Consolidated Report: Durban Inner City Economic Environmentccs.ukzn.ac.za/files/Inner City Economic... · DIPA Durban Investment and Promotion Agency DIT Durban Institute of Technology

Consolidated Document: 21 September 2005

Consolidated Report: Durban Inner City

Economic Environment

Prepared for iTRUMP as part of the Inner City Spatial

Development Framework Project by: Glen Robbins (UKZN) and Tim Hadingham (Siyamisana Planning )

with assistance from Claire Goodenough and Gerry Delany

21 September 2005

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Consolidated Document: 21 September 2005 Contents 1 Introduction ........................................................................................................................8

1.1 Structure of the Report .................................................................................................8 2 Methodological issues.......................................................................................................10 3 The Metropolitan Context ...............................................................................................10

3.1 Broad trends in the metropolitan economy ................................................................11 4 Durban’s Inner City.........................................................................................................17

4.1 The socio-economic relevance of a changing demographic profile...........................17 4.2 Characteristics of growth............................................................................................26

4.2.1 Retail ..................................................................................................................29 4.2.2 Business and financial services ..........................................................................31 4.2.3 Property ..............................................................................................................32 4.2.4 Tourism ..............................................................................................................34 4.2.5 Government services ..........................................................................................40 4.2.6 Additional sectors...............................................................................................41

4.3 Dynamics of income, expenditure and poverty..........................................................42 4.4 Employment, unemployment and the informal economy ..........................................46

5 Existing interventions.......................................................................................................52 6 Key issues that arise from the analysis (for inner city strategy) ..................................53 7 What do we know about the desired conditions that people seek in the inner city?..56 8 The key actors and their leverage ...................................................................................57 9 Proposed points of strategic focus for Durban inner city economic development .....58

9.1 Strategic Thrust #1 – Repositioning the Inner City in Mainstream Economic Processes ................................................................................................................................59

9.1.1 Major Strategic Points of Focus .........................................................................60 9.1.2 Priority projects ..................................................................................................67

9.2 Strategic Thrust #2 – Building a Foundation for Improved Economic Prospects for the Inner City Poor .................................................................................................................72

9.2.1 Major Strategic Points of Focus .........................................................................73 9.2.2 Priority Projects..................................................................................................74

10 Conclusion.....................................................................................................................76 10.1 Activities that arise from the strategies ......................................................................76 10.2 What does this mean for iTRUMP and eThekwini Economic Development/Business Support ...................................................................................................................................77

Bibliography..............................................................................................................................79 Appendix 1: PAICE Report.....................................................................................................81

Process................................................................................................................................81 Results ................................................................................................................................81 “It’s not about palm trees”..................................................................................................89

Appendix 2: Notes on Precincts ..............................................................................................91 Appendix 3: Discussion note on the Inner City .....................................................................97 List of Figures Figure 1: Verification of finding from multiple sources ............................................................10 Figure 2: Influences on the Inner City Economy .......................................................................11 Figure 3: GVA by selected city (Global Insight) .......................................................................12 Figure 4: Broad sectoral growth performance in Durban (Global Insight)................................13

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Consolidated Document: 21 September 2005 Figure 5: Broad sector employment in Durban (Global Insight) ...............................................13 Figure 6: Unemployment in Durban (Global Insight)................................................................14 Figure 7: Durban manufacturing sector growth (Global Insight) ..............................................15 Figure 8: Export Performance over time....................................................................................15 Figure 9: HDI and inequity in Durban (Global Insight) ............................................................16 Figure 10: Inner City Population 1996 - 2001 ...........................................................................21 Figure 11: Inner City Population Pyramid 1996 ........................................................................21 Figure 12: Inner City Population Pyramid 2001 ........................................................................22 Figure 13: Inner City Racial Composition 1996-2001...............................................................23 Figure 14: Inner City Levels of Education.................................................................................23 Figure 15: Warwick Education Levels 1996-2001.....................................................................24 Figure 16: Inner City Employment by District 1996-2001 ........................................................24 Figure 17: Inner City Unemployment by District 1996-2001....................................................25 Figure 18: Inner City Household Income 1996-2001 ................................................................26 Figure 19: Projected GDP growth of Durban magisterial district.............................................27 Figure 20: GVA Growth by Sector ............................................................................................28 Figure 22: Services Sector Share of GVA..................................................................................29 Figure 23: Retail Sales Durban Magisterial District 2003 .........................................................30 Figure 24: Property Sales and Municipal Valuations in CBD (Economic Development)..........34 Figure 25: Hotel Occupancy 2003..............................................................................................37 Figure 26: Comparison of Volume and Value between Domestic and Foreign Tourists (Hayley

Sharpe, 2003) .....................................................................................................................39 Figure 27: Foreign Tourist Types...............................................................................................39 Figure 28: Projected GDP Growth in the Durban Magisterial District ......................................43 Figure 29: Durban Disposable Income 1999/2003.....................................................................44 Figure 30: Household distribution by income level (Global Insight) ........................................45 Figure 31: Poverty Percentage in Durban and eThekwini Municipality 1999/2003..................45 Figure 32: Durban Employment 1999/2003 (Global Insight)....................................................47 Figure 33: Durban employment in selected sectors 1999/2003 (Global Insight) ......................48 Figure 34: Percentage unemployment in Durban and Ethekwini Municipality 1999/2003.......49 Figure 35: Origin of informal economy workers .......................................................................50 Figure 36: Income profile of informal economy workers ..........................................................50 Figure 37: Key issues facing informal economy workers..........................................................51 Figure 38: Core Interlocking Elements of a Possible Strategy ..................................................77 List of Tables Table 1: Census Sub-Plan area vs iTRUMP Districts................................................................18 Table 2: Durban - Changes in Average Rental 2000-2003 ........................................................33 Table 4: Property Trends in SA - Durban vs. Other Major Centres...........................................33 Table 5: Hotel Establishments by Product Type and Location (Grant Thornton, 2004) ...........36 Table 6: Occupancy by Product Type and Location (Grant Thornton, 2004) ...........................36 Table 7: Prioritisation of Roles by Strategic Focus....................................................................77 List of Appendices Appendix 1: Notes on precincts Appendix 2: Discussion note on the Inner City Appendix 3: Report on Participatory Assessment of Inner City Economy

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Consolidated Document: 21 September 2005 Appendix 4: Using the Household Assets Component of Sustainable Livelihoods as an Approach to Understanding the Urban Poor

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Consolidated Document: 21 September 2005 List of Abbreviations ABBREVIATIONS ABM Area Based Management (Programme) AIDS Acquired Immune Deficiency Syndrome B&B Bed and Breakfast BAT Bartle Arts Trust BID Business Improvement District BPCC Business Process/ Call Centre BPO Business Process Outsourcing BPO&O Business Process Outsourcing and Offshoring CBD Central Business District CCTV Closed Circuit Security Systems DIPA Durban Investment and Promotion Agency DIT Durban Institute of Technology DJs Disc Jockeys DMA Durban Municipal Area DPW Department of Public Works DTI Department of Trade and Industry EAs Enumerator Areas (Census) EMA eThekwini Municipal Area EPWP Expanded Public Works Programme GDP Gross Domestic Product GIPO Geographic Information and Policy Office GVA Gross Value Added HDI Human Development Index HIV Human Immuno-Virus ICC International Convention Centre IDP Integrated Development Plan INK Inanda- Ntuzuma-KwaMashu IT Information Technology KZN KwaZulu-Natal KZNTA KwaZulu-Natal Tourism Authority MBA Masters of Business Administration MERSETA Manufacturing, Engineering and Related Sectors Education and Training

Authority MTA Metropolitan Transport Authority NGOs Non-Governmental Organisations NYC New York City OEM Own Equipment Manufacturer PDC Property Development Company PMU Project Management Unit (eThekwini) SA South Africa SACN South African Cities Network SARCC South African Rail Commuter Corporation SARS South African Revenue Services SATOUR South African Tourism

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Consolidated Document: 21 September 2005 SDB South Durban Basin SDF Spatial Development Framework Stats SA Statistics South Africa TKZN Tourism KwaZulu-Natal UIF Unemployment Insurance Fund UIPs Urban Improvement Precinct UK United Kingdom UKZN University of KwaZulu-Natal USA United States of America VFRs Visiting Friends and Relatives VOIP Voice Over Internet Protocol

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Consolidated Document: 21 September 2005 Acknowledgements The process to prepare this document has benefited from much assistance provided by a range of city officials, researchers, consultants and inner city stakeholders. Information from previous reports commissioned by the city proved invaluable (although effort was made not to repeat work that is already contained in these). Particularly useful insights were provided by city officials through Brian O’Leary of GIPO and Denny Thaver, Fred Pietersen, Ajiv Maharaj, Aman Maharaj all of Economic Development, and Russell Curtis and Monique Labat of DIPA. Those stakeholders interviewed for the preparation of this report also require thanks for allocating the time and patience to talk to yet another set of consultants. Special thanks go to Caroline Skinner of UKZN for insights she provided from her work on the informal economy. Thanks also go to James Seymour from TKZN for valuable insights on tourism issues. Finally, the report has benefited immensely from contributions from project team members (Robynne Hansmann, Theresa Gordan, Sarah Charlton, Jo Lees and Mike van Tonder as well as feedback from Julie-May Ellingson of iTRUMP and her colleagues).

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1 Introduction This report has been prepared as an input document to the development of a spatial framework plan for the Durban Inner City and as guide to inform the development of an economic strategy that will guide the activities of the Inner Thekwini Renewal and Urban Management Programme (iTRUMP). The report is not a comprehensive overview of all economic information and activities. Rather, due to the limited availability of data, it provides a series of focused insights into the Durban Inner City economic environment. The Inner City of Durban has for many decades been at the heart of regional economic activity and continues to play a major role in the regional, national and in some cases global economic processes that characterise what is today the eThekwini Municipal Area (EMA). In examining the economic conditions which have pertained in the period leading up to the writing of this report it is important that the economy be examined both in terms of how households interact with it and in terms of the major categories of economic activity.

1.1 Structure of the Report This report consists of two sections: an analysis of the dynamics driving and sustaining the inner city economy, and a suite of strategies aimed an maximizing the benefits of these dynamics and enhancing the competitive advantage of the inner city. Section 1 begins with a brief overview of the methodology employed in collecting and analysing data on the status quo and is followed by an examination of the metropolitan context. Although the Inner City is a significant core of activity in the region it cannot and should not be understood in isolation from regional trends and how the regional as a whole connects with national and international economic processes. Following this discussion, the dynamics of the Inner City are examined through both a thematic or sector lens and where appropriate spatial aspects are explored. The document concludes with the identification of issues that will be given further attention in Section 2 of the report. Section 2 of the report has as its focus the identification of strategic economic development issues needing attention in the Inner City. These are set in a brief contextual discussion on the role of strategy and a recap of key concluding points for section 1. Whilst there might be repetition in some instances it is important that the thread of these summary points be recapped so that the matters identified are kept in mind during the discussion on strategy. Under the identified strategic thrusts a number of interventions are discussed that could yield a more sustainable outcome for the inner city.

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SECTION ONE

STATUS QUO ANALYSIS

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2 Methodological issues The approach to preparing the status quo document has focused on three main approaches:

• Accessing available data; • Accessing secondary sources; • Interviewing key informants. 1

All of these have been carried out in a focused manner to accommodate time and budget constraints. It should be noted that there are substantial gaps in available reliable data and that in many instances secondary sources are not that current. In this regard a technique referred to as triangulation has been used to try and identify key issues deserving attention and where possible to verify trends. This approach involves the testing of information received from the three sources against one another as is illustrated in Figure 1 below.

Figure 1: Verification of finding from multiple sources

3 The Metropolitan Context The examination of the state of the Inner City economic environment must of necessity be preceded by an examination of the metropolitan environment as the fortunes of the Inner City are closely bound in with the trends in the rest of the region. Whilst the Inner City does have its own dynamic local economy, it is also substantially influenced by the regional economic environment. As there is a considerable amount of interchange of people, goods and services between the Inner City and the region outlining the relationships becomes essential to a

1 Selected within the terms of the project contract discussions where it was stipulated that due to extensive stakeholder interaction in the past this project should not seek to replicate official Council stakeholder interactions.

Secondary sources

Interviews

Data

Triangulation

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nuanced understanding of the context. So for instance, demand for inner city commercial property is not just a function of growth in economic activity in the inner city itself, but is also heavily influenced by dynamics of commercial property in other metropolitan nodes. As the status quo report for the inner city spatial framework points out, the inner city environment is also heavily influenced by metropolitan policy and regulation issues. Markets in any environment are influenced by the nature of regulation. Decisions about how to regulate development, land release, costs of services and infrastructure provision by the local state as well as other factors such as policing all have in impact in influencing outcomes in the inner city in the same way general economic trends would have. Figure 2 provides a diagrammatic representation of this metropolitan economic and regulatory influence.

Metro social andeconomic

trends

Metro policy and regulation

Inner Cityconditions

Figure 2: Influences on the Inner City Economy

The following section paints a broad picture of key performance areas of the metropolitan economy. This will be followed by a discussion on the Inner City dynamics in more detail, which includes references to how the trends being discussed are informed by, or in turn inform, the metropolitan picture. It is hoped that this approach would facilitate alignment of strategy between the Inner City and the metropolitan-wide strategic frameworks.

3.1 Broad trends in the metropolitan economy The past decade of evolving democratic local government in South Africa’s cities has occurred in a context of significant and far-reaching economic change. During this period South Africa has steadily shifted away from its status as an isolated pariah state with protectionist policies and increasingly unsustainable levels of debt. The impact of these reforms, together with the legacy of Apartheid, has been enormous on cities such as Durban2. Not only have democratic local governments’ inherited local economies with amongst the highest levels of inequality in the world and where the bulk of residents still live in conditions of unrelenting poverty, they have also seen the structure of their key economic sectors shift rapidly as a consequence of domestic and global policy adjustments (SACN, 2004; Parnell, 2004). The following information seeks to present, over time where possible, some indication of the economic circumstances pertaining in Durban during this period. In presenting this it should be noted that much of this information has only recently come to light and for much of the past decade cities such as Durban have had little more than a patchwork of unreliable and out-of-date data sources supplemented by anecdotes on which to base policy development and plan interventions.

2 In this instance the term Durban is used to denote the metropolitan region.

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Consolidated Document: 21 September 2005 Durban rivals Cape Town as South Africa’s second most important geographic centre of economic activity after Johannesburg. Whilst Johannesburg’s primacy in economic terms has never been in dispute, Durban, Cape Town and more recently Pretoria with their similar population sizes have been consistently present and significant also-rans. Figure 3 gives an indication of the share on national product originating in Durban during the past decade.

Metros vs National Total GVA (current prices)

2%

4%

6%

8%

10%

12%

14%

16%

1996 1997 1998 1999 2000 2001 2002 2003

WC - City of Cape Town KN - eThekwini Metropolitan (Durban Unicity)GP - Ekurhuleni Metropolitan (East Rand) GP - City of JohannesburgEC - Nelson Mandela Metropolitan (Port Elizabeth) NW/GP - City of Tshwane (Greater Pretoria)

Figure 3: GVA by selected city (Global Insight)

The significance of this information is best seen together with information on average annual growth during this period. For Durban during the late 1990s this was a relatively meager 2.3% (SACN, 2004). During this same period Pretoria grew at 5.1% and Johannesburg witnessed growth levels of 4.5% (SACN, 2004). This suggests that economic restructuring in South Africa has left Durban with a disproportionate presence in lower-growth traditional manufacturing sectors and only a limited presence in higher growth technology and knowledge-based services activities. Figure 4 illustrates the performance of key sectors in Durban at a broad level. Noteworthy is the growing impact of services type activity and in particular the transport sector with Durban being the location of the Country’s premier container and liquid bulk port.

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GVA-R sector growth 1996-2003 eThekwini and National (1995 constant prices)

-10.0% -5.0% 0.0% 5.0% 10.0%

Agriculture

Mining

Manufacturing

Electricity

Construction

Trade

Transport

Finance

Communityservices

Sect

or

Percentage growth

KN - eThekwini Metropolitan (Durban Unicity)National Total

KN - eThekwini Metropolitan(Durban Unicity)

0.5% -6.1% 2.1% 2.2% 1.8% 1.7% 6.6% 4.7% 0.5%

National Total 0.4% -0.1% 1.9% 1.9% 2.7% 1.9% 7.0% 4.8% 0.5%

Agriculture Mining

Manufacturin

g

Electricity

Construction Trade Transp

ortFinanc

e

Community

service

Figure 4: Broad sectoral growth performance in Durban (Global Insight)

The changing sectoral character of the Durban economy is particularly noticeable when looking at formal employment. Figure 5 provides clear evidence of how employment has shifted into tertiary sectors in the past decade. Where absolute growth in formal employment has occurred, it is in service activities that it has been most significant. It should be noted that in many instances these services jobs are not particularly well paid, neither are they high-skill or as secure as the employment might have been in other sectors in the past (eg in government/community services or in highly unionised manufacturing sub-sectors).

eThekwini formal employment by sector 1996-2003 (Global Insight)

0

50,000

100,000

150,000

200,000

250,000

300,000

1996 1997 1998 1999 2000 2001 2002 2003

Years

Empl

oym

ent

AgricultureMiningManufacturingElectricityConstructionTradeTransportFinanceCommunity servicesHouseholds

Figure 5: Broad sector employment in Durban (Global Insight)

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Consolidated Document: 21 September 2005 However, when looking at employment in the South African context it is essential to examine issues of unemployment as it is the persistence of massive unemployment that continues to dominate the economic environment in the Country. The scale of this unemployment at a national level is replicated at the local level as can be seen in the Figure 6. Whilst new jobs have been created and the absolute level of formally employed has increased in the past years this limited growth has been overshadowed by substantial growth in the numbers of unemployed. This is not only witnessed in the data, but also in the growing numbers of people resorting to informal activities for survival.

eThekwini unemployment (expanded) 1996-2003 (Global Insight)

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

1996 1997 1998 1999 2000 2001 2002 2003

Years

Num

bers

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

Perc

enta

ge

Number of unemployedPercentage

Figure 6: Unemployment in Durban (Global Insight)

To understand matters of employment and unemployment and also other economic dynamics there is benefit in looking at key economic drivers in some more detail. Focusing on the manufacturing sector, which has been Durban’s economic mainstay for much of the last half of the last century, one can see in Figure 7 below the degree to which previously dominant traditional sectors have lost much of their lustre as drivers of local economic growth. This is equally true in terms of employment where, critically, major employment-intensive manufacturing employers such as clothing and textiles haemorrhaged jobs during the period of rapid trade liberalization in the 1990s. Whilst Durban remains a major location of manufacturing employment in South Africa (second after the East Rand in Ekurhuleni Municipality), the sector has not proved to be a rapid generator of jobs.

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eThekwini Metropolitan manufacturing growth 96-03

-1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5%

30 Food, beverages and tobaccoproducts

31 Textiles, clothing and leather goods

32 Wood and wood products

33 Fuel, petroleum, chemical andrubber products

34 Other non-metallic mineral products

35 Metal products, machinery andhousehold appliances

36 Electrical machinery and apparatus

37 Electronic, sound/vision, medical &other appliances

38 Transport equipment

39 Furniture and other items NEC andrecycling

Figure 7: Durban manufacturing sector growth (Global Insight)

However, looking through other lenses one can see the positive impact of policy adjustments. In the South African context the rapid growth of manufactured exports in the past decade has been a major success story. Figure 8 provides an indication of Durban’s significant share of national exports. A closer look at the data reveals that Durban has moved from a position of a local economy importing more than it exported in the 1990s to a trade surplus area. Durban has therefore kept pace with South Africa’s rapid growth in export activity in the past few years. Nevertheless, this has not translated directly into major employment gains in manufacturing, although employment growth in sectors such as transport, financial services and trade and retail can also be attributed, in part, to growth in trade activity.

Share of national exports 1996-2003 (Global Insight)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1996 1997 1998 1999 2000 2001 2002 2003

Years

% s

hare

Rest of SAeThekwiniRest of KZNGautengEastern CapeWestern Cape

Figure 8: Export Performance over time

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Consolidated Document: 21 September 2005 In looking at Durban’s economy it is also essential to examine the economic state of households and individuals as this reveals how citizens experience and engage with the economy. In the Durban context, the challenges that are faced in improving the regional growth performance and increasing levels of formal employment need to be considered in terms of how matters of growth and employment relate to household conditions. Drawing on an analysis of the 1996 census in a report by Casale and Thurlow (1999) the scale and character of poverty in Durban is described as the most notable characteristic of the City’s households. The authors outline how, “as far as poverty is concerned, it was found that the poorest 40% of EAs (Census Enumerator Areas) earn less than R412 per month, and contain over 44% of the total population of the DMA. Furthermore, the poorest 20% of EAs, representing 23% of the population, earn less than R296 per month. The analysis of poverty across population groups reveals that 93% of the total number of poor people in the DMA are Africans. When this is compared to the rates of the other population groups it is clear that poverty and race are intrinsically linked in the DMA. Furthermore, the findings confirm the generally held view that women are more likely to be poor then men. Poverty rates between the genders show that while only 29% of males are poor, over 58% of women suffer from poverty. The findings of this study have also revealed a disproportionately high incidence of poverty amongst children in the DMA, confirming their particular vulnerability to poverty.” (Casale & Thurlow, 1999) More recent data reveals that this basic pattern has not improved significantly and in some instances has got worse. Analysis of the 2001 census figures reveals facts such as the growth in informal settlement households from 5.10% to 13.74% of total households, that more households have got access to services and electricity and that the number of households registering zero income has grown by 152% (SACN, 2004). The figures below illustrate how public interventions have had a positive impact on the local Human Development Index (HDI), but how poverty is persisting and for the poorest of the poor becoming more extreme.

0.50 0.52 0.54 0.56 0.58 0.60 0.62 0.64 0.66 0.68

Measure

HDI

Gini

Indi

cato

r

Gini and HDI measures eThekwini 1996 & 2003 (Global Insight)

19962003

Figure 9: HDI and inequity in Durban (Global Insight)

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Consolidated Document: 21 September 2005 These snapshots of Durban’s economy create a complex and challenging picture. It is one in which there has been considerable economic upheaval and where mainstream economic change in a small open economy is likely to continue to be something of a roller coaster ride. In this environment household patterns have changed, urbanization processes continue to place pressure on the city and conditions of poverty remain the daily experience for almost half the citizens. Developing responses in such a context is no easy task and converting this to meaningful implementation is equally daunting.

What does this mean for the Inner City? • The combination of a sustained period of economic flux combined with changes in urban

dynamics has had an enormous impact on the Inner City. Pressures of urbanization, sprawl, increases in urban poverty and changes in economic structure (spatially and in sector terms) present the Inner City with major challenges in terms of its future users.

• Low levels of economic growth, limited employment creation and structural economic change have seen the loss of many business activities and changes in the profile of Inner City users. This presents both a challenge and an opportunity as new activities (formal and informal) have arisen and the new markets need to be served.

• The shift in the economic role of the Inner City in relation to other metropolitan nodes requires careful consideration in terms of relative advantages of different nodes and the approach to developing linkages between these nodes.

• Recent improved levels of economic growth and shifts in employment creation towards services suggest a potential for the Inner City to take advantage of a maturing metropolitan economy.

• Metropolitan wide trends in manufacturing, tourism, transport and other sectors have both direct and indirect impacts on the Inner City as they impact on the employment prospects of residents and the types of economic activities which the Inner City could capture.

4 Durban’s Inner City In order to meet the needs of both the spatial development framework exercise and to provide an input into the development of an inner city economic strategy this section will provide an selective insight into economic activity in the inner city and will then present some spatial insights in terms of the Inner City precincts as identified by the iTRUMP ABM.

