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Managing informality and growing affordable Cape Town housing through partnerships

From left; Beverley van Rheenen, chairperson Human Settlements portfolio committee, Councillor Malusi Booi and JP Nortier, development director of Devmark Property group. File picture: African News Agency (ANA)

From left; Beverley van Rheenen, chairperson Human Settlements portfolio committee, Councillor Malusi Booi and JP Nortier, development director of Devmark Property group. File picture: African News Agency (ANA)

Published Mar 23, 2021

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By Malusi Booi

Cape Town, as with many other cities in South Africa and in the rest of the world, has seen an unprecedented migration to urban areas over the last 20 years.

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The landscape has changed dramatically since the dawn of the South African democracy.

Since 2010, the City’s population has increased by about one million people due to the attractive financial and sound governance in Cape Town as well as the high access to basic and other services and economic opportunity.

Decline of national socio-economic situation

Over the last decade there has, however, also been a marked decline in the national government’s financial management and governance. This continues to have a profound impact on cities at the coalface of communities, facing the growing needs for affordable housing and basic services and how cities tackle urbanisation in a manner that drives inclusivity and equity and that eradicates apartheid spatial patterns.

Human settlements delivery is beset with challenges, including R1.3 billion in housing projects under threat from ongoing orchestrated land invasions, national budget cuts reducing our Urban Settlements Development Grant by R118 million alone this year, a weak economy and regulatory red tape.

Innovative, partnership-driven and more cost-effective human settlements delivery options are required.

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While the City on its own cannot build its way out of informality within the foreseeable future, we can innovate within our ambit, and advocate for a more sensible national human settlements framework.

Importantly, the impact of urbanisation in general and on apartheid spatial planning cannot be addressed by a local government alone. Greater public and private sector partnerships and new ways of thinking that are not limited by the current national human settlements regime are required.

New partnership-based strategy, and ‘managed informality’

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Last year, the City’s draft human settlements strategy underwent public participation. At its core, it focuses on enabling greater partnership, collaboration, inclusivity and innovation in the human settlements sphere, especially in the income threshold of those earning less than R22 000 per month.

To address the shortcomings of the current housing system and to enable sustainable, integrated and spatially transformed communities, such a strategy has been of paramount importance. It is hoped to be finalised by council in this year.

The City’s Human Settlements Directorate spent 98% of its Urban Settlements Development Grant capital budget in the 2019/20 financial year despite the greatly negative Covid-19 and lockdown regulations’ impact on its programmes and operations.

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This illustrates the City is able to deliver on State projects as earmarked, but the need for affordable housing is pronounced and a new, whole-of-society approach is required to address the underlying cause of growing informality, which is the need for affordable accommodation.

Informality is partly due to market failure, whereby the cost to produce a house in well-located areas has outstripped the ability of a household to afford it, and due to State failure, whereby government’s national housing programmes have been unable to keep up with the increasing and widespread housing needs of households, particularly those with a monthly income of R22 000 and below.

The strategy talks to major government reform. It requires that government is more inclusive, more consultative, and more aware of the impact of the human settlements system on individual households.

Predicted 30 000 formal housing shortfall per year

Within the next 10 years, there will be a shortfall in the development of formal housing opportunities of approximately 30 000 every year, assuming the average annual rate of supply by both the private and public sectors remain unchanged.

The consequences of a business as usual approach will be felt in all corners of our society. This is why the City has been doing extensive work for some years to map a way forward to enable greater participation in the housing market.

Over this time, Cape Town will grow by roughly 800 000 inhabitants.

To accommodate this growth as well as manage the existing housing demand, it is estimated that roughly 500 000 housing opportunities need to be created between now and 2028.

National economic conditions will continue to place severe pressure on residents

Between 1996 and 2016 Cape Town’s population increased by 56% to more than 4 300 000 residents, and over the same period there was a 94% increase in the number of households, to around 1.36 million.

Approximately 17% of households in Cape Town live in informal dwellings, many with inadequate security and shelter. The provision of basic services is heavily impacted on the degree of informality and where an informal dwelling is situated.

For instance, if it is on privately-owned land, the City may not install services or the settlement or backyard is too densely populated to allow for the installation of services.

Cape Town experienced an unprecedented increase in especially large-scale orchestrated unlawful land occupations since the Covid-19 lockdown regulations were implemented. Therefore, the City is also looking at ways to find short- and long-term innovative solutions to manage the growing informality in Cape Town.

