Urban Improvements Precincts (UIPs), City Improvement Districts (CIDs) or Business Improvement Districts (BIDs) are world-wide concepts that have gained significant momentum over the years. From the humble beginnings of the first UIP to over 1000 UIPs globally today, UIPs have become a household name in communities internationally, illustrating the shift in mindset by property owners to invest intelligently in securing the value of their homes and businesses.
Services provided by local municipalities are no longer enough and more and more property owners are enlisting the services of urban management specialists to help protect their investments. Municipal departments are also partnering with UIPs to accelerate their cleaning and safety strategies for their respective cities.
Crime and its consequences impact greatly on property value and UIPs improve not just safety, but cleanliness and investor desirability of the area, whether a neighbourhood or section of the city. Urban decay without immediate intervention can weaken investor confidence. Appealing and well-managed precincts are more desirable, attracting more people and inadvertently driving property values up.
When people in various communities come together with the common purpose to improve their environment, mechanisms are sought where all ratepayers benefiting from the additional services contribute towards these extra costs.
- The area of the intended UIP must first be defined and a budget clearly outlining the services to be offered must be prepared.
- When allocating a budget for SRAs it is a case of looking at what the current levels of municipal services are and what is still needed in the area; then allocating a cost to it.
- Once a proposal and budget is drawn up, approval must be obtained from: 1) At least 51% of owners in number relating to business and commercial, provided that residential owners are zero rated in respect of the additional rate, or (2) At least 66% of other owners in number and 51% of property value.
- A proposal must then be lodged with the City and a public meeting called.
- Once the SRA is approved, property owners are charged additional rates on a prorata basis according to their property value as a % of the SRAs total property value and budget.
- Once the UIP is established (normally from 1 July), every ratepayer in the defined Special Rating Area (SRA) is obliged to pay.
- These additional SRA rates are invoiced by the Municipality to the ratepayer and once collected are paid over one month in arrears to the Urban Improvements Precincts Company who manages the required services.
- Ratepayers can also, by majority vote (51%), request Council to dissolve a Special Rating Area.
Refer to Frequently Asked Questions to learn more about UIPs in your area.