4.1 The socio-economic relevance of a changing demographic profile This section will provide an overview of some population and demographic trends in the inner city. This information is based on data extracted from the 1996 and 2001 census and needs to be used with caution. The boundaries of the sub-areas in which data was collected varies slightly between the two censuses and therefore the data is not completely comparable. However, the sub areas are similar enough to compare at a broad level and paint a general picture of trends in the inner city.

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Consolidated Document: 21 September 2005 In addition to the methodology employed by Stats SA in collecting data in the inner city, the “official” status of a census has implications for its accuracy particularly for analysis at the local level. The inner city is characterised by a wide range of social and economic activities that are undertaken in an informal manner in the metaphorical spaces that are unreached and unreachable by formal governance structures. People undertaking these activities therefore often have a vested interest in remaining out of sight of officialdom, and are therefore likely to ensure that themselves and their activities are not counted in official census statistics. However, in spite of these limitations, census data is the best dataset available particularly in terms of population dynamics, and can be used safely to understand general trends in the population. Caution should however be exercised in making specific statements about population dynamics based on census data alone. This section uses the census sub-plan areas as the basic unit of analysis. These areas do not correspond with the iTRUMP precincts. Table 1 below provides an overview of the approximate equivalence between the census sub-plan areas and the iTRUMP precincts, while the map on the following page presents this information visually.

Census Sub-plan Area iTRUMP Precinct Equivalent AK uMgeni Corridor south of Argyle Road CBD East Back of beachfront, eastern portion of CBD CBD West Remaining area of CBD, Albert Park and Grey Street Precinct Stamford uMgeni Corridor north of Argyle Road, Greater Kings Park and the

uMgeni Estuary Old Fort Greater Kings Park south of Argyle Road Point Point Warwick Remaining area of Warwick Junction

Table 1: Census Sub-Plan area vs iTRUMP Districts

According to census data, the population of the inner city increased from 39,064 to 47,043 between 1996 and 2001, which is an average annual growth rate of 3.79%. With the exception of AK, which saw a marginal decline, population increased in all census sub-districts.

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Consolidated Document: 21 September 2005 Map showing iTrump boundaries

19

Consolidated Document: 21 September 2005 Map showing Census boundaries

20


Population 1996-2001

05000

10000150002000025000

AK

CBD Eas

t

CBD Wes

t

Stamfor

d

Old Fort

Point

Warw

ick

1996 2001

Figure 10: Inner City Population 1996 - 2001

As Figure 10 above clearly illustrates, the highest concentration of the residential population are located in the CBD. Although this area includes Albert Park and the area behind the beachfront, there also appears to be a significant amount of residential activity occurring in what was traditionally the commercial core of the inner city.

Male-1996

0-45-9

10-1415-19

20-2425-29

30-3435-39

40-4445-49

50-5455-59

60-6465-69

70-7475-79

80-84>84

-3500 -3000 -2500 -2000 -1500 -1000 -500 0

Female-1996

0-45-910-14

15-1920-24

25-2930-34

35-3940-4445-49

50-5455-5960-6465-6970-74

75-7980-84

>84

0 500 1000 1500 2000 2500 3000 3500 4000

Figure 11: Inner City Population Pyramid 1996

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A comparison of the population pyramids for the 1996 and 2001 censuses reveals that although the size of the population increased in the inter-censal period, the overall composition of the population has changed little. The importance of the inner city as an important locus of employment is indicated by the large proportion of the overall population aged between 20 and 39 years.

Population pyramids in the developing world are usually characterised by a wide base, with 50% or more of the population being under the age of 19. However, as is illustrated in both and Figure 12, this is not the case in the inner city. It has been generally acknowledged that there is a lack of primary and secondary education facilities in the iTRUMP area. It has not been possible to establish if the limited number of facilities is as a result of a small school going population, or whether the small size of the school going population is a result of the lack of primary and secondary education facilities.

Male 2001

0-45-9

10-1415-19

20-2425-29

30-3435-39

40-4445-4950-54

55-5960-64

65-6970-74

75-7980-84

>84

-5000 -4000 -3000 -2000 -1000 0

Female 2001

0-45-9

10-1415-19

20-2425-29

30-3435-39

40-4445-4950-54

55-5960-6465-6970-74

75-7980-84

>84

0 1000 2000 3000 4000 5000 6000

Figure 12: Inner City Population Pyramid 2001

As Figure 13 illustrates, the Coloured and Asian population in the inner city has changed very little as a proportion of the overall population. However, the inter-censal period saw much larger changes in the proportion of the African and White population groups. The proportion of the White population living in the inner city roughly halved between 1996 and 2001, dropping from around 40% of the total population to close to 20%. The relative size of the African population increased by the same magnitude. The changes in the racial composition of the inner city population reflect a trend that started with the repeal of influx control legislation in the mid-1980s and continued with the national transition to democracy in the early 1990s. This normalisation of settlement patterns in the post-apartheid era has been sustained by “white flight” from residential areas, based on a widely held perception that the influx of African residents into the inner city has resulted in higher levels of “crime and grime”.

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Inner City Racial Composition 1996 -2001

0%

20%

40%

60%

80%

100%

1996 2001

African Coloured Asian White

Figure 13: Inner City Racial Composition 1996-2001

The levels of education of the inner city’s population rose between 1996 and 2001, with a higher proportion of the population having completed both secondary and higher education.

Inner City Education Levels 1996-2001

0%

20%

40%

60%

80%

100%

1996 2001

Higher education

Completed secondary

Some secondary

Completed primary

Some primary

No schooling

Figure 14: Inner City Levels of Education

This pattern of a general increase in levels of education was common across all the inner city districts with the exception of Warwick as Figure 15 illustrates. This area is characterised by higher levels of informal economic activity with lower educational barriers to entry than other areas in the inner city.

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Warwick Education Levels 1996-2001

0%

20%

40%

60%

80%

100%

1996 2001

Higher educationCompleted secondarySome secondaryCompleted primarySome primaryNo schooling

Figure 15: Warwick Education Levels 1996-2001

Figure 16 indicates that the largest increases in employment occurred in the two CBD districts. It should be noted that this increase refers to residents of these districts who are employed and does not indicate an increase in employment opportunities in that particular district. The census measures formal employment and the decrease of the number of people employed in Warwick is most probably a consequence of the increase in informal activity in that area rather than a decrease in the number of people in formal employment.

Employment 1996-2001

0100020003000400050006000700080009000

10000

AK DurbanCBDEast

DurbanCBD

West

Old Fort Point Stamford Warwick

Employed 2001 Employed 1996

Figure 16: Inner City Employment by District 1996-2001

24

Consolidated Document: 21 September 2005 Figure 17 indicates that the highest increases in unemployment took place in the two CBD districts and to a lesser extent in Warwick. It is likely that this growth in unemployment reflects an increasing engagement with the informal economy, as well as the difficulties new arrivals in the inner city have in overcoming the barriers to entry to the formal economy.

Unemployment 1996-2001

0500

10001500200025003000

AK DurbanCBDEast

DurbanCBDWest

Old Fort Point Stamford Warwick

Unemployed 2001 Unemployed 1996

Figure 17: Inner City Unemployment by District 1996-2001

Assessing the changes in income levels in the inner city presents a number of problems as a result of this information being collected in terms of different income bands in the 1996 and 2001 census. An approximate equivalence has been made between the groups in the two census years based on a model used by the Municipal Demarcation Board. However, caution should be used when doing a comparative interpretation of this income data. Notwithstanding the difficulty of comparing household income data between the two censuses, higher income bands showed very little change between 1996 and 2001. This suggests that the phenomenon of “white flight” referred to earlier on does not necessarily lead to increasing poverty and “ghetto-isation” of the inner city

25


Inner City Household Income 1996/2001

0%

20%

40%

60%

80%

100%

1996 2001

More than R30000/More thanR51200R11000-30000/R12801-51200R6001-11000/R6401-12800

R3501-6000/R3201-6400

R1501-3500/R1601-3200

R201-1500/R401-1600

R1-200/R1-400

No HH Income

Figure 18: Inner City Household Income 1996-2001

While the wealthier income groups maintained or improved their position between 1996 and 2001, the poor got poorer. The proportion of the households with a monthly income of less than R3,200 stayed more or less the same. However, the number of household recording no monthly household income increased from around 10% of the total number of households to just over 20%.

What does this mean for the Inner City? • The population of the inner city is becoming younger, is more likely to have access

to some employment than residents in townships, and has education levels above the metropolitan average.

• Official statistics tend to misrepresent and under-represent the marginalised. It can be safely assumed that population figures under-estimate numbers and household data tends to bias more stable and established households.

• The inner city presents many opportunities but is also in many instances a place that imposes higher living costs on its residents. Many households in the inner city struggle to make ends meet with insecure income (often from poorly paid service jobs) and the lack of amenity in the areas contributes to social problems.

• Delivery of a basket of social goods and redevelopment and management of the inner city space to meet the needs of the present profile of residents and expected users is critical.

4.2 Characteristics of growth The area making up the Inner City and its immediate surrounds provides the second largest contribution to metropolitan GDP (including the port) after the South Durban Basin area. In terms of the informal economy it provides the hub for the bulk of trading related and some manufacturing activities that some have put as high as 10% of formal GDP. Whilst no specific Inner City figures are available, Figure 19 provides an indication of past, present and projected GDP growth of the Durban magisterial district (including portions of the Port and SDB). It is

26

Consolidated Document: 21 September 2005 worth noting that the proportionate contribution of this identified area has stayed relatively constant in relation to eThekwini-wide GDP and that the past few years have seen a gradual increase in the quantum of growth of GDP on an annual basis – averaged at 2.7% between 1996 and 2003.

G V A - R f o r D u r b a n a n d E M c o n s t a n t 9 5 p r ic e s ( G I)

0

1 0 , 0 0 0 , 0 0 0

2 0 , 0 0 0 , 0 0 0

3 0 , 0 0 0 , 0 0 0

4 0 , 0 0 0 , 0 0 0

5 0 , 0 0 0 , 0 0 0

6 0 , 0 0 0 , 0 0 0

7 0 , 0 0 0 , 0 0 0

8 0 , 0 0 0 , 0 0 0

1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8

Y e a r s

R10

00

E MD u r b a n

Figure 19: Projected GDP growth of Durban magisterial district

In comparing growth for the Durban magisterial district area and the eThekwini Metropolitan Area (EMA) it is notable that there is a relative close match in broad sectoral terms as can be seen in Error! Reference source not found.. It is however significant that the Durban area outstrips EMA growth in the financial sector, a significant portion which is located in inner city area reflecting the services orientation of the inner city.

27


GVA-R growth by sec

-8.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0%

1 Agriculture

2 Mining

3 Manufacturing

4 Electricity

5 Construction

6 Trade

7 Transport

8 Finance

9 Community services

DurbanEM

Figure 20: GVA Growth by Sector

A closer look at the services sectors that make up regional Gross Value Added figures for Durban provides a better sense of what makes up the economic activity of the inner city. The chart below presents the largest services oriented contributors to Durban magisterial district GVA from 2003. Those in red are the sub-sectors contributing in excess of 4% of GVA. As expected finance and insurance contributes almost 10% to Durban GVA, whilst other services sectors that have been relatively fast growing of late such as healthcare, business services, real estate and crucially retail trade all contribute in excess of 4%. Taken together these services activities contribute well in excess of 50% of Durban magisterial district GVA (with the SDB’s manufacturing and services activities still included in the total). Including the smaller services contributors gives one a real indication of a services driven inner city economy. Sadly specific information on tourism is not available as it is a “hidden” element in many of the sub-sector components including retail trade, transport services, finance and insurance, domestic services and others. The only specific element that can be linked to tourism is hotels and restaurants establishments, which in 2003 contributed in the region of 1% to Durban GVA. Whilst a cumulative tourism figure has been estimated to be between 6 and 10%, caution should be exercised in overstating the existing position of tourism in the inner city economy. It is undoubtedly important, but evidence shows that its contribution has been relatively stagnant. Part of the reason might be that expenditure is captured in other regions, but the figures do reinforce the perspective that Durban’s tourism sector is perhaps underperforming relative to the hype associated with it.

28


Selected service sectors share of regional GVA 03

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%

30 Food, beverages and tobacco products

31 Textiles, clothing and leather goods

32 Wood and wood products

33 Fuel, petroleum, chemical and rubber products

34 Other non-metallic mineral products

35 Metal products, machinery and household appliances

36 Electrical machinery and apparatus

37 Electronic, sound/vision, medical & other appliances

38 Transport equipment

39 Furniture and other items NEC and recycling

41 Electricity, gas, steam and hot water supply

42 Collection, purification and distribution of water

50 Construction

61 Wholesale and commission trade

62 Retail trade and repairs of goods

63 Sale and repairs of motor vehicles, sale of fuel

64 Hotels and restaurants

71 Land and Water transport

73 Air transport and transport services

75 Post and telecommunication

81 Finance and Insurance

84 Real estate activities

88 Other business activities

91 Public administration and defence activities

92 Education

93 Health and social work

99 Other service activities

Figure 21: Services Sector Share of GVA

4.2.1 Retail The data shows retail activity has been critical in the context of economic activity in the inner city. While these figures only reflect formal trade, the addition of informal trade figures should they be available would undoubtedly boost this substantially. Together retail and wholesale activities contribute almost 9% to regional GVA and a significant portion of these are located in the inner city precincts. Insights from retail specialists suggest that retail expenditure in the region is relatively evenly split between malls and non-mall environments. A conservative estimate puts in excess of one third of EMA retail expenditure in the inner city – driven more by volume than by value. The inclusion of the substantial informal trade would further boost this. The figure below (Figure 22) provides an indication of the top retail items in the Durban magisterial area in 2003 by value of sales and compares these to the metropolitan total. It is noteworthy that in all the major categories sales in Durban central areas make up in excess of 50% of total EMA sales. The sustained rise in disposable income in the past few years driven by lower interest rates and a steadily growing economy have seen a growing segment of the lower-volume and higher value items such as household furniture and appliances. This suggests that there remains an appetite for a range of retail within the inner city areas with garments, groceries, health products and household goods being dominant. It is also noteworthy that the profile of goods being sold in the informal channel is diversifying as declining barriers to trade (or grey imports) bring cheaper imported consumer products into circulation. These are also finding their way into formal retail with discount stores threatening the existence of many established independent retailers. This has also been affected by the change in profile of the inner city shopper and many stores have struggled to continue to attract

29

Consolidated Document: 21 September 2005 commuters to their inner city shops. Therefore, whist the figures show retail is having a strong growth period, it is also going through major changes whereby independents are being caught between low cost retailers, national chains and informal businesses. This will fundamentally change the character of areas such as Grey Street should efforts not be made to work with long-standing business to assist in repositioning the area.

Retail sales 2003 top categories

0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000

Perishable and processedproducts

Ladies/girls and infants clothing

Inedible groceries

Pharmaceuticals

Beverages

Mens/boys clothing

Sport equipment

Hardware

Footwear

Household furniture

Domestic appliances

Glass and crockery

Textiles

Cat

egor

y

Value of sales

Durban 03EM 03

Figure 22: Retail Sales Durban Magisterial District 2003

Information from the Caxton Roots survey on retail provides some other useful insights that need to be explored. Of the suburbs immediately surrounding the inner city only Sydenham and Overport residents buy most of their retail goods from the inner city. All the other Berea suburbs spend most of their consumption expenditure in malls on the Berea or further afield such as the Pavillion. Information presented later in this document suggests that these suburbs have some of the highest levels of disposable income in the EMA and could potentially be a significant source of economic impetus if their retail habits could be incrementally influenced to allocate a greater portion of expenditure to the inner city. The development of some new retail facilities at the Point could contribute to this. However, the fact that this belt of residents in such close proximity to the inner city have so little a connection with it presents an important ongoing strategic challenge. Some key additional points raised in interactions with the local retail sector include:

• The rapid growth in retail centres and facilities in peripheral, suburban and township areas will place the inner city under major competitive pressure. The rationale for commuters to focus their shopping in the inner city because of historic underdevelopment of black residential areas will change substantially with the growth of these new facilities.

30


• The underdevelopment of nodes around the major transport facilities (the two stations) is likely to change and will in turn mean that commuters will be less inclined to travel beyond the nodes for shopping activities.

• Office workers, who used to be the main market for inner city retail chains are less inclined to shop in the inner city. There is a shift to inner city residents being the main market but core retail areas such as Smith and West are at some distance from the core of inner city residential populations making local residents more inclined to use localized facilities hence the often puzzling survival of the Wheel Shopping Centre.

• Crime and grime continues to put off shoppers from outside the inner city. This has been made worse by lack of any apparent management of informal trade.

• Smaller independent retailers in some parts of the inner city cannot secure bank finance to upgrade premises or to hold additional stock as they are either deemed too high risk as entrepreneurs or are operating from areas the banks have effectively redlined. These small independent retail and service businesses are concentrated in personal services (such as hair dressing), clothing and fast food activities.

• Related to the retail sector has been the growth of taverns and various entertainment venues, which often operate with temporary licenses. Taking into account that retail trends show consumers wanting a greater association between entertainment and retail the lack of a presence of family-oriented entertainment could be seen as a major problem.

• The inner city lacks a strong aspirational retail element, which has the benefit of attracting a much wider range of shoppers as the malls manage to do. If one buys the argument that many customers buy to be associated with a brand identity rather than to have a particular need met this means that the inner city is failing to position itself to retain existing and attract new customers in the medium term. While the inner city might be where people shop because it is convenient to them, it is not where they would want to shop if they had a choice – a real problem in an environment where competition for customers from other nodes will only escalate.

• Related to this a feeling exists that retail nodes in the inner city have little specific identity and even an area with a rich history of family owned stores such as Grey Street is now seen to becoming what one shop owner described disparagingly as “South Coast Road”, implying that its uniqueness is being lost and that stores are shifting to lower price and quality goods from a wholesale environment.

• Upgrade initiatives such as that in West Street are welcomed as helping to craft an identity but, alongside the UIP, they have not been accompanied by other types of interventions that might leverage the physical investment to grow businesses in the area.

4.2.2 Business and financial services Business and financial services have also shown a strong growth in the past few years. After some years in the doldrums these businesses are now more successfully tapping into previous unserviced markets allowing them to grow their businesses. Declining interest rates and government intervention has to a degree aided this, as has growing prosperity amongst the growing black middle class. These conditions have allowed many small business to enter this market. Inner city commercial office space occupancies remain dominated by these types of businesses. The ongoing presence of major legal facilities and the port-related sectors has helped sustain the growth of these businesses as has changing information technology. A company such as Telkom can operate a call centre from the inner city at a very competitive

31

Consolidated Document: 21 September 2005 cost structure. The global growth in business process outsourcing has also impacted on the inner city and the growth of this sector. In some cases this is beginning to move to 24 hour operations and in the longer term will require cutting edge technology and supporting skills, as well as affordable access to telecommunications services. The development of a large amount of high quality office space outside the CBD, particularly to the north of the city has resulted in high vacancy rates in the CBD. While some business have maintained a presence in the CBD and use some of the space that they previously occupied for back office activities, others have chosen to relocate all their operations out of the CBD. There was a concern that the vacancy levels resulting from this would result in further decline of inner city assets, and was exacerbated by the fact that there were no obvious candidates to step in and make use of newly vacated office space on the same scale. The business process outsourcing (BPO) sector seems to be taking up a significant proportion of the office space vacated by the larger business. This sector is growing nationally and it has been estimated to have increased from 0.8% of GDP in the late nineties to around 2.7% of GDP. Currently there are fifty-two BPO operations and call centres operating in the Durban CBD employing 8500 agents. Among the advantages of the CBD, over and above the availability of space, Durban has a large number of school leavers with matric and unemployed people with tertiary levels of education. Higher level of education allow interactions between agents and customers to be less scripted and more interactive. Furthermore, BPO operations in Durban are not required to invest as heavily in “accent retraining” as is the case in other cities in South Africa. Key challenges for the inner city in terms of this sector of activity focus on ensuring the retention of existing businesses, facilitating opportunities for their expansion and seeking to secure new investors. All of these require the offering of high-quality operating environments not yet attained in the inner city on a consistent basis. Striking special deals with individual companies is insufficient and effort must be made to ensure demand is cultivated in a number of select nodes over a period of time but ensuring the optimal level of services and encouraging new investment and the upgrading of existing stock. Alongside this are necessary sector-type partnerships to develop local skills and enhance technology supply. The main challenge facing BPO operations is the cost of telecommunications services, although deregulation and the increasing use of voice over internet protocol (VOIP) is making a contribution to reducing this. However, telecommunications costs are still high in comparison with other global BPO centres. 4.2.3 Property The property sector in the inner city has certainly seen better times. Apart from public driven projects such as the Point and a handful of other projects little investment has taken place in new or upgrading of existing stock. A range of factors have influenced this including the availability or competitively priced stock in decentralized nodes, which has the benefits of present day design requirements as distinct from the one-size-fits all office blocks of the past. Other reasons for the decentralized stock being supported is that these new nodes are seen to be free of many of the crime and grime ills perceived to dominate the inner city. Furthermore, in an environment where development sprawl has taken place such decentralized nodes can capitalize on proximity to some residential nodes.

32


R308 493 646 (2004), especially considering that Inner city building sales has lost value to the tune of about R175 000 000, over the past 4.5 years (to July 2004).”

The inner city’s relative underperformance is seen in the tables below and reinforced in the images that follow. The inner city’s mostly older building stock commands lower rentals, both from a commercial office perspective as well as form a retail perspective. These lower rentals make the investment in new stock in the inner city aimed at premium markets or even middle grade markets unattractive.

Table 2: Durban - Changes in Average Rental 2000-2003

CBDs Decentralised

Table 3: Property Trends in SA - Durban vs. Other Major Centres

Figure 23 in the text below provides an indication of the declining investment climate in CBD property for existing property holders. In this environment it is unlikely that much new investment would follow. According to the Municipality’s economic development unit, “It should also be noted that this poses a real threat to the rates base of the Inner city, estimated at

33


Figure 23: Pr nt)

19% for A and B

ategory offices, the lowest that they have been for five years. At the same time decentralized

o be confronted include the apparent open door policy for evelopment approval in peripheral nodes, which places the inner city under consistent

nother key element in the inner city’s growth performance is that relating to the tourism . SA figures do not provide a tourism specific category it is often to read

t-apartheid South Africa as the magic bullet that will eal the country’s economic ills and bestow widespread benefits upon the population.

