Submission on the Feasibility Model for Social Housing on the Tafelberg Site

TAFELBERG

SUBMISSION ON THE FEASIBILITY MODEL FOR SOCIAL HOUSING ON THE TAFELBERG SITE

March 2017

TAfelberg

Submission on the Feasibility Model for social housing on the Tafelberg Site

March 2017 Written by Julian Sendin, Martha Sithole, Sarita Pillay, and Shaun Russell Architectural Drawings by Azraa Rawoot, Ruvimbo Moyo and Loyiso Qaqane Layout by Chad Rossouw and Azraa Rawoot Massing Model by Azraa Rawoot and Julian Sendin Financial Model by Jacus Pienaar and Julian Sendin Edited by Hopolang Selebalo, Jared Rossouw and Rich Conyngham Other comments and contributions by Malcolm Mc- Carthy, Jodi Allemeir, Lungelo Nkosi and many other professionals who requested anonymity Contents

ACRONYMS & ABBREVIATIONS 5 INTRODUCTION: WHEN WILL SEGREGATION END? 6 Part ONE 7 Segregation & Affordable Housing 10 The affordable housing crisis 17 Land Use Track Record in cape town 21 Housing Track Record in Cape TOwn 28 Social Housing Track Record in Cape Town 34 Obligations: the Constitution, Law and Policy 39 Sea Point: The Need For Affordable Housing 47 Tafelberg: unjust and unlawful sale 56 Endnotes 67 PART TWO 77 Comment on Model 83 Endnotes 93 PART THREE 97 Development concept and principles 99 site analysis 100 Development Concept 104 French School precedent (Tafelberg Primary) 105 Base Assumptions 107 Scenario one: Traditional four-storey social housing typology 108 Scenario two: mid-rise social housing typology 110 ENDnotes 116

ACRONYMS & ABBREVIATIONS

AFR Asset Finance Reserve PERO Provincial Economic Review and Outlook BEPP Built Environment Performance Plan PPC Provincial Property Committee BLM Better Living Model PSDF Provincial Spatial Development Framework BNG Breaking New Ground RCG Restructuring Capital Grant CBD Central Business District RDP Reconstruction and Development CCDS Central City Development Strategy Programme COGTA Department of Cooperative Gov- RZ Restructuring Zone ernance and Traditional Affairs SDF Spatial Development Framework CRU Community Residential Unit SERI Socio-Economic Rights Institute CT-CCRP Cape Town Central City Regener- ation Programme SHI Social Housing Institution DHS Department of Human Settlements SHP Social Housing Programme (Western Cape) SHRA Social Housing Regulatory Au- DTPW Department of Transport and thority Public Works (Western Cape) SJC Social Justice Coalition EE Equal Education SPLUMA Spatial Planning and Land Use GIAMA Government Immovable Asset Management Act Management Act TDI Transport Development Index GMT Government Motor Transport The City The City of Cape Town IDP Integrated Development Plan The Province Western Cape Provincial Gov- IRR Internal Rate of Return ernment IUDF Integrated Urban Development TOD Trans-Oriented Development Framework TPN Tenant Profile Network LUPA Land Use Planning Act UDR Urban Design Report MP Modernisation Programme UDZ Urban Development Zone NASHO National Association for Social Housing Organisations UN-Habitat United Nations Human Settle- ments Programme NDP National Development Plan WCED Western Cape Education De- NU Ndifuna Ukwazi partment OECD Organisation for Economic Coop- WCG Western Cape Government eration and Development WCLAA Western Cape Land Adminis- PAJA Promotion of Administrative tration Act Justice Act 5 INTRODUCTION: WHEN WILL SEGREGATION END?

Should poor and working-class people ever real- for social housing in Sea Point. On 15 January, istically expect to live in South Africa’s well-lo- at an Open Streets event on Bree Street, hun- cated former White areas? Premier Zille and her dreds of Capetonians articulated their support Cabinet are currently in the process of deciding by contributing to a street mural. Two weeks whether affordable housing should be built at later, close to 800 people, including many Sea the Tafelberg site in Sea Point. If they agree to Point residents, gathered on the suburb’s iconic proceed with the development, it would be the promenade for a rally in response to Province’s first intervention of its kind in Cape Town’s inner financial model and the impending decision city since apartheid. If they decline, it will keep by Cabinet. Across the board the call was clear: alive the legacy of South Africa’s toxic, racially social housing must happen on the Tafelberg segregated past. Black and Coloured domestic site, as well as other well-located public land in workers of the Atlantic seaboard will continue the inner city. to spend too many precious Rands on bus, train and taxi fares, commuting to and from work for hours every day – hours that they should be This paper has been compiled by Ndifuna spending at home with their families. Ukwazi following extensive consultation with practitioners and experts in housing finance, Cape Town’s current urban landscape is in architecture, social housing, city planning, urban urgent need of restructuring. Historically en- design, and local and provincial government. trenched segregation, mixed with unbridled Part One deals with the context of the Tafelberg financial opportunism and weak governance, is site – the history of forced removals in Sea Point; damaging the economy, environment and social the Western Cape and City of Cape Town’s cohesion. Instead of waiting for every last work- embarrassing track record in the sphere of af- ing-class resident to be forced out of the city fordable housing; the constitutional, legislative bowl and its surrounds, we should be embracing and policy frameworks which place obligations the value of affordable housing in well-located on government to de-segregate our society; and areas. It as a recipe for overturning apartheid-era the ever-increasing need for spatial justice in spatial exclusion and creating a more compact, a city overrun by financially-motivated devel- sustainable, just and equitable city. opments. Part Two is a critique of the financial Tafelberg has become a symbol of this struggle. model published last year by the Western Cape For over a year, domestic workers, carers, gar- Department of Transport and Public Works; deners, teachers, academics, housing experts, and finally, Part Three presents two alternative religious leaders, ratepayer’s associations, unions models. and students have publically demanded that the sale of the site be stopped and that, on this contested ground, social housing should be built. In June 2016, residents of the Western Cape and Cape Town from an array of backgrounds resoundingly opposed the sale of Tafelberg with thousands of submissions. Cabinet, however, was not convinced and therefore requested that the Department of Transport and Public Works produce a financial model to aid the decision-making process. On 21 November 2016, it was released for public comment. The public continued to voice support Part ONE

Spatial Justice in Cape Town Contents

Segregation & Affordable Housing 10 Introduction 10 Racial segregation and inverse density in Cape Town 11 THE COSTS OF SPATIAL SEGREGATION 13 The affordable housing crisis 17 Land Use Track Record in cape town 21 Introduction 21 The failure of effective Land management 21 The Urban Regeneration APPROACH IN CAPE TOWN 23 Conclusion 27 Housing Track Record in Cape TOwn 28 Introduction 28 The Failure of Public Sector Housing Delivery 28 Conclusion 33 Social Housing Track Record in Cape Town 34 Introduction 34 An appropriate tool 34 Delivery of Social Housing 36 Conclusion 37 Obligations: the Constitution, Law and Policy 39 Introduction 39 The Constitution of the Republic of South Africa 39 National Law and Policy 40 Provincial Law and Policy 43 Local Government Law and Policy 45 Conclusion 46 Sea Point: The Need For Affordable Housing 47 introduction 47 Affordable housing in Sea Point 47 Sea Point as a Model Mixed-use Suburb 49 The Rental Property Market in Sea Point 50 A good site for social housing 53 Conclusion 55 Tafelberg: unjust and unlawful sale 56 Introduction 56 A series of failures 56 Conclusion 66 Endnotes 67

9 Segregation & Affordable Housing

Introduction have accrued significant wealth, while poor and working-class people have been ex- 1 The decision to sell public land at the Tafelberg cluded – relocated to informal settlements and site in Sea Point cannot be removed from the housing estates on the periphery, or forced historical context of land dispossession and to defend their communities and neighbour- displacement in Cape Town. Cape Town is hoods from predatory developers in well-lo- “a sprawling (2,359 km²), low-density (1,520 cated areas. people per km²) and spatially fragmented city 7 As a result, we now see wealthy property 1 of 3.74 million people”. Centuries of colonial- enclaves competing on international retail and apartheid-era migrant labour, spatial markets and swathes of land handed over to planning and housing policies have left an private gated communities. Property bubbles enduring legacy. and soaring rents have meant that now only 2 While apartheid urban planning affected all the very wealthy can afford to live in Cape South African cities, it was particularly ef- Town’s well-located areas. In some neighbour- fective in Cape Town because of the city’s hoods (such as De Waterkant), whole streets unique topographical layout and racial demo- have become investment portfolios. Some are graphics. Mountains, oceans and other natural only occupied seasonally; others are perma- features were used to control the movement of nently uninhabited. Devoid of life and com- Black, Indian and Coloured people.2 munity, land and property are being stripped of their social value. 3 20 years after apartheid, segregation and 8 exclusion are still among the most obstinate Black people in particular are treated by the barriers to equality and justice in the city. Race City and Provincial governments much like and class dictate where residents live, and they were under apartheid – as a labour consequently the extent to which they are able resource whose needs for housing and tenure 3 to access public services, social resources and security are rarely prioritised. The majority of economic opportunities. poor and working-class people live as backyarders in established townships, or in in- 4 A new era of spatial segregation, exclusion and formal settlements. Work here is hard to come discrimination is underway. South African by and often requires a two-hour commute on cities emerged from apartheid with signif- dangerous and unreliable public transport. icant legal and moral obligations to provide 9 housing, yet have been confronted by a global These outcomes are neither inevitable nor ir- order characterised by limited state regulation reversible but instead the result of inadequate over control of the economy and property policy implementation and weak political will. relations. Government continues to deny the occupation rights of shack dwellers while building low- 5 The City of Cape Town (the City) now com- density, poor quality housing on land that is petes in a global race-to-the-bottom to lure cheap, far from good schools, jobs and health investment through finance, tourism and care. This only compounds the problem.4 property speculation. All three require sympa- 10 thetic taxation, planning and infrastructure re- A few pockets of well-located affordable gimes. These have in turn led to construction housing remain in areas such as Woodstock, booms, state land capture, and successive Salt River and along the Voortrekker Road waves of inner-city regeneration and gentrifi- and southern corridors. In wealthier suburbs, cation. Black and Coloured residents employed as nurses and domestic workers live in in- 6 Along the way, a few, mostly white residents secure arrangements in the homes of White 10 employers. Others find rooms in the roofs or 15 Premier Zille has also recognised the need for basements of apartment blocks. Many do not spatial integration in the City. In her weekly have proper leases, making them vulnerable to newsletter, she has stated that her government unscrupulous landlords and governing bodies. understood the challenges of overcoming All are vulnerable to harassment and rent apartheid spatial planning, and would make it hikes, and most have nowhere else to go.5 a priority to redress past imbalances.9 11 The responses from the City and the Province 16 The public desire for change has never been have not been sufficient. Neither has built any greater. What is required is political will and new affordable housing in the inner city for robust action. The only way to reverse segre- decades, despite state land being available. gation and create an inclusive city is to bring Both have adopted an ideologically driven, Black and Coloured poor and working-class laissez-faire attitude towards the private sector. people back into the city from which they There are no progressive policy instruments – have been removed and excluded. Only gov- such as inclusive zoning or rent stabilisation – ernment, particularly at the provincial and to regulate it. In addition, the Western Cape’s local levels, has the mandate and mechanisms Rental Housing Tribunal, established in 2001 to achieve this.10 to support tenants facing unfair practices, remains largely ineffective, underfunded and Racial segregation and inverse density toothless. in Cape Town 12 The City suppresses land occupation by the 17 homeless and relocates the most vulnerable Cape Town is still one of the most segregated evictees to government-built relocation camps cities in the country. While its central, histor- on the outskirts of the city. These inevitably ically White neighbourhoods are still mostly become permanent settlements. The Province, occupied by wealthy White families in low meanwhile, has followed a similar policy of densities, on the periphery, far away from eco- “right-sizing” social housing tenants to attract nomic opportunities, poor and working-class higher rents, forcing residents to relocate.6 Black and Coloured families live in extremely high densities. This is referred to as ‘spatial 13 Realigning Cape Town’s population density injustice’ and it results in everyday ‘spatial would go far to promote sustainable, inclusive violence’. and just economic and social development, as well as the realisation of our Constitu- Entrenched racial segregation tional rights. Legislation and policy in all three spheres of government place significant 18 Based on the 2011 Census, the map below obligations on the state to restructure the city, illustrates the extent to which Cape Town re- using well-located state-owned land to build mains racially segregated. Black and Coloured affordable housing. households are overwhelmingly situated on the Cape Flats and South East Metro. White 14 This has been recognised by both Patricia de households, on the other hand, are largely Lille, the Mayor of the City of Cape Town, confined to central areas around the inner and Helen Zille, the Premier of the Western city, as well as the Southern and Northern Cape. In January 2016, when Mayor de Lille Suburbs.11 announced that she would be running for a 19 second term, she stated that she would work According to a 2016 StatsSA report, the City towards “… more integration in the City and of Cape Town is South Africa’s sixth most [would] build housing projects closer to the segregated local municipality, and third most C it y.” 7 More recently, the Mayor has restruc- segregated Metro (only marginally behind Nelson Mandela Bay and eThekwini). It has tured the City administration, announcing its a segregation index (H) of 0,67 (where 1 is aim to “reverse the legacy of apartheid spatial perfectly segregated and 0 is perfectly desegre- planning.”8 gated).12 11 Figure 1: Spatial segregation by race in Cape Town, 2011 – Adrian Firth 20 By comparison, the Census Bureau in the and working-class Black and Coloured ma- United States applied the same index to jority live on the urban periphery, in densely Census 2000 data, listing Detroit as the coun- populated settlements, far from jobs, and try’s most racially segregated city, with a segre- with poor access to amenities and services.16 gation index of only 0,48.13 Well-located central areas, on the other hand, are dominated by middle-class and affluent, Inverse densification predominantly White households. These areas are characterised by relatively low densities, 21 Research conducted by Professor Ivan Turok and a severe shortage of affordable housing illustrates population density across Cape options, despite excellent access to amenities, Town, as well as the city’s unique ‘inverse den- services, and employment opportunities. sification’.15 It clearly shows that a largely poor

