Lift­ing roof on hous­ing de­bate

Cape Town’s back­log is 193 000 and while there are no easy so­lu­tions, there are sug­ges­tions…

Cape Argus - - OPINION - Aditya Ku­mar

AGAINST a back­log of 193000 house­holds in Cape Town on the wait­ing list, for many, the de­liv­ery of dig­ni­fied hous­ing re­mains a pipe dream. While the back­log is stag­ger­ing, it doesn’t con­vey the com­plex­ity of the hous­ing de­bate.

First, the state has been at the cen­tre of de­liv­ery – ei­ther as a de­vel­oper (for low-in­come sub­sidised BNG-type hous­ing), prop­erty man­ager (for about 50000 rental hous­ing units) or as an in­vestor/fi­nancier (in the form of so­cial hous­ing) for sub­sidised hous­ing.

De­spite all the re­sources in­vested in hous­ing, Cape Town trends in­di­cate we are decades from de­liv­er­ing any form of sus­tain­able hous­ing so­lu­tions for the city. This state-cen­tred ap­proach has pre­cluded, and of­ten dis­cour­aged, any form of pri­vate in­vest­ment in low-in­come and af­ford­able hous­ing from in­di­vid­u­als and from fi­nan­cial in­sti­tu­tions such as banks.

Sec­ond, equally con­cern­ing is that most hous­ing de­vel­op­ments for the poor are far on the pe­riph­ery of the city. This form of de­liv­ery on the mar­gins of the city must be re­sisted and curbed in all re­spects, based on its im­pli­ca­tions on in­fra­struc­ture, costly trans­port costs for poor and work­ing-class house­holds liv­ing on the pe­riph­ery, cli­mate change mit­i­ga­tion, scarce eco­nomic op­por­tu­ni­ties and gen­eral well-be­ing of cit­i­zens.

The So­cial Hous­ing projects in Wood­stock and Salt River are a great start, but a drop in the ocean of hous­ing de­mand.

Third, given that it takes the City of Cape Town seven to 11 years to up­grade one in­for­mal set­tle­ment, it would take close to a cen­tury to up­grade all 204 in­for­mal set­tle­ments. This is with­out fac­tor­ing in fur­ther land oc­cu­pa­tions, ur­ban­i­sa­tion and re­solv­ing the is­sues re­lat­ing to back­yard ren­ters.

Amid this ap­par­ent doom and gloom, there are small-scale en­trepreneur­s and de­vel­op­ers who are de­liv­er­ing small-scale rental “mi­cro-units”.

These mi­cro-de­vel­op­ers are true en­trepreneur­s – prop­erty own­ers, de­vel­op­ers and prop­erty man­agers op­er­at­ing as one, op­er­at­ing with a shared vi­sion to ad­dress mar­ket and hous­ing gaps.

Driv­ing through Dunoon, Il­litha Park, Mil­ner­ton, Joe Slovo and Delft, one can see these new dou­ble and some­times triple­storey build­ings mush­room­ing.

They are of­fer­ing stu­dio rental ac­com­mo­da­tion for any­where be­tween R1500 and R2 500. This year, De­vel­op­ment Ac­tion Group has sup­ported and doc­u­mented a grow­ing num­ber of such “mi­cro unit” schemes that are ei­ther al­ready con­structed or be­ing planned at the mo­ment.

Each new de­vel­op­ment re­in­forces the mes­sage that small-scale de­vel­op­ers are de­liv­er­ing in the mar­ket seg­ment much faster than the state, while pro­vid­ing lo­cally rel­e­vant af­ford­able hous­ing so­lu­tions to a mar­ket seg­ment that is un­der-catered at the mo­ment.

Given that the es­ti­mated av­er­age rental for a one-bed­room apart­ment in Cape Town is R7000, more than dou­ble of what an av­er­age South African earns on a monthly ba­sis, it is no won­der these units have a 30-minute va­cancy rate.

The mi­cro-units are in high de­mand and suit the needs of peo­ple earn­ing in­comes fromR5 000-R10 000 that don’t qual­ify for a BNG-sub­sidised house or likely for bank fi­nance. While this new form of mi­crounits present many op­por­tu­ni­ties, they also present many risks. There is clearly a niche in the low-in­come mar­ket for such de­vel­op­ments. How­ever, these de­vel­op­ments need to be aligned with bulk in­fra­struc­ture ca­pac­ity (in the form of sew­ers, wa­ter, elec­tric­ity etc).

Si­mul­ta­ne­ously, the over-reg­u­la­tion of such de­vel­op­ments can in­ad­ver­tently push the de­vel­op­ers to cut cor­ners and build il­le­gally – of­ten lead­ing to build­ing col­lapse or sub­stan­dard hous­ing stock.

The De­vel­op­ment Ac­tion Group be­lieves pro­vid­ing core tech­ni­cal sup­port and en­cour­ag­ing this form of den­si­fi­ca­tion could re­lieve the pres­sure of hous­ing.

They are also in the process of es­tab­lish­ing a De­vel­oper Academy to as­sist small-scale de­vel­op­ers in de­liv­er­ing such hous­ing at scale. Fi­nanc­ing such de­vel­op­ments re­mains at the heart of such hous­ing de­liv­ery.

Cre­at­ing mech­a­nisms that can pro­vide low-in­ter­est eq­uity for small-scale de­vel­op­ers will go a long way in cre­at­ing mean­ing­ful hous­ing stock across the city.

Fi­nally, pro­vid­ing prop­erty man­age­ment and main­te­nance sup­port is es­sen­tial to en­sure ex­or­bi­tant rent es­ca­la­tion and evic­tions can be avoided at all costs.

If we have to move beyond the state­cen­tred ap­proach to hous­ing, a com­plete over­haul of the Na­tional Hous­ing Code and cur­rent sub­sidy schemes is needed.

This has to be in recog­ni­tion of en­abling small-scale de­vel­op­ers to pro­vide af­ford­able rental hous­ing at scale.

Aditya Ku­mar is ex­ec­u­tive di­rec­tor at the De­vel­op­ment Ac­tion Group. Pre­vi­ously he worked as deputy di­rec­tor at the Com­mu­nity Or­gan­i­sa­tion Re­source Cen­tre.


WAKE-UP CALL: Siqalo in­for­mal set­tle­ment is an ex­am­ple of how far the country has to go to de­liver dig­ni­fied hous­ing for all.

ADD-ONS: Be­cause of the great hous­ing need, back­yard rent­ing is on the rise all over.

GO­ING SMALL: “Mi­cro-units”, an innovation by small-scale en­trepreneur­s, are ad­dress­ing some gaps in hous­ing.

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