Dozens of Port Elizabeth businesses are operating illegally on residential properties in Walmer – and they are paying lower municipal rates than they should as a result.
Many of the illegal business owners have placed the blame at the municipality’s door, claiming they were never told they had to apply to rezone the properties or that officials had said previously not to bother.
Reporters visited scores of illegal businesses along Villiers, Fordyce, Prospect and Main roads between Sixth Avenue and Eighth Avenue last week.
Of the 86 businesses operating in this small node of the greater Walmer area, at least 26 – just over 30% – are operating illegally.
This is according to the 2017 General Valuations Roll and the municipality’s human settlements directorate’s Geographic Information Systems (GIS).
Municipal land use management director Mthulisi Msimanga said illegal businesses in the metro were a challenge and difficult to police, but there was a plan to change this.
The municipality plans to implement a new bylaw which would allow fines to be issued on the spot to businesses that are operating illegally..
“So if you are operating illegally on your residential property, you will be given a fine, similar to a traffic fine,” Msimanga said.
He said it was not easy to keep track of all the illegal businesses.
“They are mushrooming all over the place.
“It is also a challenge for us financially.
“We don’t have a system where we can use municipal courts for land-use enforcement issues because we don’t have the bylaws yet.
“The only avenue we are able to utilise effectively is to go to the high court to ask for an interdict to stop someone from operating illegally.
“This alone has huge cost implications for the council.
“The intention is not to punish businesses, but people have to comply.”
Some of the illegal businesses in Walmer include a hair dresser, health shop and a financial services company.
Kim Reveley, who runs The Lounge hair salon in Villiers Road, said she was applying to have her property rezoned.
“I have been running this business for 4½ years.
“A woman from the municipality came here about six months after I had opened the business and said I should stay residential because the business occupied less than 30% of the property,” she said.
But Reveley said her water use had been restricted recently, which would cause problems for her salon.
“This is why I am rezoning,” she said, showing the reporter her application.
Greta Store, who runs Health Matters in Prospect Road, said she had also been told by a municipal official years ago that she was allowed to operate from home.
“This is a small business. I am not looking to become wealthy,” she said.
“I’ve operated here for 22 years. We are trying to be self-sufficient.
“I mean we could sell [the business], vegetate and just draw a pension, but we want to help people.
“I would comply with anything that is legally required.”
Michele Adshade, who operates Kaleidoscope & Michele’s Pottery & Mosaic Studio in Villiers Road, said: “The municipality does know I run a business from this property. I’ve had them here before.
“I live here as well, so I work from home.
“I bought the place because I wanted to work from home.
“The municipality has been here a number of times so I am zoned for running a business as well. I pay a slightly higher rate because I am working from home,” she said.
Told that municipal records showed the property was zoned only for residential use, Adshade said: “This is more of a hobby than anything; I have one class a week.”
Paul Barenburg, who runs a Reiki practice in Prospect Road, said he did not run a business but just gave treatments.
Asked if he received payment, he said: “Sometimes, sometimes not. I get [clients] few and far between.”
He said he would not rezone the property as his client base was too small.
“I am thinking of closing anyway,” Barenburg said.
Darryl Harrison, a senior partner at DHA Financial Services in Main Road, confirmed that his business had not yet applied to be rezoned.
“We might consider applying at a later stage,” he said.
The municipality bills properties used for business, multipurpose and residential differently.
A R1m property will pay R959 a month for residential use, while businesses would cough up R1,947.
The same R1m property – zoned for multipurpose use and housing a small business that takes up 40% of the land – would pay R1,348 a month in rates.
The fees to rezone a property to multipurpose or business use can cost entrepreneurs upwards of R8,000.
On multipurpose use of properties, Msimanga said certain zoning schemes around the city allowed people to run a small business from home.
“You can practise your profession from home, but it will be very small-scale relative to the actual residential dwelling use that you have.
“So, if you are an artist or a painter, the scheme allows you to do it in your garage but you have to operate within certain conditions.
“For example, you cannot be in partnership with more than two people.
“You cannot have [signage] on your walls.
“There are a number of other conditions to abide to,” he said.
“But some people take advantage and look for loopholes in every legislative document.
“We have discovered that some people abuse the system and masquerade as someone practising their profession from home, but in actual fact it’s a huge multi-corporation and they are using their residential property as offices.
“So they are avoiding [higher] rates in that sense.”
Budget and treasury political head Mkhuseli Mtsila said the illegal use of a property had a negative effect on the municipality’s rates income.
Municipal spokesperson Mthubanzi Mniki said the time frames for rezoning applications were dependent on the complexity of each application.
This included outstanding documentation, environmental authorisation and traffic impact assessments.
Mniki said the municipality was aware of illegal businesses operating in Walmer and legal action was being taken.
However, there could be more illegal businesses on residential properties that had not been discovered yet.
He said zoning inspections in Walmer had been done last in 2016.
Nelson Mandela Bay Business Chamber operations manager Prince Matonsi said it was important for businesses to comply with regulations.
“However, we believe the metro should play a more proactive role in this regard by rezoning entire areas that are likely to be developed as business precincts, long before they receive applications from investors.”