by Kirsten Harris, Noluthando Mthimkulu, Sarah Atmore and Nathaneal Jacobs
As part of its foundation programme (a collaboration with the Hasso-Plattner Institute) at the University of Cape Town, the design thinking school (d-school) was given an exploratory challenge by the Western Cape Government Department of Environmental Affairs and Development Planning. The challenge centred around unpacking inclusive affordable housing in Cape Town’s Central Business District (CBD).
Taking heed of the present context and history the d-school team considered the exclusionary and segregated nature of the city, as well as the gentrification and processes of renewal taking place in various neighbourhoods to be of central concern in crafting a solution. As part of the brief, the team looked to come up with a concept which could realistically form part of a broader solution to the housing crisis in Cape Town specifically, and South African cities at large.
Introducing the disruption of AirBnB to benefit a housing model
AirBnB has often been maligned as a major force in the housing crisis affecting the city. The company operates as an online community marketplace making it possible for people to rent out their homes or living spaces to people looking for short-term accommodation.
It has been labelled a disruptive force, and has often been frowned upon due to the perceived negative impacts it has had on the lower and middle class communities being priced out of their own neighborhoods. AirBnB has been blamed for contributing towards the increase in rental prices in parts of the city and for a decreased number of properties available for long-term rental or local purchase.
“As a team, we decided that part of our thinking through a solution would involve reconsidering the role AirBnB could play. Instead of ignoring the difficulties that have been caused by this industry, we thought it could be used in a way to generate revenue with beneficial outcomes.”
After conducting various interviews in Cape Town’s CBD the original challenge was reformulated to reflect what the interviewees had identified as their most important needs, as well as the challenges they face within the CBD. Taking into account these insights, we came up with the PRIDES Ubuntu Living concept. PRIDES is the acronym for the values encompassed within the space – Progress; Respect; Inclusivity; Diversity; Engagement and Sustainability.
In this context, we took the term Ubuntu to refer to the understanding of “I participate therefore I am.” We used Ubuntu as an ethos and practical set of values to set our work apart from the traditional housing development programmes –social housing– which have generally grouped individuals and families of the same income group together.
A multidimensional solution for affordability
PRIDES Ubuntu Living is a multi-dimensional solution for affordable, inclusive and quality housing in Cape Town’s CBD. This mixed income multifunctional building works radically different from traditional developments. PRIDES Ubuntu Living is a project that integrates affordable housing for lower income citizens, while offering market-adjusted housing to higher income brackets in Cape Town. However, this housing solution is more than a set of units; the building also addresses major issues of exclusion that the CBD presents for those that desire to live in this development.
The solution offered here is an efficient, insourced housing option; the functionality is based on strong values that drive not only the administration, but the activities, spaces and dynamics within. Administratively, PRIDES Ubuntu Living provides services, resources and opportunities to tenants. It does so by creating a cash flow for the subsidisation of lower-income tenants, from the revenues acquired with the commercial activities run by the buildings’ management. Moreover, PRIDES Ubuntu Living takes advantage of different forms of production by collectively contracting services such as electricity, water, Wi-Fi as well as medical coverage, sports and childcare.
The several common multifunctional spaces within the building allow for efficient adaptation, determined by the varied daily needs of tenants; from childcare in the mornings, to workout activities or weekly/monthly medical specialist visits (i.e. dentist) in the afternoons and evenings.
Additionally, working spaces are provided in response to a reported need of young urbanites who seek spaces for creative activities and long working hours but that often find the CBD exclusive and unaffordable. The rotational nature of the multifunctional spaces is also applied to the parking facility at this building: at night, those tenants that need to park their cars have their own bays, yet parking is open to the public in the morning on week days when most tenants are at work. This will also generates revenue for management costs and subsidisation.
This development can generate resources for management, subsidisation and service provision. It does so by taking advantage of the main disruptive industry in Cape Town’s housing sector: AirBnB.
Some of the units in the building are utilised by the building’s management team for short-term rental through AirBnB Experience. Selecting AirBnB instead of traditional private-to-private AirBnB renting is justified given that PRIDES Ubuntu Living is much more than a building: it is an inclusive community that aims to work efficiently and in harmony, and empowering diversity and progress. The marketing of these units will be promoted with the uniqueness of PRIDES Ubuntu Living to spend holidays and short-terms stays while experiencing Cape Town’s diversity. The attractiveness of getting to know how PRIDES Ubuntu Living works, resides on experiencing first-hand the future of an inclusive, affordable and efficient Cape Town, without blocking or cancelling out disruptive industries.