Figure 2: The top ten most – and least – segregated municipalities in South Africa14 12 Figure 3: Population density (persons / hectare) across the Cape Metro area17 22 The map below indicates that the most groups, relatively fewer households are found densely populated settlements are Coloured in the bottom two quintiles, while more than and Black poor and working-class commu- four in every five Indian/Asian-headed house- nities on the Cape Flats. The city centre and holds (80,46%) and White-headed households surrounding suburbs are characterised by (84,60%) fall within the upper two quintiles.19 much lower densities. This reflects historical 26 Given that well-located land can only be ownership and land use patterns. obtained through access to capital, spatial Racialised economic inequality segregation is therefore further entrenched by racialised income inequality. 23 The economic realities experienced by Black and Coloured households remain strikingly dissimilar from those experienced by White THE COSTS OF SPATIAL SEGREGATION households. According to the 2010/11 Income 18 and Expenditure Households Survey, the 27 The costs incurred by the City and Province average (or mean) income of Black households owing to segregation, inverse densification was R69,632. The average income of White (and the associated sprawl) are astounding. households, by contrast, was five-and-a-half This has made Cape Town “one of the most times higher, at R387,011 for the country. inefficient and dysfunctional cities in the 24 The 2014/15 Living Conditions Survey found w or l d .” 20 But beyond government expenditure, that close to half (46,58%) of Black-headed these imbalances also impose considerable households fall within the lowest two ex- burdens on households, the economy, social penditure quintiles combined. This essentially cohesion, and the environment. means that each household was spending less than R12,781 per annum. As few as 11,09% of 28 Neighbourhoods of concentrated low-income Black-headed households were found in the households experience disproportionate levels upper quintile. of crime, poor educational outcomes, higher incarceration levels, and low levels of public 25 More than a fifth (20,87%) of Colour- health. There is also a significant social impact ed-headed households fell into the upper affecting the many thousands who are forced expenditure quintile, whereas almost a third to commute considerable distances to reach (32,32%) fell below the third quintile. Among schools, public amenities and places of work. the Indian/Asian and White population 13 Infrastructure and transport Town metro area is consumed by the transport sector.24 A recent report, which analyses the 29 A study on the economic costs of inefficient carbon footprints of Cape Town and São land-use patterns in South African cities was Paulo, reveals that Cape Town’s carbon emis- conducted for the Financial & Fiscal Com- sions of 10.21 CO2 per capita is higher than mission in 2011. It concluded that: the national average of 9.91 CO2 per capita. This is largely attributed to the lack of connec- “By international standards, South African tivity within the city.25 cities are inefficient, as measured by low density development, high travel times Spatial mismatch and unemployment and distances, and high carbon footprints. 32 The hypothetical city has illustrated a Cape Town’s dysfunctional urban form results methodology by which the economic and in ‘spatial mismatch’: significant physical dis- fiscal costs of this efficiency can be quan- location between homes, work, and services, tified. By applying this methodology to which can lead to unemployment. Figure 4 a ‘hypothetical’ South African city, this demonstrates the distribution of economic research has calculated that the present activity within the city. A comparison with recurrent cost of housing, transport and Figure 3 – which shows population densities – 26 infrastructure in South African cities is in reveals a startling inverse relationship. the order of R53 billion per annum, with a 33 Figure 5, based on 2005 data, depicts large burden for these costs falling directly turnover, payroll and the number of com- on households. The growth model has panies per nodal area. Despite being shown that the implications of a sprawling somewhat dated, it clearly indicates spatial growth pattern are increased recurrent mismatch. High-density residential areas are cost (7% - a difference of R6.4 billion per geographically separated from areas with high annum) and increased total capital in- economic nodes. vestment (2% - a difference of R5.4 billion over 10 years). If this is extrapolated to all 34 Naude (2008)29 provides evidence of spatial 6 metros, the difference between the urban mismatch in South Africa’s metros as a whole, sprawl scenario and the cheaper compact while Rospade and Selod state that this has a city scenario is approximately 1.4% of GDP significant impact on employment levels: by year 10. This cost differential is likely to continue to increase with time.”21 “... the average commuting distance of workers surveyed in the ‘migration study’ and living in the EA [Enumerator Area in 30 Research included in the 2014 Provincial the Census] plays a positive and significant Spatial Development Framework (PSDF)22 re- role in the unemployment probability. This veals that a shift towards more compact cities means that, controlling for all other vari- would lead to significant cost savings for both ables, individuals who reside in EAs where the Western Cape Government (WCG) and employed workers occupy jobs far away are its municipalities. These additional capital and more likely to be unemployed.”30 operational costs relate primarily to the WCG having to spread the bulk of its infrastructural 35 In 2016, the Socio-Economic Rights Institute capital and operating expenses across a wider (SERI) of South Africa noted that: area. The African Green City Index23 includes a survey of 15 African cities with an average “A significant part of existing unemployment 2 density of 4,600 people/km . Asian cities, by in most of South Africa’s cities can be 2 contrast, have an average of 8,200 people/km . explained by distance from jobs … Un- 2 At 1,500 people/km , Cape Town is the least doing the jobs/housing mismatch should dense of the 15. be central to any efforts that provincial and 31 More than half of the energy used in the Cape municipal governments make at applying 14 Figure 4: Spatial fragmentation of employment and residential opportunities27

the ‘spatial justice’ principle in [the Spatial This analysis of spatial mismatch suggests that Planning and Land Use Management the structure of cities is one of the key deter- Act], in spatial development frameworks, minants of chronic poverty; and that spatial municipal bylaws and land development mismatch, caused by city structure, is a quin- decisions. Matching jobs and housing tessential poverty trap. should be a cornerstone of a spatial justice definition.”31

Figure 5: Total turnover, payroll and number of companies for 23 nodes28 15 The long commute and its effects 41 Last year, in response to disruptions caused by the vandalism of Metrorail trains, the Cape 36 For a minority of adults fortunate enough Chamber of Commerce revealed that about to have jobs, physical marginalisation 85% of firms reported that their staff were means burdensome commutes on unreliable demotivated and that productivity was af- transport. More than 55% of Cape Town’s fected. 90% also complained that the resulting population rely on public transport. 61.5% of traffic congestion was costing them time and Black commuters, 41.9% of Coloured com- money.40 muters, and 4% of White commuters rely on 42 buses, trains or minibus taxis.32 Additionally, it is important to note that while commuters spend hours of their day on public 37 By the City’s own estimates, the costs imposed transport, their family lives, health and safety by dependence on public transport cur- are also affected.41 Studies have shown that rently account for between 45-70% of a low- long commute times have an impact on the income household’s income (the international commuter’s life-satisfaction, anxiety levels and standard is between 5%-10%).33 The 2015 sense of wellbeing.42 Commuting on public Transport Development Index (TDI) explains transport also comes with risks and fear of that about 90% of public transport users in exposure to gender-based violence.43 Land the City of Cape Town fall into this income management decisions should therefore factor category.34 in the effects of unequal spatial patterns on the public health system, individual households 38 Research based on national data shows that and society at large. when the time and cost of commuting are factored into the hourly wage, the average pro- 43 It is imperative to understand that these costs portion of income spent on public transport is and their causes become increasingly dif- 26% for commuters using minibus taxis, 31% ficult to address over time, largely owing to for buses, 29% for trains, and 39% for those the speculative nature of urban land markets. using multiple modes.35 Again, this proportion More than 20 years into the democratic era, it of income spent on commuting is excep- has proven harder to reverse apartheid geogra- tionally high by international standards.36 phies than it was in 1994.44 39 According to the 2003 National Transport Study,37 Black South Africans spent an average of 88 minutes a day travelling to and from work. This was almost double the average commute time in the United States in 2002, a country that is known for its long commuting times and poor public transport.38 Ten years later, the 2013 National Transport Study noted that the average national commuting times for Black households had increased from 88 to 102 minutes per day. This suggests, at least in part, a worsening of spatial inequality.39 40 Long commutes not only make it more expensive to participate in the economy – they also make it more difficult to find work. These journeys are often compounded by delays and unreliable transit options. Commuters are therefore more prone to arriving late for work or spending hours in traffic. This results in significant productivity losses for the individual and the economy at large. 16 The affordable housing crisis

