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Cape Town - Affordable housing is critical if Cape Town wants to establish itself as a thriving, integrated and cosmopolitan hub that is on par with global cities such as New York and Sydney, according to Richard Day, national general manager and Cape regional managing director of Pam Golding Properties.
That is why he welcomes the City of Cape Town’s plans to provide affordable housing opportunities to help create a more inclusive city.
News24 reported in June that the City of Cape Town wants the entire city to be declared a restructuring zone, which will allow for any suitable land to be used for social housing. An amount of R101bn was needed for another 650 000 housing opportunities over the next 20 years, according to the City. A restructuring zone is a demarcated area where a national subsidy can be used to build social housing.
There are plans for about ten inner-city sites to be developed for the poor. These city-owned sites marked for affordable housing are in Salt River, Woodstock, and in the city centre. Three of the sites have already been allocated to social housing institutions and the statutory land-use applications are underway.
"The city’s commitment to providing these housing opportunities follows international trends seen in cities such as London and the Netherlands, where local authorities have introduced innovative plans to ensure more communities are able to afford homes closer to their work and other amenities," said Day.
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Unprecedented growth
The City of Cape Town has indicated that there has been unprecedented growth in the property market in areas close to key nodes of employment and along transport routes. Ongoing so-called semigration, as buyers move from Gauteng and other provinces to the Western Cape, has also inflated property prices in the region.
“It’s therefore becoming increasingly important to ensure that affordable housing is available in growth areas for middle-income homeowners," said Day. "Innovative housing solutions and inclusive spatial planning will make it possible for more communities to have access to these opportunities."
It’s encouraging too that the City wants to provide housing in all the central business districts – such as Bellville, Claremont and Wynberg – and not just the CBD, Woodstock and Salt River, notes Day.
He explained that in Toronto, for example, one of the most successful urban regeneration projects includes a mixture of housing types, tenures, income groups and mixed retail and commercial offerings.
“If done properly, and with the backing of the private sector and developers, the City of Cape Town’s plan is an exciting opportunity to reconfigure our urban landscape to create an inclusive and thriving global city for all,” said Day.
Research by Savills, Pam Golding Property’s strategic partner, shows that demographics and the supply of land or housing are among the key factors that drive a property market.
"As such, it is imperative that Cape Town is able to provide adequate housing for its population, which in the last decade alone has increased by more than 50%. Added to this is the fact that about two-thirds of South Africans are under the age of 34, typically the age at which people buy their first home," said Day.
“We have to do all we can to ensure there are homes available for these buyers wanting to enter the property market.”
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House price inflation
Although the Pam Golding Property index shows a national house price inflation of just 4.2% for the first half of 2017, Cape Town’s property market remains robust with a price growth of 11.8% during the first quarter.
“Our resilience despite the country’s economic slowdown is encouraging, but the long-term sustainability of this property market depends on positive activity across all segments,” explained Day.
“We are seeing in the Western Cape that much of the positive market activity is fuelled by the lower price band where inflation in house prices lower than R1m was 15% during the first half of the year.”
READ: Gauteng most affordable housing market of 'Big 4' provinces
Ample opportunities
Mayoral committee member for transport and urban development Brett Heronn said recently there are ample opportunities for affordable housing in many areas across the metro, and the development and availability of affordable rental accommodation in central areas of the city must play a key role in the future development of Cape Town.
Currently however the city cannot get access to social housing grants from national government unless suitable land is located within a restructuring zone.
News24 reported that two erven along Pine Road in Woodstock, close to the city centre, will be developed first, followed by another six along Dillon Lane, also in Woodstock. The proposed developments would be a two- to four-storey mixture of studio flats and one- and two-bedroom units meant to provide about 240 state-subsidised housing units for people already on the housing waiting list.
To qualify, the beneficiaries have to earn less than R15 000 a month and be able to pay rent.
Another 476 subsidised rental units are planned for the Salt River Market in Albert Road, also close to the CBD. These will vary from subsidised social housing for those earning less than R15 000 a month, to rentals for households with a monthly income of between R3 500 to R20 000.
Retail and office space will form part of this development to cross-subsidise the housing.
Beneficiaries have to be registered on the city's housing data base to qualify and meet certain criteria, like earning less than a certain amount.
There are currently 350 000 people on the housing waiting list. This is expected to rise to 650 000 families by 2032, according to Herron.
The city is also considering changing planning laws to allow more than one dwelling to be built on one stand.
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