020000000400000006000000080000000

100000000120000000140000000160000000

2000 2001 2002 2003 2004

Sale PriceMunicipal Value

operty Sales and Municipal Valuations in CBD (Economic Developme

It is important to note that in 2004 vacancy rates in Durban CBD fell belowcvacancies rose to their highest level in the same five year period, driven largely by new stock coming on line. Information also suggested that there was some convergence in prices for space in top grade offices in the CBD and decentralised areas. However, the latter has proved to a premature conclusion as decentralized rentals were artificially depressed by the fact that building owners had often made space available as the buildings came on stream on a 3-5 year contract basis with fixed or only marginally increasing rentals. The expiry of these agreements has seen decentralized rentals displaying growth that is once again creating a larger gap. Nevertheless, some inner city nodes such as Kingsmead Office Park and the Point have achieved commercial rentals very close to the decentralized A or premium grade rates illustrating that the inner city does have some recovery potential with the right sort of stock in well managed environments. Key challenges that need tdpressure. It is also important for a series of precincts or nodes to be consolidated around an appropriate identity and level of management. Scope does exist for commercial office space in less central parts of the inner city to be converted to other uses such as housing. This should be done in the context of comprehensive precinct plans, which allow for the appropriate level of public space and amenity to support such development. 4.2.4 Tourism Asector As Statsexactly what importance it has in the local economy. Previous analyses suggest that tourism contributes at least between 4 and 6% of local geographic product and is also a key employer. Tourism includes activities in trade, catering, hotels and accommodation establishments, financial services, transport and others. Tourism is frequently promoted in posh

34


aking the contribution to the economy of the inner city at it has the potential to. This is due to a number of reasons that will be unpacked in the

he beaches of the Golden Mile are the inner city’s, and indeed Durban’s, premier tourism

rd sociated attractions such as the Suncoast Casino and uShaka Marine

urist attractions in the inner city include: • The Point Waterfront, Vetch’s Pier and Limestone Reef;

rea;

ead; and

However, linkages between these attractions are poor and it is not easy for tourist on the eachfront to access other areas of the inner city. The proposed development of a people

, with the xception of the Hilton, which is run by an international group. International brands such as

le 4 indicates, the inner city area contains 27 hotel establishments across varying rades , with the more mid market hotel accommodation being located on the beachfront and

However, tourism only really has this effect if some fundamental elements are in place. The most important of these is a set of unique, high quality attractions. Durban’s inner city is fortunate in this respect that it has the “Golden Mile”, considered by many in the tourism industry to be Durban and KwaZulu-Natal's core attraction, and also regarded as one of South Africa's top 20 international attractions. However, tourism does not seem to be mthsections that follows. 4.2.4.a Supply SideTdraw ca along with asWorld. South Beach is a blue flag beach, which is an international accreditation indicating excellence in safety, amenities, cleanliness and environmental standards. The Golden Mile is also a significant focus of tourism accommodation, in the form of timeshare self-catering and hotels. Other to

• Wilson’s Wharf; • The BAT Centre; • The Grey Street A• The Museums; • Kings Park and Kingsm• The ICC.

bmover system in the inner city will go a long way towards alleviating this problem and enable the development of a more integrated tourism product covering the entire inner city. Hotels in the inner city area are managed mostly by either local or national groupseHoliday Inn and Formula 1 are present but these are run by Southern Sun, a national hotel group. As Tab

3g

3 The inter ational classification is used for product type classification, ie: n• Basic – full, select or limited service; hotels offering only basic standard, quality and decor. Small sized rooms and narrow range of facilities

ooms 3-star.

provided, if any. If graded – 0 to 1 star. • Economy – primarily select or limited service; reasonable standard of product iro quality and decor. Small sized rooms and narrow range of

facilities provided, if any. If graded – 2 star. • Tourist – primarily full service, but could have good standard limited service; good standard of product iro quality and décor. Average sized r

and average range of facilities provided, if any. If graded –• Deluxe – full service; very good standard of product iro quality and décor. Large sized rooms and extensive range of facilities provided. If graded

– 4-star.

35

Consolidated Document: 21 September 2005 accommodation targeted at the low and high end of the market being located in the CBD. The inner city contains 42% of the hotels in the eThekwini Municipality. There are a total of 5,897 hotel rooms in the eThekwini Municipality (Grant Thornton, 2004). Assuming that rooms are distributed in the same proportion as hotels, this implies that there are at least 2,476 rooms in the inner city. Zone Basic Economy Tourist Deluxe First Total Beachfront 3 2 7 3 15 CBD 8 2 2 12

Table 4: Hotel Establishments by Product Type and Location (Grant Thornton, 2004)

This information is consistent with the information in the KwaZulu-Natal Tourism Authority database for Durban Central Region:

• B&B – 137 establishments • Guest house – 37 establishments • Self Catering – 46 establishments • Youth Hostel – 14 establishments • Hotel – 39 establishments • Lodge – 7 establishments • Caravan/Camping – 2 establishments

In addition to what is being considered as the inner city in this study, the area defined as Durban Central in the KZNTA database also covers Westville, Pinetown, the Berea and Durban South of the inner city to Amanzimtoti. Most of the B&Bs, guesthouses, lodges and all of the caravan and camping establishments are located in these areas. However, KZNTA research indicates that a high percentage of tourists using accommodation facilities outside the inner city area still visit inner city attractions, in particular the beaches. Occupancies in inner city hotels is particularly high as Table 5 and Figure 24 below indicates: Zone Basic Economy Tourist Deluxe First Total Beachfront 76.9% 65.0% 70.0% 68.4% 70.7% CBD 68.6% 78.4% 67.7% 69.9% Table 5: Occupancy by Product Type and Location (Grant Thornton, 2004)

• First – full service; excellent standard of product iro quality and décor. Large sized rooms and extensive range of facilities provided. If graded –

5+-star.

36


Hotel Occupancy 2003

0.010.020.030.040.050.060.070.080.090.0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

%

Durban KZN

Figure 24: Hotel Occupancy 2003

These occupancies are higher than the average occupancies in the rest of South Africa (58%) and more or less equal to international benchmarks for average occupancy (69%). Average room rates are lower in Durban than the rest of the country and internationally. Using an indicator of revenue per room Durban performs better than Johannesburg, although not quite as well as Cape Town. 4.2.4.b Demand Side According to SATOUR data, almost 14 million domestic tourists visited KwaZulu-Natal in 2003. Research done by the KZNTA indicate that at least 50% of these tourists either stay in or visit Durban at some stage of their trip4. The average length of time that domestic tourists stay in Durban has also increased from 3.8 nights in 2000 to 7 nights in 2002. The amount that domestic tourists to Durban spend on each trip has also increased, although this still remains small. In 2001, tourists were spending in the region of R600 per trip. This figure rose to more than R1,000 per trip in 2002. These figures imply a direct domestic tourist contribution to the inner city economy of R3-4 billion. The main sources of tourists for Durban’s domestic market are Gauteng and other parts of KwaZulu-Natal. There are a large number of repeat visitors with most tourists having visited on more than four occasions. Tourists visiting Durban, and the beachfront in particular, are predominantly visiting friends and relatives (VFRs) and beach tourists. KPMG (2000) identified five core domestic tourism segments, all of which are present in the inner city:

• The Emerging Tourist – a LSM 6 mainly VFR tourist

4 Defined as the CBD, the beachfront, the harbour area, the suburbs and the Valley of 1000 Hills. Umhlanga and areas north, and Amanzimtoti and areas south are not included.

37


• The Established and Settled Tourist – a LSM 8 leisure, sun, sea & sand / cost conscious tourist, mainly from Gauteng and Mpumalanga.

• The Fast Paced Tourist(Visible Achievers) – Gauteng, Free State, LSM 8, 25 – 49, leisure, short break, sport and event tourist.

• Older folk – Northern Province, LSM 8, 50 – 64, leisure, sun, sea and sand tourist looking to relax and for whom climate is a key factor.

• The Young and Upcoming Tourist – Johannesburg and West Rand, LSM 8, Yuppies, action and adventure, sport and events, trendy restaurants, want new experiences, fun and excitement.

As Figure 25 below illustrates, the highest volumes of tourists in the inner city are the Emerging Tourists, which are also provide the lowest value in terms of direct contribution to the local economy. The Young Up and Coming Tourists provide the second highest volumes, but also provide the second highest value. The Durban market is therefore characterised by two polar opposites in terms of tourism market i.e. large volumes of both high value and low value tourists. This poses significant challenges in terms of providing tourist facilities that meets the needs of two such diverse groups. Furthermore, thought needs to be given as to how the trade-off is made between the two groups. Young Up and Coming tourists are an attractive market because of the high spend they bring with them, but they may be discouraged from visiting Durban due to the large volumes of lower income tourists. On the other hand restricting or controlling the access of Emerging Tourists to the beachfront raises issues of equity, as the beaches and associated infrastructure are public goods, which should be accessible to all. In perception surveys undertaken by the KZNTA, the worst perceptions of the beachfront areas were those of people resident in Gauteng and in the rest of the province, the two most important source markets in geographical terms for Durban’s domestic tourism market. Holidaymakers and business tourists also tended to have poorer perceptions of the beachfront than VFRs. Poor perceptions of the beachfront area are built on the issue of “grime and crime” and the related issue of overcrowding, particularly in peak tourist season. The beachfront’s traditional white, middle class markets have largely abandoned the Golden Mile, with these groups being captured by the north and south coasts of the province. Growth of the tourism sector in these areas has been rapid and individually these areas are attracting the same numbers as the beachfront area. These areas are also attracting the same profile of tourists that the Golden Mile historically attracted. Approximately 600,000 foreign tourists arriving by air visited KwaZulu-Natal in 2003. Previous research indicates that at least 70% of these tourists will visit the Durban Central area. As is the case with the domestic tourists a large proportion of tourists visiting Durban Central will visit the beachfront. That means that up 420 000 foreign tourists visit the inner city area annually. Foreign tourists staying in the city have an average length of stay of 6 nights. Although the size of the foreign tourist market in terms of numbers of tourist is relatively low as compared to domestic tourists, they tend to spend more money than domestic tourists. Foreign tourists spend up to R1,000 per day, and therefore still make a significant contribution to the tourism economy of around R2.5 billion annually. Figure 25 below illustrates this point using slightly older data.

38


0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

100%

Foreign Market 447,000

Domestic market 4,000,000

Tourism Visitor Numbers

Figure 25: Comparison of Volume and2003)

Foreign tourists visiting the inner cUSA, France and the Netherlands. be holiday makers (47%), althoughtourists (16%).

Foreign Tour

0

10

20

30

40

50

%

Holiday V

Figure 26: Foreign Tourist Types

While 60% of foreign tourists visittypes of experiences, in particular cfor this with its interesting cultural such as Wilson’s Wharf, the Bat CICC. However, the transport links bpoor and this mitigates against the dwould allow Durban to compete forMiami.

R 2,458,500,000 R 4,000,000,000

Tourism Revenues Revenu

Value between Domestic and F

ity are usually from the UniForeign tourists also tend to b significant numbers are also

ist - Types 2001

1

FR Business Other

Durban for the beaches, theultural experiences. Durban imix of Indian, Zulu and Coloentre, Warwick Triangle, Greetween the beachfront and t

evelopment of a “beach and c foreign tourists with destina

R 880 R 143

e per visitor per day

oreign Tourists (Hayley Sharpe,

ted Kingdom, Germany, the e older than 25, and tend to VFRs (21%) and business

y are also looking for other s well positioned to provide nial heritage, and attractions y Street, museums, and the

he secondary attractions are ulture” tourism product, that tions such as Phuket, Rio or

39

Consolidated Document: 21 September 2005 Similar to domestic tourists, many foreign tourists have low perceptions of the beachfront areas, particularly in respect of crime and grime issues. These perceptions are in many instances reinforced by the attitude of by hotel staff and tour operators to the beachfront area and who issue security warnings about the beachfront and associated attraction. There are reports of tour operators refusing to put foreign tourists in beachfront hotels at certain times of the year when problems of “crime and grime”, and overcrowding are perceived to be at their worst. 4.2.4.c Key Challenges for the Development of the Tourism Sector Some of these have been mentioned earlier but re-emphasized here as they affect both domestic and foreign tourists. Crime and grime It is important to note significant proportions of both the inner city's domestic and foreign tourism markets have poor perceptions of key attractions as a result of this issue, and this is particularly true of key affluent, Gauteng and UK markets. Tourism stakeholders have raised this issue with the eThekwini Municipality. The Municipality has responded by producing statistics showing how crime has decreased and the number of cleaning teams has increased. However, tourism stakeholders maintain that while the statistics may be accurate, the marketplace’s perception of the beachfront as a dirty, crime-ridden area remains and needs to be addressed. Development of a unique product Durban is well placed in terms of variety of attractions and tourism infrastructure to develop a mix of tourist product catering for a wide range of tourist markets. Further development of high-end accommodation along the beachfront is necessary, as well as the development of the beach area associated with this accommodation. Attractions that are not located along the beachfront need to be linked to each other and to the beachfront. The people mover will go along way towards achieving this. These linkages can be enhanced through the development of themed tourism routes through the inner city. For example; an arts and architecture route that takes in the BAT Centre, art galleries and some of the art deco building in the inner city. Events Tourism Due to the popularity of the beachfront as a destination, the municipality has over the years developed capacity in the control of large numbers of people at events. This capacity represents an asset that could be used proactively to boost the tourism sector, particularly as far as the development of events tourism is concerned. The 2010 Soccer World Cup is the most obvious example where this capacity could be put to use but there are also a number of other annual events such as Ocean Action, the Festival of Chariots and Diwali, which could be built on in developing an image of Durban as an events city. 4.2.5 Government services Despite the fact that this has been a publicly commissioned study, it has been difficult to access reliable sources on the scale of government services activity in the inner city. Some key government role players such as Department of Public Works (DPW) were either reluctant to divulge details on square meters under use and numbers of people employed or did not have the information readily accessible. The greying of what the public service is further

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Consolidated Document: 21 September 2005 complicates this. However, if one takes a broad approach to government services and be inclusive in the definition, it is possible to get some estimates, which suggest this sector is very significant indeed. One real estate strategist suggested that there were at least 20 000 public sector-type employees in the inner city ranging from magistrates to city planners, and from social workers to economic development managers. The Municipality makes up around 50% of this figure with the remaining coming from Provincial Departments and regional offices of national departments such as education, social welfare, public works, labour, justice, SARS and others. Further contributions are made by parastatals. Employment in this sector might be below that of others (such as retail), but remains significant as its gross remuneration would be higher considering the majority are employed full time and have benefits. However, government services are not just important because they employ people and occupy lots of space, they also attract (often of necessity more than will) many people into the inner city to transact with government departments. No estimates are available on the number of people that come to the inner city each weekday to deal with one government service or another, but it is substantial. This is made all the more important in that the catchment base for such users of these services is Province wide. Many of these services are concentrated in close proximity to the City Hall but there remains little joint planning in spite of national government calling for greater intervention between services and spheres. This affects both how government departments interact and how the millions of people that come to the city each year to access services experience such services. It should be noted that a number of Provincial officials have made statements about plans to move the bulk of administration to Pietermaritzburg as the capital of KwaZulu-Natal. Whilst no specific details are available it does seem likely that should appropriate office space become available in Pietermaritzburg there will be some relocations. iTRUMP needs to initiate some dialogue on this matter sooner rather than later. 4.2.6 Additional sectors A number of other sectors are notable in the inner city. Clearly one of the most obvious is the activity related to the Port of Durban in the form of maritime and logistics services activities. This has, since the establishment of Durban as a settlement, been a core driver of activity in the city. During the 60s and 70s previous special integration was lost by scaling up of development in both the CBD and the port and since then there has been a very poor integration between these core spatial elements. However, the inner city continues to be the environment in which many maritime related activities take place. The recent extension of SARS custom services in Albany Street is an example of this as are the many businesses along Shepstone Street and the Embankment. However, despite the activity many of the role players bemoan the loss of the maritime feel of the environment and have called for a more concerted effort to generate an environment to encourage the location of appropriate businesses in these areas. The legal fraternity is also well represented in the inner city, if perhaps only for archaic rules requiring advocates chambers to be in proximity to the supreme court and the continued location of important library facilities. The legal services sector generates a considerable amount of employment and brings activity to the inner city that might, under other circumstances, have moved elsewhere. However, as with the maritime sector little has been

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done to capitalize on this and to ensure the long-term continuation of the sector as a major one in the inner city. There are also important linkages to the business and financial services sector, with one law firm indicating that the exodus of the large banks from the CBD would result in them reconsidering their continued presence in the inner city. Beyond retail and tourism activity the entertainment sector is also emerging as important one. This is closely integrated with retail and tourism but deserves specific attention. The growth in disposable income has enabled the opening of many establishments outside the traditional government subsidised entertainment activities around the playhouse. Included in these are clubs, bars, restaurants, takeaway establishments and the like. At present many would suggest that these present more problems than opportunities, but they do bring people and expenditure to the inner city and open up opportunities for the development of a number of entertainment nodes that try to capitalize on this growth sector for urban renewal. Together entertainment and cultural activities can be developed as a key sector in a manner that does not reinforce Durban’s agenda as the sleaze capital of South Africa. Discussions with Durban cultural activists reveal that the city is seen as a creative cauldron, but one that often looses its talent to other centres. Entertainment and culture activities have been used very successfully in other redevelopment strategies and could contribute much to the inner city’s prospects.

What does this mean for the Inner City? • The inner city continues to be a place of vibrant economic activity. However, its

premier status has been significantly eroded in the past decade. This has impacts on investment patters and user demand.

• The conditions in the inner city are not just the result of local factors but also arise from the facilitation by local government of a massive programme of decentralizedcommercial and residential development.

• The loss of and threat to traditional economic drivers requires a repositioning of the inner city space and activities to enable new growth opportunities to be facilitated and to ensure the space can play a positive role in the metropolitan economic system.

4.3 Dynamics of income, expenditure and poverty5 As is outlined in brief in earlier sections it is notable how the profile of inner city residents and users has changed in the past decade. The Inner City has become accessible to many more users and in parallel to this other metropolitan developments had drawn users away from the inner city. The information presented below points to the fact that if the inner city is taken as an integrated space with surrounding suburbs (some of the amongst the wealthiest in Durban) a platform does exist for effective and sustainable intervention.

5 The use of Durban in this information reflects the former magisterial district of Durban and includes suburbs surrounding the inner city. The information is contrasted with the eThekwini region as a whole. Whilst this choice is driven by constraints in data, the point that the inner city should not be artificially split from its surrounding areas is an important one.

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Consolidated Document: 21 September 2005 Figure 27 looks at past and projected GDP figures for the inner city and neighbouring areas compared to the eThekwini region. This suggests that per capital income is on the rise and the clearly the inner city and its surrounds are considerably better off than the metropolitan average per capita levels. It is noteworthy that per capita income growth in these inner city and related areas has grown faster that that of the region as a whole and as such the economic prospects of the inner city should be improving. This is closely linked to the fact that the economy has experienced sustained levels of growth and that it is the better located, skilled and resourced residents closer to the inner city that have most been able to benefit from this. Data shown in subsequent sections will show that the growth in services employment (although often on a part-time basis) in which the inner city has a strong profile would have also contributed to this.

0

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Per cap GDP

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006Years

Real GDP-R per cap 96-06 (GI)

EMDurban

Figure 27: Projected GDP Growth in the Durban Magisterial District

These trends are further reinforced by looking at disposable income for the inner city and surrounds (“Durban”) between 1999 and 2003. This has shown a considerable increase meaning that inner city dwellers and those in neighbouring areas have more money to spend on a variety of goods and services than they had previously. Clearly this has important ramifications for the inner city. It is also important to note that disposable income growth has been the highest in the black African category (although from a low level). This is significant, as the inner city has increasingly become a residential location of choice for black African people wanting to relocate from townships.

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Durban disposable income 99 & 03 (GI)

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Figure 28: Durban Disposable Income 1999/2003

The importance of reinforcing the links between the inner city and its neighbouring communities is reinforced in Figure 28, which illustrates the degree to which these areas present the regions greatest concentration of middle and upper income households. In fact the data for “Durban” is atypical in that it shows increasing proportions of households in higher income categories rather than a decline. This is clearly a legacy of apartheid with a massive concentration of wealth amongst white communities on the Berea, but is an opportunities as these areas change in profile and continue to present a major consumption market for the inner city.

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Household distribution by income level EM & Durban Mag 03 (GI)

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# ho

useh

olds

EM 03Durban 03

Figure 29: Household distribution by income level (Global Insight)

However, it is not all positive when it comes to the income figures. It is notable from an examination of the data that the number of households reporting very low levels of income have increased in the past five years. It is also notable that levels of inequality have increased presenting a threat of major social problems if social programmes are not stepped up and more distributional outcomes are not sought. Levels of poverty, while in absolute terms have been showing signs of decline remain a major problem needing urgent and sustained attention.

Poverty % Durban and EM 99 and 03

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%

Durban 2003

Durban 1999

EM 2003

EM 1999

Figure 30: Poverty Percentage in Durban and eThekwini Municipality 1999/2003

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What does this mean for the Inner City? • The inner city, taken together with its immediate neighbouring suburbs presents a

much stronger economic space than it does if artificially separated in data terms. Much effort needs to be put into reinforcing these links rather than facilitating disconnection in planning and investment terms.

• Levels of poverty and inequality remain at high levels. Evidence form other research has shown that the better the cities growth performance is the more likely they will attract more people seeking survival from their hinterlands and further afield. Comprehensive social programmes are needed which recognise that inner city as a major node in such delivery.

4.4 Employment, unemployment and the informal economy Dynamics of employment, unemployment and underemployment in the inner city need considerable attention. Earlier figures looked only at employment issues through the eyes of residents, but the inner city plays a role as an employment hub for the entire region. In this regard it is important to understand the dynamics driving employment and unemployment. It is also critical to understand informal economic activity as traditional forms of employment have in many cases evaporated resulting in the loss of formal jobs or the restructuring of formal employment into more informal and less secure relationships. Figure 31 below provides an indication of some limited employment growth in the inner city and surrounding suburbs area (“Durban”). The manufacturing data can largely be excluded, as it is a very limited aspect of inner city employment activity, but is it important in terms of linkages in the economy. For example loss of clothing manufacturing jobs has driven many women into informal employment. Most notable in these figures of formal employment are the indicators showing growth in service related employment, increasingly a key area of the inner city’s economy. Whilst in the Durban context many of these service jobs are in the lower paid and lower skilled levels, they do present a ray of hope. It is many of the people employed in these sectors that are now living in the inner city.

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Durban employment 99 & 03 (GI)

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Durban 1999Durban 2003

Figure 31: Durban Employment 1999/2003 (Global Insight)

A more detailed breakdown of employment growth for the inner city between 1999 and 2003 is presented below. Once again the services bias can be seen very clearly in growth sectors. Those areas with the fastest growth needed to be taken very seriously in any strategic planning process.

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Durban employment in selected sectors 99 & 03 (GI)

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

50 Construction

61 Wholesale and commission trade

62 Retail trade and repairs of goods

63 Sale and repairs of motor vehicles, sale of fuel

64 Hotels and restaurants

71 Land and Water transport

73 Air transport and transport supporting activities

75 Post and telecommunication

81 Finance and Insurance

84 Real estate activities

88 Other business activities

91 Public administration and defence activities

92 Education

93 Health and social work

99 Other service activities

Households

Durban 1999Durban 2003

Figure 32: Durban employment in selected sectors 1999/2003 (Global Insight)

However, formal employment growth has also been matched in this period by growth in unemployment as new people have entered the labour market at a rate that employment growth has not been able to absorb. The rates of unemployment for the region and for the areas including and in proximity to the inner city need considerable attention from policy makers as they show an economy unable to absorb up to a third of job seekers. Over and above this there are many who have given up finding work. The inner city feels the effects of this in both direct and indirect ways. High rates of unemployment can generate many social problems, which will also be presenting the inner city. The less the formal economy is able to absorb employment the more people will try to use the inner city as a platform to make a living through informal economic activity as it is attractive as a hub of activity and well supplied with infrastructure and services.

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Percentage unemployed 99 & 03 Durban and EM

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0%

Durban 2003

Durban 1999

EM 2003

EM 1999

Figure 33: Percentage unemployment in Durban and Ethekwini Municipality 1999/2003

It is widely accepted that informal economic activity is likely to be a permanent feature of South Africa’s economy due to ongoing major structural problems and trends in global economic processes. Research in eThekwini by Lund, Skinner and others reinforces this view. Those in the inner city involved in informal activity doe so for a range of reasons and often engage in a diverse range of activities to try and contribute to household income. For many migrants top the city or poorly skilled unemployed there is very little in terms of alternatives as even the low skill formal employment sector often requires a level of education or skill that many of the unemployed do not have. Figure 34 below taken from Skinner (2003) provides and indication of the origin of informal workers in the eThekwini region.

