objectives set out

service to their clients. Policy, Processes and

in the spatial development frameworks and

Stakeholder Engagement

other development policies.

Policy, Processes and Stakeholder

Private Sector Recommendations

Engagement

All of the local municipalities have developed

Public Sector Recommendations

a number of policy and strategy documents

The existing LUM process has experienced

pertaining to the social, economic, and

significant

the

spatial development of the respective area.

implementation of SPLUMA. SPLUMA provides

The onus lies with the private sector to make

municipalities with guidelines in terms of

use of these publications not only to ensure

application processing and timeframes. As

that development is aligned with these

a result of SPLUMA, local municipalities are

policy directives, but also to contribute to the

the primary decision makers on all LUM

objective of achieving a collective property

applications. In addition, SPLUMA indicates

development approach among the

that all local municipalities should develop

private and public sector. In terms of policy

their own spatial planning by-laws indicating,

consultation, the following recommendations

inter alia, the processes to be followed in terms

can be made:

change

as

a

result

of

of LUM applications. This directive provides local municipalities with the opportunity to

1.

All private sector property development

make some modifications in the system of

professionals should familiarise themselves

application processing. It is important that local

with the development vision and objectives

municipalities recognise the significance of this opportunity. Figure 28 indicates some criteria

of the governing entity. 2.

Policy documents that specifically relate to

for the writing of workable municipal by-laws

the spatial development of the municipal

as per discussions held with various private and

area, namely the Spatial Development

public sector stakeholders.

Framework should be incorporated as part of the application submission process.

In 34

The Department of Rural

Development and Land Reform provides opportunity for training on

regulatory

This will enable an understanding among

transformation undergone in the metropolitan

private sector development professionals

municipalities the following recommendations

with regard to the type of land uses and

can be made:

the areas they will be supported in. A

1.

Ensure that the municipal planning by-law is

summary of the policy context of the

a workable document accessible to all

municipalities is provided in section 2 of

Accurately and innovatively review and

this report.

SPLUMA processes to all public and private sector stakeholders.

2.

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terms

of

the

policy

and

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85

SUMMARY OF RECOMMENDATIONS

Reason for Delay

Private Sector Recommendations

Public Sector Recommendations

[Make use of pre-submission consultation methods with the public [The municipality should actively promote and enforce the submission sector in order to have a complete understanding of the technical

of quality and complete applications through continued engagements

requirements of the application. Pre-consultations with the municipality

with private sector property developers.

enables interaction between private property professionals and public

[The pre-consolation process should be properly facilitated by the

sector officials before the submission of applications and payments of

relevant departments within the municipality.

35

the respective fees .

[Ensure that all departments and sub-offices involved in the

[Ensure that the information submitted as part of the application processing of LUM and building plan applications follow a comparable is accurate and updated. Memorandums should be well written and

approach to processing applications. This will enable effective and

include all of the information in order to avoid any misunderstandings. accurate evaluation of performances. It is vital that no information is omitted from the application.

[Information on the application processes and requirements should

[All applicants should ensure that an accurate understanding of the be more visible to the private sector as a means of ensuring that Application Administration

requirements set out in the relevant town planning schemes of each

applications submitted are complete. In addition, applicants should be

municipality is made.

notified timeously if applications are incomplete . 36

[If amendment requests are issued, quick response to the requests is [Improvement in the circulation of applications files between required to ensure the process is not unnecessarily delayed.

departments. Accurate record should be kept with regard to where

[ Records of all application documentation including correspondence the file is located and in cases where the file is misplaced or lost the with local municipalities and other entities should be accurately kept.

respective department should be held accountable.

[The improvement of records management, in particular application files, should be implemented across all municipalities. The possibility of replacing hard copy application files with electronic files should be explored by working in partnership with the private sector.

[With regards to the post-approval process, the municipalities should ensure that the conditions of establishment are clearly and well written as a means of avoiding any confusion and unnecessary delays.

Interdepartmental Relations and Communications

Private sector firms should take active steps to continuously improve

[During the processing of applications, the responsible official

their relationship with the local municipalities through continuously

should be in continues communication with the applicant as well as

enhancing communications methods.

the departments that the application is circulated to. This can be done

Applicants should respond timeously to requests made by the local

through actively engaging through existing communication methods.

municipalities with regard to the application.

[In cases where problems with the application have been identified it is important that communication to the applicant is done timeously.

[Avoid misunderstandings by communicating in a manner that is easily comprehensible to all parties involved in the processing of the application.

[Processes of application circulation should be examined and improved.

[Regular meetings between the relevant internal and external

Decision making procedures

departments should be held with the respective municipality as a means of identifying ways of fast-tracking processes.

