Accommodation with proximity to jobs, transport, amenities is vital in Cape Town.
Some say Cape Town is a city of beauty, wealth and privilege; others call it a city of poverty, desperation and despair, where a R250 million penthouse is a stone’s throw from a shack.
The housing crisis is affecting not only the unemployed as people with jobs also struggle to find affordable housing.
According to FNB stats, first-time home buying in Cape Town in particular slumped to a low 6.64% for the first half of 2017.
This week, in a report by the organisation Ndifuna Ukwazi and titled “I used to live there”, Ndifuna Ukwazi said because of rising house prices even middle-class families with good incomes were finding it almost impossible to afford a roof over their heads.
Cape Town’s CBD has a growing residential community producing high demand for limited properties available, which in a supply-and-demand economy means prices have sky-rocketed.
Estate agencies say they have not seen anything in the area below R1.2m on the market for more than a year.
Affordability, says FNB household and property strategist John Loos, remains one of Cape Town’s big stumbling blocks for entry into the property market.
Civil society organisation Reclaim the City says not enough is being done to address the crisis, arguing unregulated rents and property prices are forcing the poor from the city as gentrification escalates in certain areas.
It says the lack of affordable housing in Cape Town means spatial apartheid persists, and continues to reinforce inequality.
“There is not enough well-located affordable housing. The city and province say they have no plots, but are selling or leasing land that could be used for mixed-income affordable housing. This has to stop,” the organisation says.
Reclaim the City, launched last year to campaign for desegregation and affordable housing development in the CBD and surrounds, has called on the state to be proactive.
Councillor Brett Herron, Cape Town’s Mayco member for Transport and Urban Development, is the authority in charge. He says 318 182 applicants are registered for affordable housing.
While one person’s affordable is another’s prohibitive and a third person’s change, affordable housing is a category of housing available to beneficiaries who qualify.
Herron says there are plans to address the legacy of apartheid spatial planning, but the City of Cape Town can’t do it alone. “Given the scale of demand, we need the private sector to contribute to the delivery of affordable housing opportunities,” he says.
Herron points to the Foreshore Freeway Precinct as an example of how the city intends to encourage the private sector to contribute.
The precinct – a 6 hectare strip of city-owned land located under and between the existing and unfinished highways near the harbour – is a prime location and has the potential to provide developers with significant return on investment.
The city will make this land available to a successful bidder for development. But, in return for the land, the developer must provide housing for a range of income groups, including affordable housing.
Herron says the city also intends to accelerate the provision of other housing opportunities close to public transport.
“The Transport and Urban Development Authority will, in the next five years, embark on at least five transit-oriented development projects to assist us in providing affordable rental and other housing opportunities in well-located areas. The exact number of housing opportunities at each site will be known once planning processes are concluded. The current estimate is 3 000 (each site).”
According to Herron, the city is also looking at providing opportunities in the Bellville, Parow, Khayelitsha, Claremont, Mitchells Plain, Wynberg and Plumstead CBDs.
“Providing affordable housing opportunities closer to where people work or to public transport is non-negotiable.”
Herron says the City’s Transit-Oriented Development Strategic Framework, adopted last year, is “a bold commitment to transform our spatial reality over the next decades”.
The framework looks at best places for residential areas for all groups in relation to opportunities. This, he says, will hold substantial benefits for the poor, who spend up to 45% of their monthly income on daily transport between 45km to 70km to work.
The city’s magic formula to address the apartheid legacy is to make sure the correct developments, catering for all, are built in locations with public transport, and the magic word is “integration”.
“The delivery of housing opportunities will happen in conjunction with access to work opportunities and to public transport,” says Herron.”
He says the approved R6.8 billion Built Environment Performance Plan will invest in major capital projects and interventions to address the legacy of apartheid spatial planning.
At a conference earlier this year of the Western Cape Property Developers Forum, chairperson Deon van Zyl called on developers to use strategically located state-owned land to create accommodation for those who were active in the economy, but unable to afford market prices.
Van Zyl said affordable accommodation is not charity, but a business opportunity.
He challenged the development industry to break through its “fear factor” and engage with organisations such as Ndifuna Ukwazi around affordable accommodation.
Ndifuna Ukwazi supports Reclaim the City, and wants Cape Town to be desegregated, by race and by income.
“People on all levels of the income spectrum should live and work in the same suburb,” says Ndifuna Ukwazi researcher Shaun Russell. “We cannot bus people to economic hubs to take advantage of their labour – which increases the social value of an area – then send them home to live in poverty on the outskirts. It is unsustainable and inhumane to expect people to commute for four hours a day.”
He says an economically-integrated city would mean rich and poor living next door to one another, and sending their children to the same schools so those historically excluded from opportunity have a chance to climb out of poverty. “It would mean a society not defined by wealth.”
Russell says affordable housing should be measured as 33% of a person’s income. “This would mean across the board people could live in good locations, not relocation camps, informal settlements or other poor areas, and not spend more than a third of their income on rent or mortgage.”
‘Radical’ homes plans afoot
The City of Cape Town’s transport and Urban Development Authority is finalising a “radical and game-changing” strategy for the provision of affordable housing opportunities in Salt River and Woodstock.
The full package of plans is scheduled to be released on Wednesday, but it is believed the housing projects being planned will provide “a few thousand opportunities to lower-income households in those areas”.
The city’s new affordable housing strategy is apparently aimed at “expediting the delivery of these opportunities and providing residents in need with housing opportunities close to where they work and in close proximity to public transport”, according to the authority.
Taller buildings, smaller units key to affordability
Research by UCT’s Department of Construction Economics and Management indicates ways to encourage affordable housing in Cape Town’s inner city.
“Those who can least afford it travel the furthest and pay the most to get to work,” explains land economist Robert McGaffin, one of the paper’s authors.
According to the research, development costs must be balanced by creating a product truly affordable for a lower-to-mid-income market.
Increasing the height of buildings and dividing developments into smaller units can help improve the ratio between costs and profitability for developers, while keeping housing affordable, says McGaffin.
He calls for untangling red tape, saying stringent building standards have been a stumbling block to affordable development.
“It’s vital for standards to be in place for human habitation, but a balance has to be struck between making buildings safe to live in yet affordable. Otherwise, a few will live in safe spaces, and those who cannot afford to, will be forced to live in dangerous buildings.”
Weekend Argus Property