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Domestic worker 1.6%

Employee - informal

enterprise6.3%

Employee -formal

enterprise 21.5%

Unemployed47.5%

Self-employed agric 1.6%

Scholar or student 11.2%

Other previous work8.5%

Pensioner1.8%

Figure 34: Origin of informal economy workers

Many of these workers who subsist on the margins of the inner earn very little and make an attempt to minimize their accommodation and other expenses so as to be able to direct as much of their income to household needs. It is clear that some informal economy workers do earn income enabling them to access formal accommodation establishment in the inner city, but many would be reluctant to allocate the bulk of their incomes to such expenditure.

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Figure 35: Income profile of informal economy workers

The presence of growing numbers of informal economy workers in the inner city presents a major challenge for the inner city. Clearly this activity, whilst it will change over time, will not go away. The means that the inner city space set up in response to the needs of formal trade needs to be rethought and a much greater emphasis placed on public space and related

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Consolidated Document: 21 September 2005 amenities, as has been attempted in Warwick Avenue. This must respond to some of the issues raised by informal economy workers themselves.

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Figure 36: Key issues facing informal economy workers

In preparing this document particular attention has not been paid to various forms of so-called illegal informal activity. However, it should be noted that these are rife in Durban and thrive in areas with unstable resident populations and limited urban management. They also reflect a dearth of effective social programmes to support the most vulnerable. Often the mainstream media characterize the activity taking place as being orchestrated by elaborate organized crime syndicates. This is true in some cases, but ignores the reality of suffering and exploitation of those drawn into activities such as drugs and prostitution. Previous research has shown, supported by official statistics, that drugs and exploitation of women and children are on the increase and need consistent high level intervention activities. While these activities and more formal related activities (strip clubs, sex shops etc) might form part of and contribute to the inner city economy the reality of the experiences of those involved present major challenges from a human development perspective. Failure to address these issues and the related problems will undermine other activities.

What does this mean for the Inner City? • The regional economy is generating some jobs and these are in sectors in which the inner

has a relatively strong profile. • However, many of these jobs are less secure and relatively low paid (for example domestic

work as opposed to call center operators) and this presents a requirement for the inner city stakeholders to examine upgrading of skills and types of activity.

• Unemployment presents an ongoing challenge and the inner city needs to be supported to provide at least part of the solution in a metropolitan wide initiative to generate jobs.

• Informal economic activity is growing and diversifying and needs to be accommodated in any vision and action in the inner city.

• Illegal activities need to be confronted and forms of exploitation that underlie them need vigorous interventions to secure the livelihoods of the most vulnerable.

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Consolidated Document: 21 September 2005 5 Existing interventions The inner city has been the subject of considerable interventions and interest from an economic development point of view to date. This includes the widely acclaimed Warwick Triangle initiative, innovative street trader research and support ventures, tourism marketing and eventing, the construction of the ICC, the initiation of the iTRUMP programme itself and more recently the Point redevelopment project. These interventions have had a major impact whereby it could be said that the inner city, despite many of its problems, remains in a relatively sound state. However, it is clear that the place of the inner city in metropolitan-wide programmes remains in dispute. Rarely is the inner city’s potential to offer solutions to metropolitan wide problems articulated explicitly. This is true for both the IDP and emerging economic strategy work. Furthermore, existing and past initiatives have largely taken place in isolation from one another and have not been designed to yield impacts in neighbouring spaces. The focus on large investments and large initiatives has not been supplemented by a substantial increase in operating support to leverage the impact of such activities. Previous work in this regard by the iTRUMP team has not been sustained with the resultant effect that urban renewal initiatives have not been sustained at the level of processes and operating interventions seen as central in any set of sustainable activities. Private sector ventures such as Urban Improvement Precincts (UIPs) have also limited themselves to very basic interventions and have not been seen as a platform for building social capital for new co-operative ventures. Private sector investment projects have tended to reinforce an island mentality and not seen themselves as spatial catalysts in urban renewal processes. Sadly, partnership activities with other non-private sector stakeholders have not been sustained in many cases. Previously established partnerships and processes around participation such as those pioneered by Durban local government around street trading have also been largely superseded by new approaches which have raised widespread concerns amongst many stakeholders. It is clear that the policy adopted on the informal economy is not being implemented to a large degree and this raised some questions about a long term vision for an inner city as an inclusive environment. A key gap in the existing inner city experience is the lack of a vehicle and/or tool to impact directly on the property sector, which has been to be so important in other successful renewal initiatives the world over. Degraded inner city environments and those suffering negative perceptions often result in market failures arising, which further undermine the potential of an area. Failings in regulation and management, which provide a framework for markets to function also, contribute to these problems. For the city to be able to leverage its various interventions with direct property-related interventions (demolition, acquisition and redevelopment etc) would make a significant difference. However, despite these shortcomings there are a number of strengths to build on:

• The inner city does continue to capture attention and expenditure from local government and other authorities;

• A range of private sector groups continue to express a commitment to the space and its future;

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• Emerging economic development strategies do overlap with areas of major potential in the inner city (leisure/tourism, logistics, technology and services);6

• The ABM process is providing an opportunity to examine and test the level and degree of operating commitment;

• A core strategic capacity does exist to help drive a strategy.

6 Key issues that arise from the analysis (for inner city strategy) From the information presented and the analysis provided the following issues need key attention in the economic development strategy and spatial processes:

• Recent improvements in economic fundamentals have had a positive impact on the inner city but have also escalated challenges. A growing inner city economy will present challenges of increased pressure from migrants, exclusion of the poor and urban management problems.

• Thresholds of resources, infrastructure and access make the inner city an attractive environment for opportunity seeking urban dwellers and visitors and a place to eek out a livelihood for marginalised.

• The past failure to manage sprawl will continue to result in decentralisation of activities. In some cases this will be reinforced by the necessary development of facilities in township areas previously denuded of services and much formal commercial investment.

• Dynamics of urbanisation in a context of severe poverty and inequality will place greater, rather than less pressure on inner city environments over time.

• Economic restructuring in the metropolitan sphere, most notably seen in the development of a high order investment node in La Lucia/Umhlanga, has had very direct impacts on the role of the inner city in the metropolitan economy with a shift to greater services-based and back office activity and increased importance placed on skills and technology.

• Changing economic and social circumstances require new approaches to the management of space, activities and the built environment. Investment in new approaches to urban management, new physical spaces and new structures must accompany activities to re-orientate existing assets and services for other uses.

• Services based sectors that are showing some potential need to be reinforced and spaces in which they operate need to be aligned to their needs. The potential of the inner city resident population to add value to these activities must be facilitated. In some cases this will involve tradeoffs with potential exclusionary effects which would need to be carefully managed through improved and more focused social provision.

• Informal economic activity will continue to be a key form of survival activity in the inner city and a combination of development support and public space management and investment needs to be offered. The present lack of effective frameworks does little to improve the security of the informal economy operators and allows for new forms of exploitation to arise such as protection rackets.

6 At the time of preparing this report the Metropolitan Economic Development Strategy was going through a process of consultation and editing. The draft documents were a valuable resource in the preparation of this document and every effort will be made to align strategy aspects to be followed up in the strategy aspects of the project.

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• Major physical interventions need to be more effectively integrated with one another and with the inner city fabric. These attract considerable public and institutional attention which should not detract from interventions of a less public nature such as those focused on retaining and growing inner city businesses.

• Considerable effort needs to be made to step up institutional capabilities and resources to support the type of interventions that are implied in the analysis with a string focus on partnership formation, social capital development and specialist urban and economic development management. This is particularly relevant in a context of market failure and weaknesses apparent in other institutions such as business organizations or street trader bodies.

• Planning and regulatory frameworks have encouraged considerable decentralisation and enabled the formation of competing nodes of economic activity in areas peripheral to the inner city and resulted in substantial shifts in the users of the inner city and in the dynamics of investment.

• Inconsistent public sector urban management approaches have struggled to convert creative pilot responses into comprehensive programmes to deal with physical, social and environmental problems in the inner city thereby escalating crises of investment.

• Market failure and distortion inducing private sector activities have undermined confidence and investment in the inner city economic fabric.

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SECTION TWO

STRATEGIES AND PROJECTS

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7 What do we know about the desired conditions that people seek in the inner city?

Not all users have a shared sense of the desired conditions and in some instances such desired conditions from different stakeholders are in contradiction. The strategy framework does not seek to resolve all these contradictions as they form part and parcel of any urban renewal process, but it does attempt to propose ways in which potential negative aspects of contradictory activities can best be mitigated. At the broadest level the eThekwini Municipality is seeking to improve the quality of life of all its residents. The municipality identified the delivery of basic services and strengthening the economy, skills and technology as being the core foundations on which an improved quality of life can be ensured for all the citizens. Critical to note is that the eThekwini Municipality sees the Inner City as not just one of many places in which the conditions of residents and local businesses need to be improved, but also as being a central asset in achieving an improvement of the quality of life of all eThekwini’s residents. An example of this would be a requirement from a metropolitan perspective that the Inner City attract high yield foreign tourists with ramifications on the inner city in terms of increased investment, but also potentially the creation of limited access zones and displacement of the poor and marginalised in some precincts. A further example would be that the inner city absorb significant amounts of new lower-cost housing to ensure metropolitan-wide sustainability and urban efficiency with ramifications on existing residential and commercial nodes in the inner city and their character. In the parlance of contemporary planning key outcomes that have been identified for the inner city generally focus on the following:

• Improved economic growth and employment creation • Improved living and working conditions • Enhanced potential of the inner city to support long term sustainable development in

region as a whole Preconditions relevant to achieving these outcomes, that have been identified in various documents and stakeholder processes, include:

• Improving the productivity of the inner city as a place of exchange and production (people, goods, capital)

• Ensuring improved governance of the inner city and its processes • Facilitating greater inclusiveness of the poor and marginalised • Making choices based on sustainability rather than short-term effect

However, beyond these very broad and at times abstract statements it is essential to note that different inner city interest groups have some very specific expectations on the inner city environment. It is often at this level of detailed expectations that previous development

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Consolidated Document: 21 September 2005 processes have stumbled as translating broad concepts into meaningful place specific interventions brings to the fore trade offs required and contradictions that might seem less serious in abstract terms. However, there is also a remarkable degree of overlap. Whilst the process undertaken in this exercise did not involve extensive participatory elements of the key stakeholders some innovative tools were used to access some perspectives. These included accessing existing research material such as recent work done by Caroline Skinner on the informal economy in Durban and undertaking a series of workshops and interviews with formal businesses (mainly conducted by Gerry Delany and Claire Goodenough). In assessing the material the following points can be highlighted:

• Both formal and informal business identified the need for the basics of urban management to be dealt with, with a particular emphasis on ongoing concerns of “crime and grime” (much frustration was expressed by formal businesses, who despite access to communications technology could often not get any appropriate response from city departments on issues such as waste clearing, street light repairs, pavement repairs – as one respondent put it, “We get sent from pillar to pole (sic) – there is just no one interested in dealing with the day-to-day issues of average businesses”;

• Both formal and informal businesses see themselves as stakeholders in the inner city and express and interest and a commitment to the place and its future;

• Both formal and informal business recognise that some form of managed co-existence is essential in working towards future development objectives (with a few exceptions formal business did not express a desire that the inner city be rid of informal traders, but rather saw them as “part of the picture” and needing to be accommodated in more innovative ways than in poorly designed public space);

• Stakeholders have felt largely by-passed in city plans and projects – the larger the scale the less the involvement – despite the fact that such initiatives are often mooted as being in the interests of the private sector (participants also noted that there has been a decline in institutional participation processes in the last few years and that IDP-related forums tend to marginalise business-related issues).

Whilst it is often easy to gloss over differences, both groups of stakeholders identified a lack of lower order investment and management at the street and precinct level as constraining their access to markets. It was also recognised in the business process that vary little business-to-business interaction took place at this level and this could be enhanced with more effective interventions and facilitation. The eThekwini Municipalities Informal Economy Policy makes a similar point in relation to the need for the Municipality to play a role in building the capabilities of organisations working in the informal economy to enable future endeavours to get some institutional purchase and thereby promote sustainability.

8 The key actors and their leverage Some of the key actors and their possible points of leverage include the following:

• Government: Regulation, administration, urban management, land and property investment and taxation, political influence, legitimate facilitation, resources

• Private sector: Investment capital, knowledge, management, social capital

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• Residents: Investment capital, disposable income, labour/human capital, leisure time, social capital, creativity

• Visitors: Disposable income and leisure time • Informal economy workers: Social capital, investment capital

However, it is important to note that considerable constraints exist in many different ways on how effectively this leverage is exercised. For example a highly fragmented private sector would be unable to use social capital as a point of leverage or a government department with weak capacity in property related matters would be unable to utilise this effectively in strategic processes. In an environment where key actors are constrained it is important that any strategic framework identifies removing some of the constraints as a priority area of attention. In the inner city context this remains a matter requiring ongoing and sustained focus as institutional capacity and alignment remain a source of weakness. To date government interventions have focused largely on physical interventions and the process related and institutional aspects of development processes have been neglected.

9 Proposed points of strategic focus for Durban inner city economic development

Based on the analysis and feedback from stakeholders in the study process it is proposed that the following form the foundation of an inner city economic development strategy. At the outset it is critical that that two inter-related but distinct strategic thrusts be given equal attention. Effectively these thrusts are distinct in that the one has as its focus repositioning the inner city in mainstream economic processes whilst the other seeks to build a foundation for an improved quality of life for the marginalised inner city poor. Wherever possible these two thrusts need to be managed in an integrated manner to ensure they are mutually reinforcing rather than competing agendas. This is best done by setting criteria for interventions to meet that ensure there are direct and explicit activities within the scope of specific interventions that reinforce both thrusts and do not overly compromise one in an attempt to further the other. However, a note of caution should be sounded which recognises that all development processes do involve trade-offs of one sort or another and instances will arise in which for instance the displacement affects of a mainstream economic activity will compromise the position of the most marginalised or where the rights and needs of the marginalised will need to take precedence over market-oriented processes. In such instances mitigation measures must be given due consideration.7 The following graphic, taken from a UK Audit Commission document outlining European best practice on regeneration provide an indication of the integration between the issues of the marginalised and mainstream economic processes. Whilst is it obvious that the conditions that pertain in Durban are likely to very different from those in a developed country environment a case can be made that, at least conceptually, the graphic talks to challenges that many would find resonates with issues in the Durban inner city.

7 An example of this in day-to-day intervention terms could be where a drive to remove counterfeit goods from informal traders is seen to be important in enabling formal retailers to continue to operate profitably. In such an instance traders could be encouraged to hand over their stock to authorities in exchange for access to start-up capital and training for a different business.

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9.1 Strategic Thrust #1 – Repositioning the Inner City in Mainstream Economic Processes

• Reinforce the inner city’s potential to help drive growth sectors in the metropolitan economy

• Facilitate node-based partnerships in identified zones and build place identity

• Combine physical nodal upgrade and site redevelopment tools to intervene where property market failure undermines economic prospects

• Enhance labour market positioning (range of skills, absorption and productivity)

• Link spaces of opportunity

Evidence suggests that the repositioning of the inner city’s place in mainstream economic processes that has taken place to date has to a large degree seen a reduction in the economic influence of the inner city both in terms of types of activity and in terms of the scale of capital accumulation. In order for the inner city to live up to the needs of its residents and its users and metropolitan pressures for a more effective urban form it must seek to reposition itself to reinforce its centrality in generating growth and employment. In this regard it should be understood that the inner city plays both direct and indirect growth and employment roles in relation to the metropolitan scale challenges. Direct roles would be related to the fact that it is a significant hub of employment, a base for considerable numbers of private enterprises and public sector entities and the most important centre for a range of

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activities such as retail, leisure, entertainment and those related to culture. At an indirect level it would be important to recognise the role the inner city plays as an icon representing the city as a whole, its role as a place of exchange of goods, people and ideas and its place as a centre of service provision in an increasingly services-driven economy. In recognising that the inner city is a strategic site of action for attaining metropolitan wide goals it is important to be explicit as to the key roles that have been or could be envisaged for it on these terms. Particularly worth noting is the fact that the selection of the inner city, by the eThekwini Municipality, as the preferred site for a number of very significant public investment decisions certainly suggests that choices are being made to build the inner city as an explicit centre of strategic activity. The nature of these investments provides considerable direction from which the intent of public policy can be drawn and for pragmatic purposes this must be incorporated into a strategic framework. The following strategic positions attempt to encapsulate these roles and align them with emerging metropolitan-wide strategy on economic development. Whilst the metropolitan-local axis used to differentiate strategies is somewhat contrived it does allow for contradictions to be mitigated and opportunities to be reinforced in the form of interventions being proposed at different scales which have an explicit agenda of improving the physical, spatial and economic-relationship fabric between metropolitan-scale activities and local ones. In this regard it should be emphasised that the strategies at different scales must be given an equal measure of attention as failure to do so will severely undermine the sustainability of interventions. The relationship between the proposed strategies in this economic development framework and others being prepared with an emphasis on transport, housing and spatial elements also needs to be emphasised. This strategy cannot proceed alone without interventions in inner city fabric proposed in these other frameworks as they have been conceptualised as mutually reinforcing. Whilst at the level of day-to-day processes it is likely that contradictions might need to be worked through such trade-off choices need to be made with the principles of sustainability, good governance, inclusivity and productivity upper most in mind.8 In understanding trade-offs there should be a sense of the general context and not just the micro-level mechanical issues. In accepting trade-offs will be made it should also be noted that these are generally made much more possible should there be effective communication and if such communication is underpinned by trust that needs to be built through sustained participation and institutionalisation of partnerships with both formal business and informal economy operators. 9.1.1 Major Strategic Points of Focus 9.1.1.a Reinforce the inner city’s potential to help drive growth sectors in the

metropolitan economy Rationale: The inner city already does play an important metropolitan economic role. The IDP and SDF stress the fact that should the inner city fail to play an important economic hub role this will have detrimental impacts on metropolitan sustainability.

8 Whilst this might seem noble in the abstract it is often difficult to translate into effective action. However, by having a transparent set of principles to inform decision making the likelihood of improved outcomes is increased. For example, a proposal to limit access to the public to some sections of beachfront might at a superficial level reinforce the attractiveness for some segments of the tourism market but also deny local citizens the opportunity to enjoy unfettered leisure access. Should such a choice be deemed necessary to secure visitors some explicit and direct commitment would be required elsewhere to upgrade services and facilities to the general public.

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Consolidated Document: 21 September 2005 Criteria for sectors: Identified sectors of interventions must display either an existing level of importance at the metropolitan scale or should show some evidence of an emerging role. Analysis has shown that the inner city plays a critical role in terms of the following activities:

• Store of value and investment capital (National) o The inner city is a site of considerable historic (and present) infrastructure and

built environment investment. This makes it very important to those public and private entities that rely on the effective management of the space in that it plays the role of a store of value and income generator for their investments (rates are critical here).

• Centre of tourism and leisure (National and international)

o Durban is still South Africa’s domestic tourism hub and an important centre for international and business tourism. This role is reinforced by the ICC. The inner city is also a preferred location to host leisure, culture, sporting and other events and activities that in many cases (although erratically) place the inner city on the international map. The commitment of considerable public funds to the ICC expansion, the Point and the beachfront illustrate an attempt by the city to aggressively position itself as a domestic and international tourism hub. It is widely recognised that prolonging the stay of the existing visitor mix in Durban could yield significant gains in the shorter term whilst those efforts at raising numbers of visitors should be considered in the medium to longer term.

• Site of government administration and services (Regional and national)

o The inner city is host to a range of public services administrations and service centres. Its unrivalled infrastructure and location in a hub of available skills and supporting services enable it to play this role. Property experts estimate that the public sector (defined to include local government, parastatals and government agencies) are the largest single occupier of office space in the inner city. It is also suggested that after retail, public sector employment is the second largest category of inner city employment (with gross remuneration outstripping retail remuneration by some margin as public sector employment is generally full time and comes with benefits).

• Node of significant retail spending (Regional)

o Whilst the past decade has seen the inner city come under considerable threat from other nodes, it remains a major retail hub, sustained to a large degree by the volume of people using public transport that pass through it. Improved economic circumstances and increased disposable income has reinforced this role.

• Logistics management (National and international)

o Whilst the Port of Durban is a notable feature in the inner city, it is the location of many services providers in the logistics chain that offers much direct benefit to the inner city. These entities play a critical role in linking the city with the rest of the country and the globe and many have substantial international links.

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• Financial and legal services (Regional) o The inner city, whilst having lost some of its key commercial business drivers to

peripheral business park nodes remains an important hub of financial services and a centre of business processing for the financial sector.

• Education and training (Regional)

o In the last five years the considerable growth in private tertiary education establishments and increased public and private training expenditure has seen demand for locations for businesses offering services in this sector.

• Hub of creative industries, culture and entertainment (Regional and national)

o Durban’s role as a generator of creative industry expertise has largely gone unheralded, but is widely recognised by talent scouts from other major centres. Creative and entertainment industries are a growth sector both domestically and internationally and could be reinforced to considerable effect.

• Business Process Outsourcing and Offshoring (Regional, National and International)

o The flight of some of the inner city’s “anchor tenants” to La Lucia has resulted in the availability of a significant amount of office space. This office space is increasingly being taken up by the BPO&O sector, which has created 8000 jobs in the last 3 years. While the space exists for this sector to further establish itself, the sector is at a disadvantage due to the high costs of telecommunications infrastructure and services, although this is expected to ease as the effects of deregulation of the telecommunications sector filters through the market.

• Residential Support Services (Local)

o The inner city contains a significant residential component, which requires access to basic retail services such as grocery stores, bakeries, petrol stations, laundries etc. Residential support services are locally based and are accessed by their users on foot. The activity that these generate at street level can result in lower levels of crime and the development of more robust neighbourhood identities.

• A place with market thresholds to support new small businesses (Local, regional)

o Market thresholds and availability of infrastructure could allow for the development of new small businesses. These could be viewed as an important potential user of the inner city and be embraced in terms of innovative built environment re-development. Small business face many transactions costs in such an area which drives them away to less suitable locations – these are presented both by the public and private sector in the form of inflexible rental arrangements or various permiting requirements. Various incubation models (such as SmartXchange) could be considered for other sectors.

In each instance the ramifications inherent in the roles outlined above present both spatial and non-spatial or physical and more process oriented strategic challenges. In general terms the following points of departure need to be incorporated:

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• The linkage between these activities and metropolitan strategy needs to be reinforced and made explicit. In these terms the inner city needs to be seen as a crucial site in achieving metropolitan goals and should therefore be a recipient of resources and attention. Achieving goals in these sectors must be directly linked to achieving them, at least in part, in the inner city to ensure sustainable urban form.

• Emerging activities that offer considerable potential, but have not been recognised in

metropolitan strategy need to be placed on the agenda through evidence-based research and effective partnership processes with stakeholders in those sectors.