The Building
Ownership
It is proposed that the Western Cape Government own the building in the initial stages. It will grant the contractual requirements for inclusive housing and partner with a committed private management enterprise that would oversee the allocation of units (and therefore making profit from unit selling), the provision of services, the cash flow, marketing and the commercial and recreational activities of the building. Later, if the performance of the initiative is positive in terms of sustainability and and there is a desire to purchase from the renting tenants, the units could be offered for purchase by tenants under certain contractual restrictions to ensure it does not, disrupt the community nature of Ubuntu or negatively impact the mixed income structure of the building.
Ratio split of tenants in the building according to current housing crisis and revenue generating viability.
Management
The partner that oversees the building’s activities, promotion and management would see value in long term economic sustainability instead of short term profitability from prices booming in the housing sector. The best partner would potentially be a small or medium sized local enterprise. The building management partner would oversee all operational stages of this development from the allocation of units to the running of the building. This includes managing the common spaces, parking utilities, goods and resources’ generation (roof top), rental of commercial (AirBnB) units, common electricity, water, Wi-Fi and social development actions (for the homeless); but it would also promote and present the building as an example of development, enhancing and embracing the values that PRIDES Ubuntu Living intends to communicate to society.
Tenants
The tenants of PRIDES Ubuntu Living are not merely renters. They are active members of an inclusive, open and diverse community that does not occupy but cohabitates in the space. The selection process will need to ensure that the income mix and the diversity of the building is granted while being flexible with the different tenants’ particularities in terms of familiar space and time of rental.
For the allocation of tenants and thus for the selection process, this solution establishes a ratio-based offering that guarantees the developmental purpose of Ubuntu:
- 40% lower-income (R0 – R4250 per month)
- 20% middle-income (R4250 – R31833 per month)
- 30% higher-income (R31833 per month)
- 10% AirBnB units.
Initial Resources
The difficulty of raising funds for the renovation of the WCG’s owned property that would constitute PRIDES Ubuntu Living is one of the major challenges of this project. Thus, a diversification of initial resources is required. We consider not only government subsidies, but the attraction of private and institutional investors with development goals, corporate social responsibility initiative from corporations (CSR), social investment and philanthropy, as well as private investors linked to the private partner/management organization. Lastly, and if necessary to cover expenses, the capacity associated to the WCG would allow for obtaining an initial loan at a possible reduced lending rate. A percentage of the profit from higher and middle income units (30% + 20% Unit 1) would perhaps cover management costs and repayments.
Revenues
Once the building is fully developed and all units have been given to tenants, the generation of a cash flow would be carried by management. The revenue generation would aid the prolonged subsidisation of the cost of living for lower income tenants, while financially assisting the activities and services within the building. In this way, the building outsourced resources and canalises its cash flow to guarantee the long-term sustainability of PRIDES Ubuntu Living.
After testing this concept with potential different users, questions concerning the concept of ‘belonging’ were raised – “Who belongs?” “Would I fit in a space like this?” “How do you decide? As a user within this space, to ‘belong’ you need believe in and want to implement the values (PRIDES) that are central to the functioning of the living space.
Monetary and Non-Monetary Value
Unlike private developments and social housing, PRIDES Ubuntu Living is not an option for mere profitability nor a low-quality construction with very little market interest. Acknowledging the expensive housing market that Cape Town’s CBD offers, the solution creates opportunity for both money and non-monetary value. The cash flow to support services, activities, management and the subsidisation strategy would be generated through renting of spaces, economic maximization and complementary solar power generation. Creating non-monetary value would be done through principles of quality housing, inclusive and diverse space sharing, economic sustainability, social contribution, meaningful living and life opportunity.
The concept of PRIDES Ubuntu Living is one which looks to redesign the way ‘social housing’ is understood and experienced. Here, the social aspect returns to a societal sense, a lifestyle of community, support and connection on a human level.
All content and views expressed in this article remains the property of the author(s) and does not constitute an endorsement by Future Cape Town.
This exploratory research was conducted by the UCT d-school and the views expressed herein are
not necessarily the viewpoint of the Western Cape Government.
Kirsten Harris, Noluthando Mthimkulu and Sarah Atmore are students from the Hasso Plattner Institute of Design Thinking at the University of Cape Town who, together with Ivan Suarez and Kamal Yakubu, conducted research for the Western Cape Government Department of Environmental Affairs and Development Planning. We acknowledge Nathaneal Jacobs from DEAP for his contribution.