Good Hope Cen­tre site ‘holds the key’

He’s rais­ing Kane to ef­fect ur­ban change

Weekend Argus (Saturday Edition) - - FRONT PAGE - MICHAEL MOR­RIS

NOT EN­TIRELY in jest some years ago, Rob Kane sug­gested to the city that in­stead of their spend­ing R9.5 mil­lion a year main­tain­ing the Good Hope Cen­tre, it could be de­mol­ished for R4.5m, and they would save R5m in the first year.

The anec­dote un­der­scores Kane’s pre­oc­cu­pa­tions – mar­ry­ing eco­nomic sense with the ideal of mak­ing a more live­able, in­te­grated city.

The Good Hope Cen­tre, he re­mains con­vinced, is a par­cel of land – like oth­ers on the pe­riph­ery of the cen­tral city – that begs to be de­vel­oped as af­ford­able hous­ing.

To get it right, though, he said this week, would re­quire a more focused, ef­fi­cient and prac­ti­cal ap­proach that would avoid the pit­falls of the con­ven­tional high­est-price ten­der sys­tem – com­pelling de­vel­op­ers to “squeeze” ev­ery rand from a project, or go out of busi­ness – and lim­it­ing the city’s scope for guar­an­tee­ing an af­ford­able hous­ing out­come.

Kane wears two hats, but if his roles are dis­tinc­tive, they are not wholly sep­a­ra­ble.

He chairs the board of the Cape Town Cen­tral City Im­prove­ment Dis­trict (CCID) – whose con­tri­bu­tion to the com­mon­wealth of the metropole is read­ily re­flected in the CBD’s prop­erty val­u­a­tions hike from R6 bil­lion in 2006 to R24bn to­day – and he is also a prop­erty de­vel­oper, the chief ex­ec­u­tive of Box­wood Prop­erty Fund.

Kane, who trained as a civil en­gi­neer, said his view of the pos­si­bil­i­ties in Cape Town drew as much on his CCID ex­pe­ri­ence as on his work in de­vel­op­ing res­i­den­tial and com­mer­cial space, chiefly con­vert­ing older build­ings for new uses.

The ar­gu­ment for a dif­fer­ent kind of city was in­con­tro­vert­ible. He cited UCT prop­erty econ­o­mist Fran­cois Vir­uly’s “40x40x40x40” rule – a mea­sure of the ur­ban con­di­tion that af­flicts most South African cities; peo­ple liv­ing in 40m² homes, 40km from where they work, spend­ing at least 40 per­cent of their in­come on trans­port, and liv­ing in com­mu­ni­ties where there is 40 per­cent un­em­ploy­ment.

“It is a bru­tal statis­tic,” Kane said.

The most ob­vi­ous in­ter­ven­tion was to cre­ate hous­ing closer to jobs. But suc­cess – and the con­sid­er­able knock-on ben­e­fits of bet­ter lives, less traf­fic con­ges­tion, more eco­nomic ac­tiv­ity and less wasted ex­pense on costly in­fra­struc­ture to ser­vice the pe­riph­eral sprawl – would de­pend on a fresh ap­proach.

Kane’s pre­ferred op­tion was for the city to ap­point a ded­i­cated task team – draw­ing closely on the pri­vate sec­tor – not to fash­ion an in­evitably “neb­u­lous” pol­icy frame­work, but to tackle a par­tic­u­lar site or build­ing, and craft a pro­posal to achieve a spe­cific re­sult.

As things stood, the eco- nomics of the prop­erty mar­ket was an un­for­giv­ing con­straint, and risks to de­vel­op­ers aris­ing largely from un­pre­dictable and de­lay-prone plan­ning and ap­provals pro­cesses was pro­foundly dis­sua­sive.

The CBD – the CCID area – had ex­pe­ri­enced an “ex­plo­sion of de­vel­op­ment”, with the value of real es­tate grow­ing four-fold since 2006. With this came an “ex­plo­sion of jobs” and of rates revenue, which was “be­ing spread across the metro, as it should”.