• The inner city stakeholders should participate in sector based processes and in some

cases drive them with a shared inner city/metropolitan brief. In order for the inner city institutions to effectively “harvest the externalities” from partnership processes around the nurturing of place-biased networks it is critical that some specialist capacity be built to contribute to knowledge formation in the processes and to absorb and disseminate such knowledge in other processes (for example planning and land use activities). Such capacity can only be sourced through effective public-private partnership vehicles or in partnership with NGOs, non-profit ventures and tertiary institutions.9 9.1.1.b Facilitate node-based (sector) partnerships in identified zones and build place

identity Rationale: Improving social capital through effective networking should promote the competitive resilience of role-players and facilitate creative collective responses to enhance sector-location dynamics Criteria for nodes: Must be of significance in commercial and investment terms either in scale or existing/potential uniqueness Criteria for sectors: Those showing existing or potential growth and displaying some competitive dynamics and linked to metropolitan priorities where appropriate Proposed node-sector matrix

Node Sector(s) ToolsInner City Core Beach areas (including Point)

Tourism, culture, entertainment, leisure/recreation (ocean sports related) – Safe, happening place … not just beach and bed Middle-to high end residential property development Retail (including specialist informal) – niche centres integrated with hotels

Process facilitation for place and sector related partnerships to inform: • Node branding and place identity

development • Physical upgrade • Enhanced urban management (crime,

grime and beyond) • Property interventions • Marketing • Public space enhancement

City Hall - Centrum Public sector administration and services - Tourism, culture, entertainment – KZN and

Process facilitation for place and sector related partnerships to inform:

9 Capacity at this level must offer tangible resources in terms of business processes and be able to operate to build social capital at a decision making level (eg facilitating the formation of a logistics and supply chain training institute offering programmes from basic to MBAs). This is distinct from the more local activities where capacity is centered around generic capabilities in terms of people being able to orchestrate collective agendas between disparate firms and public bodies around a set of very tangible micro-level activities (eg agreement on details of a street festival for Grey Street).

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Node Sector(s) Toolsone of Africa’s centre of arts and culture – galleries and hosting of sensational drama and music events Property

• Node branding and place identity development

• Physical upgrade • Enhanced urban management (crime,

grime and beyond) • Property interventions • Marketing • Incubation • Public space enhancement

Core CBD Retail Financial services BPO companies Property Motor retail and services Legal


development • Physical upgrade • Augmentation of telecommunications

infrastructure • Enhanced urban management (crime,


Embankment Middle-to high end residential property Maritime services Legal services Tourism, leisure, recreation, entertainment (extend brief of Vic Embankment team to Esplanade CBD properties)



grime and beyond) • Property interventions • Marketing • Incubation

CBD Field St - Broad Retail Property development Small service businesses Education and training




Kings Park. Northern beaches, Blue Lagoon

Sports, leisure and recreation (ocean and land) Process facilitation for place and sector related partnerships to inform: • Node branding and place identity


grime and beyond) • Property interventions • Marketing • Public space enhancement

Umgeni Rd Retail and wholesale (including informal Process facilitation for place and sector related

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Node Sector(s) Toolswholesale) partnerships to inform:

• Node branding • Physical upgrade • Enhanced urban management (crime,

grime and beyond) • Marketing

Warwick Ave Retail (formal and informal) Tourism, culture




Grey Street Retail Tourism, culture



grime and beyond) • Property interventions • Marketing

The activities outlined in this section (above) have a strong orientation towards improving a sense of place identity – both for local stakeholders and for those outside particular nodes. International and domestic experience (eg Newtown) has illustrated how important building place identity can be in creating an environment for sustainable development interventions and also encouraging social actors to work collectively without always placing the onus on the state. 9.1.1.c Combine physical nodal upgrade and site redevelopment tools to intervene

where property market failure undermines economic prospects Rationale: Market failure continues to beset many inner city nodes with the ramifications that public space upgrades yield slow leverage impacts in property re-development. Criteria for intervention: Identified node in strategy, public private or public public partnership in place to occupy re-developed asset. To date the City has had an ambiguous attitude to intervening in property development beyond public space (ICC, beachfront, Point, Warwick, West Street). However, evidence form around the world suggests that an active city role in taking a lead in re-developing certain properties is an essential element in building momentum to correct market failure. Despite some legal uncertainty, the likelihood of national government preventing such an approach is unlikely if undertaken in a transparent manner closely aligned with public sector objectives.

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9.1.1.d Enhance labour market positioning (range of skills, absorption and productivity)

Rationale: Literacy and skills development are increasingly key foundations to enable a region to set itself apart from others. Reinforcing the skills capabilities of inner city dwellers and making the inner city a hub for regional skills processes would provide reinforcement to the presently weak competitive platform. Criteria: Skills activities focused on the services (including government, tourism, business processes, tourism) sector and logistics/supply chain. Enhancements in human capital are recognised as being central to improving individuals and communities’ developmental prospects. There is also unambiguous research which shows that the economic prospects of a location are closely tied in with the level of human capital development. A programme focused on improving the skills base in the inner city could enhance the employment prospects of residents (in and out of the inner city) and make the location an attractive one for enterprises needing to access skills development services. Such skills programmes can also be of direct and meaningful benefit to those excluded from the formal economy. Opportunities also exist to offer those earning marginal incomes from informal activity the opportunity of participating in public works oriented activities where an training element is included. Urban management challenges in the inner city present a number of such opportunities. 9.1.1.e Link spaces of opportunity Analysis of the inner city and interaction with selected stakeholders in the strategy process identified two sets of key disconnections in the inner city from a spatial perspective. The first of these related to the key nodes in the inner city where there did not exist some key integrating elements improving access and interaction. The second related to the fact that the inner city seemed disconnected from the port and from the city bowl area, which both of them present major linkage opportunities. In dealing with these linkages it is important that attention be given to matters of marketing, transport, infrastructure, urban design, signage and management. 9.1.1.f Some further points In taking these strategic elements forward it is important that these are not seen as exclusionary or in contradiction to other strategic objectives. In fact, by recognising that the inner city is an important strategic economic hub requires that it also plays a growing and critical role from a social perspective. In a context of inequality and unsustainable urban form the inner city needs to be invested in to play a productive role as a place for people to live and survive. In this regard it would be critical to focus attention on sustaining and improving the inner city’s role as a major transport hub through the upgrading of major service nodes and building connections with these nodes and key sites in the inner city. It is also an imperative to upgrading the physical and non-physical connections between the designated inner city and the surrounding city bowl, which presents a major opportunity for integration through enabling employment and expenditure exchanges.10

10 Research has shown the city bowl area (Berea, Umbilo, Overport, Sydenham etc) is growing as a site of employment and hosts the bulk of metropolitan disposable income. A mutually beneficial relationship needs to be reinforced.

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Consolidated Document: 21 September 2005 Furthermore, it is essential that inner city roles related to housing be substantially reinforced. From an economic development perspective the proposed orientation of public policy towards greater social housing can significantly improve the store of value role of the inner city by boosting confidence, attracting families to the inner city, bring improved urban management necessary for sustainable high density housing development and allow for growing local market businesses. As the target market for such housing also has a relatively attractive skills profile the linkages are also important for inner city and city bowl businesses in this regard. However, such efforts must be matched with provision of other forms of social accommodation facilities to meet the need of the poor and excluded. Such developments must not overwhelm sensitive nodes of the inner city and must be matched with a level of supporting services. It is also important that housing initiatives allow for the development of housing units in higher income brackets and the retention of existing units in such brackets. A lack of income diversity in inner city housing stock is likely to undermine the economic and investment base of the inner city with consequent costs to the city. 9.1.2 Priority projects The following have been identified as priority projects to be considered in terms of an implementation plan. Some preliminary notes are provided on possible partnerships and where appropriate spatial priorities. Where possible the report authors have identified in bold and with grey background items that could benefit from immediate attention.

Strategic intent

Proposed project

Description Spatial implications

Implementation issues

9.1.1.a Reinforce the inner city’s potential to help drive key growth sectors in the metropolitan economy*

Sustain investment commitment to existing key node icon projects and upgrades AND work in partnership with tourism role players to develop a secondary attractions development plan and marketing strategy.

The municipality’s commitment to upgrading tourism zones can be seen in the very significant investment in the ICC, Point and in terms of beachfront development plans. This momentum must be sustained and enhanced with a growing focus on secondary attractions/nodes/activities to give a much needed depth to the inner city tourism experinece. Secondary attractions are a critical layer of assets and activities that enable a tourism node to provide a diversity of experiences to lengthen the stay of visitors and attract new niche markets. Durban suffers from short term visits and major investments need to be situated in a context of other activities in order for their investment value to be leveraged for broader benefit. These other activities have the benefit of offering opportunity to smaller scale entrepreneurs often sidelined in larger capital developments.

Activities to be concentrated in proximity to hotel precincts and cultural nodes precinct around the city hall (link with cultural/entertainment strategy)

If only a fraction of capital investment, eventing and marketing resources were redirected for this purpose it is likely to make sufficient resources available for a unit (see Beachfront partnership note project below) to support live music, short-term gallery exhibits, public/street performances, theatre, international DJs etc (through some hosting subsidies, collaborative marketing, safety management etc – link to cultural entertainment project).

Culture/entertainm The potential exists to develop and City Hall cultural A number of customer bases

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Strategic intent

Proposed project



ent – enhance quality, range and scale of offerings

support an almost continuous programme of activities in the City Hall and back of beach areas. The City Hall node could focus on more traditional forms (theatre, art, museums etc) whilst the back of beach projects could encourage investment in quality investments for a range of cultural/entertainment activity forms (for example having temporary galleries in warehouses along Point Rd or Hunter Street, exhibitions in unlet shops). The back of beach area could be considered as a location for a “red-light district” as has been mooted in other Council documents (see comment in implementation issue column)

precinct and back of beach entertainment district

need to be considered. In the first instance there is a large inner city population of young residents with a string sense of identity. Appropriately supported and managed events/activities attracting these sectors could also give visitors a sense that the inner city has a strong identity and make it a more appealing place to visit. Domestic and international visitors are also likely to be potential interest groups – who have differing wants and needs. Activities could also tap into the visiting/spending potential of visitors from the rest of Durban – in particular suburbs in close proximity. There is a need for the municipality to effectively deal with issues of security and social development in the precincts to make this a workable project in the inner city. Must have been tested and in place for 2010.

Public sector services and administration node – enhance co-operation and seek co-operative development opportunities

The public sector in its broadest sense (including local government) is the dominant occupier of inner city space and after retail employs the most number of people. Growing public investment and securing jobs from this sector has to be a key focus. Furthermore, the move towards integrated government services and improved citizen orientation could benefit from Durban facilitating a number of integrated customer service nodes at key transport hubs (Home Affairs, Social Security, Safety, municipal bill payment etc). The present fragmentation in location and suboptimal built forms make this very much a citizen unfriendly system. A process can be initiated with key public sector partners to examine the possibility of developing the Centrum site as a public sector services and administration node to accommodate evolving needs. to

Centrum node a possibility for development.

A level of commitment needs to be secured for a joint planning effort – focus should not only be on Centrum, but a range of other issues relating to the needs of various government departments and agencies. Examine potential to utilise common fibre-optic cable

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Strategic intent

Proposed project



the public service and citizens (eg more electronic systems, more citizen orientation in built form etc

Financial and Business services (including legal) development partnership

A number of significant tenants in these sectors remain in the inner city as do some key institutions. These are supported by a host of smaller firms and related services. A partnership could focus on the combination of common needs such as public realm improvement (esp safety), skills development, access to technology and winning customers back to the inner city. Major opportunities exist in terms of BPO activities.

Core CBD (Aliwal to Vic Embankment to Smith/West to Field)

A dedicated facilitator with credibility amongst the key roles players could begin a process with relevant roles players to agree on an agenda Work with KZN Onsource Examine potential to use common fibre optic cabling

Maritime services precinct – development of an area identity for greater port area with emphasis on zones of interface

Direct employment in the Port numbers in excess of 5000 people and port related activity employs in excess of 25 000 people. At least 50% of these additional jobs are located in the territory in immediate proximity to the port. In the inner city this includes freight forwarders, customs and clearing agents, integrated logistics operators, stevedore agencies and others.

Point, Shepstone, Victoria Embankment

A medium-longer term collaborative planning and development effort with the NPA is essential to develop synergies and resolve conflicts. Enhancing the maritime character of areas of the inner city offer a unique positioning opportunity.

Diversified retail experience circuit – marketing and identity enhancement (underpinned by effective urban management)

At present the inner city has a relatively fragmented retail environment. Whilst the fragmentation is to some degree along market segmentation some thought and action could go into the creation of an “Inner City Retail Experience” with the identification and enhancement of a number of distinct nodes (eg Grey Street, Warwick and Core CBD) and a venture to link these with branded transport (which could also involve the Wheel and Workshop as inner city malls) and appropriate signage, walkways etc.

Core CBD retail, Greater Grey St, Warwick Junction (and malls ?)

(see project about linkages between inner city and surrounding areas as well as place-identity partnerships note)

Education (see 6.1.d.)

9.1.1.b Facilitate node-based (sector) partnerships in

Partnership to enhance Beachfront and back of beach as

Enhanced UIP concept to include cooperative place marketing, small scale out of season beach eventing (not to compete with major

Partnership could also involve Provincial authorities Will be key to be in place for 2010

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Strategic intent

Proposed project



identified zones and build place identity*

tourism hub and place of (quality) entertainment

eventing), and ongoing programme of small scale cultural and entertainment activities (beach and back of beach)

Partnership Grey Street

City to work with independent facilitators to initiate task teams to look at: urban management UIP, marketing and cultural activity programme and heritage and urban design enhancement)

Provincial authorities have expressed interest in supporting an initiative

Warwick Triangle

Dedicated market development team in partnership with Business Partners (Victoria Mkt) to examine physical and management enhancements of trading spaces and markets and to host tours/visitors in a “living City” exhibition similar to Cato Manor and KwaMuhle experiences. Initiate joint retail / public services development feasibility in greater Berea Station precinct with SARCC and Business Partners.

This could include consideration being given to proposals in the Informal Economy Policy about the possible use of the MMD facilities.

Existing Core CBD UIP

Commission evaluation of UIP and feasibility report on enhancing its activities to incorporate active involvement of retail and office tenants in marketing and eventing processes (link to sectoral work in Retail, and Business and Financial Services)

Umgeni Corridor Initiate joint retail / public services development feasibility in greater Durban Station precinct with SARCC and Business Partners.

Links with Mansell NB

Use as platform to examine public transport, pavement and public realm improvement Option for link to social housing developments and short-term accommodation

9.1.1.c Combine physical nodal upgrade and site redevelopment tools to intervene where property market failure undermines economic prospects

Conduct feasibility report on the creation of Inner City Property Development Company

Discussions with other SA Cities reveal the importance of a dedicated property development vehicle to drive strategy (social and economic) through enabling the City to have the requisite influence on development outcomes (especially where market failure persists)

Initial activity should be in areas where there is a high level of other Council-related activity and partnership potential.

City could set up a team with dedicated Council mandates to “mimic” a PDC as a pilot.

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Strategic intent

Proposed project



9.1.1.d Enhance labour market positioning (range of skills, absorption and productivity)

Facilitate establishment of partnership forum between municipality, inner city employers and inner city education and training institutions – for improving local skills and improving the inner city as a competitive centre for people to seek training

The inner city has a relatively young population keen to upgrade skills. Often these residents have some employment and could benefit from skills to moves from low-end service jobs to more technically demanding forms of work. The range of educational institutions operating in the inner city could form the basis for a cluster-type network amongst providers to attract more learners and corporate interest.

Venues in close proximity to residential nodes (and taking account of existing concentrations)

Some public funds to be made available for initiatives that might arise from this such as developing a profile of existing skills and employer demand, examining options for evening classes etc. The development of an education precinct with shared facilities and improved public space for students could be considered. Could look at a skills plan for 2010 needs.

9.1.1.e Link spaces of opportunity

Develop effective public transport links with “City Bowl” to link into other strategies.

Work with MTA to secure 18hr (6am – 12pm) Thurs-Sat bus routes to link Berea directly with Inner City retail and beaches/hotels along key Berea corridors (Florida, Ridge, Musgrave/Essenwood, Sparks, Manning/Nicholson, Moore, Francois)

Could be linked with people mover for special events and weekends. Will be key for 2010.

* It has been proposed to the ITRUMP team that two funds be administered on a partnership basis with business stakeholders in the inner city – these funds will receive applications from node-based partnership endeavours and also fund strategic sector facilitation processes. A model similar to the KZN (EU) Gijima project is proposed. Proposals would need to meet an agreed set of criteria.

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Strategic Thrust #2 – Building a Foundation for Improved Economic Prospects for the Inner City Poor11

• Create opportunity within land use systems, regulatory approaches and management/development of public space for informal income generation activities

• Enhance capabilities of organisations working with the inner city urban poor and support social capital development

• Provide appropriate dedicated services to meet social needs of inner city poor

• Facilitate public works opportunities alongside processes aimed atenhancing employment conditions and skills

Poverty is important in the context of overall economic development. There are strong interrelationships between the performance of the mainstream economy and the economic activities undertaken by the poor. Furthermore, poverty issues cannot simply be wished away. The hope that benefits from economic growth will trickle down into the poverty economy is neither an effective nor a desirable poverty alleviation strategy. As the local government agency responsibly for the inner city, iTRUMP has an important role to play in poverty alleviation. This section attempts to develop a basic understanding of the poverty economy and unpack some of the dynamics of the interactions between the mainstream and poverty economy. In addition to the linkages with the performance of the mainstream economy, poverty alleviation activities are also important from other perspectives such as social cohesion and equality. Furthermore, high levels of poverty have also been correlated with high rates of crime and violence, and high levels of political instability. All of these phenomena have been shown to have an indirect impact on the performance of the mainstream economy. Whilst this section has as its focus the identification of economic-linked strategies focused on the inner city poor it should be emphasised that in many instances the most meaningful impacts on the poor of government interventions could be felt through various forms of social policy. The provision of access to housing and shelter, affordable transportation and health and education services are but some examples of this. It should also be noted that the orientation of this section towards various categories of the inner city poor does not mean that the city should neglect the wealth creation aspects outlined to some degree in the previous section. However, based on processes and analysis linked to

11 For the purposes of this exercise the inner city poor would include those households that have less than R2000 a month regular income. This figure is above the poverty line in use in other studies as costs of living in the inner city are higher than elsewhere. Earnings below this level make it very difficult for such households to secure appropriate housing and would generally mean that employment is relative unskilled and insecure. According to the 2001 census around 50% of formal households would fall into this category and the bulk of informal (those living on the streets or in un-official accommodation establishments) households. As census incomes information is poor it could be reliably said that in excess of one quarter of inner city households are poor with this figure rising closer to a third with inclusion of non-formal residents.

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Consolidated Document: 21 September 2005 this project it is strongly recommended that the city give some priority to an inclusive approach for the inner city poor in addition to the other interventions. 9.1.3 Major Strategic Points of Focus The following have been identified as key points of intervention within a broad framework that could be of relevance to the inner city poor (and supported by other recommendations forming part of the broader inner city strategic framework process: 9.1.3.a Create opportunity within land use systems, regulatory approaches and

management/development of public space for informal income generation activities

o These three elements are often combined in ways that exclude the poor. Durban, however, has some prime examples of where this has been the reverse in that the prime beneficiaries have been the poor. An example of this would be some of the initiatives in the Warwick Triangle area. It is important to note that in an environment of highly marketised space (such as the inner city) the flows of people and goods attract the poor to provide informal labour, as consumers and as survivalists living on the margins of transactions of such processes – but the marketised nature of the space allows little in terms of scope for the poor to be able to afford a formal presence as micro-enterprises or residents. In accepting the apartheid city was designed to exclude the poor considerable work needs to be done to redevelop key nodes for informal economy operatives and to legitimise certain existing spaces. Wherever possible consistency, transparency and security need to be emphasised as the lack of these conditions are likely to have greater impacts than they would have on other inner city stakeholders.

o Key interventions could include: Improving and extending the reach of market management; re-design of public space and a strong emphasis to creating new forms of public space with defined public trading opportunities; looking at options of localised and temporary/weekly markets; incorporating space for support institutions etc.

9.1.3.b Enhance capabilities of organisations working with the inner city urban poor

and support social capital development o Work needs to be done to improve and strengthen the layer of organisations that

represent and work with the inner city poor – from the most marginalised of street children to those entities seeking to enable individuals or households to improve their prospects. As with many other areas it is the poor whom are often not party to formal decision making processes and structures. As the reach of the state in this sector is often hampered by its bulky and often ambivalent institutional form relationships must be built with service providers that have greater access and legitimacy. From an economic development perspective supporting entities working with and organising micro-enterprises would be a prime example. The state in similar contexts has been shown to be able to play a meaningful role in terms of provision of premises, facilitation services and a consistent funding base tendered through reputable and established NGO partners.

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o Key interventions could include: Support framework for institutions and organisations working in the sector. Support needs to include those working at the welfare as well as at the developmental end of the scale.

9.1.3.c Provide appropriate dedicated services to meet social needs of inner city poor

o The provision of dedicated services for the inner city poor does take place, but its relationship to welfare often renders it a lower priority aspect in local government processes. Furthermore, the considerable fragmentation that exists between various services providers makes it difficult to ensure adequate levels of delivery. Government could work to make its offerings more user friendly and locate them in appropriate places. Policy should include extending the existing range of services to include offerings such as crèche facilities (considering the high proportion of women in the marginal economic sector and high risk sectors and the orientation of shorter term services and domestic employment to women).

o Key interventions could include: Formation of satellite service and advice offices, making available public premises for delivery of both state and non-state services and welfare in areas and areas with high levels of informal activity.

9.1.3.d Facilitate public works opportunities alongside processes aimed at enhancing

employment conditions and skills o A series of public works initiatives could provide an alternative source of

employment for some informal traders deemed to be operating at sites that might be inappropriate for clearly defined reasons. These interventions could be designed with an explicit objective of improving peoples employability and also simply as a form of income enhancement for a period of time to assist with adjusting to the loss of a trading opportunity (although these should be seen in the light of abovementioned initiatives to develop new public space opportunities).

9.1.4 Priority Projects

Strategic intent

Proposed project Description Spatial implications


9.1.3.a Create opportunity within land use systems, regulatory approaches and management/development of public space for informal income generation activities

New public space development and creative use of space for public space trading

The Apartheid city was not designed to accommodate significant public space trading and conflicts have arisen over public space use in recent times as informal trade has grown. Pressure on such space will continue to be a factor. Create solutions should be explored in priority nodes to open up new forms of public space for trading these could include specialised markets, temporary closure of streets for market day trading, expansion of pavement areas and resign, demolition of

Areas with public transport thresholds and proximate to residents must be given priority

Some model of area-based trader management associations for selected spaces could be considered (similar to the Muthi market example). Capacity building of street trader organisations would be required and a relationship of trust would need to be built. This approach could form the basis of a right-based approach. (Link to project 6.2.2.b.)

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Strategic intent



structures to make way for public open space for trading

Independent regulatory review of trading regulations and enforcement – similar to BPCC

The City’s approach to this issue has been somewhat consistent and has begin to diverge from a widely agreed and consulted policy. By entering into a transparent review process the city could move to a position of consensus and operate with a greater sense of legitimacy. In a context where trading pressure will grow and not diminish it is key to examine appropriate policies that have a foundation in recognising constitutional imperatives and the realities of urban management and governance.

Most areas within the inner city have a presenc or permanent or temporary trading.

The recent note of caution from the National Prosecuting Authority to municipalities about exercising care with by-law enforcement against traders in Durban and Johannesburg should be noted here.

9.1.3.b Enhance capabilities of organisations working with the inner city urban poor and support social capital development

Project to identify inner city organisations of the poor, NGOs and charity organisations and their development needs. To be followed by support programme to improve scope and scale of service delivery in priority sectors

Interventions of this sort could be look at in terms of homelessness, street children, drug abuse, support for refugees, trafficking of women and children, employment generation.

Ensure appropriate spatial coverage

(Link to project in 6.2.2.c.)

Initiate process to develop production, design and marketing support centre for pinafore manufacturers and traders in the inner city

It is estimated that in excess of 1000 people earn a living in the inner city from the sewing and trading of clothes – esp pinafores. An opportunity exists to gather relevant stakeholders together to support a process to enable diversification, quality improvement and improved market channels.

