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Author:  Carin Smith
14 August 2021

Western Cape’s ‘groundbreaking’ new affordable housing policy hits the home stretch

The Western Cape Government is finalising a new draft policy aimed at tackling affordable housing.

The Inclusionary Housing Policy Framework – which it describes as groundbreaking – is tackling the legacy of ‘apartheid spatial planning’, with the goal of allowing middle-to-low income households better access to well-located areas, transport and economic opportunities.

The draft policy will help municipalities in the Western Cape facilitate more inclusive housing in collaboration with the private sector.

“Inclusionary housing is a mechanism to share in the value of land – which the whole of society has contributed to.

“It requires new private developments looking for further residential or mixed-use development rights, to include housing units that are affordable for lower income members of the public or to contribute towards affordable housing in well located areas in other ways,” Anton Bredell, provincial MEC of Local Government, Environmental Affairs explained in a statement.

“We are trying to work with the private sector to create more affordable housing opportunities in the parts of our cities and towns located close to jobs, schools, health facilities and good quality public spaces.”

Comments received during the recently completed public participation phase are being reviewed before finalising the draft for submission to the provincial Cabinet for approval.

Catherine Stone, Western Cape Director of Spatial Planning, told Fin24 on Friday that spatial planning legislation requires municipalities to designate areas where the policy can be applied.

“The Western Cape government chose not to prescribe this, but rather to provide a guiding framework for municipalities and to encourage them to introduce their own regulations. We are trying to provide consistency on what inclusionary housing is,” she said.

The idea is that, when a developer applies for approval of a development of a certain size, it will trigger the requirement of having an inclusive housing component.

“It is not about trying to get developers to deliver affordable housing at scale to very poor households. It is about asking them to provide more affordable housing in certain areas,” she said. The idea is not necessarily cheap housing, but more affordable units within the same development, she added.

“It is a mechanism to try and spatially transform our cities and mitigate the apartheid-era spatial development by providing more affordable opportunities in certain areas,” she added.

These units must be indistinguishable from the others in order to avoid prejudice.

“Of course, it must still be feasible for the developer to provide it without being subsidised,” said Stone.

Developers may also be given the option to make a different contribution to social housing in lieu.

Prime spots

The proposal is to look at this type of development in prime spots that have good access to transport, amenities and jobs. In Cape Town, for example, this would be the Atlantic Seaboard, Southern corridor and CBD.

Stone says a “blanket” approach is not being taken – rather, the idea is to target the “gap market” of households that don’t qualify for a full housing subsidy but also do not qualify for a bond; that is, people who earn roughly between R3 500 and R22 000 per month.

For this gap market housing units should cost about R600 000.

The draft policy recommends that municipalities do feasibility studies to determine what would still be a fair return for a developer so that new housing developments are not disincentivised.

Internationally, usually about 30% of such developments are set aside for affordable housing.

“We can only show in practice that these kinds of projects are possible. The people we are targeting are key workers like teachers, nurses, educare workers and police who are earning about R20 000 a month and have to travel long distances to work. We have to break the anonymity between classes and show that we can live together,” says Stone.

Councillor Malusi Booi, the City of Cape Town’s Mayoral Committee Member for Human Settlements, says the eventual approval of a Provincial Inclusionary Housing Policy Framework would also satisfy the Spatial Planning and Land Use Management Act (SPLUMA) requirement of a National or Provincial Inclusionary Housing Policy for implementation in municipalities.

The City is in the process of developing its own Inclusionary Housing Policy which will be premised on the principles of the Provincial Framework.

Not all developers are fully on board, however. Deon van Zyl, chair of the Western Cape Property Development Forum says the Forum is not opposed to inclusionary housing and bringing people closer to economic hubs.

“What we are opposed to is what boils down to an additional ‘value added tax’ being imposed on the private sector to fund and implement the development of affordable housing. We are saying government is trying to use us to do its basic job. If government wants us to build affordable housing for it, then contract with us formally,” says Van Zyl.

“The Forum is concerned about a culture of government lobbying more and more obligations on the private sector because government is failing to do its job.” He wants the release of well-located government-owned land, which could be developed in partnership with the private sector.

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