2026 Overall IDP and Budget – Johannesburg

1. INFRASTRUCTURE SERVICE DELIVERY AND BACKLOGS

The IDP (2026/2027) for Johannesburg identifies a severe “multi-dimensional crisis,” particularly highlighting infrastructure collapse due to historic underinvestment, with an estimated backlog exceeding R220 billion. The deteriorating conditions of roads, electricity, and water services are leading to widespread service failures and declining citizen satisfaction. Economic impacts include increased operational costs for businesses and reduced investor confidence. Although the Draft IDP plans to allocate up to 80% of capital expenditure for infrastructure renewal, past efforts have been ineffective due to poor implementation. Recommendations include establishing a dedicated budget for maintenance, conducting an infrastructure condition audit, creating a multi-year recovery plan, introducing performance-based contracts, utilising public-private partnerships, and implementing public service delivery dashboards to enhance transparency and accountability.

2. INFORMAL SETTLEMENTS, ECONOMIC STAGNATION AND THE IMPACT ON THE PROPERTY SECTOR

The expansion of informal settlements in Johannesburg is a pressing issue stemming from poverty, economic stagnation, and limited formal housing access, especially in townships. Despite acknowledgement in the Draft IDP 2026/27, economic drivers of informality are inadequately addressed, affecting the built environment and the property market. The growth of informal settlements creates structural problems for property owners and the CoJ revenue base, exacerbating poverty through reliance on unregulated housing. This trend strains municipal infrastructure, increases operational costs, and negatively impacts property values and investor confidence. SAPOA recommends prioritising township economic development, accelerating formal housing delivery, implementing integrated upgrading programs, enhancing infrastructure planning, formalising qualifying informal settlements, enforcing zoning regulations, and improving service reliability. These actions aim to address the cycle of informality and promote long-term growth and stability.

3. FINANCIAL CONSTRAINTS, INFRASTRUCTURE FUNDING LIMITATIONS AND DECLINING SERVICE RELIABILITY

The municipality struggles with service delivery pressures due to declining revenue, rising costs, and growing demand, leading to a cycle of under-maintained infrastructure and service failures. Financial constraints correlate with decreasing service reliability and operational inefficiencies, notably in electricity, water supply, and waste management. Recommendations include enhancing revenue strategies, protecting capital funding for infrastructure, exploring alternative funding sources, ensuring transparency, setting performance standards, adopting preventative maintenance, and improving operational coordination through centralised management systems and private sector partnerships.

4. URBAN DECAY, HIJACKED AND DILAPIDATED BUILDINGS

The issue of hijacked and dilapidated buildings in Johannesburg, especially in the Inner City and key economic areas, is a significant indicator of urban decline, threatening economic viability and safety. While the IDP 2026-27 acknowledges urban regeneration, it lacks focus on combating building hijackings and deterioration. Such buildings, often illegally occupied and in poor condition, lead to municipal revenue loss and increased crime, further deteriorating surrounding infrastructure. Their presence diminishes investor confidence and attracts disinvestment in commercial and residential areas. Socially, these buildings provide unsafe housing for vulnerable populations, highlighting a failure in integrating housing and urban management strategies. Recommendations by SAPOA include establishing a targeted building recovery program, strengthening by-law enforcement, creating public-private partnerships, and enhancing revenue protection measures, aiming for a cohesive response to urban decay and housing needs.

5. CAPITAL DELIVERY, GOVERNANCE, DIGITAL READINESS AND IMPLEMENTATION CAPACITY

The introduction of a project stage-gate process aims to improve readiness for funding allocation but indicates deeper institutional limitations, such as incomplete planning and constrained municipal expertise. Governance issues, including political interference and corruption risks, further complicate project execution, leading to declining citizen satisfaction and eroding stakeholder confidence. While the IDP aspires to a smart city through digital transformation, a lack of necessary data governance and operational capacity hampers effective implementation. Recommendations include enhancing project scoping, strengthening technical capacity, streamlining procurement, and improving governance and service delivery accountability.

6. IMPACT ON INVESTMENT CLIMATE AND PROPERTY MARKET

The deterioration of infrastructure, service inefficiencies, and delays significantly harm the City’s investment climate, undermining economic growth initiatives. Unreliable services elevate operating costs, lower asset values, and create investor uncertainty, compelling businesses to invest in backup systems. This reduces the City’s competitiveness. To address these issues, SAPOA recommends enhancing service reliability in key areas, developing frameworks to facilitate investment, strengthening public-private partnerships, and monitoring investment climate indicators.

1. PROPERTY RATES

The proposed 3.60% increase in property rates is slightly below the projected CPI of 3.7%, demonstrating the municipality’s attempt to mitigate cost burdens for property owners. This moderation benefits both residential households and commercial owners, alleviating some financial pressure in a challenging economic landscape. However, this increase must be viewed alongside cumulative municipal costs such as utilities, which could still strain households. From SAPOA’s perspective, while the restrained increase is commendable, concerns about revenue usage persist. Recommendations include ensuring financial governance, linking rates to tangible service improvements and enforcing accountability to prevent fund misallocation.

2. ELECTRICITY TARIFF

The proposed 8.63% electricity tariff increase in Johannesburg significantly exceeds the CPI benchmark of 3.7%, raising affordability concerns, especially for lower- and middle-income households. Although it is below the NERSA guideline of 9.01%, the increase is critiqued against ongoing inefficiencies in the electricity distribution system, which still experiences over 30% losses. These losses stem from illegal connections and metering inefficiencies, forcing compliant consumers to subsidise these shortcomings through higher tariffs. The situation creates a misalignment between tariff increases and operational performance, exacerbating costs for SAPOA members and diminishing property values. Recommendations include prioritising loss reduction, enforcing against electricity theft, linking tariff hikes to service delivery improvements, and strengthening accountability within City Power.

3. WATER TARIFF

The CoJ’s proposed water tariff increase of 12.50% far exceeds the CPI benchmark of 3.7%, raising affordability concerns, especially among lower-income households where water is essential. The situation is exacerbated by the City’s inefficiencies, with non-revenue water losses exceeding 40%, as noted in the Draft IDP 2026/27. This leakage results from leaks, infrastructure failures, and illegal connections, leading to significant financial losses that ultimately burden compliant consumers with higher tariffs. Consequently, the misalignment between cost recovery and operational efficiency negatively affects property values, rental demand, and business operations. To address these issues, the SAPOA recommends prioritising the reduction of non-revenue water with clear targets, investing in infrastructure, enforcing against illegal connections, reassessing the tariff scale and enhancing transparency.

4. SANITATION TARIFF

The proposed 11% increase in sanitation tariffs significantly exceeds the CPI benchmark of 3.7%, leading to a real cost burden for users. This rise in mandatory sanitation services imposes additional financial strain on lower-income households amid other escalating costs like water and electricity. The cumulative effect could heighten the risk of payment defaults and reduce household affordability. Persistent problems such as sewer blockages undermine the rationale for higher tariffs. Recommendations include reconsidering the tariff scale, ensuring that increased revenue is allocated to infrastructure improvements and improving consumer communication regarding service benefits from the increase.

5. REFUSE REMOVAL

The proposed 6.20% increase in refuse tariffs exceeds the CPI of 3.7% but is less severe than hikes in water and sanitation, making it more manageable for households. However, service quality issues like inconsistent waste collection and illegal dumping raise concerns about justifying the increase. While the hike is smaller than others, it adds to cumulative costs for low-income households. Recommendations include enhancing service reliability from Pikitup, enforcing waste management strategies and improving operational efficiency.