How affordable housing can be delivered by the private sector : A case study in Parow, Cape Town

Kate Hogarth was a finalist in the Royal Town Planning Institute Student Award in Research Excellence, and received a Commendation for her research efforts.

Before studying city planning, Hogarth started her academic career in property investment and development. She was interested in understanding the complex nature and challenges of property and housing markets and how planners can better work with and intervene in them to produce more equitable, desirable outcomes.

Hogarth’s 2016 thesis, as part of the Masters of City and Regional Planning at the University of Cape Town (UCT), entitled Leveraging the Private Sector to Enable the Delivery of Well-located Affordable Housing in Cape Town, was concerned with the fact that affordable housing in Cape Town tends to be located far away from economic opportunities, social facilities and public transport infrastructure, which reinforces inequality and inhibits efficient functioning of the city.

It focused on exploring the challenges related to bringing well-located, affordable housing units to the market in Cape Town and the city-scale interventions. This would be possible within a short- to medium-term basis, and would tackle inefficiencies in the market and regulatory systems, in order to leverage the power of the private sector (including institutions, small-scale landlords and households themselves) towards the goal of well-located affordable housing. 

“I wanted to use this project to broaden my own understanding of housing markets, and hopefully contribute to the wider debate” says Hogarth. “Most of us are aware of the significant backlog in supply of affordable housing units in South Africa. To make matters worse, those houses that are built are often at densities too low to create the necessary thresholds to support city functions such as public transport; and many settlements are poorly located in terms of access to economic opportunities and social facilities. The polarisation between the areas of wealth and economic opportunity and the overcrowded and underserviced areas where the majority of the population lives, serves to reinforce inequality, burdening poor households and the city” adds Hogarth.

These features are common to many South African cities, but tend to be more acute in Cape Town where well-located land is particularly expensive. An important root of the problem is apartheid spatial planning, which promoted a racially segregated, unequal and sprawling city. Rather than resolving these issues, the current state-led housing programme and private development patterns have tended to reinforce fragmentation and exclusion.

Hogarth analysed the local housing market and national housing policy in South Africa and thereafter conducted interviews and hosted a workshop with participants from both the private and public sector, as well as NGOs and academia, in order to explore the key related challenges, opportunities and potential solutions in Cape Town. Finally, these challenges and opportunities were investigated and interventions proposed in a particular context, namely the Parow train station precinct within the Voortrekker Road Corridor (VRC) in Cape Town.

 

 

Case Selection:

The Parow Study Area was selected with the intention to generate findings that could be tested in other local areas, particularly train station precincts, within the VRC.

It typifies many of the challenges experienced in well-located areas of Cape Town; for example excessive parking requirements and minimal depreciated, higher-density, convertible buildings.

A particular opportunity is the lower land prices (relative to other well-located areas, such as the CBD), but this is somewhat overshadowed by bulk infrastructure constraints and an increasing crime problem. In addition, while large tracts of developable land are limited, there are significant parcels of city-owned land which could be put to much better use, provided they are appropriately packaged (consolidated, re-zoned and made available to appropriate developers, either on long leases or in public-private partnership). There is also significant potential for the densification of single residential properties (mainly through small-scale landlords), provided restrictive development parameters are removed.

The existence of the Greater Tygerberg Partnership, tasked with facilitating public and private partnership in the development and regeneration of the VRC, would be an important enabler in this regard.

 

Findings and Recommended Interventions:

At a national level, there are systemic issues in terms of poor education, poverty, debt, access to housing, finance, and exclusion from land markets. Furthermore, there are major problems with the current national housing programmes, particularly social housing, Finance Linked Individual Subsidy Programme (FLISP), and the excessive building standards for (entry-level) subsidised houses. This serves to hinder the delivery of higher-density, well-located units and reduces the incentive for the private sector to provide innovative housing products. Hogarth states that, rather than reactively applying further layers of subsidies, a comprehensive review of the national housing policy and related funding is required.

The findings for Cape Town indicate that the greatest challenge for developers is the limited availability of well-located land at affordable prices. Compared to cities like Johannesburg, Cape Town lacks depreciated, higher-density built stock which could easily be redeveloped. In addition, a key realisation was that development viability can be significantly impaired by seemingly small issues, such as excessive parking ratios and delays in the development process. A further challenge is posed by the lack of nuanced market information, particularly regarding demand.

Fortunately, there are many opportunities, including a capable and facilitative municipality in Cape Town, emerging actors and a growing private sector interest in affordable housing, small-scale landlords and innovative design, a shift from ownership to rental and a potential synergy between affordable housing, transit-oriented development (TOD) and urban regeneration (provided policy and public spending are aligned).

Key recommendations for public intervention, applicable both city-wide and to the Parow Study Area:  

1. To urgently develop programmatic (national and city scale) and area-based (precinct scale) strategies which position affordable housing (including social housing) as a catalyst for urban regeneration and TOD, and align public investment in order to incrementally densify appropriate areas.
2. To protect and package public land for affordable housing and other public benefit uses.
3. To remove obstacles to private sector provision of affordable housing by both institutional and small-scale actors; for example by reducing parking requirements and restrictive development parameters (potentially through affordable housing overlay zones), making market data available and fast-tracking approvals. An essential institutional intervention would be the creation of an inter-departmental ‘affordable housing task-team’ within the municipality to champion and facilitate such interventions.

“Planning needs to take advantage of the emerging movement of more collaborative approaches to design, production and management of shared resources. Prioritising the delivery of well-located, affordable housing is crucial if we are to create more integrated, equitable and liveable cities” says Hogarth.

 

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Kate Hogarth is an urbanist in pursuit of shared wellbeing, resilience and regeneration, with a number of particular interests including urban commons, affordable housing, food security, innovative and resilient urban infrastructure, inclusive public spaces, and community-building through place-making (Linkedin). She graduated from the University of Cape Town’s Masters in City and Regional Planning programme in 2016 and is currently registered with the Royal Town Planning Institute (RTPI) as a Licentiate Planner.

Read more at:

• Guy Briggs calls for social housing to bring Cape Town out of its apartheid history
• 5 ideas to shape the future of housing in South Africa
• 10 housing projects changing communities around the world
• Housing in Post-Apartheid South Africa: Challenge or Opportunity?
• Transforming Maitland Train Station as part of Densifying Cape Town

Credits:

1. Image 1: Indicative map, based on Turok, I. (2001). Persistent Polarisation Post-Apartheid? Progress Towards Urban Integration in Cape Town. Urban Studies 38 (13): 2349 – 2377.
2. Image 2: Source – author
3. Image 3: Source – author
4. Hogarth, K. 2015. Leveraging the Private Sector to Enable the Delivery of well-located Affordable Housing in Cape Town. Masters. Thesis. University of Cape Town.