Phase 1 – Application Process to the City Council
The number of units grew from 827 to ±1020 to now 1259.
The last two sets of people that were included know very little. As they come on board much later, we are sure we will get more buy-in from the community as they get up to speed.
How many people will eventually pay is an open question that no one can answer.
The 31% is of the 1259 residents and roughly about 45% of the 827 people. Very little of the additional households have contributed thus far as they have only recently been involved.
The business case for closure was based on a 50% buy in (which is very low), if only 31% paid the initial deposit it is highly likely that far fewer will pay a much larger sum of money as the second deposit. Even if the 31% were to pay, it would mean that on the basis of the 50% calculation, there would be a major shortfall and potentially they would be required to pay almost double the capital amount and monthly fee.
The original calculations were done on 827 people (mix of house / complex), which equates to 453 “weighted-houses”, to pay an amount of R10.5m, and 70% of the people participated. For typical household:
Deposit 1 = R2500
Deposit 2 = R19 745
Total cost per house = R22 245
Monthly = R972
Alarm monitoring = R150
By increasing the area to 1259 houses , the cost has reduced to R7.4m due to less construction required.
The community gets the same benefit with less cost.
The people “bought in” and were willing to pay the above amounts for the closure.
Assuming the same people still believe, the cost per household reduced from R20 702 to R19 745 for the same benefit.
We believe from other complexes, like Wapadrand, once the booms are up and running and the people see the benefit, many more will join.
Construction work cannot start until there is council approval. Construction work must go out to tender.
For those who pay the second instalment there is no guarantee of a full reimbursement if the project fails.
We will not get our full Deposit 2 back, as this initiative incur cost on a monthly basis as we have to pay for consultants and bank charges.
The shorter the time, the less the cost and vice versa.
Stats from Streetsafe:
100 areas that start this initiative, only 70% to 80% get to phase 1 where an application is submitted to Council.
From the 70% of households that submit (like we have done), 100% have received approval.
Case study: Lynnwood North was submitted in Dec 2018 and was finally approved by Council September 2019, after 9 months.