44 The housing market as it stands is serving to half of the nation’s average and one-third of entrench rather than undo patterns of seg- the metro’s, indicating a wide value gap; regation and exclusion. The private property market excludes millions of South Africans. • Despite making up almost half the total Unchecked by state regulation, the result is a number of metro properties, affordable crisis of unaffordability. suburbs take up significantly less land area due to smaller property sizes; Priced out: The general housing market • Cape Town’s affordable properties are highly 45 concentrated in affordable areas (of all In the context of Cape Town and the Western major metros, Cape Town has the highest Cape, purchasing or renting a home in a concentration of properties below R500,000 well-located area is financially unfeasible within affordable areas. This, however, may for most residents. The city currently has be due to it also having the lowest level of the highest average home sales prices in the properties of unknown worth – i.e. prop- country, increasing year-on-year at a rate well 45 erties believed to be government-sponsored, beyond inflation. According to research by worth less than R500,000). First National Bank’s Property Barometer, cited in a 2015 Provincial Government report, 48 Areas with affordable housing options (below average property values in the Western Cape R500,000) are severely limited, and affordable increased by 14.9% in 2014, the “fastest rate of properties are highly concentrated and dense, South Africa’s major provinces”.46 located predominantly in historically Black 46 and Coloured townships like Gugulethu, The average household income in Cape Town Khayelitsha and Mitchells Plain (see map is just over R13,000 per month, allowing the below). average family to qualify for a home loan of approximately R336,000. However, the average 49 The high concentration of affordable housing home in the city costs just over R1 million. in certain areas is indicative of a lack of af- This means that in order to afford the average fordable housing options in historically white house, a Capetonian must earn 3.1 x the av- and well-off areas. The nature of the housing erage income.47 market, with limited affordable housing 47 It should be noted that while average income is commonly used by government to measure affordability, median income serves as a more accurate measurement because of South Af- rica’s extremely high levels of inequality.48 The median income in the Western Cape is R3,424 per capita.49 A 2012 Affordable Land and Housing Data Centre study50 defined affordable housing suburbs as those in which the average house value was below R500,000. The authors made several important conclusions: • The average value of a Cape Town home exceeds the national average by 1.7 times; • The average residential property value in an affordable Cape Town suburb (R272,000) is Figure 6: Cape Town affordable housing suburbs, 2011 17 options confined to the periphery, thus serves 54 The lack of government regulation in Cape to perpetuate existing patterns of segregation. Town stands out as an anomaly among upper-middle-income nations where there is Unaffordable rental housing a long history of land market interventions aimed at securing affordable housing solu- 50 Owing to these extraordinarily high property tions. These measures have included, among purchase prices, many Capetonians have no others, inclusionary zoning, density bonuses choice but to enter the rental market. It is and tax breaks to stimulate the provision of very difficult to find accurate data on rental affordable housing by the private sector. costs and other information on rental market 55 conditions because many rentals occur in- Given the combination of its historical formally (especially in informal settlements context, relatively clean governance and and backyard dwellings). To the best of our healthy private sector, Cape Town should be a knowledge, reliable data on rental costs and leader in the field of spatial justice. Instead, it conditions are not centrally collected, pro- is one of the few ‘world class cities’ across the cessed and publicised by any government globe that does not intervene effectively in the agency. property development sector. 56 51 Based on data collected from property man- One attempt to intervene in the property agement companies, the PayProp Rental development sector was undertaken through Property Index produces quarterly and annual the Urban Development Zone (UDZ) tax reports on national and local trends in rental incentive instituted by the National Treasury. pricing. According to their latest report, the The UDZ incentive was envisaged to promote average rental price in the Western Cape is urban renewal and development by stimu- R7,161 per month. This is the second highest lating private-sector investment in the con- rate in the country, after the Northern Cape. struction or improvement of commercial It means that the average Capetonian would and residential buildings, including low-cost have to spend more than half of her/his housing units, situated within demarcated average income on rent, well beyond what is UDZs.53 considered affordable. Rentals in the Western 57 Tax incentives are provided to facilitate devel- Cape are increasing significantly faster than opment in these zones. Among these are in- inflation. Between 2012 and 2015, rents in the 54 51 centives for “low-cost residential units.” The province increased by 28.76%. UDZ incentive provides the most significant 52 This trend is particularly strong in the histor- tax rebates (25%) when low-cost residential ically White central urban areas. For instance units55 are erected in a new building, added in the Cape Town CBD, the value of the 1.6 to an existing building, or improved in an square-kilometre city centre area is estimated existing building.56 If combined with land use to have quadrupled over the past ten years to regulations by local municipalities, the UDZ R24 billion52 yet in this same area zero af- has the potential to harness the tax incentives fordable housing options have been provided. for inclusive urban regeneration.57 58 Instead, the advantages from the tax break Lack of government regulation were applied unchecked and have largely ben- 53 At present, government at all levels does efitted companies that develop market-rate, not provide meaningful intervention in the high-end flats and mixed-use developments private rental or sales market to control radical in order to maximize profit. In certain areas of price fluctuations or promote the inclusion of the city, the UDZ’s impact was compounded by zoning changes initiated in 2012 under affordable units in new residential develop- 58 ments. This is especially problematic in Cape the Cape Town Zoning Scheme. In many Town given its extremely robust property instances, these expanded land-use rights and market. encouraged mixed-use developments. 18 Figure 7: Cape Town UDZs have correlated with areas associated with gentrification such as Woodstock and Salt River where affordable housing units have not been created 59 In Woodstock, for example, areas that were Evictions and displacement previously zoned for low-density residential or industrial use became high-density mixed-use. 61 Low-income and working-class people are not This increased the attractiveness of purchasing only encountering limited opportunities in the property in areas of the suburb which had inner-city housing market – as property prices been low-income residential areas. Property rise with unregulated redevelopment, many values increased dramatically both in Wood- are also being pushed out from areas they stock and neighbouring Salt River.59 However, once called home. given that no regulations were introduced to 62 In particular, rising rents have led to residents determine how mixed-use development would being evicted from accommodation that was occur, no value was extracted by the state. previously affordable in the inner city. This 60 As an incentive expected to speed up the trend has been noted particularly in Wood- delivery of well-located affordable housing, stock and Salt River, but extends to other the UDZ in Cape Town has yielded no results, inner-city suburbs such as Sea Point and Zon- even having a negative impact on the inner nebloem.61 Since the early 2000s, a number of city.60 While development has been plentiful in high-profile evictions in Woodstock and Salt the city centre, urban regeneration has had the River have illustrated the impact that urban unintended effect of large-scale displacement redevelopment and rising property prices are and the subsequent eviction of low-income having on the city’s poor and working-class rental tenants. A vital opportunity was missed people.62 to ensure that urban regeneration took place 63 The alternative accommodation provided inclusively by using government incentives to evictees by the City are effectively relo- and regulations. cation camps in peripherally located areas. Blikkiesdorp63 is now at capacity, destined to remain temporary and poorly serviced 19 in perpetuity. New camps such as the site in Wolwerivier64 are meanwhile being built in even more isolated locations. This only serves to perpetuate Cape Town’s long history in which Black and Coloured people have been displaced from the inner city to the urban periphery. 64 The Rental Housing Tribunal has confirmed that tenants who rely on informal and unregulated arrangements – mostly month-to-month leases – tend to lack security of tenure and are left vulnerable to abuse by landlords and poor living standards. 65 Without affordable housing in the inner city, poor and working-class people are pushed to find accommodation either in historically Black and Coloured townships or in the informal, unregulated market. Where these options fail, people are forced into homelessness or isolated emergency housing sites provided by the City.

Conclusion

66 The housing market in Cape Town is failing poor and working-class people. The lack of affordable housing options and the concentration of affordable housing in certain areas is entrenching segregation. A lack of government intervention leads to a situation where affordable housing options are not being provided, and existing affordable options are not being protected. Particularly in the inner city, this is leading to increased evictions and displacement. In the light of this unaffordability crisis, state-subsidised housing becomes imperative to the restructuring of South Africa’s urban form.

20 Land Use Track Record in cape town

Introduction not happening in the Western Cape. A decisive shift in approach and planning is needed 67 Guy Briggs, interviewed for the Harvard for effective land asset management. Political Review, highlights that housing and service delivery in the City has maintained The value of land the status quo rather than challenging it. 72 Land – especially centrally located land – is a This form of delivery has followed the same scarce and finite asset that cannot be replen- patterns as apartheid spatial design and has ished. Because land is integral to so many entrenched patterns of inequality and segre- needs there is intense competition for these gation. assets. As described in Volume 1 of the South 68 In particular, “Cape Town’s affordable housing African Cities Network’s Urban Land Paper initiatives are ineffective for two main reasons: Series: too few houses have been built and existing developments are located in the same distant “Land is critical to all aspects of human well- location allocated for non-whites during being: it provides material goods for live- Apartheid.”65 lihoods, food and health; mitigates environmental stressors or future uncertainties; 69 It is a telling indictment of post-apartheid and underlies many cultural values. Access governance in Cape Town that no state-subsi- to land and land resources is central to dised housing has been built in the inner city creating opportunities, reducing inequality since 1994. The ability of the state to provide and improving the livelihoods of the most well-located housing is intrinsically linked vulnerable. As urban populations grow, the to its management of land assets. Here, too, demands on land (and possible subsequent the spheres of government have failed. Unless conflicts) are likely to only increase in the the state proactively leverages its land assets, f utu re .” 66 and decisively shifts its approach to housing provision, apartheid spatial design will persist 73 Given the centrality of land to human pro- unchecked. gress, it generates a great deal of competition. In the free market, land allocation is deter- The failure of effective Land mined by the price mechanism (generated by management the ‘willing buyer willing seller’ paradigm). This spells out the exclusionary nature of the 70 In South Africa the ‘land question’ can be market as the poor have insufficient capital described as the battle for the nation’s soul. to invest in, and extract use from, a parcel of How it is managed needs to reflect an under- land. Generally, the urban poor are unable to standing of its multiple values and its power bid competitively for well-placed land pre- 67 to shift persistent patterns of inequality and cisely because they are poor. exclusion. 74 And yet, in highly urbanized areas, the ex- 71 In the urban context (notably the inner city), clusionary effect of the price mechanism where the market-value of land is high, it is extends well beyond traditional definitions pertinent that state-owned land is leveraged of ‘the poor’. To an increasing degree, even strategically for socioeconomic goals – and in middle-class people are being priced out particular, affordable housing. This is currently of the market. This is a dominant trend across the globe and can be attributed to ever-higher levels of urbanisation, increased 21 financialisation of real estate, and the spec- land is lost when it is reduced to cash which is ulative capital flows associated with globali- then spent in a non-spatially-targeted manner. sation. 79 A policy framework navigating these com- 75 To secure affordable housing in well-located peting interests would be ineffective unless it areas, it is essential that state-owned land is is combined with a strategic plan that takes a released below market value.68 In 2017, the portfolio approach to all of Provincial Govern- Western Cape Provincial MEC for Human ment’s immovable assets. This currently does Settlements, Bonginkosi Madikizela, stated: not exist and, as a result, good land is routinely left fallow or sold. “We need to come to the party as government and say, ‘we are going to subsidise The failure to make state land available land, we are going to subsidise bulk infra- 80 structure, so we can push the cost of the The City routinely cites availability of land as house down so that it becomes affordable one of the primary barriers to the expansion for the people we are talking about’ … of affordable housing. It acknowledges that What type of house can you afford if you even if the delivery rate were to be drastically earn ten thousand rand? We can’t start increased to 20,000 units per year, it would costing all these things, because before you run out of land suited for housing devel- even put a spade in the ground, the house is opment within five years. unaffordable.”69 81 One of the main arguments cited by the City 76 By releasing the Tafelberg site below market to explain land shortages is that there are value, Provincial Government would be many sites, regarded as ‘well-suited for devel- acknowledging the multiple values tied up opment’, which have not yet been transferred to the City by other levels of government in land as required by the Government Im- 70 movable Asset Management Act (GIAMA) (including the WCG). and the Spatial Planning and Land Use Man- 82 The reluctance by the WCG, National Gov- agement Act (SPLUMA). ernment and parastatals to unlock land for affordable housing development has been Management of state land corroborated in an international study con- 77 ducted by the Organisation for Economic The Western Cape Provincial Government Co-operation and Development (OECD). has an enormous immovable asset portfolio. This was cited by the City and The Cape Town Because there are numerous, sometimes con- Partnership in their 2009 Central City Devel- flicting demands on land, it is essential that opment Strategy: strong frameworks are in place, allowing competing interests to be fairly weighed against each other. Such frameworks should prevent “The difficulties in addressing the housing decisions based on short-term financial re- issue are in turn linked with the regula- wards from delaying or preventing long-term tions surrounding land use. [The City] social integration. owns relatively little land in comparison to provincial landholdings and those of state- 78 Land is different from any other asset in that owned companies, such as the Transnet its value is derived not only from its size and and South African National Defence Force. quality, but also from its location, and the op- The latter owns a large supply of land on portunities that this offers in achieving other, well-located sites but they are reticent to less tangible goals such as social integration release these properties at below-market and redistribution. This is particularly signif- values as these areas often generate icant given the spatial nature of our apartheid revenue. This, in turn, compounds land legacy. Unlike cash, land is a non-fungible scarcity, raises the price for low-income asset. Inherently spatial, the value of a plot of 22 housing development, and forces housing Districts (CBDs) that have suffered from authorities to concentrate developments on urban decay are most appropriate”.75 remote land plots”.71 87 In South African cities, urban regeneration 83 The Provincial Rental Housing Strategy is nebulous. Government has focused its (2010–2014) further highlights how the lack spending largely on infrastructure to en- of land availability is having an adverse impact courage private investment in urban areas per- on the ability to develop rental stock across ceived as underutilised or derelict. Crucially, the Western Cape: “In Cape Town and leader these ideas of regeneration have not focused towns of the West Coast, Cape Winelands, explicitly on housing provision or housing Overberg and Eden Districts, there are limited affordability. According to the Housing Devel- quantities of well-situated, state-owned opment Agency: land suitable for formal state-funded rental housing.”72 “There is no strong policy framework for 84 It has been acknowledged by the MEC of the urban regeneration in South Africa. A few Western Cape, Mr Donald Grant that it is not provinces, Gauteng and the Western Cape, sustainable to dispose of government-owned have strategies for urban regeneration but immovable assets because once an asset is these are not linked to delivery mech- “disposed of (it) is no longer as asset”.73 It is anisms. The primary planning focus of also worth acknowledging the Western Cape urban regeneration sits with strategic plans Asset Management Review (2003) which of the major metros. These vary greatly expresses that property assets should be used in form, scope and linkage to implemen- “to undo the negative legacies and create an tation mechanisms. They are, however, integrated society within which every indi- often built around the policy frame of vidual is empowered to love and participate on City Improvement Districts (CID) that equal footing”.74 strongly emphasis tackling of ‘crime and grime’ issues with government investing 85 The Province has an obligation to address the in infrastructure to encourage inflow of issue of spatial injustice. In the absence of an private investment. There is little reference overarching strategic plan ensuring that state to provision of housing to low- and mid- land assets meet the recommendations con- dle-income households in these strategies tained in the PSDF, emphasis has been placed and no mention of social housing as a on what the WCG commonly refers to as potential driver or significant contribution ‘urban regeneration’. This alternative approach to such initiatives.”76 has proved detrimental to the affordable 88 housing agenda. In Premier Zille’s 2016 State of the Province Address, she acknowledged that urban regeneration in the Cape Town inner city has made The Urban Regeneration APPROACH IN the area unaffordable for most people: CAPE TOWN