Area around Soldiers Way and Umgeni Rd could be considered

Could involve MERSETA, DIT, Business Support, Economic Development, KZN DED and other role players Could be linked to secondary tourism node development, but primary emphasis should be on sustainable market development (long distance buses and eThekwini commuters).

9.1.3.c Provide appropriate dedicated

Satellite service nodes to be rolled out with City Health and Social Services

These could provide some basic health care services, counselling for homeless, street kids, drug users and sex

Location in proximity to nodes with density of social challenges

(Link to project in 6.1.1.b) Potential to handle through NGOs on an agency basis

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Strategic intent



services to meet social needs of inner city poor

workers and general advice. Each centre could be linked to a community facility/venue which could be a location at which various activities are organised (eg support group meetings for refugees or play therapy for street children

9.1.3.d Facilitate public works opportunities alongside processes aimed at enhancing employment conditions and skills

Enter into agreement with Ethekwini PMU and Economic Development/ Business Support for a joint initiative to appoint manager to initiate and oversee inner city public works programmes in partnership with NGOs

A range of public works opportunities exist in the inner city which could improve income generation prospects for the inner city poor and marginalised. These could include tourism ambassadors, precinct cleaning, car guards, gardening, building refurbishment (from better buildings and social housing). Targeted groups could be inner city homeless (with a link to a shelter programme), street vendors being forced to move off undesignated sites in the present so-called “clean-up”, those living in doss-house type accommodation, people in rehabilitation programmes)

(Link to projects in 6.1.1d.) The EPWP was designed with economic projects in addition to social and basic needs. DTI were made responsible for developing programmes. The Municipality should consider building the capabilities and reinforcing the potential of NGOs to be service providers. Should be a relatively short term programme aimed to improve mobility, work experience and skills of participants. The potential exists to enable this programme to form the basis of extending participating in activities around the 2010 World Cup.

10 Conclusion

10.1 Activities that arise from the strategies The following graphic (UK Audit Commission) provides an outline of how a range of strategic interventions can contribute to improved economic circumstances. The strategy outlined above attempts to make explicit interventions in the four relevant areas of activity. However, considering the immediate past of activities in the inner city the bias of this document is towards more process orientated activities with a considerable emphasis on building partnerships and facilitation of collective action by key stakeholders.

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Figure 37: Core Interlocking Elements of a Possible Strategy

The table which follows the graphic seeks to identify the types of roles that could be played – not just by local government it should be noted – in taking the strategy forward. In the activity matrix priority is given to those categories of activity that are most essential to get off the ground.

Activity category Mainstream economy

repositioning

Improved economic prospects for inner

city poor Public space management (crime, grime, proactive activity planning) 1 1 Administration and regulation 2 2 Physical upgrades (urban design, maintenance) 2 2 Property re-development 1 2 Labour market 1 1 Process facilitation 1 1 Business development 2 1 Information provision 1 1 Market development (Including marketing) 1 2 Institutional development 1 1 Service upgrading/extension 2 1

Table 6: Prioritisation of Roles by Strategic Focus

10.2 What does this mean for iTRUMP and eThekwini Economic Development/Business Support

• There is a need for space-dedicated agents to work up node programmes, supported by

defined budgets and by general sectoral initiatives from Economic Development/Business Support

• The agents are best sourced from business (although this is not always the case) and some form of secondment arrangement could be worked out in partnership with the business sector

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• iTRUMP itself needs to move onto a strategic partnership footing • An active property development function is required in the framework of a public-

private partnership (beyond the major projects) • Capital funds need a matching commitment in operational terms • iTRUMP needs to build a developmental capability to work with informal economy

operators – at a sectoral level and in spatial terms • iTRUMP should explore a partnership with the Municipality’s Public Works project

unit to pilot a series of initiatives • iTRUMP and its partners could gain substantially from initiating an annual survey of

inner city users • Operating funds in partnership with Economic Development Unit should be made

available on application by stakeholders in identified priority nodes to initiate activities that could build local social capital and where necessary enhance operation of UIPs or other partnership forms (the operation of the KZN Gijima project could provide some pointers as to how best this could be done)

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Bibliography Bouillon, A.., 2000: Durban: Towards a City Without Citizens; Urban Futures Conference, Johannesburg. Berry, A., and Papanek, G.F., 2004: Pro-Poor Growth: A Guide to Policies and Programmes; USAID, Washington DC City of Johannesburg, 2005: Human Development Strategy; City of Johannesburg, Johannesburg. Davies, A., 1998; Arresting Decline in Urban Areas; The OECD Observer, No 210, pp 8-12. Durban Investment Promotion Agency, Undated: Doing Business in Durban; DIPA, Durban. eThekwini Municipality, 2004: Integrated Development Plan 2004; eThekwini Municipality. Grant Thornton, 2004: eThekwini Hotel Development Prospectus – Phase 1: Executive Summary; eThekwini Municipality. Grest, J., 2000: Urban Citizenship and Legitimate Governance: The Case of the Greater Warwick Avenue and Grey Street Urban Renewal Project, Durban; Urban Futures Conference, Johannesburg. Istanbul+5, undated :Urban Indicators Toolkit; Istanbul+5. Iyer Rothaug Collaborative, 2001: Durban Central Business District Office Concept Plan; Durban. Lund F & Skinner C, 2004, “Integrating the informal economy in urban planning and governance”, in International Development Planning Review 26 (4) Mitial Research, 2002; South Africa 2002/3: Call Centre Country Report; Trade and Investment South Africa. Monitor Group, 2000: Durban at the Crossroads: The Monitor Report; Durban Unicity. Morris, A., 1999: Bleakness and Light: Inner City Transition in Hillbrow, Johannesburg; Wits University Press, Johannesburg. Paladin Consulting, 2004: Research Study into the BPO/CC Industry in South Africa: Summary of Secondary Research; Department of Trade and Industry. Parnell S, 2004, “Constructing a developmental nation – the challenge of including the poor in the post apartheid city”, unpublished conference paper, October 2004 hosted by UNDP, HSRC and DBSA

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Consolidated Document: 21 September 2005 Porter, M.E., 1995: The Competitive Advantage of the Inner City; Harvard Business Review, May-June, pp. 55-71. Rakodi, C. (ed), 2002: Urban Livelihoods: A People Centred Approach to Reducing Poverty; Earthscan Publications Limited, London. Robbins, G., 2002: Sustainable Development Strategies for Port Cities in the Globalisation of the Economy: Some Insights from Durban, South Africa; 8th Conference Internationale des Villes Portuaires, October 2002. Robinson, P., McCarthy, J, and Forster, C., (eds) 2004: Urban Reconstruction in the Developing World: Learning through International Best Practice; Heinemann Publishers, Sandown. SACN, 2004, State of the Cities Report, www.sacities.net Skinner C, 2005, “Constraints to growth and employment in Durban: Evidence from the informal economy:, SDS UKZN, Research Report No 65 Staley, S.R., Husock. H., Bobb, D.J., Burnett, H.S., Creasy, L., and Hudson, W., 2001: Giving a Leg Up to Bootstrap Entrepreneurship: Expanding Economic Opportunity in America’s Urban Centers; Urban Futures Program. Stats SA, 1996 : Population Census; Government of South Africa Stats SA, 2001 : Population Census; Government of South Africa Thale, T., 2004: City Positions Itself as Leading Call Centre Hub; http://www.joburg.org.za/2004/sep/sep16_call.stm Tourism KwaZulu-Natal, 2004: The Nature and Extent of KwaZulu-Natal’s Foreign Tourism Market: January to March 2004; Tourism KwaZulu-Natal Occasional Paper No. 22. Tourism KwaZulu-Natal, 2005: Early Indicators of the Performance of the KwaZulu-Natal Tourism Market over the Christmas/New Year Holiday Period 2004/2005; Tourism KwaZulu-Natal Occasional Paper No. 26. Unsworth, S., 2001: Understanding Pro-Poor Change: A Discussion Note; Department for International Development, London. Urban-Econ, 2003: iTRUMP Economic Profile: A Window on the Economy of iTRUMP; Durban.

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http://www.sacities.net/

http://www.joburg.org.za/2004/sep/sep16_call.stm


Appendix 1: PAICE Report

Appendix 1: Participatory Appraisal of the Inner City Economy The Participatory Appraisal of the Inner City Economy (PAICE) was conducted in May and June 2005 in order to obtain an up to date business perspective on the economic conditions in the inner city. It forms part of Status Quo Report: Durban Inner City Economic Environment prepared for iTRUMP by Glen Robbins and Tim Hadingham The appraisal focussed on the following iTRUMP precincts: - Umgeni Corridor - Beachfront - CBD - The Grey St complex spanning the CBD and Warwick Junction precincts. Process The views of key informants were obtained either by individual interview or in participative mini-workshops. In both cases the sequence of questions covered: - the nature of the business - its unique features - customers - suppliers - advantages and disadvantages of current location - what the current location would be like in five year. It had originally been intended that most of the work would be done in mini-workshops which would be supplemented where necessary by a limited number of individual interviews. The mini-workshops were undoubtedly productive, but even with the help of the Durban Chamber of Commerce and Industry actually of getting people to attend them in the first place involved a disproportionate amount of time and effort. As a result the emphasis shifted entirely to individual interviews in the latter stages. Results While business locations throughout the inner city have many features in common, each precinct has its own particular blend of advantages and disadvantages and these can vary quite dramatically from one block to the next. However before looking at them at precinct level it is worth recalling some of the factors influencing business choices about where to locate. Setting aside specific locational advantages related to, say, mining or tourism the most influential factors seem to be much the same whether one is choosing a country, a region or an inner city block. The top four according to the Multilateral Investment Guarantee Agency (MIGA) are as follows: - access to customers (77%)

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Consolidated Document: 21 September 2005 - social & political stability (64%) - ease of doing business (54%) - reliability & quality of infrastructure & utilities (50%) The experience of the SDI Investment Centre in uMhlathuze is much the same and as Michael Porter points out in The Competitive Advantages of the Inner City it is not about social benefits and artificial inducements but whatever makes business sense. Umgeni Corridor This is home to an eclectic mix of enterprises ranging from large retail chains like Game and Furniture City to a cluster of informal traders serving commuters around Durban Station. The motor trade is particularly well represented with large dealers, specialist and quick-fit workshops and a variety of used car dealers. There are large and small clothing and textile firms and some modestly sized food producers. There is a small, but growing, cluster of architects and engineers in and around the refurbished Lion Match factory. Within a short distance one can arrange a funeral or an insurance policy, acquire a house or a boat, buy a surf-board, concrete pump, bunny chow or smoked ham. In general they seemed to be doing fairly well but the ones doing best also happen to be the ones with the fewest reasons to stay in the area. • Most firms are there because it gives easy access to customers – for some this means

pedestrian traffic near the station and taxi ranks, others draw customers from Morningside and Durban North, still others go to customers in various parts of the city and can reach most places fairly quickly from the Umgeni Corridor.

• Several saw advantages in being easy for their customers to find either because they had

been in the same place for a long time or were in a landmark building like the Lion Match factory.

• Customer access is much less important for businesses serving a national or regional

market and several of these are located in the area because suitable, reasonably priced accommodation was available when they needed it. They could easily move elsewhere simply because they needed larger or smaller premises.

• There are advantages for some businesses, such as the cluster of professional firms, in

being close to existing and potential partners. • There were conflicting views on the subject of parking. In some areas it is readily

available, in others it is a distinct problem and providing customer parking increases the cost of doing business.

• Opinion on the environment also diverged; some feel it is a pleasant place to be and

appreciate the “well established” buildings, others feel it is run down and neglected.

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Consolidated Document: 21 September 2005 • It is well served by public transport from the townships and thus easy for staff to get to

work. On the other hand it is much more difficult for those relying on public transport from the city centre or suburbs.

Most placed more emphasis on the disadvantages than the advantages and a couple of the larger firms are contemplating moving out of the area altogether, • Top of the list of disadvantages was crime, particularly hi-jacking, armed robbery and taxi

violence. The degree to which this is seems as a problem varies. Umgeni Road is seen as dangerous compared to Stamford Hill Road while firms in the well protected Lion Match factory complex have few concerns about crime.

• Strong feelings were expressed about the Municipality’s failure to enforce bylaws, e.g., to

control street trading or the mess made taxi operators, street mechanics or vagrants. Equally disliked was its inconsistent application of them, and there seem to be one set of rules for the formal sector and another, if any, for informal business. So, for example, a business owner would not be allowed have a sandwich board outside the door of his premises yet street traders could obstruct the pavement just a short distance away.

• Traffic was frequently mentioned as a disadvantage and this was not only about

congestion and poorly synchronised traffic lights but also about the way drivers behave - speeding, reckless driving, buses and taxis stopping in any lane to discharge passengers. Again this was laid at the door of the Municipality which is seen as unwilling or unable to enforce traffic regulations.

• Some firms believe they have lost or are losing customers who are reluctant to come to the

area not only because of crime but also because of congested and unruly traffic. This, they feel, is aggravated by dilapidated buildings and the unkempt, run down appearance of the area, particularly at the CBD end. Even where this is not a particular issue the image of the area can be a handicap and some of the professional firms have lingering worries about the impression an Umgeni Road address makes on their clients.

Looking to the future it was expected that the Corridor would upgrade at the Goble Rd end but would probably continue to deteriorate towards the city centre. Participants sought more interaction with the Municipality, always provided this was two-way. They particularly looked for feedback on the outcome of the current exercise but noted that nothing had come of development plans the Municipality had presented some years ago. Grey St Complex Although a number of family businesses have barely changed in style and appearance for two or three generations, some quite fundamental changes are taking place in this unique, historic and still fairly close-knit community. It is perhaps the only part of the inner city that could still be described as a community – and that may not be so for much longer.

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Consolidated Document: 21 September 2005 The traditional small outfitting and tailoring businesses continue to dominate the area and cater for a local pedestrian market. There are a few small consumer electronics outlets and some wholesale operations supplying both regional and national customers. Just a couple of years ago the outfitters relied almost entirely on local supplies but these have been largely displaced by imports, particularly of clothing from China. Manufacturers like Kingsgate Clothing have been hard hit and in the process of retrenching large numbers of people during the PAICE exercise. Meanwhile Chinese run importers and distributors are popping up in places like Short St and Foundry Lane. • Despite present difficulties local business people still feel that the main advantage of the

Grey St area is its heritage and history. The fact that it is a community and that people still live there keeps many from moving.

• The volume of pedestrian traffic is also very important as most businesses relay on passing

trade. • Other advantages are the central location and ease of access from different parts of the

city, the existence of specialised businesses and the variety offered by what was described as an “open air mall”.

• Crime topped the list of disadvantages of doing business in the area. This generally meant

shoplifting, picking of pockets and theft from cars but a recent murder in the area had raised worries about violent crime. There were strong feelings about the lack of visible policing which not everyone feels is entirely caused by a manpower shortage.

• As important was the impact of uncontrolled street-trading. Business owners are not

opposed to street-trading per se but to the fact that it is uncontrolled and not catered for in planning and policy for the area. As a result pavements are overcrowded and dirty, dealers in illegal cell phones and jewellery operate freely and makeshift stalls affect the . the overall appearance of the street.

• Traffic related issues were not far behind on the list of disadvantages with concerns about

the volume of vehicular traffic and a street plan ill-suited to the needs of a long established economic corridor. Parking is a problem in much of the area. There are too many taxi ranks and they are poorly controlled.

• For many businesses crime, unregulated street trading and traffic are the reasons their

traditional customers, of all races, no longer come to town. It has seriously undermined the tourism potential of the area and to remain in business means competing in the mass market against low cost chains on one hand and street traders on the other.

Participants were generally pessimistic about the future - but also angry and frustrated. Much of this anger was directed at the Municipality which they feel has no interest in the area or vision for its development and that its planning and decision making had been “unsystematic” to say the least. Conceding that meetings and workshops have taken place, they said nothing had come of them and that the Municipality had done nothing to help promote tourism or trade.

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Consolidated Document: 21 September 2005 They seek the support of the Municipality in a partnership that involves local people in decision making in order to rejuvenate the area, make is safe for business and shoppers and maximise its tourism potential in time for 2010. If matters continue as they are and nothing is done they foresee further decay, decline and business closures. Meanwhile as long established family firms struggle to survive and don’t always make enough to pay the rent, newcomers from South Africa and elsewhere are able to outbid them and take over their premises. The process of change seems to be well under way. CBD: Financial and Legal There are several “sub-precincts” within the CBD of which the West St retail sector and the financial and legal cluster on Smith St are arguably the most important, but while West St business is booming, Smith St is undergoing a period of transition and uncertainty. Mergers and acquisitions have resulted in fewer and larger financial institutions and they have outgrown downtown offices designed a generation or more ago. ABSA is addressing the problem by modernising and expanding their existing building, but across the street Standard Bank is preparing to consolidate its regional head office operations in new, more efficient, low rise buildings in Kingsmead. At least two other banks are contemplating similar options. If they decide to relocate it will weaken the incentive to remain in the CBD for a number of legal firms. • A CBD address has a number of advantages for a law firm. It is within easy walking

distance of the High Court and is close to financial institutions, the post office and SARS. Advocates’ chambers, other attorneys, the Law Library and Docex are all clustering in and around The Marine.

• For both legal and financial firms a central location means easier access for staff,

especially those relying on public transport. At the same time a number of people complained about traffic congestion and “lawlessness” on the roads in the CBD.

• The advantages for a bank are less obvious than they used to be. Many of their corporate

clients have moved out of the CBD and technology has altered the way they do business anyway. Banking halls and branches will remain and even expand but there is no longer much to tie head office operations to the CBD.

• In the minds of staff, the disadvantages outweigh the advantages. This seems particularly

so in the case of female staff of all race groups some of whom are quite vehement in their dislike of working in the city. Indeed one law firm said it was getting more difficult to recruit good secretarial staff as a result

• Their main concern is crime ranging from bag-snatching to mugging and car hijacking

which, in one very recent incident, left the victim badly injured. One bank reported an average of one incident a month and it now discourages staff from leaving the building

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during the day. Other firms say female staff are afraid to leave the offices at lunchtime and no longer do any shopping in the CBD. Many people are reluctant to stay and work after normal office hours.

• Male employees seem less concerned and at least one Smith St law firm says the crime

situation has improved noticeably. Either way, they agree that because people believe the CBD is dangerous, many of their clients are unwilling to come to town, especially when they also have to contend with traffic congestion, battle to find parking and are harassed by vagrants and street children on the walk to the office.

The net result, particularly for the law firms, has been a substantial reduction in their private client practice. Going to the client or opening a satellite office offers a partial solution but it also increases costs and adds to the pressure to relocate.

• Matters are not helped by the dirt and congestion created by uncontrolled street traders

who, some believe, also make a contribution to crime. However there seemed little enthusiasm for the recent Municipal crackdown on street-trading. People were sceptical about whether it would be sustained and disapproved of he way it has been conducted feeling that alternative sites should have been found instead of simply chasing traders off the street.

In the meantime, lawyers are starting to drive instead of walking to court and say they could just as easily do so from offices outside the CBD.

• One large law firm is increasingly uncomfortable with the impression made on its clients

by the state of buildings in the area and the fact that it becomes a “hookers’ paradise” after hours. Another lawyer said that a number of downtown office buildings had changed hands and that the new owners had cut down on services and maintenance. As occupancy declined their building became dirtier and the air-conditioning, escalators and lifts were breaking down more frequently. They were moving out shortly and if it was up to him they would leave the CBD altogether

There is a view that it is already too late to stop most of the remaining financial institutions from moving their main offices out of the CBD leaving only a branch operation behind. If that is the case then many of the law firms will surely follow. It there is any possibility of encouraging them all to stay it must lie in a closer and more balanced partnership between business and local government. While being open to this idea, business representatives felt it would also be necessary for the Municipality to take a less inflexible and more creative and responsive approach to problems than it had in the past. CBD: Retail Happily the picture for the West St retailers is much more cheerful. In fact business is booming around the Gardiner St to Field St section. Long established firms and relative newcomers are all experiencing a significant increase in sales and are looking for additional ground floor space or contemplating opening new branches. The upsurge in sales from city

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centre stores is not unique to Durban and similar increases have been reported from Johannesburg and Cape Town. Unfortunately it is not matched by an increase in the occupancy rates of offices in the floors above. These remain low and the upkeep of some buildings is compromised as a result. • Access to a very busy pedestrian market is the main advantage of a West St address for a

retail outlet. Shoppers are said to be attracted by “the appeal of West St and the general vibe”. Typically they are black, aged 25-35 and increasingly accompanied by the family. This coupled with an increase in Sunday shopping is an indicator of growth in the number of inner city residents, according to some retailers. There also appears to be an increase in the number of students.

• It also points towards a real or perceived reduction in crime – one would not expect people

to bring families into what they consider a dangerous environment. Store managers have had to strengthen security measure to deal with breaks-ins but feel that while pickpockets and shoplifters remain a problem, violent crime has decreased. However a recent shoot-out at a large furniture store has caused some concern.

• There were complaints of poor police visibility and lack of foot patrols.12 UIP security

personnel were also criticised for not being very visible and for a “lack of knowledge” in that they could see nothing odd in the fact that a retailer’s house brand of shirts was being for only R20 by street traders just a short distance away.

• Uncontrolled street trading was high on the list of disadvantages. Street traders clog

pavements, block loading zones and are seen as playing a part in crime. They detract from the appearance and appeal of the area but what was advocated was their regulation, not their removal.

• They are also seen as the source of much of the litter problem which apart from being

unsightly is blocking storm-water drains and causing an infestation of rats. • The number of unoccupied and poorly maintained buildings in the area also creates a bad

impression but could bring a variety of benefits if converted to residential accommodation. • Unregulated traffic is seen as a chronic problem. Poorly synchronised traffic lights, lane

swapping, jaywalking, unskilled and aggressive, double and triple parking driving all contribute to the regular gridlock. There is a need for designated taxi stops like the ones for Mynah buses.

• It was claimed that bylaws are enforced erratically, if at all. Previously not very visible,

Metro Police are said to have swung to the other extreme in the current “clean up”

12 Immediately after an interview at which such a comment was made an SAPS foot patrol was encountered within metres of the store entrance!

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campaign. Businesses have had fines for parking in their designated loading zone for more than 30 minutes or while waiting for an unauthorised vehicle to move out of it.

• A shortage of convenient parking is a major disadvantage for more prosperous customers

who add to the congestion by circling the block looking for a space. • There is also a shortage of public toilets and both men and women simply use the street at

present. Arcades are used as toilets as well as places to prepare food. • One sided reports in the media of marches and protests have been contributed to the

negative image of West St. They are invariably peaceful but reporters do not seem to check on their impact with people on the spot.

In short the prevailing attitude might be described as one of seems to be one of qualified optimism. West St seems to have reinvented itself successfully although some problems remain. One retailer felt there was even a danger of becoming too successful and that recent progress could be undone by trying to crowd too many people and businesses into the area. Beachfront The section of beachfront between the Point developments and the Sun Coast Casino is experiencing mixed fortunes. On one hand beachfront hotels reported a very good festive season but smaller businesses like those on Lower Marine Parade have lost business to Sun Coast and uShaka while deriving little benefit from the December crowds and being unable to open at all on peak days. • The main advantage for any beachfront business is quite clearly the beach. It remains a

prime holiday destination for the inland domestic market. International tour groups help to maintain satisfactory off-peak occupancies in the beachfront hotels.

• Smaller businesses benefit by their proximity to the large hotels. An important

contribution to their market is also made by local residents and by walkers, joggers and cyclists. Breakfasts form a higher proportions of day-time sales in the beachfront outlets than in equivalent businesses elsewhere but night-time trade has declined sharply in recent years.