In this way, the CBD’s suc­cess was a com­mon ben­e­fit to the whole city, even though it came with in­creased de­mands, not least in traf­fic con­ges­tion lead­ing into the city. “It’s a prob­lem we are lucky to have,” Kane noted, “though one that needs ur­gent res­o­lu­tion.”

But there were lim­its to what could be done on high­priced cen­tral- city land. “There has been crit­i­cism that the CBD is ex­clu­sive, but the prob­lem is that prices have risen so high that to buy and con­vert a build­ing in the hope of pro­vid­ing af­ford­able hous­ing is just not prof­itable.

“And if you try to stop de­vel­op­ers from mak­ing money they will sim­ply go else­where, to Joburg, Tsh­wane or Lon­don.”

That said, within the CBD pe­riph­ery – rather than the cen­tral city – there was “huge” scope for tar­geted af­ford­able hous­ing projects.

The Good Hope Cen­tre was a case in point. “I’m guess­ing, but you could prob­a­bly put between 1 000 and 2 000 units on that site, with a small re­tail cen­tre, and a crèche. There are lots of good schools in the area, and it would give a lot of peo­ple the op­tion of walk­ing to work.”

Nearby, es­pe­cially in the East City precinct, there were “tons of pub­lic land and build­ings”.

But if projects were put out to ten­der in the nor­mal way – for the high­est price – de­vel­op­ers were “forced into re­ally squeez­ing ev­ery last drop of value out of that land”, which mit­i­gated the prospects for af­ford­able hous­ing.

How­ever, a spe­cial task team could help draw up a le­gal and plan­ning for­mula that would en­sure an eco­nomic propo­si­tion for a de­vel­oper, but en­able the city to set out its re­quire­ments for an af­ford­able end prod­uct.

One of the big­gest prob­lems de­vel­op­ers faced was un­pre­dictable and time-con­sum­ing town plan­ning and her­itage pro­cesses. “I have re­de­vel­oped many build­ings in town over the years and, I can tell you, the process can be quite scary,” Kane said.

“Mar­ry­ing lease ex­pi­ra­tions with the town plan­ning process is re­ally dif­fi­cult, for in­stance. These are among the is­sues that haunt de­vel­op­ers.”

One con­se­quence was that the city’s “most beau­ti­ful” (older) build­ings were de­te­ri­o­rat­ing be­cause de­vel­op­ers weren’t in­ter­ested in tak­ing them on. “The irony here is that the most run-down build- ings in need of care are gen­er­ally her­itage pro­tected.

“The her­itage im­pli­ca­tions can be oner­ous, and rep­re­sent too much risk to de­vel­op­ers. In­stead, they are filled with low- or short-term rental shops, and they are fall­ing to pieces. There’s not enough in­come, or in­cen­tive, to fix them up.

“There’s a real tragedy there.”

Kane cred­ited Cape Town with be­ing “more open than most cities”, and he be­lieved a dia­logue about de­vel­op­ment dif­fi­cul­ties would be “most use­ful”.

“If pro­cesses can be stream­lined, the CBD will be­come an even stronger de­vel­op­ment node, which fits very well with the city’s den­si­fi­ca­tion strat­egy. And I think there’s a good chance that stake­hold­ers could col­lab­o­rate to ar­rive at creative so­lu­tions for af­ford­able hous­ing close to the CBD.”

The knock- on ben­e­fits would be felt city-wide.

In an in­ter­view last month, Trans­port and Pub­lic Works MEC Don­ald Grant and Hu­man Set­tle­ments MEC Bonginkosi Madik­izela said the multi­bil­lion-rand Con­radie Bet­ter Liv­ing Model Ex­em­plar Project near Pinelands was in­tended as a pro­to­type to guide fu­ture in­te­grated hous­ing de­vel­op­ments, in­clud­ing on city-owned land in the in­nercity. michael.mor­ris@inl.co.za

PIC­TURE: CCID

Out­side the CBD, there is much scope for af­ford­able hous­ing de­vel­op­ment, not least on the Good Hope Cen­tre site, be­low left, says Rob Kane.

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