86 “Cape Town is a city that is trying hard to In a research report by the Housing Devel- overcome the spatial planning model that opment Agency, ‘urban regeneration’ is de- apartheid entrenched so deeply. Thanks fined as: to our partnership with the private sector, the Cape Town inner city has regenerated “A process to address urban decay, especially at an accelerated pace compared to any in inner-city areas, in order to revitalise the other South African city. This has had one whole physical, social and economic envi- negative consequence – the escalation of ronment of this area … it generally targets property prices beyond the reach of most areas with potential in terms of economic people. Demand for affordable housing return on investments. Central Business closer to the city bowl is an important 23 priority for a functional city, and this can rugby fields. If used appropriately, it could be achieved more effectively if the state have a significant impact on addressing af- complements the market mechanism ap- fordable housing shortages and spatial segre- propriately.”77 gation in Cape Town.80 89 These negative outcomes have occurred in 93 Given the size of the Regeneration Pro- the inner city despite the WCG’s initial in- gramme’s portfolio, this approach could tention that regeneration should include af- leverage private sector investment and secure fordable housing. In 2010, the Western Cape’s a large amount of affordable housing in Transport and Public Works Department well-located areas. This would be decisive in initiated the Central City Regeneration Pro- furthering the urban restructuring agenda. gramme (CT-CCRP) to determine future uses In practice, however, this has not been the of publicly owned land in and around the case. Rather than using land assets to provide central city. Crucially, one of the key objectives affordable housing in the CBD, the WCG has of the programme was to “develop a per- disposed of well-located land through the centage of the residential stock in identified Regeneration Programme. precincts for affordable housing to ensure that poorer households get incorporated into the The failures of the Regeneration Programme central city”.78 94 The Regeneration Programme has managed 90 The strategic framework for the CT-CCRP key WCG land assets in a way that appears notes: “In sum, the overarching aim is to to be ad hoc and delinked from other gov- unlock the latent value of the Provincial ernment imperatives. It has not prioritised property portfolio, and encourage synergistic, housing in the inner city, and is not driven by well-coordinated development of public and the policy mandates for urban restructuring. private properties in the selected central city Crucially, there is an overriding focus on en- precincts, in order to generate economic ac- couraging private investment and generating tivity and create new jobs and productive op- an immediate income stream for the WCG. portunities for all, including interventions that The sale of the Tafelberg site is emblematic of empower poor and working people to access this approach. opportunities; create conditions for social 95 cohesion and well-being; and enable environ- One strategic objective cited in the CT- mental sustainability and energy efficiency.”79 CCRP’s strategic framework is the development of affordable housing. However, 91 Along with partnerships with the City, Na- since 2010, the programme has achieved tional Treasury and several Provincial Depart- no developments of this nature. In fact, in ments, the CT-CCRP places a strong emphasis the Programme’s Annual Reports between on leveraging the finances and skills of the 2011/2012 and 2015/2016, not a single com- private sector through public-private partner- pleted development – affordable or otherwise ships (PPPs) to achieve its aims. – is recorded. 92 Since its inception, the CT-CCRP has evolved 96 Relatedly, between the Programme’s first to form part of a larger Provincial Regener- recorded expenditure in 2010/2011 and the ation Programme (Regeneration Programme). latest in 2016/2017, all spending and alloca- According to a document entitled Provincial tions have been for planning, not for tangible Regeneration Programme: Projects and Progress development.81 Figure 8 illustrates this. Of (2012), the latter’s portfolio began with six in- primary concern is that the Programme itself itial projects followed by a further 14 projects. – like the six projects it includes – is identified Of these 20 projects, four lie outside of the as an expenditure item, with its own allocation Cape Town Metropolitan area. The 16 projects and expenditure amounts. located within the city constitute more than 97 5.6 million m2 of bulk. This is an enormous According to the Western Cape Provincial property portfolio – roughly the size of 560 2016/2017 Budget, the total expenditure for 24 Figure 8: Cape Town Central City Regeneration Programme Allocations82 the Regeneration Programme for the year interrogation in the Regeneration Programme 2015/2016 amounts to R56,148,000.83 In the is the revolving door that exists between its same period, the total expenditure for the officials, consultancy firms, and private de- six projects that fall under the Regeneration velopers. The Regeneration Programme is Programme was R59 532 000.84 This suggests privy to sensitive information on land assets an irregularity – i.e. double counting of alloca- available to the WCG, yet much of its work is tions and expenditure. conducted by external consultancy firms that 98 tend to lack a comprehensive understanding In order to justify its consistent under- of government’s responsibilities. To make spending, the Public Works Infrastructure matters worse, an influential actor in the Planning Programme (under which the Regeneration Programme, Gary Fisher, was Regeneration Programme falls) noted that for shown to have substantial private development three consecutive years capital expenditure interests.86 This raises concerns that the Re- in the regeneration project was “slower than 85 generation Programme has a misplaced focus, p l a n n e d ”. Spending for the Regeneration and is unaccountable to the WCG’s planning Programme is neither explained nor disag- and socioeconomic development goals as well gregated in the annual reports, and since 2010 as intra-governmental obligations. there is no data on the tangible outputs of the Programme. This does not provide sufficient 101 The track record of the Regeneration Pro- information for public monitoring of expend- gramme thus far indicates that, despite its iture and outputs of the Programme. power to leverage private sector investment 99 in the interest of affordable housing oppor- In order to assess the actual performance of tunities, the Programme has failed to deliver the programme to date, there is an urgent on this mandate. This justifies a review of the need for investigation by auditors, as well as Programme, its functions and outputs. the Parliamentary Oversight Committee for Transport and Public Works, and/or Cabinet. 100 Equally of concern and warranting 25 Skewed inner-city development priorities have sought to address Cape Town’s spatial dynamics. Instead, they have entrenched spatial 102 Associated with this approach to urban exclusion through the sale of assets and the regeneration, the refurbishment and con- prioritisation of office space. struction of office space through the Modern- isation Programme (MP) has been prioritised Land and property: Assets with many values in the inner city. According to the Western Cape Provincial Treasury’s 2016 Adjusted Esti- 105 GIAMA requires national and provincial mates of Provincial Expenditure, the total cost departments that hold land to draw up Im- for projects within the MP is approximately movable Asset Management Plans.88 These R430 million.87 should be binding on all land disposals that a department carries out. This suggests that 103 The MP projects are at all different stages, there could be a time delay in accessing land from planning to completion. It is concerning that has not already been identified for dis- that government land and spending on devel- posal in the relevant Immovable Asset Man- opment in the inner city is reserved for offices, agement Plan. while other assets such as Somerset Precinct or Alfred Street Complex have been put on the 106 A strategic policy framework for managing market. state land assets allows for a comprehensive overall understanding of the value, eco- 104 The various reports published by the De- nomically and functionally, of all public real partment of Transport and Public Works estate assets. It also allows for the uniform (DTPW) infer that it has three main objectives application of generally accepted accounting for its infrastructure and immovable asset principles, improving transparency and portfolio. These are: modernisation, acqui- connection to other municipal systems and sition and regeneration. To date, none of these frameworks. In this, the framework should

Figure 9: Illustration of the proposed Dorp Street PPP 26 consider the three components of land asset Conclusion value – financial, social and economic – together in relation to the full property portfolio 111 The current approach by Province to man- that the State holds, rather than as a single aging land as an asset is failing to achieve piece of land in isolation. urban restructuring imperatives noted in 107 It may be the case that some land parcels are legislation and policy. A decisive shift is best suited for the maximisation of financial needed which recognises the long-term and value, whereas others offer opportunities to re- multiple values of land, proactively makes land alise social benefits, or to stimulate economic available, prioritises housing development, growth. By considering the full portfolio of and strategically manages state-owned land land assets, the state can better balance the transparently through a strategic portfolio ap- costs and benefits of specific land use choices proach. The effective use of well-located urban within the constraints of its available re- state land is critical to the realisation of pro- sources. The cost of not managing public real gressive and transformative housing in Cape estate strategically in this way is the wasted Town, and cities across South Africa. opportunity of not realising the multiple and diverse benefits that land can have. This, too, has financial, social and economic cost implications, all of which must be considered. 108 While South Africa’s regulatory framework allows for such a view, the Human Settlements policy framework provides insufficient prac- tical guidance on how this might be achieved. This is an important area for attention, not unique to this country. 109 Both international and local experience suggests that the cost of not managing public real estate strategically is overspending, lost income and poor service delivery. Ultimately, realising the financial value of land without engaging strategically with its social and economic opportunities is a wasted opportunity that itself has real costs, as the asset is not being used to its full effectiveness. 110 What this means is that the state must shift its approach to property as falling within a public works service function to one that views state property as falling within an asset management function. By viewing property as an asset with multiple values that must be managed, the strategic role that it can play in achieving the broader objectives of social transformation and economic development can be identified and amplified.

27 Housing Track Record in Cape TOwn

Introduction being significantly reduced.”90 115 112 The national statistics below show a rising The sheer number of people who do not have trend in subsidised housing from 1.8 million access to adequate housing in Cape Town in 2004/2005 to 3.7 million in 2013/2014. is testament to the fact that housing policy However, the actual number of houses com- and delivery has failed. There are simply not pleted in each year is declining over time. In enough houses being built; where they are 2004/2005, 148,253 houses were completed. being built, they tend to exacerbate spatial The highest ever number of houses completed injustice. The state at all three levels has not was in 2009/2010 (164,854). Since then, the come to terms with this and invested in alter- number of houses completed has been de- native models that can rapidly provide access clining. In 2011/2012, 120,610 houses were to land and tenure security. completed, but in 2013/2014 only 105,936 houses. The rate of delivery is too slow given The Failure of Public Sector Housing the housing backlog and that the need for Delivery housing is increasing over time. 116 According to the City’s most recent calcula- The housing backlog tions, 373,641 households qualify for govern-

113 ment-provided housing. This figure includes In tackling the housing backlog, government 131,000 households in informal settlements, relies solely on quantitative calculations based 87,000 in overcrowded city rental stock, on need and delivery. It does not, as inter- 70,000 in overcrowded Reconstruction & national standards suggest, view “adequate Development Programme (RDP) or Breaking housing” as requiring the provision of more New Ground (BNG) homes, 41,000 back- than just four walls and a roof. For instance, yarders in Community Residential Units the United Nations Human Settlements (CRUs), and 34,000 backyarders in RDP/BNG Program (UN-Habitat) has set minimum houses.92 The backlog for the Western Cape is criteria which includes security of tenure, currently at 521,305 families.93 access to services, affordability, habitability, accessibility, cultural adequacy, and location to 117 The City’s backlog is rapidly expanding. If services and economic opportunity.89 In South the current delivery rate of 6,100 units a year Africa, these factors are not taken into ac- is maintained, the City estimates that the count when determining housing needs. Very number of those in need will almost double few measures are in place for government to within 15 years, growing to more than 650,000 monitor housing quality in both state-subsi- households by 2030. To meet present and dised and open housing markets. future needs, delivery will have to increase to 114 30,000 units a year – an increase by almost The 2014 Provincial Spatial Development 400%.94 Framework acknowledges this problem, stating: “A central challenge is that the perfor- 118 While the government’s housing backlog mance of housing is being measured primarily calculations are daunting, they do not fully in terms of numbers rather than quality and so disclose the gravity of Cape Town’s housing inappropriate implementation tools are being employed. In spite hereof, the backlogs are not

