Port Elizabeth police spokesperson, Alwin Labans said the protests had started at 05:00 with just a few protesters.
It grew to more than 200 people who blocked the main roads in the area.
“We can confirm that an Algoa bus was torched during the protests and another damaged. A case of malicious damage to property has been opened,” he said.
Labans said Standford Road and Nooitgedacht Roads were closed for most of the morning.
These roads have since been reopened. Booysen Park Drive, however, remained closed.
He said police used teargas to disperse the crowds.
There have been no arrests but police are monitoring the situation.
The protesters are residents of the Vastrap informal settlement, who have been at loggerheads with the municipality over RDP houses.
While Mayor Danny Jordaan earlier issued instructions to have the Vastrap residents temporarily relocated to serviced plots, residents have refused to budge unless moved to Chatty.
The municipality, however, has refused this, saying there is simply not enough space to accommodate them all.
Instead, it wants to move them to Kayamandi and Joe Slovo West while they wait for RDP houses.
There are some 1 060 sites in Chatty, where the municipality plans to build RDP houses, but there are roughly 5 000 families in Vastrap that need to be relocated.
Labans said motorists were advised to proceed with caution when travelling in the area, as there was still a lot of debris in the road.
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