2026 Overall IDP and Budget – City of Cape Town

1. UNEMPLOYMENT AND PRO-POOR PLANNING

SAPOA supports Cape Town’s pro-poor development initiatives aimed at addressing spatial and income inequality. The city’s growing economic sectors, like real estate and retail, provide an opportunity to combat unemployment. Innovative decision-making approaches were recommended to improve operational efficiency and job creation, especially in light of load shedding issues with Eskom. The 2026/27 IDP aligns with the Western Cape Provincial Strategic Plan but raises concerns over the measurability of the load shedding objective. There is a revision in the target for affordable housing development from 14 to 8 land parcels, focusing on existing awarded properties, but slow development progress is noted, highlighting the need for identifying challenges faced by developers. The IDP also aims to reduce the average finalisation time for informal trading permits from 30 to 24 days, supporting business efficiency. However, challenges persist regarding business license renewals under current legislation. Additionally, there are concerns about the extended approval timeframe for development applications, which may delay processes, especially given quicker performance in previous years.

2. COMMERCIAL AND INDUSTRIAL MARKETS

They express concern over the lack of changes in proposed amendments regarding the Urban Development Department’s role in facilitating quicker approval for developments. SAPOA emphasises the need to reduce bureaucratic hurdles in land use to expedite building plan approvals. They also advocate for prioritising medium- to high-density mixed-use developments and better partnerships with the property and finance sectors. Currently, over 50 CIDs exist, with plans to increase this number under the Deputy Mayor’s oversight.

3. ELECTRICITY PROVISION

A key update in the proposed 2026/27 IDP amendments involves aligning with the Western Cape Provincial Strategic Plan (PSP) 2025-2030, leading to a restructuring of focus areas and interventions. Three objectives are now outlined in the basic services priority area: improved access to quality basic services, ending loadshedding in Cape Town over time, and modernised infrastructure for economic growth. This restructuring has resulted in some enablers being reassigned, raising concerns about the diminishing prioritisation of the loadshedding objective. Previous support for affordable electricity initiatives was highlighted, alongside suggested minor grammar refinements for KPIs concerning energy capacity and connections. Additionally, a new KPI on embedded generators was endorsed. However, concerns regarding responses to legislative frameworks on power generation incentives remain unresolved, with requests for further clarity on these issues.

4. TRAFFIC CONGESTION

The proposed amendments reduce the target for scheduled public transport access points from 12 to 0 due to the delay of the MyCiTi Southeast Corridor development until July 2027. Clarity is requested regarding the potential extension of the MyCiTi service to northern suburbs and any established timelines. The removal of scheduled access points from barriers indicates improved readiness for implementation. The City is recognised for addressing system limitations related to public transport access and is encouraged to leverage private sector expertise for practical solutions. Additionally, congestion issues due to increased CBD popularity are noted, with a recommendation to explore a Park and Ride concept for better transport integration.

5. INFORMAL SETTLEMENTS, SERVICE DELIVERY AND HOUSING

The target for taps in informal settlements has increased from 700 to 750, though concerns about achievability due to past inconsistencies are highlighted. The adoption of the NRS 047 benchmark for new electricity connections has been adjusted to 80%, recommended as a minimum standard. New indicators for repairs coverage (3.5%), industrial and commercial metering performance (98%), repayment efficiency (95%), and automated meter reading coverage (73%) are welcomed for enhancing revenue management. Monitoring these targets for continuous improvement is advised. For the percentage metering performance, system limitations affecting data availability are acknowledged, with a recommendation for alternative reporting mechanisms. In housing, the target for land parcels for affordable housing has been revised from 14 to 8, focusing on previously awarded properties. Implementation should be closely monitored, especially since no development has begun on the seven awarded parcels that could yield about 5,000 housing opportunities. Further analysis of challenges faced by private developers is recommended to facilitate land release.

6. DILAPIDATED BUILDINGS

In its previous submission to the City of Cape Town’s IDP, SAPOA raised concerns about the poor condition of properties in the city, stressing the need for urgent upgrades. They urged the City to work with property owners to ensure compliance with City By-Laws and promote improvements. Enhancing these buildings could enhance safety, aesthetic appeal, and economic value, attracting investment and development.

1. ELECTRICITY TARIFF

SAPOA comments on the City’s average electricity tariff increase of 6.67% for the 2026/27 financial year, noting it misleadingly downplays the true impact on non-residential customers, whose service charges rise by about 8.55%. They urge the City to provide clearer details on effective tariff increases and highlight that non-residential customers carry significant cross-subsidisation costs. While electricity revenues exceed bulk purchase costs, the persistent 11.2% distribution losses raise concerns, suggesting a need for targeted reductions. Additionally, SAPOA warns of a potential tariff spiral driven by reduced electricity sales from alternative energy sources. They recommend a balanced tariff structure and support the new Residential Time-of-Use tariff, but advocate for clearer benefits communicated to consumers. Enhanced transparency regarding capital investment outcomes is also emphasised to maintain consumer confidence.

2. PROPERTY RATES

SAPOA announced the completion of General Valuation 2025 (GV2025), which will influence property values starting 1 July 2026, showing an average increase of 16.65%. The City plans to reduce the rate-in-the-Rand by 10.21% to mitigate the impact on ratepayers, particularly in a tough economic climate. However, SAPOA is concerned about the City’s focus on residential properties, which shows that 60% will see stable or reduced rates, while the effects on commercial and industrial properties lack clarity. They suggest that the City provide clearer communication regarding the overall impact of the valuation increases on all property types.

3. WATER AND SANITATION

The allocation of 55% of total infrastructure investment to the Water and Sanitation Directorate emphasises the need for targeted improvements due to persistent water distribution losses of around 30%. Monitoring and evaluation of these investments are critical to achieving tangible results. Concerns are raised over declining compliance with effluent discharge standards, now at 77%, down from 88%, influenced by ageing infrastructure and delays in capacity expansion. SAPOA supports wastewater projects but stresses the need for prioritisation, funding, and timely delivery, along with clear performance targets to restore compliance above 90%. Urgent action is required to address the sustainability of current compliance levels. Proposed tariff increases of 4.5% in 2026/27 and 14% in subsequent years may hinder economic sustainability, necessitating clearer justification linked to specific projects and smoother implementations to alleviate financial impacts on consumers.

4. CITY-WIDE CLEANING TARIFF

The initial 3.75% increase in 2026/27 aligns with inflation; however, the projected increases of 16.96% and 37.31% in subsequent years pose concerns about affordability for property owners and tenants. These steep rises could pressure operating costs, especially for commercial properties reliant on cleaning services. Additionally, the city’s ongoing dependence on supplementary funding from the Rates account indicates that the shift to a cost-reflective tariff is incomplete. Clarity is needed on the long-term funding model and how City-wide cleaning costs will be stabilised in the tariff.

5. OTHER BUDGET MATTERS

The City relies heavily on rates and service charges for its revenue, with electricity contributing 33.5% and property rates 19.8%. Collection rates for water and sanitation, at 92% and 94% respectively, lag behind property rates at 95%, which could lead to revenue shortfalls and pressure on compliant payers. Strengthening collection mechanisms while considering affordability is crucial. SAPOA advocates for directing 73% of the capital program toward infrastructure investment to ensure service delivery and economic growth. They stress aligning tariff increases with service improvements, enhancing transparency in revenue allocation, and improving operational efficiency to maintain financial sustainability. Prioritising predictability in budgeting and engaging the private sector are also emphasised.