Good Hope Centre site ‘holds the key’
He’s raising Kane to effect urban change
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. firstname.lastname@example.org
Outside the CBD, there is much scope for affordable housing development, not least on the Good Hope Centre site, below left, says Rob Kane.