[ It is recommended that SAPOA commits to offering relevant [Conduct an in-depth evaluation on possible staff shortages in all basic training to the public sector at a reasonable rate in order to

departments and in response increase staff capacity where needed.

facilitate capacity and general knowledge on the property sector. [Increasing the involvement of students and interns as a means Capacity Issues

Added to this, SACPLAN needs to play a role in terms of ensuring that qualified town planners are well versed in property related matters

of ensuring a long-term contingent of well trained and experienced personnel.

[Provide continuous training opportunities for personnel. Training should include project management and administrative organising skills.

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SUMMARY OF RECOMMENDATIONS Private Sector Recommendations

Public Sector Recommendations

Private sector firms should take active steps to continuously improve

[During the processing of applications, the responsible official

their relationship with the local municipalities through continuously

should be in continues communication with the applicant as well as

enhancing communications methods.

the departments that the application is circulated to. This can be done

Applicants should respond timeously to requests made by the local

through actively engaging through existing communication methods.

municipalities with regard to the application.

[In cases where problems with the application have been identified

Reason for Delay

Accountability and Management

it is important that communication to the applicant is done timeously.

[Avoid misunderstandings by communicating in a manner that is easily comprehensible to all parties involved in the processing of the application.

[Processes of application circulation should be examined and improved.

Policy, Processes and Stakeholder

[Regular meetings between the relevant internal and external

Engagements

departments should be held with the respective municipality as a means of identifying ways of fast-tracking processes.

Active involvement with the public sector

the public sector to take in consideration the

processes will assist in the development of

perspectives and views of the private sector.

stronger relationships with the governing entities leading to more efficient processes.

The following recommendations can therefore

Existing platforms are made available by the

be made:

public sector for continuous engagements in

1. Private sector firms should actively be

the form of public participation meetings.

involved in public participation process and ensure that the views presented are in the

These engagements enable the private sector to

best interest of the local community.

contribute to the decision making processes of

2. Participate in training and workshops

the public sector while simultaneously allowing

presented by the local municipalities.

SECTION EIGHT: THE ECONOMIC IMPACT OF APPLICATION DELAYS 35

Information pertaining the

Any development, no matter the scale, has a certain economic impact on the economy. As

technical requirements of the

such, delaying development within various application processes will also result in a delay in the

application is available on the

economic impact of the proposed development and economic losses which would have been

municipality websites. City of Joburg:

gained from the development. The purpose of this section is to explore the overall economic

www.joburg.org.za;

impact of delaying the application processes. Essentially, this will contribute to creating awareness

City of Tshwane: www.tshwane.

for all public and private sector stakeholders regarding the importance of the efficiency to progress

gov.za; Ekurhuleni: www. ekurhuleni.gov.za. 36

The City of Tshwane has included

through the stages of property development.

8.1 Approach During our engagement with the private

this approach in the Tshwane draft Land Use Management By-Laws. See

In order to quantify the impact of an

sector developers, the following applicable

section 4 of this report.

intervention on the economy and society,

statement continuously made:

The Department of Rural

econometrical modelling can be performed.

â&#x20AC;&#x153;It is often not direct project costs that

Development and Land Reform

This technique involves the development of a

causes a project to fail, but financial

provides opportunity for training on

model based on the Social Accounting Matrix

implications that are escalated due to time

SPLUMA processes to all public and

(SAM) that allows the quantification of

delaysâ&#x20AC;?

37

private sector stakeholders

economic impacts.

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87

Diagram 24: EIA modelling

Economic impacts refer to the effects on the level

initial impact on GDP for example, is taken

of economic activity in a given area, as a result

from the financial information and equals the

of some form of external intervention in the

value added generated by a specific scenario.

economy. The intervention can be in the form

[Indirect

of new investment in, for example, technology,

calculated from the Activities of suppliers

transport

facilities,

social

impact:

Indirect

impacts

process

are

development,

through application of the model. For the

housing, business development, commercial

purpose of this study, indirect suppliers

development etc. Diagram 24 illustrates the

include those industries who deliver goods

economic impact modelling process.

and services to the Activity under discussion (first round suppliers) including suppliers

As indicated the economic modelling is based

who, on their part, deliver goods and services

on the capital (CAPEX) and operational (OPEX)

to the first mentioned indirect suppliers.

expenditure

property

[Induced impacts: The induced impacts are

development. For the purpose of this analysis

the impacts on goods and services generated

the CAPEX and OPEX were based on a number

due to increased income and expenditure by

of industry standard assumptions. The impact

households as a result of the development.

of

the

commercial

is measured in terms of the direct, indirect and induced impacts of new business sales,

