Why privatising public land in Cape Town needs a rethink | FUTURE CAPE TOWN

“At the crux of the issue is the fact that well-located state-owned land is a public good, a capital asset to be held onto.”

A number of City and provincial-owned properties close to the economic opportunities of the central city have recently been earmarked for sale. This sparked renewed discussions on the privatisation of public land. Sean Dayton explores the reasons why this is such an important issue and dispels some of the myths around affordable and mixed-income housing. 

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Harold MacMillan was 90 years old when he spoke out against the British Conservative government’s aggressive system of privatisation. It was 8 November 1985, only a year before his passing, when the old man stood up and, with characteristic charm and wit, spoke his now-famous words of warning against the selling of state-owned capital assets. “It is very common with individuals, or states, when they run into financial difficulties, to find that they have to sell some of their assets”. MacMillan, the First Earl of Stockton, continued: “First of all the Georgian silver goes. And then all that nice furniture that used to be in the salon. Then the Canalettos go.”

Selling the family silver – that was the accusation MacMillan was levelling against his government; And much like the British government of the 1980s, the City of Cape Town and the Western Cape Government are, in 2016, pursuing a similar wave of privatisation, albeit of their prime real estate assets. A large number of City and provincial-owned properties close to the economic opportunities of the central city have been earmarked for sale despite repeated calls by organisations to scrap the sales and consider the development of the sites for affordable housing.

In a recent article in GroundUp, Ashleigh Furlong highlights the Western Cape Government’s plans to lease or sell four Cape Town properties to private investors. Among these sites is the Alfred Street Complex in Green Point, the Top Yard vehicle compound in the CBD and the site of the old Tafelberg Remedial High School in Sea Point.

The City is planning to sell the Clifton Scenic Reserve, a few acres of pristine coastal land between Clifton and Camps Bay, to a private developer. The site is a provincial heritage site and, during Apartheid, was one of the few spots along that majestic stretch of coastline where non-whites were allowed to picnic. The site is also the well-known landing spot for Lion’s Head paragliders.

And most recently, as reported another Groundup article, tenants in Maynard Street in Cape Town’s city centre – some whom have been living there for 34 years – have learned of the proposed sale of their units after coming across a notice in local newspapers.

It’s in this context that in the first week of April, 2016, Reclaim the City, an NGO that campaigns for affordable housing in Cape Town, the trustees of Ndifuna Ukwazi and former and current residents of Sea Point filed papers in the Western Cape High Court requesting an urgent hearing to interdict the Western Cape provincial government from selling the Tafelberg School site in Sea Point.

Selling our land – don’t we need it for other things..like housing?

Green Point, Sea Point, the CBD and Camps Bay – these are some of the City’s most economically vibrant neighbourhoods, making up a massive proportion of the City’s jobs (the city centre alone accounts for around 25% of Cape Town’s turnover). Despite this, working class commuters travel great distances, sometimes 2 hours each way, to provide the labour that these neighbourhoods consume. These are the nurses, supermarket cashiers, domestic workers, gardeners and security guards that keep Cape Town running.  

Academics have been telling us for years how this “spatial mismatch” between employment and housing locations is highly inefficient, serves to further exacerbate unemployment and has substantial economic and social costs. For example, in 2015 SA’s Statistician-General released a report revealing how households in the two lowest quintile income groups spend between a third and a half of their entire disposable income on transportation.   

The issue is such an obvious threat to the city’s future sustainability that, when Cape Town Mayor Patricia de Lille announced that she would be running for a second term as mayor, she announced unequivocally that if the incumbent Democratic Alliance retained control of the city‚ she would work for more spatial integration by building housing projects closer to the city centre.

On the face of it, this issue seems to be an issue close to the mayor’s heart – in 2014, Mayor de Lille wrote to the President encouraging him to facilitate the release of two National Government-owned properties for affordable housing. In this letter, the mayor wrote that “one of the major challenges confronting the City is a shortage of suitable available land for housing”, emphasising the fact that the two properties in question were close to economic opportunities.

The City’s own 5-year plan for human settlements directs that developments “must be suitably located and must facilitate the spatial transformation of the City’s suburbs”, moving toward efficiency, inclusion and sustainability. The report goes on to say that the building of cohesive and caring communities, with improved access to economic and social opportunities, is “imperative”.

Yet, despite what has been expressed by the City and Province, their actions point to a contrary intention, as both appear to be determined to sell off their prime land to private interests rather than holding onto these sites and utilising them for affordable housing. This isn’t fixing the spatial mismatch problem – and it seems to be a complete slap in the face for the spatial transformation that the City’s own policy documents speak about.

In a recent Daily Maverick article, Jared Rossouw and Hopolang Selebalo from NGO, Ndifuna Ukwazi, calculate that the sale of the Tafelberg school site in Sea Point alone has resulted in a lost opportunity to build 216 mixed income affordable units in a prime high-employment neighbourhood.

Selling off a bit of expensive land to buy lots of cheap land (far away)

Despite making all the right noises about building housing projects close to the city centre, the City and Province have indicated that they favour an approach called “cross-subsidisation” – namely, the selling-off of relatively more valuable land in upmarket neighbourhoods in order to (ostensibly) use this money to purchase cheaper land in outer-lying areas for affordable housing.

A 2015 Mail&Guardian article featured a quote from Mayor de Lille’s spokesperson, Zara Nicholson, explaining that the City’s proposal to sell the Clifton site “was part of a broader plan to generate revenue for the city by putting public spaces into private hands for commercial development”.