Figure 10: National housing delivery91 28 Figure 11: State-subsidised rental housing in South Africa99

crisis. It is very likely that the actual number (inclusive of social housing) declined sub- of households living in inadequate housing stantially between 2010 and 2014, despite conditions is much higher. the demand for housing. In 2010/2011, only 119 8,655 rental units were built nationwide. This Only households earning less than R3,500 dwindled significantly to 3,516 by 2013/2014. qualify for a fully subsidised RDP/BNG home Thus, despite their policy mandates, all or CRU. Households earning more than spheres of government have failed to increase R3,500 but less than R15,000 fall into the rental housing. “Gap” housing market. These households do not qualify for an RDP/BNG or CRU home, 124 In 2014/2015, the actual delivery for nor a bond from a bank to purchase a home. state-subsidised rental rose to 11,407 and then Approximately 28% of households in Cape 12,097 in 2015/2016.100 In 2014/2015, 106,617 Town fall into this category.95 Some gov- units were completed. In 2015/2016 a total of ernment subsidies for home-ownership (such 112,001 units were built. The proportion of as the Finance Linked Individual Subsidy subsidised rental to total housing delivery is Programme and Integrated Residential Devel- therefore 10.7% and 10.8%, respectively. As opment Programme) and rental options (such much as this increase should be welcomed as Social Housing) do exist for those falling when compared with 2013/2014, it still does into the “gap,” but not at the scale needed. nothing to mitigate the demand for state-sub- 120 sidised rental housing, let alone the national Premier Zille has acknowledged that policy housing backlog. instruments targeting “gap” households “do not, as yet, work nearly as well as they 125 Public rental accommodation is an ambi- should.”96 Falling beyond the criteria or ca- tious political target at a time when many state pacity of state support, these households are functions are increasingly outsourced,101 but dependent on the formal and informal rental there is little alternative if South Africa’s cities markets which – given Cape Town’s high are going to succeed in reducing poverty while property prices and rental rates – also pose stimulating growth and mobility.102 significant affordability challenges. Location of housing opportunities 121 In addition, Cape Town has a growing im- migrant population, many of whom have fled 126 Building integrated, sustainable and bet- unstable and violent contexts out of necessity. ter-located human settlements is the essence According to census data, 8.1% of the Western of a decade-long policy mandate encapsulated Cape’s population is comprised of immigrants. in the BNG Policy. And yet, according to This is the second highest proportion of any the 2016/2017 Integrated Development Plan province in the country, after Gauteng.97 (IDP) Review housing projects planned and Despite often living in inadequate and over- under construction by the Province and City crowded housing, the law currently prescribes are continuing unchecked on the periphery of that only citizens and permanent residents the CBD, outside of historically Whites-only qualify for subsidised housing.98 areas (See Figures 12 and 13). 127 The failure of state-subsidised rental housing There are approximately 24 human settlements developments currently under 122 There are concerning trends in the delivery construction by the City. An additional 27 of state-subsidised rental housing: housing developments are planned. A further 123 seven projects are being developed by the The number of rental housing units WCG.104 The vast majority of the City and 29 Provincial housing developments are located in former Black, Coloured and Indian areas, all situated far away from employment opportunities, social amenities, services and infrastructure. 128 This trend of development follows that of the apartheid government and continues to perpetuate spatial injustice, entrenching cycles of poverty among Black and Coloured people in Cape Town. Only two of these projects are being built in a former Whites-only area. Figure 12: Map of City and Provincial 129 In the foreword to the Central City De- housing projects planned and under velopment Strategy (CCDS), the Premier construction, 2016/2017103 (then-executive Mayor of Cape Town) stated population, with at least 20% affordable that: “The City seeks to promote policies housing, and include specific mechanisms to bring poor people closer to the urban (such as density bonuses) to promote appro- economy (not just as commuters but as full priate residential densification in general and participants) and, at the same time, take affordable housing in particular (proposed investment to areas of greatest need through target: 20% of new residential development to community development programmes. These be affordable).”107 strategies should be viewed as complementary rather than competing – both are necessary.”106 131 It is significant that most government housing projects in Cape Town – either 130 It is noteworthy that the outcomes of the planned or currently under construction – CCDS called for the “tripling of residential are over 15km outside of the inner city. It

Figure 13: 3km buffers along established economic corridors in Cape Town in relation to planned and under construction City and Provincial housing projects.105 30 signifies a failure to bring poor people closer 135 The Conradie Better Living Model Game to the urban economy. Changer is a mixed-income project led by the Premier’s Office. It combines Social Housing Location and spatial justice and GAP housing. Although this large- scale development is planned in the former 132 National, Provincial and local policy agree Whites-only area of Thornton, it is to be built on the need for diversifying housing opportu- on the edge of the suburb and thus could be nities, inclusive of rental options. That these seen as an extension. should be well-located, near to areas with 136 job opportunities, is vital if we are to redress Recent data released by the City of Cape apartheid planning. As noted by SERI in 2016: Town on current city-owned rental stock111 matches the spatial trends of affordable “The National Housing Programme has the housing provision in the City (See Figure 14). potential to make a significant contribution This indicates that most existing city-owned to undoing spatial mismatch, were it to be rental stock is concentrated on the Cape Flats based on city densification and intensive and historically Black and Coloured town- development, rather than extensive de- ships, far from established economic cor- velopment which by design will increase ridors. This is contrary to a Rental Housing urban sprawl. In this context we conclude Strategy for the Province, set in motion in 2010, that called for “sustainable, integrated that housing mega-projects and new towns 112 development should be opposed, both communities”. because the spatial form they envision is 137 Much of existing government-owned rental undesirable, and because they are likely to stock consists of CRU units – an estimated fail and entrench peripheral housing for 70,000 – which include inherited hostel poor and black people.” rooms built during apartheid.113 In 2010, the 133 As observed above, Human Settlements Province noted that CRU projects approved Policy currently over-emphasises the as- for the City largely involved the refurbishment of existing flats rather than the construction set-based potential of ownership housing to 114 exit poverty. A more important poverty-re- of new developments. Furthermore, poor ducing objective would be to contribute to re- management and maintenance issues have versing the jobs/housing mismatch prevalent maligned the projects. Crucially, the provision in South Africa’s cities.108 Again, it is important of such stock has persisted in former apartheid townships - thus not contributing to urban to emphasise that this is what Social Housing 115 seeks to do. restructuring and spatial integration. 138 134 Development Indicator 28 from the 2014 Much of Cape Town is polycentric with Development Indicators109 (National Gov- multiple nodes of varying size scattered across ernment’s medium-term strategic document) the metro. The three biggest nodes (Cape commits to: “meeting housing needs of the Town, CBD, Bellville CBD, and Claremont poor by creating sustainable human settle- CBD), which are connected by two economic ments and improving the quality of life for all corridors, are in former Whites-only areas and residents.” It notes the importance of rental form an arc around the Cape Flats. And yet, housing, calling for “a renewed emphasis on as Figure 13 illustrates, most new affordable rental housing (some 21.6 % of the popu- housing is being built on the periphery of lation rent and, of those, 713,000 households these CBDs – and never within them. stay and/or rent in both formal and informal backyard dwellings) into the broader housing delivery systems, to enable better socio-economic integration of settlements in South African towns and cities.”110

31 Figure 14: Existing state-owned rental stock in Cape Town, 2016

Figure 15: Inner-city Cape Town: CBD and neighbouring suburbs

32 lost forever, with no evidence that the money made from the sales is ever used for affordable The Gap - No housing opportunities in the housing. inner city 144 Displacement on a larger scale is happening 139 While government has failed to build af- at the few well-located, bigger provincially fordable rental housing in the inner city and owned rental housing schemes. Residents of surrounding areas, it is also true that existing De Waal Drive, Naruna Estate and Sandrift government-owned rental units and their are currently under threat of eviction by the tenants are under threat. Working-class com- Provincial DHS which, without public partic- munities are increasingly being pushed out of ipation, has changed the qualification criteria well-located rental stock in suburbs like the for their rental units. City Bowl, Plumstead and Zonnebloem (Dis- trict 6) where they have lived for decades. Conclusion 140 These regressive steps were exemplified by 145 the Wynyard Mansions evictions in 2012. Housing delivery is much lower than Wynyard Mansions is located on the Tafelberg demand across all three spheres of gov- school site in Sea Point. The Provincial De- ernment. Subsidised housing opportunities partment of Human Settlements (DHS) re- are situated far away from economic hubs. located a number of families who were living This is particularly the case in Cape Town, in these flats, to areas such as Sanddrift and where apartheid spatial planning persists to an Plumstead.116 astonishing degree. The current distribution of subsidised housing at the periphery also exac- 141 Wynyard Mansions evictee Aubrey Brown, erbates spatial mismatch, forcing low-income who spoke to the Cape Times in 2012, stated families to spend their limited resources on that the only reason given for the evictions transport in order to travel to and from work. was that the 12-unit block was to be used for As a result, these people are stuck in a cycle “official purposes”.117 The building has been in poverty despite the subsidised housing vacant ever since,118 leading one to question provided to them. It should be logical for low whether the tenants were evicted so that the income housing to be well-located, closer to site could be sold before an official decision economic hubs. Government is failing dis- was made regarding the future of the Tafelberg mally in achieving these ends. site. 142 Preliminary research by Ndifuna Ukwazi (NU) has found this trend to be most per- vasive with stand-alone council units that do not sit in distinct developments but instead are ‘scattered’ in-between privately owned houses. These houses were built primarily for poor and work-class whites by the previous government in well-located, former Whites-only areas. They now lie in upmarket suburbs and are extremely valuable. 143 These units have been prone to misman- agement; because of their scale, they are not institutionally managed. Left to fall into disrepair, they are later put on the market and sold off. When sold their social value is

33 Social Housing Track Record in Cape Town

Introduction households with good-quality and affordable rental housing opportunities in well-located 123 146 Social housing – which supports integrated parts of South African cities. settlements within existing urban areas 150 There are two primary objectives of social through densification and infill – is the most housing: appropriate mechanism for ensuring urban restructuring and addressing spatial injustice. • Restructuring South African society in This section focuses on the suitability of the order to address the structural, economic, Social Housing Programme (SHP) as well as social and spatial segregation that came the track record of delivery in Cape Town. It with the apartheid legacy; concludes by underscoring the importance of • Improve the housing sector by contributing location in the facilitation of cross-subsidi- to the range of housing options available to sation in social housing as well as its improved the poor. 124 delivery. 151 In order to meet the first primary objective, An appropriate tool National Government disburses the Restruc- turing Capital Grant (RCG) through the Social Housing Regulatory Authority (SHRA). Social rental housing is spatially targeted However, the RCG can only be granted in areas that fall within Restructuring Zones 147 Globally, social housing is used as a blanket (RZs), unless the National Minister declares term to refer to subsidised housing in general. the project in question a ‘mega project’. Ac- In South Africa, social housing is a specific cording to the National Restructuring Zone National Housing Programme in terms of Guidelines, nodes and corridors are suitable the Housing Act (1997)119 and is governed as RZs due to their proximity to job opportu- by the Social Housing Act120 and its Regula- nities and consumption opportunities.125 tions.121 Social housing is a distinct housing programme, separate from the other types of The use of Restructuring Zones subsidised housing programmes defined in the National Housing Code. 152 RZs are defined as ‘geographic areas iden- 148 Social housing refers to high-quality and tified for targeted investment based on the well-located subsidised rental housing need for social, spatial and economic restruc- 126 managed by viable sustainable, independent turing of the areas.’ The Draft Restructuring 127 institutions on participatory management Guidelines state that RZs are intended as principles. It is aimed at providing rent to one of several instruments to pursue the re- low-to-moderate-income families, earning be- structuring of South African cities. tween R1,500-R7,500 p/m. These rental units 153 The use of RZs clearly displays a com- 122 are not available as rent-to-buy. mitment to social housing and urban restruc- 149 The Social Housing Programme is the only turing. It signals an attempt to move away government housing programme with a clear from housing interventions that entrench urban restructuring mandate. It is the only the spatial status quo. RZs are identified as spatially targeted housing policy in South specific spatial areas in key municipalities, Africa which explicitly aims to redress the old including all metros, major cities and small 128 apartheid spatial inequities and segregation. cities. They must first be approved by the It professes to do so by providing low- and Municipal Council, then by the Provincial moderate-income, previously disadvantaged MEC and the National Minister. All current Restructuring Zones are gazetted.129 Once RZs 34 are identified,130 within them Social Housing 158 The Social Housing Policy puts an emphasis Institutions (SHIs) can apply for government on the construction of quality structures for funding for social housing. social housing. It is on these grounds that a 154 unit is estimated to provide housing for an Aimed at well-located land where densifi- average of five-to-six different households cation is desirable, social housing tends to during its lifetime. As rental accommodation, produce medium-density housing, usually 131 it allows for families to move out if / when around three-to-four storeys high. Receiving they are can afford bigger and more expensive rental income, and with relatively higher rental opportunities or home purchase oppor- grants per unit compared with other housing tunities. This leaves rental opportunities for programmes, social housing is one of the few other families, perpetually under the man- housing programmes capable of overcoming agement of SHIs. The affordability of these the costs associated with well-located areas 132 units is thus bound in perpetuity by legis- and higher-density building. It is thus a stra- lation. tegic tool for addressing the peripheralisation 133 of sprawling low-cost housing. Cross-subsidisation

Investing to ensure perpetual affordability 159 Another unique aspect of social housing, 155 which improves its financial viability, is the As a programme for state-subsidised af- concept of cross-subsidisation. This occurs fordable rental, social housing is unique not in two ways: internally, as the higher-income only in terms of its focus on urban restruc- residents (secondary target market) pay higher turing, but also in its ability to leverage private rents that partly cover the maintenance costs equity from: of the lower-income households (primary • the SHI; target market) who pay less; and also through the construction of market residential units, • private developers if commissioned into commercial or retail space onsite. The pro- partnerships; ceeds of the sale or rental of these facilities • rent paid by beneficiaries; and provide income that can be used to cover some of the debt services costs. They can also • its lifespan as an affordable housing option. go towards the payment of land or the direct coverage of maintenance costs. One recent 156 Social housing projects are built at a level example of this is the Drommedaris Social of scale and form which requires institution- housing project by Communicare, which has alised management, provided by accredited small-scale retail space on-site. SHIs in non-profit social housing projects.134 The SHI uses a combination of its own equity, 160 Cross-subsidisation can also be done off-site, government grants and debt funding. The rent where money is received from other prop- received by the SHI is used to cover main- erties, such as mature social housing projects tenance costs of the social housing project with their debts paid off or from the rental as well as service the debt incurred owing to or sale of market residential units. This is the construction. social enterprise funding model employed by Communicare.135 157 In the event that supplementary finances and expertise are needed, the Social Housing Policy provides for a partnership, bound by legislation and contract, with a private developer. After construction, ownership and management of the social housing lies with the SHI, which in turn takes pressure off the limited state capacity to manage rental stock.