The following property development variable

GDP, employment and income. The economic

assumptions were utilised to determine the

impacts are defined as follows:

Economic Impact of delaying development applications, it should be noted that the

[Direct

impact:

The

direct

impact

is

information provided is theoretically based

calculated from macro-economic aggregates

on the below industry medians and standards

occurring as a direct result of the project. The

which were adjusted to be conservative:

CAP rate

10%

Commercial Property Rental Income R/m²per month39

R 107.33

40

Annual Rental Escalation

8.76%

Average Construction Cost R/m²

R 7600.00

Average operational income per month R/m²

R 150.00

Average operational expenditure per month R/m²

R 15.00

Average Maintenance cost per month R/m²

R 12.00

Total rateable property value

R 5 000 000

Total Loan Repayment per annum (based on 11% interest rate)

R 94 135 581

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38

The capitalization rate (CAP) is

the rate of the return on investment made by the property developer. As a means of ensuring the EIA is conservative a relatively low CAP rate is assumed. 39

Rode Report 2015:4

40

Rode Report 2015:4

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THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

Diagram 25: Development Scenario: Total Economic Injection

[CAP rate

38

As

indicated,

the

development

of

100

[Average rental income and escalation (R/m²)

commercial properties with an average size of

[Average Construction and Operational

1000m² each will inject approximately R 909

Costs (R/m²)

270 281 into the local economy per annum.

[Rateable property value

Roughly 84% of the economic injection is

[Total loan repayments per annum

forms part of the CAPEX and 16% forms

8.2 Quantifying the Economic Impact of Property Development

part of the OPEX. The total annual economic impact of 100 commercial development applications with an average size of 1000m² each is indicated in Table 14.

The following section provides the outcome of

Based on Table 14 it is evident that the

the Economic Impact Assessment (EIA) as per the

implementation of 100 commercial property

identified specifications. It should be noted that

developments with an average size of 1000m²

the EIA is based on theoretical inputs and does

will generate roughly R3.3 Billion in new business

not specifically represent developments in any of

sales. This suggests that for every R1 million

the identified municipalities. The EIA is based on a

rand invested, approximately R3.5 million will

development scenario of 100 commercial property

be generated. The primary industries affected

developments with an average development size

by this is the business service, manufacturing

of 1000m² each. Based on this as well as the

and construction sectors. Furthermore, the

identified medians and industry standards some

value added component of economic activity,

conclusions can be made in terms of the financial

measured by the GDP, will increase by roughly

injection into the economy.

R 925 million, suggesting that for every R1 million invested approximately R1.04 million

Table 14: Development Scenario: Economic Impact

Diagram 25 indicates the total economic injection

will be injected into the economy. In terms

based on the above mentioned scenario.

of the economic impact on employment it is

per Annum

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evident that the development scenario will

is viewed in terms of the entire economic

generate approximately 2116 employment

contribution to the area of influence and does

opportunities.

not represent the financial impact experienced

Diagram 26: Development

by the private property developer.

process and application delay

89

The primary industries where employment is generated includes the business services,

Diagram 26 illustrates the concept of delaying

construction and wholesale and retail industries.

applications

Lastly, the additional income generated by the

process. The delay in processing development

proposed development scenario is estimated at

applications directly contributes to the delay

roughly R638 million, indicating that for every

in construction and operation of commercial

R1 million invested approximately R680 000 is

property, ultimately resulting the delay of

generated in additional income.

potential economic contributions to the local

8.3 The Financial Impact of Delays in Processing of Development Applications

in

the

overall

development

area (business sales, GDP, income, employment).

Based on the EIA analysis of the identified development scenario a number of deductions can be made in terms of the financial impact of delaying the development application process. It should be understood that the impact

Time delays in development processes presents the largest financial risk for private sector property developers in terms of profit loss. In addition, the delays in application processes results in limited financial and employment contributions towards the local economy. It is important that property developers take the average application processing timeframes into consideration prior to commencing with a property development project.

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SECTION NINE : CONCLUSION AND FINAL REMARKS Based on the analysis the following deductions can be made on the financial impact of application processing delays: New Business Sales – An application

“When people are determined, they can overcome anything”

processing delay of 30 days will delay an economic

contribution

of

approximately

R 2.8 million in new business sales and production.