In the GroundUp article, Furlong reports how the Western Cape Government, in a letter to the Social Justice Coalition, made it clear that, in order to fund developments for the poor, it preferred to “extract maximum value from the more valuable inner city properties to create an income stream and a development fund from which projects for the poor can be cross-subsidised”.

Cross-subsidisation may seem like a no-brainer for a cash-strapped city or provincial government needing to keep providing for its citizens. But to what extent is City or Province really cross-subsidising to create an income stream and a development fund for affordable housing? According to deputy mayor Ian Neilson, only 10 % of the sales price of the Clifton Scenic Reserve will be used for “near inner-city social housing projects”.

It therefore seems as if the cross-subsidisation argument is simply a distraction. In light of all of this, the City of Cape Town and the Western Cape Government must alter their approach to affordable housing for the following reasons:

1. Apartheid forced removals have created a racially polarised dystopia

South Africa’s Apartheid government systematically removed tens of thousands of non-whites from areas in and around the Cape Town central city. Because of continued economic disadvantage coupled with inflated property prices, the racial makeup of these neighbourhoods has changed little since then. Non-whites continue to remain disadvantaged, and market forces will not resolve this. As is clear from Adrian Frith’s enlightening (and frightening) maps of South Africa, Cape Town is massively polarised along racial lines.

 

 

 

 

 

 

 

 

 

 

 

 

Even though we’re more than 20 years into democracy, non-white neighbourhoods in this country remain vastly unequal to those of whites. Non-whites continue to live among more disadvantaged neighbours, continue to have access to lower performing schools, and to be exposed to more violent crime.
By using well-located state-owned land for mixed income housing, rather than selling it to private developers with no strings attached, we can most quickly ensure the spatial (and therefore racial) transformation of our neighbourhoods. The City’s own 5-year plan for human settlements speaks to the same point when it discusses balancing quantity with quality:

“While the drive to accelerate the delivery of more housing opportunities (quantity) will continue, there is an equally important drive to pursue quality-of-life objectives relating to improved human settlements. These include…ensuring and promoting medium-density housing in well-located and appropriate areas within the urban core, along transport corridors and in economic nodes.”

2. Sprinkling a measure of affordable housing around Green Point, Sea Point, Camps Bay and the City Bowl neighbourhoods is not going to create a hotbed for crime

Unfortunately, a few vocal middle class residents will likely to oppose plans to develop affordable housing in their neighbourhoods. They will probably argue that poorer residents will contribute to ‘crime and grime’ or the depreciation of their property values.
To be clear, giving nurses, supermarket cashiers, domestic workers, gardeners and security guards an opportunity to live close to where they work will not contribute to crime. And as far as depreciation of property values is concerned, Vancouver and New York City, two cities with some of the highest property values in the world, have over the last decade forced developers to include affordable housing components in affluent neighbourhoods with no noticeable effect on property values (other than that these values continue to increase year on year).

3. Affordable, mixed income housing does not mean low cost

Affordable housing doesn’t have to entail only the most rudimentary form of accommodation, and it doesn’t have to be geared only to the very poorest of the poor. Mixed-income housing schemes have been introduced in many cities around world as places where people can thrive in all aspects of their lives, from students renting small studios to start-up homes for purchase by newly-weds. The use of mixed-income housing could result in more inclusive communities and achieve balanced development that effectively addresses the problems of concentrated urban poverty. A project such as the Brickfields development in Johannesburg seems to have had some success as a mixed-use development that, in addition to residential units, provides retail units, live-work units and community facilities. The overall development consists of three separate precincts and offers a model for economically and socially sustainable housing provision.

4. Once the land has been sold it’s…gone

At the crux of the issue is the fact that well-located state-owned land is a public good, a capital asset to be held onto. Government should not be in the business of getting rid of it, least of all to property developers with no strings attached. Once sold, this land will become too expensive to buy back when we need it.

It’s a funny thing, privatisation – the more a government accepts it as a legitimate way to fund spending, the more the public purse seems to become reliant on it. Like a farmer who buys GMO seeds, he finds himself having to go back and buy more seeds every year…he can no longer produce his own. How do we determine what land can be seen as surplus land and be sold off for private use? It seems there is an urgent need for a framework for determining whether a certain piece of land is surplus or not. This method will need to be publically available and transparent, and must take into account both financial and social considerations of these assets.

In 2014, around the time that the Western Cape Government announced its plans to lease the Tafelberg site (rather than sell it outright as it is now in the process of doing), the provincial Minister of Transport and Public Works highlighted the fact that that the decision to lease, rather than sell, was to ensure that “future generations will (in say 30 or 50 years’ time) again have an opportunity to decide how to utilise this most valuable, finite and irreplaceable resource, namely property.” If this was the government’s position in 2014, why has this position changed so much since then?
We hope that the present legal challenge by Reclaim the City and other applicants will force Cape Town residents to have an important conversation about what the City and Province are doing to progressively correct the racial and spatial imbalance that we presently find in our central city and surrounding neighbourhoods.

Read more:

• What to do about the Good Hope Centre : Towards a new framework for public assets
• Why inner city housing is possible : Calls to halt sale of prime city land in Cape Town
• Potential sale of valuable land in Clifton is planned

Sources:

• www.groundup.org.za
• www.campsbayratepayers.blogpost.co.za
• www.mg.co.za
• www.capetown.gov.za
• www.dailymaverick.co.za
• www.bdlive.co.za
• www.bsc-projects.co.za

Image credits:

• Mary-Anne Gontsana: Groundup
• Naib Mian: Groundup
• Albie Sachs: Campsbay ratepayers association
• Craig Mckune: Mail & Guardian
• BSC projects
• Aphiwe de  Klerk: Times Live