For years, the Nelson Mandela Bay municipality’s human settlements department has thumbsucked the fees it charges for land development applications.
It has now finally drawn up a set formula to determine what it should charge for the applications.
Human settlements boss Nolwandle Gqiba said on Tuesday that in one instance a developer had been charged fees of up to R1m.
“The formula has never been there and it has been going on for years,” Gqiba said.
“For example, [for] a single application for two properties that are adjacent to each other, they would charge two advertising fees, yet they are only going to publish one advert.”
Gqiba said the high application fees had seen many developers abandoning prospective developments.
But some developers have become vocal and challenged the municipality.
“There is no justification for it and no-one could defend that.
The human settlements department could not give any logical explanation as to how the fees were calculated.”
She said the debate around land development application fees was sparked by a recent application where the developer was charged R900,000.
Gqiba said she could not divulge more on what the application was for.
“It was so high and it was only for an application to rezone, and if we’re comparing this with Cape Town or Johannesburg, an investor would rather go elsewhere.”
The proposed formula to be presented to the human settlements portfolio committee could see investors paying for one erf (plot of land) registered to one owner, with rezoning, special consent and departures as one component, regardless of the number of zoning or consents applied for.
The same would apply to applications for two or more erven adjacent to each other and registered to one owner.
All are to have a single advertisement fee.
In applications for two or more erven adjacent to each other and registered to different owners, they will be treated as individual properties.
For two or more erven not adjacent to each other registered to one or different owners, a developer would have to lodge separate applications for each erf, be required to pay an advertisement fee per erf and advertise it as such.
“This new formula will help give uniformity for developers.
“There wasn’t any uniformity and this chased away investment,” Gqiba said.
She wrote in a report to the human settlements committee that the absence of a prescribed formula had discouraged investors and driven developments from the Bay.
“Upon investigating how the fees are calculated in the human settlements department, it has become apparent that the resolutions made by the council are not prescriptive on the formula.
“It has been left to officials to use their discretion to apply the rules, which are often not consistent. This has led to a huge public outcry and in some instances the demoralisation of investors,” Gqiba wrote.
She wrote that a benchmarking exercise had revealed that the City of Johannesburg and the City of Cape Town had application fees that were focused on creating value.
“The impact of new zonings or erven created on reticulation services are what other cities focus on, wherein such costs are covered by, including the reticulation service contribution, which becomes part of the conditions for approval.”
The fees formula was meant to be debated at a human settlements meeting on January 15 but it did not take place.
Human settlements portfolio head Andile Mfunda said this was because councillors returned from recess the day before and were not prepared.