High cost of spatial inequality
Continuing cycle of poverty could be alleviated by creating affordable housing closer to the city
THE World Inequality Lab reveals that South Africa is one of the world’s most unequal countries, with 10% of earners capturing 66% of the national income. In 1987 the top 1% held 8.8% of the country’s wealth, and in 2012 their share of the wealth grew to 19.2%.
Studies have revealed urban design has the potential to reduce inequalities and create safe and financially and environmentally sustainable towns and cities.
However, annual global traffic studies have once again rated Cape Town’s roads as the most congested in South Africa, due mostly to spatial injustices implemented in the city during apartheid.
Urban researcher Barbara Southworth states that studies have found the creation of more compact urban areas could reduce a city’s operating budget by between 35% to about 45% – and a 2011 study by theFinancial and Fiscal Commission estimated compact development could save a large city such as Cape Town R9 billion a year in public transport expenditure.
The reversal of apartheid spatial planning could thus annually release billions of rand for social development interventions on the Cape Flats.
A number of academics and researchers have drawn attention to the fact that compact cities could reduce levels of inequality.
Senior researcher at the University of Johannesburg’s Centre of Social Development in Africa, Lauren Graham, highlighted the inter-generational transmission of poverty as being a hurdle to reducing high levels of poverty, emphasising that, “Young people who are born to parents who live in poverty have every chance of falling into poverty themselves .... We need to look at methods to interrupt the transmission of poverty .... Suggestions of extending the child support grant to a youth grant will not solve the problem on its own .... A lot of it (poverty) is rooted in the apartheid policy of the past, relating to exclusion from partaking in the economy”.
Urban researcher Andrew Fleming explained in the online magazine Global Urbanist that the important intervention of creating housing opportunities in the inner city (CBD and a 10km radius around it) would integrate historically disadvantaged Capetonians into the economy and social fabric of society.
Dr Johan Fourie, senior economics lecturer at Stellenbosch University, linked the distances that Capetonians travel to and from work to high poverty levels. “One of the ways to combat poverty in South Africa is to bring the poor, who live on the outskirts of cities, closer to the city centre,” he said.
Professor Raj Chetty, editor of the Journal of Public Economics, and Nathaniel Hendren, a professsor of economics at Harvard University, have, in their Equality of Opportunity Project, developed solutions to the mobility of low-income households.
Analysis by Chetty revealed the cost-effectiveness of moving to opportunity (MTO) – to affluent or upmarket areas; and an increase in income, available to children below the age of nine, of 31%.
The five factors associated with strong upward mobility were:
Less segregation by income and race. ● Lower levels of income inequality. ● Better education opportunities. ● Lower rates of violent crime. ● A larger number of two-parent households.
Analysis of the US government’s MTO programme highlighted that cities that scored highly in facilitating MTO established affordable housing in well-located, mixed-income apartment blocks in upmarket areas.
The study, “Effects of Exposure to Better Neighbourhoods on Children”, by Chetty, Hendren and Lawrence F Katz (Harvard University, 2015) concluded that “offering low-income families housing vouchers and assistance in moving to lower-poverty neighbourhoods has substantial benefits for the families themselves and for taxpayers... our findings suggest that efforts to integrate disadvantaged families into mixed-income communities are likely to reduce the persistence of poverty across generations”.
The study concluded that children’s opportunities for economic mobility were shaped by the suburbs in which they grew up, and that every year a child spent in an area where permanent residents’ outcomes (income, college attendance, marriage, teenage employment) were higher, increased their future earnings.
“These results motivate place-based approaches to improving economic mobility, such as making investments to improve opportunity in areas that currently have low levels of mobility or helping families move to higher opportunity areas,” it said.
The Equality of Opportunity Project reveals that the creation and promotion of affordable social housing for the poor and working class within the inner city and along the M4 (from central Cape Town to the southern suburbs) will have benefits for taxpayers and ratepayers – as this will stimulate economic activity, which will lead to a larger tax base.