Cape Town – The Mother City of Inequality

by Oct 21, 2010All Articles

sra 2 1By Dick Forslund

The City of Cape Town is proudly proclaimed in travel brochures as the Mother City – a place of great historical importance, the mother which welcomed a free Nelson Mandela. There is tarnish on this hallowed image – that of a city nibbling away at the old anti-apartheid principle of one-city-one-tax base through its City Improvement Districts. The legal term is Special Ratings Areas (SRAs). SRAs are for ‘communities who wish to enjoy municipal services of a higher level’, explains City promotional material. 

Echoing the wordings of the 2004 Municipality Property Rates Act, the City Council states in a binding policy document that an SRA business plan ‘must contain an explanation of why the proposed SRA will not reinforce existing inequities in the development of the City’.

Hard to explain

Save for one thought-provoking exception (see red text), there are no such explanations in the business plans Amandla! has read. Why is the City of Cape Town not enforcing its own policy? A city official ensures ‘We will do that’, but the difficulty is justifying how implementing this policy will not increase inequality in the city.

One may ask: if the city is receiving further revenue for services through the SRAs, why can it not divert this windfall to areas where toilets, roads and street lighting is needed? The city ensures the opposite: ‘the City is obliged to sustain existing service levels’ in the SRAs. The extra rates must be used where the extra rates are collected.

Addressing development inequities?
‘The successes of the CIDs in neighbouring suburbs is (sic) raising the pressure on Obs to follow suit; undesirable elements leave the better managed suburbs and congregate in the remaining ‘soft target’ areas such as Observatory.”
Motivation for the ‘Observatory Improvement District’, Cape Town, 2008.i

The first SRA was initiated in the central business district in the heart of Cape Town. Today there are 23 SRAs in operation, spending R83 million collectively, each with a budget of between two and four million rand, after a little more than 15% has been added to the mandatory rates. Another 42 prospective SRAs are listed by the City. Enthusiasts start the process with newsletters and meetings, usually in historically white, middle class areas. This is a social movement in Cape Town where property owners pay extra rates to the City. In seventy municipalities around the country rates are paid, in protest, to trust funds. (M&G, 17/6).


Seventy to eighty percent of the SRA-budgets in Cape Town are devoted to additional security and surveillance.ii

Law Enforcement Officers, licensed to make arrests, were trained by the City before the World Cup. Many of them would today be unemployed if it wasn’t for the SRAs, an official explains. SRAs can ‘Rent-A-Cop’ from the City to patrol their area.iii

SRAs are mainly confined to rich or white middle class suburbs but there are exceptions. In working class Athlone, the business owners have formed an SRA to deal with ‘crime and grime’. Affluent Constantiaberg admittedly also contains pockets of more run-down and historically white working class neighbourhoods.

Tragedy and comedy

The role of exceptions is however to highlight a rule. Here: the rule that borders of Special Ratings Areas run along the old apartheid fault-lines. In prosperous Hout Bay, three SRAs are under formation. The overcrowded Hout Bay harbour and the neighbouring Imizamu Yethu informal settlement is, of course, not a part of this. They are the threat and the topic of both angry and charitable concern in the Residents’ Association’s newsletter, tragically blind to redistributive solutions that locally could start to build one nation.iv

A tragedy can harbour elements of comedy. The Zeekoevlei Improvement District was approved by the City in July. It is limited to the Zeekoevlei peninsula, with its wedding cake houses by the vlei overlooking the University of Cape Town’s yacht club.  The larger middle class Zeekoevlei − historically white, nowadays ‘grey’ − is not a part of the SRA. Neither is working class Grassy Park, separated from Zeekoevlei by an apartheid buffer zone.

Nibbling at ‘One City, One Tax Base’

In a 2001 University of Stellenbosch study on taxation and redistribution, Van der Berg speaks of two conflicting taxation norms. One is ‘based on the apartheid paradigm’: Taxes paid by a particular group ‘should largely be used to fund public expenditures benefiting that group only’. The other norm states ‘that need rather than origin of taxes should determine public expenditure’.v

MA mental map of divisions are the ideological backbone of any society.

In South Africa, they have an especially sick geographical twist to them. The SRAs reinforce this twist while the City of Cape Town slowly nibbles away at the anti-apartheid principle of One City-One Tax Base.

Challenges to the base of the Constitution – Owners of residential or business property, or both, can set up an SRA. Within the selected area, a majority must approve in writing to pay extra rates. This One Property-One Vote procedure is binding for all, save for owners who don’t pay rates.
Up until 2009, the Cape Town by-law was explicit about weighting the voting rights when managing the SRA, with a cap to one third of the votes. The City is preparing a ‘memorandum of incorporation’. Weighted voting will be kept. Theoretically, two wealthy owners can have a decisive vote.
The new by-law allows for closer collaboration between the City and an SRA, but this has not been implemented and the City still demands that SRAs form section-21 companies. This closer collaboration means that SRAs mimic the role and responsibilities of the

(i)  Pdf in my possession.
(ii) Interview with Eddie Scott, Cape Town City Council. This is also evident from budgets in the business plans.
(iii)Interview with Eddie Scott. The expression “Rent-a-Cop” was given to me by the informant.
(iv) Hout Bay Residential Association news letter, HoutAndBout, August 2010, in my possession as pdf.
(v)  S. Van Der Berg, “Trends in Racial Fiscal Incidence in South Africa”, The South African Journal of Economics, Vol 69:2, June 2001, 253f.
(vi) City of Cape Town, Special Ratings Area By-Law, 2010.

Read the response by the Democratic Alliance (interview with Amandla)

More articles from Amandla on SRAs “Lacking Resources?

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