South Africa: What happened to the affordable housing policy promised by Cape Town?

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Activists launch report on urgent need for ‘inclusive’ housing policy

  • In 2019 Mayco member Malusi Booi said Cape Town would develop an affordable housing policy.
  • Three years later, it is not yet finalized.
  • Last week, housing activists Ndifuna Ukwazi published a report and issued an urgent call for the implementation of an inclusive housing policy.
  • There is a huge gap between the price of formal housing and what people earn and can afford.

In November 2019 Malusi Booi, Mayco Fellow for Human Settlements, said Cape Town was engaged developing an “inclusive housing” policy. Three years later, the policy has still not been filed.

Cape Town City told GroundUp that Mayor Geordin Hill-Lewis has “reviewed the policy work done to date in the city after taking office in November 2021, and has directed officials to conduct further reviews to finalize the most feasible inclusive housing policy for Cape Town”.

“It is essential that any policy works well in practice and takes into account feedback from the development fraternity,” the City said.

An “inclusive housing policy” would require developers to include affordable housing in developments.

Last week, housing activist group Ndifuna Ukwazi released a report titled Regulate the private sector. In this document, the researchers make an urgent appeal to the City to complete and implement an inclusive housing policy.

According to the report, the city is short of about 23,000 formal housing units per year.

“While 76% of Cape Town’s population earn less than R22,000 per month, only 34% of all formal households cater to households in this income bracket,” the report said.

“There is clearly a big disconnect between what people earn and the cost of houses,” he says.

Meanwhile, at the provincial level, the Western Cape government past his Inclusive Housing Policy Framework November 4. It aims to help municipalities, in partnership with the private sector, to include more affordable housing in urban center developments.

By province: In 2019, the estimated average monthly household income in the Western Cape was R19,430. It is therefore unlikely that the average household in the Western Cape could afford a property costing more than R600,000. However, the average sale price of a property in the Western Cape in 2021 was R1,350,000. To buy a property at this average selling price, a household would need to earn a gross monthly income of over R33,000 (assuming a 10% down payment, 7.75% interest rate and 20-year loan ).

The NU researchers say that in practical terms, private developers can be offered incentives in return for creating affordable housing in their developments, on nearby land or through a financial contribution.

NU researcher Robyn Park-Ross said while inclusive housing is not a silver bullet to the housing crisis in Cape Town, there is a need to tackle spatial apartheid in the city by creating affordable housing in well-located areas. It would help break down racial and class segregation, Park-Ross said.

The NU report also documents 16 private developments across Cape Town that have included some form of inclusive housing contribution.

The number of affordable homes in the developments ranged from 5% to 30%.

“In an environment of political uncertainty, these contributions demonstrate the minimum of what is possible… They provide a foundation from which to develop more meaningful contributions in the future,” the report said.

But the researchers noted a “worrying inconsistency” regarding the homes’ affordability, access, location and physical standards, among other issues. The report states: “Clarity and consistency are desperately and urgently needed, and both of these can be provided by an appropriate inclusive housing policy.

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