35 Delivery of Social Housing

161 According to the National DHS’s Annual Report,136 2,053 social housing units from a total of 11,407 rental housing opportunities were provided nationally in 2014/2015, while 3,480 social housing units from a total of 12,097 were delivered in 2015/2016. Figure 16: Spatial distribution of the RCG for Social Housing across South Africa137 162 Social housing, as purposeful well-located housing, thus constitutes only about 2% of state funded social housing rental and rent- 140 total housing opportunities provided by to-buy units were provided.” In 2014/2015, Human Settlements across the country in only 2,053 social housing units were built, 2014/2016 and 3% in 2015/2016. This is neg- and in 2015/2016 only 3,480 units were built 141 ligible and shows stunted growth of the Social nationally. Housing Sector since its inception in 2008. 167 In Cape Town, according to recent NASHO This is unacceptable. records, there are currently 4,485 social 142 163 An analysis of the national distribution of housing units under management; however, the RCG has shown that, although broadly approximately 3,000 of these were built by 143 well-located, SHIs have not constructed a high Communicare prior to 1994. This suggests proportion of developments directly in CBDs that since the onset of the post-apartheid SHP, due to the cost of land. only 1,485 social housing units have been built in Cape Town. The current rate of social 164 In 2013 nationally, only 15% of social housing development is thus low relative to housing using the RCG had been built in the other housing programmes.144 CBDs. However, 29% of RCG spending has 168 been in inner suburbs while the bulk has been Of all these newly built units, 1,019 units are spent in the outer suburbs. Rather than being located close to transport nodes and acces- built directly in CBDs, This is partly owing to sible socioeconomic nodes. These include the government’s unwillingness to release the the Bothasig Projects, Drommedaris Project, 145 best-located land to SHIs.138 Steenvillas and Scottsdene developments. 169 165 Another challenge encountered by SHIs is The abovementioned well-located social the unavailability of suitable land. Options housing is a direct consequence of post-2008 are limited owing to competition with private legislation which targets housing in RZs, with developers. Social housing and affordable the explicit intention of improving urban housing as a whole should be prioritised by integration. They are the only state-subsidised local and provincial governments. Because housing developments built in Cape Town that social housing is not considered a driver or break with historical and continuing patterns major player in urban regeneration and re- of housing provision that sustain spatial seg- structuring, certain urban regeneration initia- regation. And yet it is still telling that none is tives also sideline affordable housing.139 located within the existing CBDs of Belville, Claremont or Cape Town. Social housing in Cape Town 170 Although the CBD, Salt River and Wood- stock all fall under a Restructuring Zone, there 166 The 2014 PSDF acknowledges historic and have been no social housing developments on-going failures in the delivery of social built within or near to inner city Cape Town, housing, stating that: “The gap in the property 146 despite plans dating back to 2008.147 This market is not being addressed, and affordable differs significantly from elsewhere in South rental housing is not being delivered. In the Western Cape, by 2014, fewer than 2,500 new 36 Africa, where social housing is being built in application had been received from the the inner cities of Johannesburg, Tshwane and City and Provincial DHS to use Woodstock eThekwini. Hospital for social housing.152 Brett Herron, 171 the City’s Mayoral Committee Member of In 2008, proposed social housing develop- Transport and Urban Development, has also ments for Woodstock were expected to yield recently said that social housing projects over 3,000 units, with completion expected 148 are planned for Woodstock/Salt River in six in 2009 and 2011. A planned development different locations. These recent promises to in the Bo-Kaap’s Military Road had a yield build Social Housing projects in the area come expectation of close to 900 units. Three de- almost a decade after they were first planned, velopments (Bo-Kaap, Dillon Lane and Pine and still lack decisive timelines. Road) were included in the Province’s proposed expansion of rental housing in its 2010 176 Other promises to build affordable housing five-year Rental Housing Strategy.149 Other in the inner city were made in relation to the social housing proposed for completion by Government Garage precinct properties in 2014 included two District Six developments. 2013.153 This has been similarly characterised This would likely have yielded over 500 social by inaction. Instead, it was included in the housing units in inner city Cape Town. WCG’s Regeneration Programme Property 172 Investment Portfolio which invited parties to Damningly, despite a decade of commit- submit offers for disposal via an expression of ments, the inner city remains devoid of af- interest. fordable housing options, despite the inner city experiencing considerable property Conclusion development and growth in recent years. The DTPW has not even reserved land for social 177 housing in the inner city.150 Instead, its ap- There is logic to focusing on the inner city proach has been to leverage land assets for first. Cape Town’s CBD alone (only 1,6km²) income and to attract market-rate residential accounts for over 25% of the entire metro’s and commercial development. The man- economy and is the place of work for 30% of 154 agement of the Tafelberg site and the Wood- Cape Town’s workforce. The surrounding stock Hospital site are both illustrative of this. suburbs, like Sea Point, have ample access to economic and social opportunities. These 173 The Woodstock Hospital site was recognised were intentionally created as racially exclusive in the 2002 Woodstock/Salt River Urban Re- spaces. generation Plan as an under-utilised site with 178 potential for housing and other community An individual’s life and wellbeing can uses. In 2012, after NASHO earmarked the flourish in spaces which allow for access to 155 site, along with Tafelberg, as ideal for social opportunities and facilitate inter-genera- housing, it conducted a feasibility study.151 tional upward mobility. Such spaces have the This study showed that Woodstock Hospital power to increase the tax base, support social could yield over 500 social housing units. cohesion, ease traffic congestion and create stronger local economies. 174 Despite support for social housing on the 179 site from Human Settlements in Provincial Based on this rationale, Reclaim the City has and Local Government, the DTPW did not chosen as the spatial footprint for its cam- transfer the land to Human Settlements for paign the central city and its surrounds – an social housing. To date, the site has remained area that stretches along the Victoria Road under-utilised. In 2016, a feasibility study was economic corridor to Salt River in the east again conducted, drawing significantly on the and along the Main Road economic corridor 2012 study. Again, it reiterated the possibility to Sea Point in the west. And yet, beyond the of building social housing on the site. inner city, there are other established economic nodes such as Bellville and Claremont 175 The DTPW noted recently that an where the struggle for well-located housing 37 also needs to take place. 180 Social housing is pertinent to urban restructuring in South African cities. The success of such housing relies on the state and SHIs having access to, and effectively utilising, well-located urban land.156 The South Af- rican government, as well as parastatals, hold substantial land assets across the country.157 How this land is used will be decisive in determining whether social housing will be an effective tool for urban restructuring. 181 As mentioned in various policy documents, social housing is noteworthy a tool that resonates with National158, Provincial159 and local policy.160 Intrinsically linked to this are the many policy documents, including the Social Housing Policy, which speak to the importance and need for effective utilisation of well-located, state-owned land for this purpose. 182 As evidenced above, this is not happening – and the problem evidently begins with the government’s lack of political will in refusing to release available public land for social housing.

