Need to think outside the box

New approach demanded to solve the city’s housing challenges

MEETING the growing demand for affordable housing in Cape Town is not a simple task, but an independent think tank believes that developers and authorities need to focus on supplying housing across all income brackets.

While there is no silver bullet solution to the issue, Future Cape Town founder Rashiq Fataar says the focus has been on the wrong areas.

“The supply of housing across all income brackets is simply too low given our population growth and our demand, and our housing crisis requires bold changes. There should be a clear focus on the supply of affordable housing across categories and income groups.”

Without clear goals and targets, he says stakeholders risk “going around in circles trying to find the policies, ideas and dialogues, which while all essential to lay a foundation, do not deliver actual units on the ground in a defined period of time”.

And Fataar says not nearly enough is being done to include all the diverse incomes groups in the city, in well-located areas.

“Because the stretched middle is not on the upper or lower end of the scale, the market simply assumed that this segment of the market could take care of itself, without realising that the consequences of having this part of our workforce living further away from our cities, results in these households spending more money on transport, and having to travel further for social, cultural and economic opportunities.

“This increases carbon emissions and increases the spatial inequality in our city.”

Some reasons why few developers have plans to include more diverse income groups include:

The high cost of land in Cape Town, and the fact that those who own land factor additional incentives into the sale price.

A lack of clear incentives and rules on how developments could accommodate the forgot- ten middle, students and other groups.

Fataar says achieving integration or more mixed, diverse neighbourhoods should be prioritised.

“Creating more inclusive and integrated neighbourhoods as a way to overcome the spatial inequality that exists in the city is at the centre of the City of Cape Town’s Municipal Spatial Development Framework and is fundamental to the sustainable growth of Cape Town.

“In the past, integration has mostly been achieved through transport and mobility, by better connecting people’s homes to employment opportunities. But in the future we will need to consider a range of more creative responses to overcome the spatial inequality here.”

A number of approaches could be considered to achieve more mixed and diverse neighbourhoods. These include:

The 80: 20 Inclusionary Housing Model where developers are granted increased development rights by the city in exchange for affordable units.

A housing levy where developers make a financial contribution to the city to be used for the provision of social housing in exchange for increased development capacity approved through a departure.

And/ or smart partner- ships where the city partners with an affordable housing delivery agent to grant reduced land procurement costs, rate rebates and assist with administrative and bureaucratic hurdles.

In addition, banks must become more flexible and engaged in financing innovative projects that promote inclusionary housing, and there needs to be a major reduction in rapid rising land prices through rezoning and additional bulk rights, Fataar says.

“Any site potential that the city offers – such as activating additional bulk rights on certain sites – should be at the city’s discretion per site, versus an intrinsic part of the land in order for developers to be able to benefit from this. Otherwise, this value is simply priced in and developers have to cover these additional costs from the day the site is acquired.”

Earlier this year, Cape Town property developer Blok launched its 80:20 Inclusionary Housing Model Blok Raw, which aims to introduce a new range of urban homes in a new price band and new locations within the city’s growing urban centre.

The Forty on L development, to be located on a vacant site in Lion Street in the Bo Kaap, looks to adapt the current model in which housing solutions in well-located urban areas are being provided at the lowest and uppermost ends of the market but leaves out the millions of households in the middle.

“We are excited to be launching a first for Blok that responds to needs that are current and very real in today’s market – the lack of inclusionary urban housing for a more diverse set of income ranges in well-located areas,” says Blok managing director Jacques van Embde.

“As developers, we recognise that we have a role to play in contributing towards a more integrated, diversified and sustainable development trajectory.” – Property Writer

Forty on L is an Inclusionary Housing Model for a more diverse set of income ranges in well-located areas.