Our new proposed managed settlements programme intends to create the opportunity to allow residents to lawfully and safely erect informal structures on land that has been prepared for service access and infrastructure installation.

This would be the rapid, affordable housing solution that is required. The new plan to address informality thus comprises a sustainable, legal housing response that is not a temporary relocation area. In all fits into the broader thrust of the strategy.

Brick and mortar will not solve challenge

Urbanisation will continue and the associated growth in informality, especially considering the dire national economic conditions in South Africa. This is not a problem that is unique to Cape Town, but it is perhaps exacerbated by the limited suitable land and topography of Cape Town as a Peninsula.

There will need to be a far greater acceptance of a different mix of accommodation types and that formal State-subsidised housing (the old RDP and now Breaking New Ground models) cannot be the primary vehicle to tackle the challenges.

It will take the efforts of all market actors and extensive community participation and a new normal consensus to meet the demand for more inclusive and affordable housing stock in Cape Town, and to address and manage growing informality with diminishing public budgets.

Homeownership remain elusive for majority of households

The City and its partners need to increasingly adapt to systems of informality, emphasising the creation of liveable, dignified, and integrated human settlements that support the well-being of residents.

We need to think innovatively about accommodation types and suitable land, from unlocking and enabling partnership-driven developments in urban centres, incorporating land not used before for housing such as golf courses and mixed use areas to modular housing, micro-developers, large developers and large-scale managed settlement interventions such as site and service offerings and the roll out of far more upgrading of informal settlement programmes and managed settlements with site and service.

It’s estimated that entry-level formal housing within the formal market costs between R400 000 and R500 000 in Cape Town. A household would require a minimum gross monthly income of R20 000 to afford such a dwelling.

As between 60% and 65% of Cape Town households earn less than R20 000 per month, ownership of a house is generally beyond their financial reach.

For these households there are alternatives, including various forms of State-subsidised and State-supplied housing as well as private rental accommodation.

However, the State doesn’t have the available resources on its own to provide the range of housing necessary to address the demand at the required income levels, and the private sector isn’t delivering supply at the scale or affordability levels necessary to ease the demand.

For those households who are not supported by the State or serviced by the private sector, informality often becomes one of the only options for housing.

The desired outcome of the strategy is for a Cape Town housing market that is able to produce a diversity of safe, valued, accessible, and well-located housing opportunities, which meets the demand of Cape Town’s residents, especially households who earn up to R22 000 per month.

All these plans, including for social housing which has been a growing type of subsidy accommodation over the last five years especially, are derailed when we have large-scale, organised land occupations or organisations hijacking buildings, such as at the Woodstock Hospital site.

For four years, this illegal act has stalled social housing developments at both the City-owned Woodstock Hospital site and the Helen Bowden property near the V&A Waterfront, owned by the Western Cape Government.

Following provincial and local government’s announcement of social housing plans for these properties, Ndifuna Ukwazi staged an organised invasion in March 2017 under their “Reclaim the City” campaign banner, with subsequent calls to “sustain and build” the occupation.

In contempt of the court interdict that was obtained by authorities, the number of unlawful occupants has increased substantially, along with reports of criminality, rent extortion rackets, violence and mob activity to the detriment of the surrounding community. These actions where an organisation decides who gets an affordable opportunity or not, hold profound impacts for cities and housing programmes.

The strategy presents seven strategic shifts that should be made by the City and its partners to help realise these objectives:

  • Reduce or remove the barriers to expanded housing provision that are within the City’s authority and ambit
  • View housing provision as an inclusive process involving a number of actors and stakeholders where the City is an enabler, advocate for inclusive housing and provider
  • Acknowledge the importance of location for integrated and sustainable human settlements
  • Recognise the necessary balance of rental and ownership to meet affordability demands
  • Develop practical and realistic compliance regulations that ensure the safety of residents
  • Incentivise the transformation and regularisation of informal dwellings into formal housing
  • Implement measures that affect human settlements overall and not just housing opportunities

Stronger Cape Town for all

The City is busy with immense work on tackling the affordable housing challenge.

There is a place for all types of housing delivery, such as State-subsidised housing, upgrading of existing informal settlements, managed settlements, rental and social housing, micro-builders among others, but we need to look at methods that also rapidly provide affordable housing opportunities to address the worsening economic situation in South Africa and to ensure that Cape Town becomes a healthier and stronger city for all.

* Councillor Malusi Booi, mayoral committee member for Human Settlements, City of Cape Town.

** The views expressed here are not necessarily those of Independent Media.

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