This

can

be

interpreted

to

Pres. Nelson Mandela (2006)

approximately R 90 000 a day. Gross Domestic Product (GDP) – When

Some final considerations to be made:

there is a delay of 30 days for 1 application (representative of the above mentioned

We are all on the same team – Whether

criteria) a GDP contribution of approximately

a property developer, architect, planner,

R 770 000 does not materialise in the

building inspector, municipal official or

provincial economy. This can be interpreted

whatever the case may be, we all want

to approximately R 25 000 a day

the

Employment – An application processing

tracking

delay of 30 days will delay the opportunity

ultimately contribute to the local economy.

for

Development

employment

for

approximately

2

prospective employees.

same

thing:

Improving

development essentially

and

fast-

processes

that

results

in

the

building of facilities that potentially provide income and employment opportunities to

Income – An application processing delay

local communities. The private and public

of 30 days will delay income generation

sectors should both aspire to develop a

of approximately R 530 000. This can be

culture of professional cooperation. Working

interpreted to approximately R 17 000 of

towards ways of enhancing the cooperation

additional income a day.

between commercial property development professionals

(public

or

private)

will

Based on the analysis of the economic value

ultimately contribute to the improvement of

of the commercial private property sector it

local communities.

is evident the economic contribution of the sector plays a significant role in the provincial

Honour

decisions

economy. It is evident that the property

authorities

market is negatively impacted on as a result of

sustainable development it is important that

application processing delays in the identified

the private sector honours the decisions

municipalities. For this reason, it is imperative

made by the local authorities. It is evident

that development processes are not only kept

that there are a number of frustrations

to the legislated guidelines, but are also a

between the private and public sectors,

reflection of sustainable development.

however valiant efforts should be made to

The success of the commercial private property

endure any disagreements with regard to

sector in the Gauteng Province is dependent

land development decisions made by the

on valued cooperation between the private

local authorities. Private sector developers

and public sectors. In addition, it is crucial that

should recognise that the more you ‘play

a collective attitude towards the development

by the rules’ of the municipality, the more

of the Province should be adopted. After all,

efficient the process becomes.

In

made order

by

to

local

implement

the outcome and impact of development ultimately has a significant effect on the

Local

livelihoods of local communities.

their responsibility to promote development

authorities

should

acknowledge

– Active steps should be taken to ensure

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91

that all local municipalities understand the need for fast-tracking development processes. be

a

Furthermore,

comprehensive

there

should

understanding

of

the responsibility and role they play in development. In terms of public policy, local authorities should ensure that public policy reflects the economic realities of the respective municipalities. Opportunities for Additional Research â&#x20AC;&#x201C; It is important that research in the field of commercial property development is continuously expanded as a means of enhancing our understanding of the sector. A number of research opportunities can be highlighted as a means of exploring further research into this field. These opportunities include, inter alia, the following: [Defining

the

development

cost

implications

sprawl

on

of

municipal

departments responsible for the provision and maintenance of infrastructure and other services, ultimately adding to the bulk service contributions. [Exploring

alternative

and

modern

technological systems that can enforce electronic

submission,

processing

and monitoring of land development applications to the extent of creating a paper free administrative environment. [Determining

the

personnel

capacity

benchmark of municipalities in terms of how many employees are required to process development applications.

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G a u t e n g

THE ROLE AND IMPACT

2016

Metropolitan Municipality. City of Joburg. (2016). Land Use Management By-Law. City of Tshwane. (2016). Draft Land Use Management By-Laws.

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International Finance Corporation. (2011). International Finance Institutions and Development through

COMMERCIAL PROPERTY SECTOR the Private Sector.

Kidd, M. (2014). Country Report: South Africa. The Spatial Planning and Land Use Management Act 16 of 2013. IUCNAEL EJournal, 239-248.

MILE. (2013). A Developer's Guidebook.

THE ECONOMIC VALUE of the RSA. (1998). The White Paper on Local Government. COMMERCIAL PRIVATE PROPERTY SECTOR Reiner, C. &. (2013). Private sector development and Industrial Policy.

SALGA. (2011). An Introduction to Municipal Spatial Planning in South Africa. SAPI.

South African Cities Network. (2015). SPLUMA as a tool for Spatial Transformation. Johannesburg: SACN. Statistics South Africa. (2015). Selected building statisticsPROCESSING of the private sector as reported by local APPLICATION REPORT government institutions. RSA.

Pretorial

l Cullinan

Bronkhorstspruit

Tshwane

l

Metsweding

l Centurion

Midrand

l

l

Magaliesburg

Sandton

Muldersdrift l Randburg l l Krugersdorp l l Roodeport l

Johannesburg

West Rand Carltonville

Soweto l

Johannesburg

l Bedfordview l l

Benoni

Boksburg

l

Springs

Ekurhuleni

l l

Heidelberg

Sedibeng Vander Bijl Park

l

Vereeniging

l

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Layout and pre-press material MPDPS (PTY) Ltd mark@mpdps.com

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THE ECONOMIC VALUE OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

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