Karatara is located north of Sedgefield about 30 km from the town of Knysna. It is on top of the plateau, in a beautiful setting amidst agricultural land and forests. It consists of three non-contiguous urban settlements known as:

• the Welsynsdorp,
• the Bergvallei, and
• the Bosbou Village (Bosdorp).

Karatara falls within the jurisdiction of both the Eden District Municipality and the new Knysna Municipality. However, this area had no local government status before the 5 December 2000 elections.

Each one of the three areas within Karatara has different histories and services.

The Welsynsdorp consists of 123 houses and 112 serviced sites. It was established in the 1940s and of the three settlements is both the oldest and largest. Township establishment has not been completed. Most of the houses are two-bed roomed with a number of three-bed roomed and a few four bed roomed structures. They are on relatively large plots of approximately 1000 m sq and are fully serviced. The perimeter road is tarred but the internal roads are gravel and there is a primary school, a church and what was once an old age home that is now being used as a community centre.

The population consists mostly of retired people from lower income groups. Currently many of the inhabitants are unemployed or rely on very low incomes. In a survey conducted a few years ago, inhabitants showed that they were passive about the future of their area but identified the need for employment opportunities and for the upgrading of their houses.

Historically the Welsynsdorp was a white group area and houses were leased to ex-forestry workers, disabled ex-civil servants and pensioners. Although it is still predominantly white, there are a number of coloured families living there. There is an Aksiekomitee that is exclusively white and includes people who live on farms surrounding the Welsynsdorp.

The Welsynsdorp is owned by the Provincial Government and has been financed predominantly by the Provincial Department of Social Development (formerly the Department of Social Services) who pay the Eden District Municipality (District Municipality) for providing some municipal services. When the Department shut down the Old Age home in Karatara in 1996 and removed its administrative capacity from the area, the District Municipality was forced to take over the rendering of services.

Bergvallei consists of 10 houses about a kilometre to the west of the Welsynsdorp. Although these houses are also brick, they are on much smaller plots and were traditionally labourer cottages. These are serviced, owned and administrated the same as the Welsynsdorp. There has been no process of township establishment here.

The Bosdorp is to the north east of the Welsynsdorp and consists of 53 houses, most of which are wooden and are in good condition. The plots are smaller than the Welsynsdorp but larger than the Bergvallei. The houses are serviced but there are often problems especially with the inadequate sewerage system. Traditionally this was a settlement for predominantly black and coloured forestry workers. The accommodation was conditional upon employment with the national Department of Forestry. Houses had to be vacated upon termination of employment. Coloured and black ex-forestry workers mostly occupy the houses now, but a few white families are also living there.

The Bosdorp land was originally the property of the national Department of Forestry and administered by Safcol (MTO Forestry). It was deproclaimed as forestry land and both the land and the houses have been vested nationally. The houses were promised to former forestry employees who live in them, provided that they were fully paid up for their services. The land is now owned by the national Department of Public Works and has been earmarked for a land reform project. The District Municipality provides some services that are reimbursed by the national Department of Public Works.

State land in the area was identified by the State Land Disposal Committee for future agricultural use by the land reform beneficiaries. It has been agreed in principle that this land, or a portion, could be made available to beneficiaries through future applications to the national Department of Land Affairs for grants for agricultural development.

• Municipal Infrastructure Enhancement (Department of Local Government and Housing, Provincial Government of the Western Cape)
• Department of Social Development (Provincial Government of the Western Cape)