38 Obligations: the Constitution, Law and Policy

Int roduction 188 Access to housing must be based on measures that achieve equality164 on the basis 183 Rooted in the Constitution, numerous legis- of race, gender, class and age. The current lative and policy instruments have been put in housing situation in Sea Point, like most place to address South Africa’s housing crisis central suburbs, violates these rights in at least and tackle the issues of spatial segregation two ways: and injustice. These laws and policies place an • The squalid condition of the so-called obligation on the three spheres of government ‘domestic quarters’ of domestic workers, to manage and utilise their infrastructure and security guards and other groups of Black immovable asset portfolios in the appropriate and Coloured workers; and manner. 184 • The long distances travelled by the majority This section sets out the various constitu- of workers in Sea Point. tional, legal, policy and international instruments which obligate the Premier and her 189 Access to housing and equality intersects Cabinet to address spatial injustice using with the use of well-located public through well-located public land like Tafelberg. It also the principle of spatial justice. Access to land lays bare several examples of how these obliga- through the appropriate housing mechanism tions have already been violated. promotes dignity, freedom and security of the person and of privacy.165 The Constitution of the Republic of 190 Well-located public land used to redress South Africa spatial inequality and violence will ensure a healthy environment that promotes individual 185 In its preamble, the Constitution of the and household wellbeing.166 In addition, using Republic of South Africa highlights the need a site such as Tafelberg for social objectives to “heal the divisions of the past and establish will help protect the environment for future a society based on democratic values, social generations through ecologically sustainable justice and fundamental human rights.”161 urban planning. 186 In schedule 6 of the Constitution, under the 191 The Premier and her Cabinet are obliged sub-heading National Unity and Reconcil- to implement land reform measures that iation, South Africa is encouraged to build ensure equitable access for black African a bridge between a history characterised by and Coloured working class communities on division, suffering and injustice, and a future well-located public land. This will also assist founded on the recognition of human rights, with the realisation of security of tenure.167 democracy and development opportunities for 192 all South Africans. This should be the centre Well-located land must be used to assist of any decision which will materially shape the in the realisation of the right to adequate 168 future of any South African city.162 housing and the principle of spatial justice is known to improve access to health and edu- 187 The Constitution and the Bill of Rights re- cation outcomes, as well as inter-generational quires the Premier and her Cabinet to “re- wealth creation. In our view, using this land spect, protect, promote and fulfil” the rights to realise rights constitutes reasonable legis- and duties contained in law and policy. The lative and other measures, within the available Constitution also requires all obligations in resources of the Provincial Government. terms of housing, land reform and spatial 193 justice to be fulfilled diligently and without The sale of well-located public land like Taf- delay.163 elberg offends s195 of the Constitution, which 39 requires the Premier and her Cabinet (through that the holding of property also carries the DTPW) to act ethically, efficiently and with it a social obligation not to harm the in an economically justifiable manner. The public good. The function that the pro- Tafelberg sale has also undermined the devel- tection of holding property must thus, opment objectives of the state. broadly, serve is the attainment of this 194 socially-situated individual self-fulfilment. Province has also displayed a lack of The function of personal self-fulfilment openness and accountability. This led to a in this sense is not primarily to advance court intervention on behalf of poor and economic wealth maximisation or the working-class people. Adopting a socially satisfaction of individual preferences, but appropriate outcome will build racial, class to secure living a life of dignity in recog- and gender cohesion in a time of deepening nition of the dignity of others. And where inequalities and heightening tensions. The the holding of property is related to the situation presents a unique opportunity to exercise, protection or advancement of par- rebuild trust between the people affected and ticular individual rights under the Bill of all organs of state. Rights, the level of the protection afforded 195 The rights to access land and housing, and to that holding will be stronger than where the state’s corresponding obligations, must be no relation of that kind exists.” interpreted and understood in their social and historical context. National Law and Policy 196 The Constitutional Court (ConCourt) in the case of Grootboom made it clear that the state’s Government Immovable Asset Management Act, duty to take reasonable legislative and other No. 19 of 2007 measures to achieve the progressive realisation 199 of the right of access to housing. This includes With regard to asset management and the the obligations to: meeting of service delivery objectives, the Government Immovable Asset Management • formulate reasonable programmes designed Act (GIAMA) provides for: to achieve the objective; and • implement those programmes reasonably. “…a uniform framework for the management of an immovable asset that is held The same principles must apply to the right to or used by a national or provincial de- gain access to land on an equitable basis. partment; to ensure the coordination of the 197 In this same case, the ConCourt also en- use of an immovable asset with the service dorsed the view of the Committee on Eco- delivery objectives of a national or pro- nomic, Social and Cultural Rights that “ret- vincial department; to provide for issuing rogressive measures” should not be taken of guidelines and minimum standards in without justification. These are measures respect of immovable asset management by a national or provincial department; and to which, for example, cut back on housing pro- 170 grammes. provide for matters incidental thereto.” 200 198 In the Shoprite case,169 the ConCourt also The objective of the GIAMA is inter alia held that private property, and by extension to: promote accountability and transparency public property, should serve the public good: within government; ensure effective immovable asset management within government; ensure coordination of the use of “The fundamental values of dignity, equality immovable assets with service delivery objects and freedom necessitate a conception of of a national or provincial department; and property that allows, on the one hand, for the efficient utilisation of immovable assets. individual self-fulfilment in the holding of property, and, on the other, the recognition 201 The GIAMA places a duty on government to 40 use its immovable assets efficiently, and that 206 SPLUMA’s preamble acknowledges that: they only become surplus to a user if they do not support governments service delivery ob- “Many people in South Africa continue to jectives. “A custodian may dispose of a surplus live and work in places defined and influ- immovable asset: enced by past spatial planning and land use (a) by the allocation of that immovable asset laws and practices which were based on — to another user; or racial inequality; segregation; and unsus- tainable settlement patterns.”174 (b) subject to the State Land Disposal Act, 207 1961…”171 Therefore to address these imbalances, SPLUMA adopts, amongst others, the prin- 202 However, in deciding which option to follow, ciples of ‘spatial justice’ and ‘spatial sustaina- government is obliged to take into account bility’. whether the immovable asset can be used: 208 With regard to ‘spatial justice’, SPLUMA • by another user, such as a national or pro- states inter alia that: vincial department or jointly by different users; • past spatial and other development imbalances must be redressed through improved • in relation to social development initiatives access to and use of land; of government; and • spatial planning mechanisms, including • in relation to government’s socio-economic land use schemes, must incorporate provi- objectives, including land reform, black sions that enable redress in access to land by economic empowerment, alleviation of disadvantaged communities and persons. poverty, job creation and the redistribution 209 of wealth.172 The principle of ‘spatial sustainability’ includes inter alia that spatial planning and land 203 Yet, in the case the Tafelberg, despite the use management systems must: Western Cape DHS confirming that it needed the site, the Western Cape DTPW issued a call • promote and stimulate the effective and for expressions of interest, in terms of which equitable functioning of land markets; it proposed disposing of the Tafelberg site to • consider all current and future costs to all prospective investors through a commercial parties for the provision of infrastructure use structure.173 and social services in land developments; 204 In terms of GIAMA, there can be little • promote land development in locations that doubt that the Premier and Cabinet, through are sustainable and limit urban sprawl; the DTPW, failed to apply their minds in a rational and/or reasonable manner when • result in communities that are viable. making this decision. 210 The disposal of the Tafelberg site by the De- partment of Public Works to the private sector Spatial Planning and Land Use Management for private interests further perpetuates the Act, No. 16 of 2013 inequality and spatial segregation that is dom- 205 The adoption of the Spatial Planning and inant in Cape Town. The sale of the site is also Land Use Management Act, 16 of 2013 inconsistent and in conflict with the principles (SPLUMA) is a significant step in advancing of spatial planning, land development and spatial transformation. It focuses on a set of land use management contained in SPLUMA. progressive development principles which must apply to spatial planning, development and land use management at all levels of government. 41 211 National, provincial and local spheres of accommodation. In addition to this, the NDP government are obligated to ensure that these emphasizes the unlocking of well-located land, development principles are translated into especially state-owned land, for affordable achievable, contextualised spatial outcomes housing. and plans. 215 The NDP acknowledges the failure of gov- National Development Plan, 2011 ernment to identify and address the importance of rental accommodation across income 212 Currently at the helm of policy directives at bands. It recognises this failure to be partly all levels of government in South Africa is the a symptom of limited incentives for public National Development Plan 2030 (NDP). The and private stakeholders to invest in rental NDP cites exclusive urban spatial patterns housing, and partly a result of government’s as one of the nine primary challenges facing inadequate operational capacity in managing South Africa, noting that: rental stock. The NDP calls for a multi-seg- mented social-rental housing programme to “South Africa’s towns and cities are highly revitalise depressed property markets in- fragmented, imposing high costs on house- cluding the lower-end rental market. holds and the economy. Since 1994, densities have increased in some urban areas The National Housing Code, 2009 and there has been partial regeneration of 216 In 2004, the President referred to “a compre- inner cities, but, overall, little progress has hensive (housing) programme dealing with been made in reversing apartheid geog- human settlement and social infrastructure, raphy, and in some cases the divides have 177 175 including rental-housing stock for the poor.” been exacerbated.” He also highlighted the need to address “the 213 The NDP’s vision for South Africa’s future broader question of spatial settlement patterns human settlements states that: and implications of this in our efforts to build a non-racial society.”178 “By 2050, South Africa will no longer have: 217 The Housing Code of 2009 states that social poverty traps in rural areas and urban housing has proven to contribute meaning- townships; workers isolated on the pe- fully to this type of urban regeneration. It riphery of cities; inner cities controlled meets three vital objectives: good location, by slumlords and crime; sterile suburbs integration and viability. In addition, the Code with homes surrounded by high walls states that social housing has shown it can im- and electric fences; households spending plement not only successful developments of 30% or more of their time, energy and new housing, but also the management of that money on daily commuting; decaying rental housing stock, contributing to social infrastructure with power blackouts, integration, social stabilisation, and crime re- undrinkable water, potholes and blocked duction. Social housing contributes to Human sewers; violent protests; gridlocked roads Settlements’ delivery objectives as well as the and unreliable public transport; new public wider national goals of promoting “citizenship, housing in barren urban landscapes; new democracy and good governance”.179 private investment creating exclusive en- 218 claves for the rich...”176 In order to achieve spatial restructuring and integration, the Housing Code calls for 214 The NDP proposes a new urban devel- more intervention in the land market. The opment strategy that breaks apartheid spatial Department of Human Settlements’ Breaking patterns and integrates “residential and New Ground180 proposes the following: commercial hubs in our cities and towns,” promoting mixed-use development. It em- • Accessing well-located state-owned and phasises the need for increased social housing parastatal land: This strategy is to re- delivery and inducements on affordable rental lease well-located public land for housing 42 development; Province pertaining to provincial planning, regional planning and development ... and • Acquisition of well-located private land to regulate provincial development man- for housing development: A plan will be agement… to provide for land use planning developed together with the Department principles.”181 of Rural Development and Land Reform to finance and guide the acquisition of private 222 The land use planning principles set out in land for housing. Private land will only Chapter 6 of the LUPA apply to all organs of be acquired where there is no appropriate state responsible for the implementation of state-owned land. legislation that regulates the utilisation and development of land, and that guide: Integrated Urban Development Framework, 2016 “(a) the preparation, adoption and im- 219 The Integrated Urban Development plementation of a spatial development Framework (IUDF) is a more recent policy framework or zoning scheme and of any document coordinated by the Department of policy or law concerning land use planning; Cooperative Governance and Traditional Af- fairs (COGTA). Like its antecedents, the IUDF (b) any steps to ensure sustainable devel- problematizes the lack of sufficient social opment; and rental housing for the lower end of the market, especially well-located land with good (c) the consideration by a competent au- access to socio-economic opportunities. It also thority in terms of this Act and any other acknowledges the need for diverse dwelling relevant authority of an application that forms and sufficient affordable housing op- impacts on the utilisation and development tions across all tenures in order to accom- of land; and modate people during different stages of life. 220 Another spatial challenge acknowledged to (d) the performance of a function in terms be hindering integrated urban development of this Act or other legislation regulating is the location of new housing projects, in- land use planning.”182 cluding rental housing. The IUDF speaks to 223 With regard to spatial sustainability, LUPA the importance of the renewal and redevel- adds that: “development should be princi- opment of inner-city areas with a focus on ple-driven and should prioritise long-term providing affordable housing. It appears to social, economic and environmental benefits recognise that as much as government should over short-term benefits.”183 In other words, attract private investment in the regeneration LUPA supports a long-term approach to land of the inner city, there must also be a pro- use and development which aims to correct gramme to protect the poor residents from “historically distorted spatial patterns of set- displacement and exclusion. This is pertinent tlement”.184 given that – as mentioned previously – the UDZ did not sufficiently prioritise affordable 224 The Department contradicted LUPA by housing. taking a short-term approach based exclusively on the economic potential of the Taf- Provincial Law and Policy elberg site.

Western Cape Land Use Planning Act

221 The Western Cape Land Use Planning Act (LUPA) was enacted in 2014 to give effect to the new SPLUMA national legislation and inter alia “consolidate legislation in the 43 ecosystems.”187

Western Cape Provincial Strategic Plan, 2014- • Efficiency, noting that attention should be 2019 given to “compaction as opposed to sprawl; mixed-use as opposed to mono-functional 225 The Western Cape Provincial Strategic Plan land uses; residential areas close to work 2014-2019 has five strategic focus objectives. opportunities as opposed to dormitory set- Two of these echo the points mentioned in the tlement; and promotion of public transport NDP: over car use”.188 Goal 4: Enabling a resilient, sustainable, • Accessibility, noting that a focus should be quality and inclusive living environment; and on “improving access to service, facilities and employment, and safe and efficient Goal 5: Embedding good governance and transport modes.”189 integrated service delivery through partnerships and spatial alignment. • Quality and Liveability with a focus on “liveable settlements (that) balance indi- 226 With regard to the Province’s Strategic Goal vidual and community facilities”.190 4, the Province acknowledges the need to 229 address the “serious inefficiencies in the func- The PSDF makes several comments and tioning of its human settlements, especially prescriptions on future land use and affordable the lingering spatial inequalities that persist housing strategies. Of particular significance as a legacy of apartheid planning and devel- for the Tafelberg site – and other publicly o p m e n t ”. 185 owned well-located land parcels – are the following passages: Western Cape Provincial Spatial Development • “Exclusionary land markets mitigate against Framework, 2014 spatial integration of socio-economic 227 Against this backdrop, in March 2014 the groups and limit affordable housing on WCG adopted the PSDF, which provides a well-located land. At the same time, government sits on well-located under-utilized shared spatial development vision for both 191 public and private sectors, and serves as a land and buildings”; guide to all sectoral considerations with regard • “Given the complexity and risks of changing to space and place. current spatial patterns, the default position 228 The PSDF is intended to align spatial plans, is to revert to business as usual. Politicians, housing policies, environmental plans, and de- the private sector, and spatial planners have velopment strategies of national government, different agendas and resultant timelines. Political decision-making often contradicts provincial departments, and municipalities. 192 Its guiding principles include commitments stated spatial policies.” to: 230 The Province admits spatial transformation is • Spatial justice, noting that: “Past spatial an economic, social and environmental imper- and other development imbalances should ative for the WCG be redressed through improved access to 231 The PSDF, along with the Provincial Growth and use of land by disadvantaged commu- Strategy, assists the development of sustainable 186 nities.” integrated human settlements through the • Sustainability and resilience, noting that: application of transversal long-term planning “Land development should be spatially based on rigorous spatial analysis. The Prov- compact, resource-frugal, compatible ince’s plan for densification and integration is with cultural and scenic landscapes, and social housing in RZs. should not involve the conversion of high 232 Furthermore, in the PSDF the WCG admits potential agricultural land or compromise that overcrowding is widespread in in the 44 province due to limited accommodation Local Government Law and Policy choices, especially rental options. 233 It acknowledges the need to attract the City of Cape Town Spatial Development private sector in the development of rental and Framework gap housing markets; also noting that the gap in the property market is not being addressed 237 Spatial development in Cape Town is also and that affordable rental housing is not informed by the City’s 2012 Spatial Devel- being adequately delivered, both in terms of opment Framework (SDF). It is worth high- scale and location. The PDSF recognises that lighting the objectives shared by the SDF sprawling housing developments on the out- and the PSDF with regard to land use and skirts of urban areas are inefficient and more affordable housing. costly in the long-term, both for households 238 According to the SDF, in order to redress im- and government. balances in the distribution of different types of residential development and avoid creating Provincial Economic Review and Outlook, 2016 new imbalances, the City should: 234 The central theme of the 2016 Provincial • promote a greater mix of market-driven, 193 Economic Review and Outlook (PERO) is gap and subsidised housing developments ‘inclusive growth within a weaker global and in as many neighbourhoods as possible; national economic environment’. The document envisions a shift towards an inclusive • avoid making decisions regarding the growth and development trajectory as a means affordability of land for subsidised, rental, to growing the economy and creating jobs. social and gap housing programmes and projects on the basis of price alone. The 235 Drawing on the work of economist Mariana short-term and long-term capital and Mazzucato, PERO finds that a “[b]etter way recurrent operating costs/savings incurred of evaluating a given investment would be to by the beneficiaries and the relevant City consider the different types of ‘spillovers’ … departments must be factored into the cal- These projects may act as catalysts of eco- culation of the price of land development; nomic development and growth by empow- ering tenants and homeowners to live and • adopt a spatial fair-share approach to the work in centrally-located hubs rather than identification of land and/or housing oppor- commuting from the outskirts.”194 tunities for subsidised and gap housing; 236 The document emphasises the need for • where appropriate, use publicly and SOE- affordable housing and new job opportunities owned infill sites to help reconfigure the in inner-city Cape Town: “Construction worth distribution of land uses and people; and almost R8 billion is expected to take place • increase low-income earners’ access to af- in the Cape Town CBD alone over the next fordable housing that is located close to the five years. However, growth in the residential city’s economic opportunities. 196 property market could slow down in line with the national experience, albeit not to the same 239 It is notable that the SDF promotes the use degree. The availability of affordable housing of well-located state-owned land for urban and the creation of job opportunities will have restructuring, and that it aspires to increase to improve for current high growth rates to be affordable housing close to the city’s economic sustained over the longer run.”195 opportunities. Furthermore, it notes that a broader definition of “affordability” (which takes into account the long-term costs and savings for both people and the City) should be carefully considered when decisions are made about housing programmes. 45 240 Policy 37 of the SDF calls for public-private partnerships to accelerate integrated housing development. This requires the identification of “publicly owned land that can be used for housing projects, which will be executed in partnership with the private sector. Projects should provide for socio-economically integrated communities in a similar ratio of income distribution to the municipality as a w h o l e”. 197

