Annual Report 2003

It is enormously gratifying that in my eighth, and last, year as Chairman of the Johannesburg Housing Company, I can report that the company has achieved a position of financial sustainability – where its operational income covers all operating costs. This is a remarkable accomplishment for a non-profit organisation such as JHC and one which makes it quite exceptional among the many social institutions active in South Africa.

We have travelled a steep and challenging road to reach this point. Eight years ago, the inner city of Johannesburg was seen by many as an anarchic environment, characterised by disorder and decay. When we launched JHC into this arena, with the aim of providing affordable, well-managed, social housing and taking a stand to reverse the decline in the inner city, many counselled us about the risks involved. Not all, however, concurred in our confidence that we would overcome them. We are thankful to those who shared our vision and trusted JHC to deliver on its objectives. Having invested more than R100 million in housing in the inner city and taken ownership of 15 buildings, JHC today manages over 1600 housing units which provide safe, clean, comfortable and affordable homes to more than 4 000 people. The fact that JHC has established itself as a financially sustainable organisation in this testing environment gives us all cause for celebration!

The tide of inner city degeneration is turning, with a growing number of agents working towards the regeneration of Johannesburg. We are particularly pleased about the return of the private sector, pioneered through the loans provided to the JHC by Absa bank. Who would have thought this would lead to a demand for loft apartments in art deco inner city buildings at a selling price of over R500 000 per apartment?

JHC’s achievement is no small measure due to the commitment of the company’s Board and staff.

As a theologian, when I took up the chairmanship of the company, I knew little of the business world. During my eight years at the helm of JHC, I have learnt a great deal from an experienced and innovative Board, committed to strong business principles, yet sincerely aware of the social imperatives of our initiative. Together and individually, this team of people has contributed consistently to the company’s evolution and growth. At JHC we have explored, and in many instances put into practice, new methods for managing a business in a socially sensitive way.

Without any precedent to follow, we have learnt along the way; about design to produce quality at an affordable cost, about building on empty land and about upgrading derelict buildings, and in the process we developed opportunities for building-skills training on our sites. We have learnt about managing buildings to create hospitable enclaves that impact positively on the city. In this, we have supported the development of the requisite skills among our housing supervisors, leasing and credit control staff and we have encouraged our tenants to play a constructive role in their communities.

The development of skills, particularly among the less skilled staff within the company, has become central to JHC’s operations. The company embraces a unique nurturing mode of interaction between the Board and staff. It provides in-house training and encourages staff to take up outside training opportunities, to progress in their careers. It operates as an empowering organisation, supporting personal growth and development. What other company can boast a performance management programme which is structured to ensure that staff at the administrative levels of organisation has the opportunity to learn from working in similar institutions overseas?

While the enthusiasm of the staff at JHC is in part attributable to the empowering environment that the company provides, it is as much the willingness of the staff to rise to the opportunities presented to them that makes the JHC the successful company that it is. I want to salute them all.

All JHC’s achievements have been accomplished within a framework of strict business principles. It is this framework that has enabled us to secure the financial sustainability of the company. At the same time it has, in effect, created a shield, enabling us to offer people who choose to live in the city the possibility to do so securely, in peace, and with dignity; enabling children to become children again, to go to school unthreatened and to play at home in gardens and courtyards. It is in this unique interlacing of business skills and social awareness that JHC demonstrates the best of what the new South Africa can be.

During the year of my leave-taking we reached a number of further milestones at JHC. After three years of planning, we secured the finances and finalised the operating framework for the development of Brickfields – which represents the first major public-private partnership in residential development in the history of South Africa. Furthermore, this partnership holds particular significance in that it has attracted, for the first time, direct investment from one of South Africa’s big four banks and from leaders of the corporate sector, in a project that conventionally would have been considered too high risk by such institutions. Although they are partnered by the Gauteng Department of Housing and other government agencies in this venture, there are no underlying government guarantees on this JHC-driven initiative. This move on the part of the private sector marks a major shift in corporate social philosophy. Here we are seeing not just a loan and not just an investment in bricks and mortar, but a commitment to commercial opportunity, social responsibility and the future of Johannesburg as a world class African city. Set to deliver 1 400 new housing units in the inner city, Brickfields is the largest social housing project to take form in our country.

Another milestone, of a quite different nature, was marked in this past year with the opening of JHC’s Lake Success in Hillbrow. This is the first of the projects in the City Council’s Better Buildings Programme to come on stream.

It must be said that the task of unravelling the deeply intertwined roots of social and physical decay to restore a much-neglected building to a healthy state for newly regulated occupation is considerably more difficult than building anew on open ground. In Lake Success, JHC has secured a bridgehead in the sea of degeneration that surrounds this building. We have again learnt valuable lessons in negotiating, with the existing tenant body, the transfer, the upgrading and re-letting of the building under a new management regime. This experience will be taken forward in the Better Buildings Programme which aims to recover and rehabilitate this desperately abused neighbourhood.

In Brickfields and Lake Success, the company has demonstrated once again its capacity to tackle the diverse challenges encountered in its drive to increase the availability and improve the quality of social housing in the city.

In my last report as Chairman of the Johannesburg Housing Company, I would like to say that it has been a singular honour for me to serve the JHC and the Board. I wish to record my gratitude and appreciation for the staff at JHC and for the support and love that they have shown me.

I must note that it was with regret that we accepted the resignation of John Ndebele, JHC’s Property Manager, who left the company during the year to pursue his studies in England. I would also like to note that Paul Jackson, JHC’s Operations Manager, has been seconded to the Trust for Urban Housing Finance (TUHF) as the CEO of this new organisation that will assist in securing finance for inner city housing development. Both made exceptional contributions to the development of JHC and regeneration of the inner city and we wish them both well in their future careers.

Zora Ebrahim, Roger Jardine and EricMolobi resigned from the Board during the year. I would like to thank them all for their service to JHC. In particular, I pay tribute to Eric who, as one of JHC’s founding directors, was instrumental in conceptualising the company’s potential as an agency for transformation and development and in laying down the foundations for the successful enterprise it has become.

I am also pleased to have welcomed the new Board members appointed during the year – Novideran Govender, Kura Chihota and Len Kline.

Finally, I would like to welcome Murphy Morobe as the incoming Chairman of JHC; I have full confidence that under his widely respected and able guidance the company will continue to grow from strength to strength in serving the people of Johannesburg.

Rev Mvume Dandala

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JHC 2003 Annual Report