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Affordable housing and megacities

How do developers strike a balance?

By Esther de Villiers

, |

Affordable housing and megacities

How do developers strike a balance?

By Esther de Villiers

, |

2 min read

During the third quarter of this year, the Western Cape Government was finalising a draft policy to address affordable housing. Billed as ‘ground-breaking’, its Inclusionary Housing Policy Framework (IHPF) tackles the consequences of ‘apartheid spatial planning’ – and developers form an integral part of the plan.

Public private partnership

Local Government MEC Anton Bredell explained that private-sector partners should share in the responsibility of creating more opportunities for affordable housing in well-located areas with access to transport, jobs, schools and other amenities.

‘It requires new private developments looking for further residential or mixed-use development rights, to include affordable housing units for lower income members of the public, or contribute towards affordable housing in well located areas in other ways,’ Bredell said.

Don’t go cheap

The IHPF proposes that, when approval of developments of a certain size is applied for, it triggers the requirement of having an inclusive housing component. This does not mean cheap housing, but more affordable units within the same development.

Not all developers are on board, however, said Western Cape Property Development Forum chair Deon van Zyl in an interview with News24, adding that the plan equated extra ‘value added tax’ imposed on the private sector to fund the development of affordable housing.

‘The Forum is concerned about a culture of lobbying more obligations on the private sector because government is failing to do its job,’ he said, adding that well-located state land could be developed in partnership with the private sector.

Megacities, major challenges

According to, Cape Town is fast gaining a reputation as an up-and-coming megacity. Top access spots for transport, amenities and jobs, and thus proposed for affordable housing projects, include the Atlantic Seaboard, Southern corridor and CBD.

When shifting the focus to megacities in Gauteng, urbanisation mirrors global patterns. It is South Africa’s smallest province with the fastest population growth, which compounds the region’s housing backlog.

Pam Golding Properties development manager Peet Strauss says the massive ongoing migration means a lot of pressure on infrastructure, and not necessarily enormous buying power, as people moving from rural cities are not buying R20 million apartments in Sandton. ‘Affordable housing is the main pressure point.’

Buyers increasingly turn to private estates that offer open spaces in a crime-free environment. But even if every upmarket project contained low-cost housing, gated estates hardly mitigate the challenge of spatial and social integration that lies at the core of new legislation, such as the IHPF.

Charity begins at home

A perspective by Kenneth Wanyama Kulundu and Gustav Muller of the University of Pretoria’s law faculty urges developers to explore the policies of municipalities in their target areas, cautioning that ‘although still in its formative stages, inclusionary housing in South Africa’s constitutional context is inescapable’.

When required to dedicate a specified portion of projects to the provision of affordable housing, concerns are raised about the possible violation of developers’ property rights, as it affects their investment-backed expectations regarding future earnings.

‘Since municipalities are the chief agents of implementing inclusionary housing, it is important to investigate how they can respond effectively to the property-related concerns of developers.’

Visit and search ‘The incentivisation of inclusionary housing by South African municipalities’ for the full report.

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