• July rather than December has become peak season for the smaller businesses. Events

such as Ocean Action attract people to the beachfront, but even though the crowds are much smaller than in December, they are far more inclined to buy refreshments at a beachfront outlet instead of bringing everything with them.

• The number of Muslim family groups enjoying the beachfront during weekends has

increased substantially and create niche market opportunities for businesses able to satisfy religious norms.

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Consolidated Document: 21 September 2005 • Crime is a major disadvantage and attacks on tourists reached record levels in November

2004. Tourism safety measures over the festive season were highly effective in containing crime but were withdrawn when the season came to a close whereupon muggings, theft from cars and bag-snatching immediately resumed. There is a strongly held view that these measures and the way they were managed should be continued throughout they year, even if on a reduced scale.

• International tourists seem particularly vulnerable. A group of hotels employs private

security patrols and gives a map to visitors showing “recommended routes” for walking and jogging. As these are confined to the beachfront in the immediate vicinity of the hotels they create the impression that the rest of the city is a dangerous “no-go” area.

• While crime is undoubtedly a problem, especially at night, the image of the beachfront is

even worse than the reality. People have become afraid to go there at all and have their fears reinforced by a steady flow of bad news stories in the media. There is a need for a campaign to address this and for additional events to attract people to the beach.

• Business people are not unsympathetic about the plight of the many vagrants and street

children in the area, but they have a negative effect on business because they harass and even intimidate visitors and make the already poor image of the beachfront even worse. In the view of business they represent a social problem that needs to be solved properly and not simply by periodic clean up operations during high profile events.

• In peak season parking is a problem while road closures and access restrictions make life

difficult for the smaller businesses in particular. Large and small businesses agree that the beachfront has a great deal of unrealised potential. While generally positive about the Sun Coast and uShaka developments many feel that the “Golden Mile” itself has been neglected. They seem enthusiastic about the “people mover” initiative but also argue for less restrictive bylaws that would allow, for example, the sale of food and drink on parts of the beach as is the practice in many tourist destinations. “It’s not about palm trees” As can be seen from the following table, the issues raised by business people in each are have a lot in common. Business priorities are also consistent with the MIGA survey factors listed at the beginning of this appendix. Access to customers/markets was by far the most common reason given for being in a particular location. In turn the most frequently identified disadvantages were the ones inhibiting customers, e.g., crime or parking.

Issues raised by business

Um

geni

Gre

y S

t

CB

D F

in

CB

D R

et

Bea

ch

Crime Poor image Street traders

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Vagrants, street-kids Bylaw inconsistency Cleanliness Congestion Seasonal Parking

Time and again people spoke of the need for visible policing to control crime. In most cases they meant patrolling on foot or perhaps by bicycle. Almost as often they spoke of the need to regulate (as opposed to remove) street traders and to address the problem of vagrants and street-children in a constructive way. They see the provision of improved parking or toilet facilities as potential opportunities for the disadvantaged rather than an additional burden on the Municipality. They want to see the streets kept clean, the traffic regulated and flowing smoothly. “It’s not about palm trees” they said, repeatedly. Although there was very little reference to the big projects beloved of politicians and the media, there were some suggestions along those lines. There certainly was support for the idea of converting existing underutilised inner city buildings into residential accommodation13 - but not on a piecemeal basis. In fact it was proposed that a public private partnership should set the standard by redeveloping an entire block with retail and service outlets at street level, apartments on the floors above and with provision for churches, schools and security. There were several approving references to the “people mover” proposals and beachfront businesses would dearly like to see direct international flights to the city. It was suggested that although some government departments will relocate to Pietermaritzburg, it makes more sense for others, like Economic Development, to remain in Durban. The development of the Centrum site as a government office complex could encourage them to do so. It could also accommodate the High Court which is not at all happy with the present building. A combination of offices, retail and residential accommodation could make this a highly desirable location and revitalise the surrounding areas. The continued decline of “motor-town” at the end of West St was seen as inevitable and it was felt that prompt action was necessary to prevent the are becoming a sources of crime and social problems which would be difficult to eradicate. In keeping with the need to invest in education and skills it was proposed that the area be redeveloped as the fully residential city campus of a new or existing tertiary institution. Where might the money for all this come from? Businesses large and small are willing to play a part in solving the problems of the inner city. It is in their interests to do. It could include direct investment or helping to find project finance nationally or internationally. However a great many spoke of the need for improved communication and genuine partnership between the Municipality and the business community. Until there is some sense of shared priorities and greater understanding of each others’ concerns it will be difficult to make real progress.

13 It was suggested that much could be learned from the example of Tshwane where Jeffrey Wapnick of City Property has been the driving force behind many of the successful conversions in the city centre.

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Appendix 2: Notes on Precincts Economic Dynamics/Issues by precinct and possible responses Umgeni Estuary General descriptionHighly sensitive zone which could offer some limited potential for enhancement of cities green spaces. Key issues/responses needing attentionPossible development of eco assests and related low scale tourism development. Gold course could possibly be a site for a smaller scale hotel without compromising public access. Greater Kings Park General descriptionA major asset in an environment of growing international focus and commercial development related to sport. Considerable space exists for new development to enhance the public amenity aspect of the zone and to provide worldclass sporting facilities. Key issues/responses needing attentionPoor integration and lack of effective management of the full zone presents a fragmented asset to the outside world and alienates local users. Umgeni Corridor General description The core focus of this precinct has to be its role as a major public transport corridor with three important modes dominating (rail, bus and taxi). It serves as a major entry and transport mode/route change point to hundreds of thousands of people every week from the greater Durban area and beyond. Apart from its transport infrastructure (regional rail station, main road, taxi ranks, long distance bus stop) it is also a thriving commercial retail and services corridor with businesses and service providers (including gov) taking advantage of the public transport thresholds. The corridor also has some light industrial activities and some residential property (although much of this has converted to business use, whilst some light industrial and commercial has converted to informal accommodation). The commercial activities in the area range from substantial chains such as Game and some of the furniture retailers to numerous independent retailers, fast food businesses, taverns and a strong informal trade and informal production processes. The area also provides a range of employment types and is proximate to the ever-shifting service requirements of the Berea commercial and residential sectors (for example people working in restaurants on the northern Berea often have accommodation in this corridor or in the Sydenham area. The rapid development and growth of the Umgeni Business Park and the continued thriving of North Coast Road, further reinforced by the new link to Riverhorse Valley and KwaMashu makes this a zone of critical economic importance and some considerable investment interest (note the recent conversion of the Lion Match Factory area). Key issues/responses needing attention

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Consolidated Document: 21 September 2005 Umgeni Station – this site is vastly underutilised and the uses it has recently encouraged are not necessarily optimal in the medium term to the role the corridor could play (i.e. Mr Price HQ). This facility should be a centrepiece asset servicing commuters and inner city residents in terms of their commercial, service and entertainment needs in addition to fulfilling a role as an inter-modal facility (both as entry point to inner city and as change over point for trips elsewhere. A comprehensive redesign of the facility, its connections with the Mansell Rd facility and the northern Kings Park precinct must be considered to enable the corridor to leverage benefit and provide service to the commuters, existing residents and potential residents. The facility must also be seen in terms of a role it could play in terms of comments below on accommodation. Accommodation – in terms of the corridor approach the Umgeni corridors would meet some criteria and fail in particular due to the almost complete lack of high density accommodation along its route. This is a legacy of apartheid and is being reversed in a limited form through informal use conversion. This area lends itself to a major housing and short term accommodation programme accompanies by all the amenities and management that would make it work (in particular pedestrian links - perhaps through a station mall) to parkland/sports and recreation facilities in the Kings Park area. The area could also become one of the points of accommodation absorption required to deal with present issues in the back of beach area. Commerce, light industry and retail – The corridor has considerable existing commercial activity, although changing use dynamics in some areas have seen an informal shift to residential, that continues to thrive and offer returns to investors from small businesses to large chains. Improved and focused land use management (also required due to housing/accommodation needs) could enable ongoing investment supported by considerable improvements to the public space, and road and pavement interfaces which are sub-optimal to say the least. Some sub-precinct theming and related management could go someway to improving opportunity. A much stronger government services profile could benefit the area. Transport/pedestrian management – As mentioned above the corridor is of major importance from a transport perspective and should also be send in terms of commuter needs and leverage potential. Key problems include management of flow/stopping of taxis and busses, connections with rail, physical barriers between north and south sides of Umgeni rd, pavement management and holding/service nodes for transport providers. Beachfront General descriptionThe beachfront a quite fragmented and is quite different from zone to zone. The area is relatively well managed and presents considerable opportunities. Key issues/responses needing attentionUrban management Diversify activities – the beach is not enough. Tourists are wanting access to retail, leisure, cultural and entertainment activities. The back of beach zone could assist in this as well as some release of sites for development in conjuction with hotels Link hotels to beach more effectively Safety and security at all times

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Consolidated Document: 21 September 2005 Warwick Junction General descriptionA major economic node related to trading activities (formal and informal) and transport services. The area, despite considerable attention could do with significant ongoing development support in physical and management terms. Grey Street node presents rare culturally unique node in inner city characterized by modernist interventions of the 60s and 70s and the effects of apartheid. Key issues/responses needing attentionPublic space and amenity Support and services to users and informal economy operators Specialist interventions around Grey Street offer an opportunity to revive a commercial zone and attract visitors. Victoria Embankment General descriptionThe area has avoided some of the worst effects of the inner city property slump. Residential and commercial office demand remains strong. Key issues/responses needing attentionThe area needs to be thought of in integrated terms with the harbour front zones. A range of interventions could improve the maritime profile of the area. CBD General description The precinct referred to as the CBD is best thought of in terms of a number of sub precincts. Each of these deserves some comment. The sub-precincts can be thought of in terms of existing character or potential character. In the descriptive section they will be considered in terms of existing character whilst in the issues section they will be recast in terms of potential. Centrum, Workshop, Soldiers Way, Old Fort and Ordinance Rd – This area has been the focus of considerable attention for some time as it is dominated by the large, essentially vacant, Centrum site and has often been viewed as having possibilities for a range of developments. It is bounded by a range of uses that have very little direct connection with another and little articulation with the site itself. The area has considerable potential to serve as a node around which to structure a coherent development plan for this section of the inner city but has never attracted decision making in any effective manner. ICC – The ICC Durban has been an icon in the post apartheid area for Durban’s inner city. The original location decision made in relation to the facility requires that it be dealt with on its own as it does not interface in any meaningful way with any surrounding space. The ICC, and perhaps even more so in its expanded form, bring many visitors to the City and in particular to the inner city (no Sandton Convention Centre here!). It has played a key role in initially stabilizing and recently contributing to improvements in Durban’s tourism market share. However, as an urban development catalyst is could be seen as a failure (apart from boosting values of a few private sector property and land parcels), both in choices made about its design and in terms of supporting investment in surrounding areas. Rethinking the facility, its surrounding spaces and its connection to other key precincts is an imperative.

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Consolidated Document: 21 September 2005 Motor town (Ordinance to Winder) – This space is not necessarily accurately characterised as “motor town” as it is relatively mixed use in its character. However, a dominant commercial activity is that related to the sale and repair of motor vehicles and related motor vehicle accessories. These initially took advantage of cheaper land and benefited form agglomeration effects and passive clustering whereby the area could benefit from inter-firm linkages and consumers could benefit from proximity of competing firms and services providers. The area also has a number of residential establishments and a range of other business enterprises. It is coming under increasing pressure as inner city populations grow and as processes of decentralization leave motor-related premises vacant and lower value businesses replace them (eg a used car dealer replacing an OEM dealership). The area proximity to the tourist node and the ICC, its position as a physical area between the core CBD and the tourism areas and relatively low quality of build structures in many blocks makes it ideal for redevelopment considerations. This is aided by the fact that it is not, yet, encumbered by major social issues. For residents in the area the lack of amenity must be a major issue that would result in accommodation shifting towards lower-income, short term facilities vs more stable medium term family-type accommodation. Core higher end commercial office precinct (including Embankment) – This area, despite a period of considerable flux in tenants for offices and retail, has continued to play a role as a major node of business and government services location. This is supported by a some high-end, credit-based retail focused on office workers, but is increasingly making way for lower-end risk credit and cash businesses that draw their customer base form commuters. The zone has lost a number of major large tenants to other nodes in the region and many buildings have struggled to recover occupancies from large corporate clients. Today corporate location decisions are often short-term and change on a regular basis. They are very sensitive to the need for purpose built facilities in locations that they feel represent their corporate identity. Hence it is small scale business and service ventures that have remained or located into the area and those such as law, maritime and government support businesses that are bound into a CBD presence by the nature of their business. Key issues include the age and quality of property stock, safety of workers and customers, unmanaged informal trade and perceptions of the location as being one in decline and in a poor condition. Ad hoc initiatives such as the West St upgrade and the BID have made a difference in ensuring that the area has some appeal to possible occupants and to their customers. However, the area lacks some sense of identity and differentiation and has lost its corporate focus which reinforced other activities in the area in the past. It is likely that the next few years will see further corporate relocations and withdrawal of high end retail chains without a concerted and focused effort. Core lower end office and retail precinct – This precinct is distinct from its eastern neighbour in that the focus of retail is very much on commuters and to some degree inner city residents and the office space that exists is under considerable pressure from changing uses and low demand. Values have fallen to record lows, rentals rarely cover building maintenance costs (with the exception of retail) and structures are coming under pressure. Some areas of the zone are doing better than others for a variety of reasons but the pressure of poorly managed public transport, a complete lack of management of street trading, escalating crime and incompatible building uses are increasing the pressure on the zone. Hence the west/smith street furniture cluster has shifted eastwards and traditional Grey Street business are being replaced by new, lower cost retail entrants whose proprietors do not contribute to enhancing the historically and

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Consolidated Document: 21 September 2005 culturally framed social capital of the area. The zone does have some residential capacity – both formal and informal and has considerable potential to be considered for a mix of residential should capital be available to re-develop entire blocks to provide for amenity (schools, parks, public space, social services) and not just individual stand-alone facilities. Key issues/responses needing attentionCentrum (Sizwe Plaza) – Apart from the beachfront areas, the inner city has few significant public space assets. Those that do exist rarely reinforce the character of the surrounding land uses. The centrum site and its surrounds offers an unsurpassed potential to develop a grand plaza as the focal point for the predominantly public sector uses and meeting spaces that surround it. As a key access points to a number of areas in the inner city it has the advantage of being well located for vehicle and pedestrian access in close proximity to major public transport nodes. The plaza-type space could be thought of in conjunction with a zone from the City Hall and its government buildings to the Old Fort Rd municipal complex. The key role of making government services and departments accessible is one which requires co-operation between all parties and could yield a significant regeneration programme. One could envisage departments using space in the plaza to host public services exhibitions, getting corporates to donate sculptures and themed markets that could be a tourist drawcard on different days of the week. ICC and entertainment/culture district – The ICC needs to be bound in with its inner city location through explicit regeneration activities in its surrounds and through direct linkages with key areas such as the beachfront and inner city facilities such as tourism info offices and museums. The development of the area to the east of the ICC has long been though of as having considerable potential in terms of entertainment and cultural facilities and has – compared to the rest of the inner city – some interest buildings that would serve to enhance such a status. New Town family residential with amenity – The existing motor-town is rapidly changing and the under-utilisation of inner city space presents a major opportunity for the development, at scale of new inner city housing opportunities in conjunction with careful amenity planning and development. Greater Maritime Precinct (high end office, waterfront, high end residential) – The existing core commercial district of the inner city reflects in its orientation a influence of the low value that was placed on maritime property in the post war era. Not only do a number of inner city businesses retain a key link with the port and its activities, but the potential maritime orientation offers a limited window of differentiation that could contribute to limiting relocations and in the medium term attract new tenants into the inner city. Point General descriptionThe area has been the subject of considerable public sector investment commitment and has begun to attract private sector investment in a much neglected area of the inner city. The potential of the area to attract investment is considerable. An inner city needs zones and spaces that meet more discreet market needs and the Point area offers this. Key issues/responses needing attention

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Consolidated Document: 21 September 2005 The failure to work to integrate the Point with surrounding areas presents a major problem for the development itself and surrounding nodes. This could threaten the project sustainability and needs considerable attention.

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Appendix 3: Discussion note on the Inner City Purpose of the note This has been prepared to encourage my own thoughts and discussion on conceptual issues as they relate to the development challenges and opportunities of the Durban Inner City with specific reference to economic and socio-economic matters. Introduction The development of a strategic framework for eThekwini Municipality to respond to economic development issues specific to the Inner City of Durban requires the following steps:

A clear sense of outcomes for the region as a whole that the Inner City is expected to contribute to (macro)

A clear sense of outcomes that stakeholders (direct) of the Inner City expect the Inner City to contribute towards their objectives (micro)

An unambiguous assessment of present strengths and weaknesses as well as prospects moving forward in relation to the above outcomes/results

Due to the fact that the Municipality has already engaged in participatory planning activities at a micro and macro level – detailed in part in the eThekwini Municipality Integrated Development Plan (2003) – the focus of the intended process will, in the first instance, be the verification of perspectives from these planning processes and seek to make explicit ideas and assumptions that might be obscured or poorly defined. This will be followed by an analysis of present conditions and likely trends in the Inner City from which the “competitive advantage” of the Inner City will be assessed in relation to its capacity to deliver on expectations will be examined and various intervention strategies assessed. The document will make the case, based on a preliminary assessment, that assumptions regularly made about the Inner City’s strategic potential at a metropolitan scale are somewhat over stated and further that shortcomings in addressing needs of priority stakeholder communities (or mis-identification of priority stakeholder communities) require some considerable reorientation of existing effort. What role is the Inner City expected to play in meeting metropolitan (macro) scale (economic) objectives? It should be said upfront that strategic planning frameworks such as the IDP and SDF are somewhat ambivalent about the role of the Durban Inner City in attaining the macro scale objectives identified as the focus of these documents. Whilst the significance of the Inner City space is reinforced in a number of contexts, this does not always translate into explicit proposals on the centrality (or otherwise) of the Inner City in strategies to attain the objectives. The often assumed “exceptionalism” of the Inner City space is therefore not particularly supported by official policy, rather the Inner City is reflected as only one a of a number of areas that carry with them metropolitan scale significance. This is reinforced at the level of political leadership the Inner City is often viewed as an area of existing relative advantage and therefore requiring less institutional and resource attention than apartheid-created townships which are home to much higher proportions of the regions residents and suffering the effects of decades of under-investment and mismanagement. These perspectives are reflected in order to

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Consolidated Document: 21 September 2005 introduce a note of caution which guards against unsubstantiated assumptions being made in the planning process under way at present. Recognition that the significance attributed to the Inner City in technical, emotional or media terms is not always matched by strategic and political endorsement should inform both planning and implementation agendas. However, despite this somewhat loose treatment of the strategic potential of the Inner City in meeting metro-wide strategic objectives there are some areas in which it is profiled (drawing on the framework of the “Eight Point Plan” from eThekwini’s 2003 IDP). These are outlined below and are supplemented with some postulated roles. This relevance of the Inner City to metro-wide strategic imperatives is important as if it offers little specific and evidenced-based advantages relative to other spaces in the region it is difficult to make claims for attention and resources on the basis of some metro-wide strategic relevance. Under such circumstances Inner City development strategies would need to focus on meet much more localised challenges and exploiting opportunities at a more micro level. Creating sustainable growth and job creation

The Inner City is home to the largest concentration of formal employment in the region and a significant base for informal economy operators.

The Inner City remains a highly significant place of commercial trade and exchange that, despite considerable competition from other nodes, continues to dominate a number of market segments.

Regenerating existing residential areas to ensure a high quality of life for all citizens

The Inner City does not features as of major strategic importance in relation to immediate and longer term residential provision plans (although some indirect reference is made to concerns of unsustainable low-cost housing delivery in peripheral areas).

The Inner City is a centre of much of the provision of private and public services (from healthcare to banking, from legal to UIF claims) and its role in overall quality of life is of some significance.

Balancing new development with renewal and maintenance

Once again there is no explicit reference made to the Inner City, although the key strategic tool that the administration identifies to achieve this goal, the SDF, is seen to contribute to matters of sustainability, urban efficiency and related maximisation of use of areas of existing investment and services to the benefit of all.

Mainstreaming responses to crime, HIV/AIDS and poverty alleviation

There appears to be no particular focus on this aspects in terms of the IDP. Focusing and integrating city delivery

As the ABM programme, of which the Inner City forms part, is seen as the primary thrust of this intended focus area it is clear that there is some expectation for the Inner City to be a place of innovation and creativity as regards public service delivery.

Developing a financial strategy which balances developmental expenditure with a strategy to grow income

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This objective speaks to the need for sustainable financial management of the Municipality. The IDP states, “the focus should also be on business-related expenditure to stimulate the regeneration of the Central Business District, South Durban Basin and Beachfront, which collectively account for approximately 75% of all rates.” (IDP, 2003: p 13)

Ensuring local government is more accessible and accountable

This objective refers to governance intentions and reflects a need for both improved quality of services and improved political and administrative responsiveness to citizens. As the inner city is the “seat” of local government and base for a range of national and provincial government department headquarters it plays both a symbolic and functional role.

Maintaining the ecological integrity of the city

The thrust of this objective as it is documented in the IDP is on improved recognition and management of the regions natural resource base and the services that are rendered by it. Whilst this presents some points of relevance to the inner city – for instance in terms of the benefits of a clean ocean for recreation and tourism, and a well functional estuary system for the harbour – it is overly functional and does not necessarily speak to an agenda of environmental issues that would be relevant in a direct manner in the inner city.

Beyond these “official” categories it is also important to recognise that the Inner City offers the potential or does already play an important role at a metropolitan scale in the following manner:

A hub/centre of service provision – Durban’s inner city is the de facto centre of service provision for a range of the provinces public services, the official centre of service provision for the eThekwini Municipality and a hub of service provision for many private sector bodies (insurance companies, banks, legal firms etc).

A place of formal and informal employment and economic activity – perhaps only the port and south Durban industrial zones can compete with the inner city in terms of its employment and business activity importance. This status feeds on itself as can be witnessed in the importance of the inner city as a place in which people active in the informal economy seek to make a living. However, despite economic decline, the area continues to have a very significant status as a place of formal business and employment too.

Seat of local government – as the home to the City Hall the inner city is the seat of metropolitan local government which is important in both symbolic and governance terms.

Icon – as the symbol of the KZN provinces urban core and a very significant tourism icon (not without its problems) the inner city is a recognised symbol of the city and the broader region.

Point of transport exchange – the inner city region is host to the most significant freight and passenger cargo inter-modal exchanges, dominated by the port, rail links, and public and private passenger transportation systems. Activities here have not only metropolitan scale impacts (think of how problems at Warwick junction can result in

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congestion city-wide) they also have a national impact because of the Port’s status as the country’s most significant container port.

A meeting place – the inner continued to command a role as a formal and informal meeting place, a status significantly enhanced by the ICC, but not limited to it.

Entertainment – the inner city presents the region’s most diverse entertainment activities and has infrastructure for such which other areas would struggle to compete with.

Visitor accommodation and experiences – the inner city is host to the bulk of metropolitan visitor accommodation and the combination of cultural, historical, leisure and entertainment assets rank it as a highly significant, if not the most significant, urban tourism zone in the Province.

