7 October 2024
Thembelihle residential complex in the City of Tshwane where Yeast City Housing offers low-cost residential accommodation. The company says its financial woes began with a rent boycott in the block during the Covid pandemic. Photo: Warren Mabona
A Tshwane non-profit social housing company has been placed under business rescue after struggling to service a debt of over R130-million, including interest.
Yeast City Housing rents out low-cost residential apartments and houses in a number of its buildings in the inner city.
Chairperson of its board Stephan De Beer said creditors include the National Housing Finance Corporation (NHFC) and the Gauteng Partnership Fund.
“We don’t want any units to be lost. Business rescue practitioners are on the ground trying to save the company and the housing units. Everything is at risk at the moment. But I hope the company will be saved,” said De Beer.
He said the financial difficulties started during the Covid pandemic in 2020, with a rent boycott by tenants at its Thembelihle residential complex. The company started civil proceedings, but its legal action failed.
“We spent over R2-million in legal fees. We had to do something because people stopped paying the rent. We are talking about people who have good jobs and nice cars.
“The result was that the City of Tshwane disconnected electricity supply to the complex. The courts also failed us because we did not get even one eviction order.”
“We are trying to line up investors. We want to protect the social housing units,” said De Beer.
If its buildings are sold, they should go to another social housing company, he said, which might also absorb the nearly 60 people Yeast employs.
“I’m hopeful the company will be saved,” says business rescue practitioner Sello Mkhondo, from Engaged Business Turnaround, which took control in May at the invitation of the board.
Yeast City Housing has 11 blocks of flats and houses. The company’s site has flats for R1,500 per month for people who earn R5,000 a month or less, and R1,800 rentals for people who earn up to R6,000 per month.
Yeast City Housing was established in 1999 by the Tshwane Leadership Foundation, according to Lance Thomas, acting co-CEO of the foundation. He said the foundation built a number of properties and handed ownerships over to Yeast City Housing in a trust.
Properties include Gilead House, which cares for more than 60 homeless and vulnerable people who have chronic illnesses.
Thomas said the foundation was particularly worried about losing its buildings and Gilead House.
“The first option for us will be to buy back our buildings but that will be a long process. We are exploring other options. We are hopeful that the company will be saved,” he said.
Thomas also blamed the rent boycott.
Tenants we spoke to at Thembelihle said they were not living there in 2020 and were unaware of the business rescue process.
“I am shocked to hear that the company has financial problems. I really enjoy staying here and I wish its financial situation can improve,” said a tenant.
Ndifuna Ukwazi’s Nick Budlender describes Yeast City Housing in glowing terms. He said it has a spectrum of housing catering for people with various incomes who can progressively move up the housing ladder when their circumstances improve.
He said if the buildings are sold, “this will place huge numbers of extremely vulnerable tenants in a very precarious position and would pretty much kill off Yeast entirely”.