Beyond these “positive” roles of metropolitan significance it is also important to note that the inner city is the hub of activity, in some instances, for some of the more socially damaging aspects of urban centres. These would include:

A headquarters of the drug trade; The region’s most significant centre of concentration of homeless people; A priority region for serious and violent crimes as well as for syndicate criminal

activities and petty crime; Host to some of the most dilapidated and poorly maintained buildings; A centre of the exploitation of women through the unregulated sex trade; A place of exclusion for people to poor to access basic necessities; An area not particularly well suited to family life (in terms of quality schooling,

adequate day care facilities, safe transport and safe streets and parkland). From the examination of official perspectives on the potential role of the inner city to contribute to meeting metropolitan needs and a recognition of the roles of significance it already plays it would be important for the inner city to be able to make an evidence-based claim to be of critical significance to the region in confronting some of the following challenges:

Economic growth Employment Quality, diverse urban environments (safety, aesthetics, service levels) Efficiency and sustainability Housing

However, care should also be exercised in not viewing the inner city in overly instrumental terms – i.e. that its potential importance derives exclusively from a capacity to deliver on policy outcomes of metropolitan significance. Following this path is likely to lead to excessively narrow and functionalist (perhaps even reductionist) perspectives on the role of the city in the broader urban context. In this regard it would be important to move beyond technocratic notions and conceptions in planning work for the inner city and seek to embrace more ethereal or intangible and socially constructed frameworks. For example, in this sense understanding the inner city as a place of alienation for some and a place of vibrant community life for others would need to be infused into planning frameworks. Some analysts or urban life have called for urban development and management to be founded on an ethic of care with a recognition that different development conceptions are as much about an approach to values as they are about the nuts and bolts of everyday choices.

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Consolidated Document: 21 September 2005 The following section seeks to balance a tendency by policy makers to offer specific places as potential instruments to meet wider social, political and economic goals by tapping into issues and expectations of the direct stakeholders of the inner city (in all their diversity). It is critical that the voices of these role players, some more influential than others, are also incorporated as more often than not it is these stakeholders who are ultimately called upon to make things happen or sustain various types of interventions. What role do direct stakeholders expect the Inner City to play? Who are the most important direct stakeholders and what are their expressed needs? Residents

Homeless: Shelter, support services, protection of basic rights Just passing through (Young, mobile students and first-time employees): cheap and

well located place to stay Bling and Bang set: Make a living of urban thresholds and urban chaos – often illegally

seek opportunities to capitalise on instability of urban population and social problems Ballies (retired folk): safe and peaceful urban environment in close proximility to

social, leisure, retail and health facilities Young professionals: starters home (flats) for buppies on the way up – safe

environment with crèches, quality urban space and well located services Discount kings (mostly formal business owners living in the city): minimal regulation

and safe environment within which to trade Threshold dependents: live of informal activity and minimise urban costs

Business (formal)

Corporates: competitive priced quality office environment with good access for workers at all hours

Retail (Chains): threshold of salaried shoppers buying on credit Retail (indep): flows of large numbers of people with mix of cash and credit purchases Professional services (eg lawyers): Proximity to key installations/facilities (eg court),

proximity to one another and high quality safe environment Institutions

Local government: seat of local government institutions and location of bureaucracy, seek to improve organisational integration, proximity and minimise costs

Provincial government: office facilities of sufficient size to host operations divisions National government: office facilities of sufficient size to host operations divisions Judicial: safe and well managed environment Health: access for patients and attractiveness to a limited supply of professionals Educational: Safe environment with supporting amenity (eg parks) Culture: Safe, well managed and themed precincts with market support – a hub of

entertainment and culture Visitors

Domestic tourists: reasonably priced accommodation in safe locations with a variety of accessible activities

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Foreign tourists: high quality beachfront accommodation with managed space and safe environment to explore cultural, entertainment and other aspects

Regional day-trippers: Safe facilities for retail and leisure Service seekers

Pay the bill, get healthcare, fill in the form, go to the library (well located, well managed and accessible facilities open a reasonable times)

Specialised: customers of professional services: place to park and safe environment Social: pensions, grants and other forms of social support

Shoppers

Bus trippers: long distance travellers seeking safe place to trade, rest and have access to ablution and rest facilities

Mode changers: passing from one mode to another and picking up some shopping on the way

Self drive: now almost entirely restricted to CBD workers who drive to work and those visiting cluster of furniture stores or wholesalers

Urban poor

Street children: safe place to hangout and limited interference with support when needed

Mental illness: effective support systems Homeless adults: temporary accommodation and social support Informal traders: safe places from which to trade in high threshold zones

Entrepreneurs

Innovative use of space and opportunity needing quick decisions and supportive and safe environment

NGOs

Well located and safe environment in close proximity to services and support base Property owners

Institutional: low risk, medium return with well managed environment to reinforce asset and brand status

Private commercial: return on investment, reasonable service costs, safe and well managed environment

Residential: protection of investment asset value Ecology

Optimum use of space and resources in a manner which does not result in destruction of bio-diversity

Reclaiming and rehabilitation of space for ecologically sound use Management of impacts

Objective trends From data …

Massive demographic shift – with all the consequences of this (unstable etc)

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Escalating urban chaos Decline in built environment quality Competing regional spaces Relative decline in cash turnover Low educational attainment (but high in macro context)

From trend assessment – eg new technology

From location is everything to location does not matter to location must be leveraged Integrated retail and entertainment experience Reclaim the night Quality (public) space Dedicated and themed zones

What is Inner City’s comparative/competitive advantage (and for whom is this advantage in favour of) Which of the roles expected of it could it realistically and successfully live up to and under what terms? What it does not offer

Easy investment Development space (physical and market) Safe and easy to negotiate REAL proximity 24/7/365 Lower operating costs Added infrastructure value Aesthetic Value adding icon Complex agglomeration effects (active) Something unique (eg museum, library, out of the ordinary)

What it does offer

Threshold window An attractive space to a growing mkt segment (young black employed people) Proximity to former users with emotional connection (city bowl – Berea) Agglomeration effects (simple, passive?)

What it could offer with a bit of work

New development space (housing, commercial) New public space New activity space (business, retail, entertainment) Coherent service centre role Icon status

What does this mean for a sense of comparative and competitive advantage and for whom?

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Consolidated Document: 21 September 2005 A reading of the Durban inner city environment could leave one with the sense that there are a handful of at times tenuous comparative advantages (buildings, infrastructure, accessibility, beaches, major transport node generating thresholds), but very few competitive advantages that are immediately apparent. This is true not only from a commercial/business perspective, but also from a social perspective. In this context areas of potential need to be identified and sustained effort needs to be undertaken to nurture competitive advantages. It is also worth noting that the inner city does not in many instances offer more immediate competitive opportunities to politicians seeking to maximise impacts on relevant constituencies. In this regard, the case that exists for attention on the inner city to be justified needs to be regularly reinforced – after all why focus so much on the inner city when INK has over 1m residents and many of them living in much worse conditions than those in the inner city. In this context, making the inner city work (according to its oft feted potential) for the other residents and business owners in Durban – outside the inner city – is critical. To be able to secure this type of sustained engagement by decision makers and potential users of the inner city needs an offering which accords with peoples needs as well as their aspirations. In this regard comparative advantages are not that much use – for example saying the inner city has a comparative advantage of attracting people because it is the hub of many government services can quite easily evaporate as government departments and agencies can be notoriously fickle when it comes to accommodation and location and often set a poor precedent when it comes to location matters. A similar case can be made for transport access as a comparative advantage which often translates into an advantage for some, but not necessarily for many of the targeted groups that might form part of a strategy. Taking these points into account it is important to think of creating a strategy which positions the inner city in a variety of ways to a variety of stakeholders:

• A place of quality employment opportunity for residents of the region and an attractive environment within which to work

• A good place to live for existing and potential residents (what can it offer that others can’t?)

• A place to invest and make a reasonable return for a variety of businesses • A place in which government can provide services and locate operations in a manner

which benefits the entire region • A place of unsurpassed entertainment, leisure and culture offerings • A place in which the urban poor and marginal urban homeless and street children can

find places of safety and resources to improve their lives • A place where innovative partnerships deliver innovative solutions

Laying the ground for strategies The development of strategies aimed at the regeneration of stressed urban environment is likely to have some generic and some highly unique, environment-specific, aspects. In this regard a set of strategies needs to be informed by things that have had some measure of success in many other environments together with innovative, place specific interventions. In economic development strategy terms it could be said that there are a set of essential platform matters needing attention without which regeneration initiatives are bound to flounder. These must then be leveraged through interventions aimed at generating a measure of differentiation, not only in market terms, but also critically in social terms

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This approach is founded on the notion that so-called “getting the basics right” (infrastructure maintenance, management issues, enforcement etc) are necessary (perhaps critical where they are weak or absent) but not sufficient conditions for regeneration-type interventions to deliver of identified outcomes. It is proposed in this approach that these foundational interventions need to be accompanied by interventions that enable one to leverage impact of “getting the basic right” towards something more than a superficial adjustment. For example, ensuring upkeep of street and pavement areas is an important element of ensuring that urban cores can continue to cope effectively with high thresholds of people and traffic and allow for property owners to continue to benefit form these thresholds. However, a quality coating of tar and new pavement stones can soon be lost as points of leverage if such interventions are not accompanied by other aspects such as improved management of public space, innovate facilities for informal traders and partnership mechanisms with street-level retailers to market their precinct. In this approach it is not always necessary for parallel interventions of the sort described above to happen in any particular order, but is important for the public sector to recognise a role for itself in different types of interventions, especially where social capital is weak in a context of urban instability, and to induce confidence by illustrating a commitment to playing a role across a range of processes essential to regeneration. In day-to-day terms this requires a significant measure of dedicated public sector institutional commitment (and commitment of other bodies representing interests of various stakeholders). Take for instance a street-scape intervention whereby a project manager under such a framework would need to do a lot more than to ensure physical upgrades were completed on time and on budget. A project manager would need to work directly with stakeholders to consider matters of design (does it suit by-laws, pedestrians, muggers), timing (when should work take place and what will impact be on stakeholders and how can this be mitigated), communication and marketing (how can different stages in the proposed intervention be used to generate publicity, what will the plan be to follow up the completed project to attract new customers), institutional/partnership formation (how can the process help deliver a new co-operation structure between stakeholders to make sure ownership is taken of new development and leverage opportunities are exploited in the future) and learning a reflection (what can be gained form the experience and applied to other opportunities and challenges). It is this kind of operational brief that has led many researchers of regeneration activity to describe it first and foremost as a people-driven process and to point out the numerous failed interventions that paid little or no attention to matters of leveraging more conventional interventions.14 Failure to do such leveraging is likely to result in delay, and perhaps at times temporary reversal, of urban decay, but not in sustainable long-term regeneration. In this context it is also critical to take into consideration times frames that operate in regeneration processes. Whilst many of the great success stories of turn-around of urban space appear as over-night successes, they are usually the result of sustained, credible and predictable co-operative ventures that have in their wake a number of failed attempts as well as 5-10 years of processes (not always neat and linear). It is true that quick fixes of specialised policing units, urban clean-ups, enforcement campaigns and flagship projects can have a noticeable impact, but they need to be located in a environment of sustained institutional buy-in to in turn be sustained as anything more that symbolic actions. For example, the introduction, by

14 Durban, through a range of projects, including some in ITRUMP, has shown considerable capacity to capitalise on leverage ability of capable people working in the public sector. The mix of interventions that accompanied the Muthi Market project would be an example of this.

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Durban, of South Africa’s first inner city CCTV network in the early 1990s was widely heralded as a turning point in the fight against escalating crime. The fact that within a couple of years the cameras were often malfunctioning, were not being monitored on a consistent basis and in some cases were located in the wrong places means that even today the investment has not been able to leverage a noticeable improvement in safety and security. Today both Johannesburg and Cape Town inner cities have seen the introduction of business-supported CCTV networks that play a crucial and ongoing role in inner city safety and security processes in a manner that far surpasses Durban’s pioneering efforts.15

Under circumstances where capacity issues become so relevant in realising a potential set of strategies it is essential that partnerships are formed to enable resources to be drawn from institutions and organisations other than just the private sector. This is true in terms of re-organising systems of governance to reflect partnerships AND in terms of day-to-day resources and people capacity that determines the success or otherwise of a project. It is for this reason that so many inner city revitalisation initiatives are partnership-based institutions and often rely on technical, leadership and project based staff from non-public sector bodies. They are also often characterised by volunteers working on a range of initiatives. For example large some corporations working in Manhattan’s financial district encourage staff to allocate time to NYC’s inner city teams working on a variety of initiatives form entrepreneurship support to homeless centres. Strategies for Durban’s Inner City The following strategic intervention categories are informed by the discussion in the earlier part of this paper. They are not in all cases particularly well developed and could benefit from further scrutiny and adjustment as well as from new ideas to supplement what is proposed here. Recognising the requirement for strategy to translate into accessible rallying points for a range of stakeholders the strategic interventions are presented in a thematic manner. Within each thematic strategy, drawing on the preceding discussion, the strategies are presented in terms of their platform (or foundational) interventions or as leveraging interventions. Matters of institutional relevance are also considered. This categorisation is not in all instances that useful, but it is hoped that it allows for some rethinking of the “how” of regeneration in the Durban context. Further work could allow for this to be considered in precinct terms although some references are made to spatial priorities in the proposed interventions. The combined impact of the proposed strategic focus areas will, it is argued, contribute to improved economic prospects for the Inner City stakeholders and contribute significant in the medium to long terms to enabling the Inner City to play a significant social and developmental role for Durban and its hinterland. The strategies take the approach that, despite some existing policy ambivalence toward the Inner City by the public sector and other stakeholders, initiatives in the Inner City can have metropolitan-wide impacts and at the same time improve the prospects of existing stakeholders.

15 At a film industry conference at the ICC in 2002, the then head of the metropolitan police in Durban spoke at length at how effective the CCTV system was and how every move of conference delegates could be monitored. This was despite the fact that at the time two ICC precinct cameras has not been operational for a period in excess of 6 months and shift problems at the monitoring centre resulted in long periods of limited or zero observation! Whilst this anecdote is both entertaining and disturbing, its prime purpose is to reinforce the point that once-off interventions are more than often a waste of resources unless they are backed by viable operational interventions.

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Consolidated Document: 21 September 2005 1. Liveable districts programme Focus

This entails sustained and targeted interventions in existing zones of high-density residential settlement to:

• improve the competitiveness of the residential nodes for a range of income groups through upgrade in physical conditions, amenities, public space and social services

• enable appropriate increases in a range of housing targeted at a mix of income groups in develop opportunity zones adjacent or well located to existing residential nodes

Platform

• New mixed income housing provision • Temporary accommodation at reasonable cost for urban poor coming to

inner city for trading etc • Maintenance and refurbishment of public space, especially parks/plaza

areas • By-law review and enforcement • Increase visible localised policing • Secure improved amenity AND social service provision (esp schools,

crèches, health) Leverage

• Extend and reinforce better buildings programme to include tenant empowerment/education and pilot new building management systems

• Work with stakeholders on housing solutions and test new institutional forms

• Use property investment vehicle to lead some regeneration and redevelopment initiatives where market failure occurs

Institutional

• Area management neighbourhood office • Supported residents association • Property and social housing company support for management of

residential blocks • Partnerships with NGOs working on social issues prevalent in inner city

Spatial The following areas need to be given urgent attention: • Albert Park (extending into new space in Smith and West for

brownfield) • Greater Point (extending into “motor town” for brownfield) • Back of beach (central and northern) • North west CBD block (Grey, Umgeni)

2. Reposition commercial space Focus The inner city remains a key employment node and has significant infrastructure

in place which in sustainability terms needs to be optimally utilised. This strategic thrust would have as its focus key areas for interventions to secure an employment and investment generating role for the inner city in the future.

Platform • Maintenance and refurbishment of public space, especially parks/plaza areas

• By-law review and enforcement • Effective management of informal trade in line with Informal Economy

Policy • Increase visible localised policing • Coherent transport route to maximise connections between residential

areas and commercial zones, between commercial zones, between stations and commercial zones and between City Bowl and Zones)

Leverage • Priority precincts with greatest potential to yield employment and investment to be themed on sectoral lines and given appropriate investment, marketing and management attention.

• Facilitators to work to generate co-operation amongst stakeholders and

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undertake projects (eg Late night shopping and food festival in Grey St; annual inner city arts festival in cultural hub with plays, music and temp public space art and art in disused offices; Point Rd closed for weekend festival, love parade with international DJs, KZN Law Society to second person to work with property owners to attract law businesses)

• Co-operative marketing system • Use property investment vehicle to lead some regeneration and

redevelopment initiatives where market failure occurs or where key long terms interests of city are at stake (eg purchasing land for increasing leverage with port in future)

• Sectoral focus: o Tourism, Sport and leisure o Entertainment/culture o Corporate back office processing o Legal services o Maritime o Government services and operations hubs o Retail o Cross-cutting IT o Market and public space trading o Education and training

Institutional • Zonal and/or sectoral commercial facilitators (seconded?) to work with ABM

• Partnership structures with business Spatial • Point to Blue Lagoon and backing areas tourism/leisure/entertainment

• Greater Kings Park Sports precinct • Core CBD (chain retail and corporate) • Grey St independent retail • Embankment, Point and Shepstone Maritime services precinct FCAs and

SAs and legal • Legal and judicial precinct (Field, Embankment, Aliwal and Smith) • City Hall to Centrum Government operations and services hub • Central cultural precinct (Museums, Playhouse, Galleries + link to

Embankment – Bat etc) • Warwick area markets • Lower (western) end of Smith Street educational precinct

Key ideas informing approach:

Building bridges –eg with berea, port Wholistic visitor experience Stable residential population at core – young families Symbolism and icon role Cutting edge urban life (shop and jol) New approach to public space as well managed public goods

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Consolidated Document: 21 September 2005 Appendix 4: Using the Household Assets Component of Sustainable Livelihoods as an Approach to Understanding the Urban Poor The Urban Poor The basis of any economic activity is the use of factors of production and various forms of capital in order to generate and accumulate further capital. In this respect, the poverty economy operates in much the same way as the mainstream economy, although the form which capital most commonly takes differs substantially. Furthermore, the primary goals of the main actors in each of these economies differs, with firms in the formal economy focussed on making profits and accumulating capital, and households in the poverty economy concentrating their energies on survival. Although the mainstream economy and the poverty economy have some similarities in that they both aim to maximise the use of their capital base, there are some important differences. Firms drive activity in the mainstream economy, while in the poverty economy the unit of economic activity is usually the household. Furthermore, the primary aims of the two economies differ. In the mainstream economy the expansion of the capital base is the end in itself, while in the poverty economy, survival is the primary end and maximising the use of the capital base is merely the means. It follows therefore that the some of the interventions that need to be made will be of benefit to both economies, although this may be for different reasons. The diagram below is commonly used to provide a general picture of the assets that a poor households use to ensure their survival.

Productive Capital

Social Capital Human Capital

Labour Capital

Natural Capital

The following sections will take a slightly more in depth look at the ways in which the poor use their capital assets to ensure their survival, with the exception of natural capital. This form of capital applies more to households operating in rural areas or on the rural/urban periphery than it does to households securing their livelihoods in the inner city, and is therefore not considered in the sections that follow. 6.2.1.a. Labour Capital Labour capital refers to the most obvious asset that poor households use to secure their livelihoods. Labour is sold to provide the household with income, which in turn determines the household’ patterns of consumption and expenditure. Income is not the only measure of poverty, but it seems to be the most important measure of poverty in areas where the linkages to the mainstream economy are strongest.

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Consolidated Document: 21 September 2005 The performance of the mainstream economy has a profound effect on the ability of households to sell its labour. Economic decline results in lower wages and lower levels of employment. Household incomes are also sensitive to changes in prices occurring as a result of economic growth or decline. The ability of local government to intervene in labour markets is limited. However, the annual investment made by the eThekwini Municipality in infrastructure development and maintenance is substantial, and the municipality is in a position to require that contractors use labour intensive methods to undertake infrastructure development and maintenance. In addition to direct labour/income impacts, the provision of infrastructure and services has other positive consequences for poor urban households, over and above its direct labour impacts. The lack of efficiently functioning infrastructure is often a key constraint to economic growth, and while economic growth does not necessarily result in pro-poor outcomes, it can provide an important basis on which policy alleviation programmes can be based. Natural Capital This refers to natural assets that can be leveraged to meet needs of one sort or another. Included could be fertile land, appropriate weather for crops or tourism etc. It is important not to only consider natural capital as an extractive resource to feed economic processes as such short-term thinking has called considerable destruction of bio-diversity and habitats that have the potential to sustain some economic activity if managed appropriately. Human Capital Human capital refers to the levels of education and health among the urban poor. The links between economic growth and high levels of education and health are well documented. The demographic profile of Durban’s inner city suggests that the levels of human capital are fairly low, and that the inner city relies on in-migration for the resupply of human capital. In general the type of human capital available in the inner city does not seem to be conducive to sustained mainstream economic growth. Interventions aimed at increasing human capital are critical to sustainable economic development, but these types of interventions are usually long term in nature. However, it is possible to put in place adult education programmes aimed at vulnerable sectors of the population that have impacts in the shorter term. The other aspect of human capital is the health status of individuals within each household. The standards of infrastructure and accommodation provision in the Durban Inner City are relatively high, and the incidence of environmental diseases are a lower than many cities in the developing world. However, the prevalence of HIV/AIDS in the KwaZulu Natal is the highest in South Africa, which in turn has one of the highest prevalence rates in the world. HIV infections have widespread impacts on the economy from households to the macro-economic level. Poor households have a high level of vulnerability to the impacts of epidemic. Sick household members are not able to earn income, require care and require the use of existing income for medication.

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Consolidated Document: 21 September 2005 Social Capital Where human capital is focussed on the individual, social capital deals with the communal and refers in the economic sense and in the context of poverty. Social capital is important in providing the networks that support the economic activities of the poor. The main role of the municipality is in the creation of an enabling environment in which social networks can thrive. Although the need for this can be applied to the entire realm of stakeholders that iTRUMP interacts with, it is particularly critical that this enabling environment is extended to the poor. In addition to providing physical spaces that the poor can use to enhance and extend their asset base and livelihoods, local government has a responsibility to ensure that an environment exists where organisations for and of the poor can establish themselves and give voice to the urban survivalist challenges they face. Productive Capital Productive capital refers to capital in the classic economic sense i.e. assets that have the potential to create surplus value. In the case of poor households this usually takes very limited form if it exists at all. Accommodation is form of productive capital that the urban poor may have access to that can be used to unlock income-generating activities. Access to secure tenure either in the form of a lease or outright ownership is well recognised as a major poverty reduction tool. Productive capital can also be made available through micro-finance schemes designed to make small amounts of capital available for lending. Making the Local (Inner City) Environment Work for the Poor Local government has an attacking and a defending role in respect to the urban poor. On the one hand it needs to facilitate the participation of the poor in the (informal and mainstream) economy (attacking role), while also protecting the poor from the effects of economic decline (defending role). In order to “make the local environment work for the poor” it is necessary that the key stakeholders provide safety-net types of support for the poor and intervene in ways that improve the prospects of the poor. Serious consideration should be given to the rights-based approach that underpinned the Informal Economy Policy adopted by the Municipality but this should be both reviewed and enhanced where appropriate as it has clearly not provided an adequate basis from the Municipality perspective and needs to be considered n the context of other initiatives proposed or already underway (e.g. housing). A vibrant inner city economy is always going to be an attraction for poor migrants from other areas within the Municipality and the province, and there is always likely to be a steady flow of poor people into the inner city. The challenge for city is to ensure that the poor that come to the inner city have access to opportunities, which will allow them to engage with either the formal or informal economy and reduce their vulnerability. However, there will also be a group of people, the “long-term poor”, who will require interventions of a welfare nature. The aim of putting in place programmes aimed at facilitating the transition of poor migrants into the economy is to reduce the numbers of long term poor and consequently reduce the city’s obligations in terms of welfare.

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Documents

Consolidated Report: Durban Inner City Economic Environmentccs.ukzn.ac.za/files/Inner City Economic... · DIPA Durban Investment and Promotion Agency DIT Durban Institute of Technology