City of Cape Town’s Integrated Development Plan

241 The City’s Integrated Development Plan (IDP) emphasises the principles of an integrated, inclusive city. It speaks to the need for densification, and reducing sprawl. 242 And yet, despite these policy imperatives, the 2016/2017 IDP review shows that government housing that is either planned or under construction continues to happen almost exclusively in peripheral former Black and Coloured areas.

Conclusion

243 When taken together, the Constitution and the legal and policy frameworks demonstrate that it is the duty of the Province to revoke the “decision” to dispose of the Tafelberg site as surplus; resile the sale to Phyllis Jowell Jewish Day School; and implement a housing programme on the site within a clearly specified timeframe.

46 Sea Point: The Need For Affordable Housing i ntroduction and Indians. Sea Point was proclaimed a ‘white area’, and the Coloured residents of 244 Social Housing on the Tafelberg site in Sea Tramway, who were now “disqualified” from Point presents an opportunity to set a new tra- the suburb, were given two years to vacate jectory for spatial restructuring in Cape Town. their homes. These Sea Point families consti- Sea Point is emblematic of the deep-seated tuted one of the largest groups of disqualified inequalities in South Africa’s cities. It is among people and they were among the first stable the most well-resourced, safe, vibrant and communities in Cape Town to be forcibly 199 accessible of Cape Town’s neighbourhoods. removed under the Act. It is a walkable neighbourhood, where shops 248 The effect this had on the affected families flank high-rise apartments and the seaside was devastating. Removed residents cited promenade attracts visitors from across the hardships like not being able to attend their city. Beneath all of this is a history of forced church, and having to deal with harsh weather removals, live-in domestic labour and an and environmental conditions on the Cape increasingly unaffordable and exclusionary Flats, where it was difficult to grow vegetables property market. in the soil.200 Other families were broken up, 245 Affordable state-subsidised housing in Sea with the men forced to leave their new, alter- Point is needed to address a pressing demand native homes in order to move closer to their and severe gap in the current market. This places of work. need would be best served by social housing, 249 In November 1959, Frederick Mitchell, a with its possibilities for high-density housing Tramway resident, was found hanging from that can capitalise on the location of the land a tree after taking his own life. Mitchell had to cross-subsidise affordable housing. In an lived in the Tramway area in Sea Point for over area with high property values, the Tafelberg 30 years and worked as a driver for the Union. site as a state land asset is the only way to Newspaper reports suggest that the impending realise affordable housing in the area. The site removals had led him to commit suicide.201 must be leveraged to set a much-needed precedent for spatial justice. 250 In 2001, the former residents of Tramway and their descendants made a successful Affordable housing in Sea Point application for land restitution. However, due to a lack of support from government, the claimants did not have the capacity to develop Forced removals and failed restitution the land. Residents ended up having to sell the

246 land to pay off the debt they owed to Investec During the late 1950s and early 1960s, the Bank for a failed development. apartheid government moved Coloured working-class people from Sea Point Tramway to 251 Tramway is indicative of the failure of under-resourced townships on Cape Town’s current restitution cases in Cape Town’s periphery. Initially the state decided that it well-located urban areas. The land is now was not obliged to provide alternative accom- being transformed into one of the most modation for the evictees; yet they quickly expensive high-end developments202 in the backtracked owing to the severe shortage of history of the city. None of the profits will go housing at the time.198 to the claimants, and the land has been lost 247 to the private sector forever. Developers and Seven years after the Group Areas Act had banks will benefit to the tune of many hun- been passed, Cape Town was carved up into dreds of millions of Rands off the backs of an separate areas for Whites, Blacks, Coloureds ill-equipped community – women, men and 47 children who were essentially cheated out family). These discriminatory rules have of the full potential value of their restitution severe social effects on families, and violate claim. their right to privacy. 252 In the context of the Tafelberg School, 256 Employment and accommodation are often Tramway is illustrative of the emotionally linked, leaving domestic workers vulnerable charged history of dislocation from Cape to the whims of their employers. Standing Town’s well-located areas. As market forces up for their rights as workers could lead to continue to reinforce segregation, in the CBD them losing their jobs. This not only means and its surrounds there are limited opportu- unemployment, but also homelessness. Com- nities for working-class Coloured and Black pounding this issue is the vagaries around people to move back. Tafelberg may be the their right to accommodation. For example, last piece of land in Sea Point that can be if a domestic worker’s employers move, is she developed for a social good to provide housing entitled to retain her accommodation? for people who were previously (and continue 257 to be) excluded from living close to Cape NU’s research and organising found that Town’s best infrastructure, services and job basements, attics and storerooms (used for opportunities. these ‘maid’s quarters’) are controlled by body corporates, some of which have resolved 253 While Tafelberg may not be a direct case that one domestic workers who work in the of land restitution, it does provide a major building can also live there. opportunity to undo apartheid spatial 258 planning by providing affordable housing to More recently, the need for live-in do- working-class Coloured and Black families mestic workers has waned and these rooms in well-located areas where traumatic forced – some of the last affordable property for removals once took place. the working-class in well-located areas – are increasingly being used as storage rooms “Maid’s quarters”: Accommodation and em- or left empty. This has led to the eviction ployment of domestic workers who have lived in the area for decades. With no other well-located 254 “Maid’s quarters”, a solution to the housing affordable housing, they are forced to move to crisis created by migrant labour, were built to the periphery of Cape Town, where it is hard house domestic workers close to their places to access healthcare, schooling and regular of employment. These cramped dwellings employment. Those who retain their jobs in meant that workers could be close to the fam- places like Sea Point, now have a commute of ilies they worked for, and available to work at up to four hours every day. any time (often after normal working hours). 259 While these rooms provide less than ad- Generally this accommodation was only for equate and dignified accommodation for female workers, who now had to live apart people who have contributed enormously to from their husband/partner and children. the economic and social capital of areas like Under apartheid, domestic workers had to use Sea Point, current domestic workers would a separate entrance to larger multiple-dwelling certainly prefer to remain in the small rooms residential buildings. than be forced to moved to townships or relo- 255 This separate entrance policy is still enforced cation camps like Blikkiesdorp or Wolwerivier. by body corporates in many blocks in Sea Social housing close to their places of work Point, as well as other parts of the city and allows them to remain in their communities country, more than 20 years into the demo- and live a dignified life in adequate accommo- cratic era. Residents of “maid’s quarters” in dation. Sea Point are also subjected to discriminatory 260 Apart from tenure security and terrible living house rules enforced by body corporates, in- conditions, many domestic workers are paying cluding rules against having visitors (including exorbitant rates for their accommodation 48 (compared with market rentals by square on-going refurbishment”,207 further en- metre). Because demand is huge and supply trenching the mixed-use nature of the neigh- is very low, vulnerable domestic workers are bourhood. forced to pay these high prices for what should 266 be subsidised accommodation. The economy of Sea Point and its desirability as a mixed-use neighbourhood is bolstered by its public transport connectivity to the Sea Point as a Model Mixed-use Suburb CBD and its walkability. The area is served by five MyCiTi Bus routes. Main Road acts as a 261 Sea Point has historically been a mixed-use thoroughfare for minibus taxis, and with its neighbourhood – that is, an area of residential, street-facing businesses is also characterised commercial and office developments alongside by considerable pedestrian traffic. The Sea hotels, community facilities and schools. It is Point Promenade, meanwhile, is frequently characterised by an active and vibrant eco- used by pedestrians, cyclists and runners. nomic corridor along Main Road. It is the 267 largest economic node along the Atlantic Sea Sea Point is thus the archetype of a Point, with a diversity of small businesses, mixed-use, compact, high-density urban large commercial stores and restaurants. These neighbourhood. In South Africa, national, are flanked by residential high-rise buildings provincial and local government policy to the north and south of the corridor. identify these urban settlement forms as strategic to integration. Policy S3 of the PSDF is to 262 The mixed-use character of the neigh- “promote compact, mixed use and integrated bourhood is reflected in both the land use and settlements.”208 Their promotion is seen as a 203 zoning of the area. The Main Road corridor means “to counter apartheid spatial patterns on which the Tafelberg site is located is zoned and decentralisation.”209 A compact city, where General Business 5, which covers most erven residential areas are close to work oppor- situated directly along the Corridor. Land tunities, is part of the guiding principle of use to the south and north of the Corridor is “spatial efficiency” which underlies the PSDF. zoned predominately for General Residential 5 268 and General Residential 4. The City’s SDF also echoes these principles. It commits to “redressing existing imbalances 263 Tafelberg has three different zones. A small in the distribution of different types of resi- portion of the site, 510m², the pavement dential development, and avoid creating new along the main road is zoned Transport 2. imbalances”.210 Policy 35 of the SDF commits The General Business 5 portion of the site to using infill sites to improve access to af- which abuts the Main Road is 2781 m². The fordable housing near economic opportu- remainder of the site which is 13059m m², is nities. zoned General Residential 4. 269 High-density, compact, mixed-use residential 264 General Business 5, with a floor factor of areas along transport routes are also consistent 4 and coverage of 100% allows for a broad with the City’s recent focus on Transit-Ori- spectrum of business, dwelling and institu- ented Development (TOD). The TOD aims 204 tional uses. General Residential 4 has a floor to address inefficiencies by shifting the City’s factor of 1.5 and 60% coverage, enabling medi- urban form to optimise the “movement pat- um-to-high-density residential uses as well as terns of people and goods”, “locating devel- 205 hospitals and hotels. The zoning in Sea Point opment near high-quality public transport” enables a high-density and mixed-use neigh- and to “match density and transit capacity”.211 bourhood. 270 Building affordable rental housing in Sea 265 In recent years, the area has experienced Point is consistent with the principles of a property boom with a proliferation of spatial restructuring and spatial efficiency. 206 mixed-use developments. These “have Demographic trends indicate that there is a become a significant element of Sea Point’s demand for affordable rental housing in the 49 area, while assessments of the residential 273 The distribution of the rental prices of two- market indicate a limited supply. The demand bedroom apartments, meanwhile, shows that is supported by a history of worker-based rent prices vary between R5,000 and R23,000 movements calling for affordable housing in per month. More than 80% of two-bedroom the area since the early 1990s. apartments in Sea Point cost over R7,000 per month, while the average in this category was The Rental Property Market in Sea R12,355 in the second quarter of 2016.216 Point 274 Using an affordability measure of 30% of household income, 217 a household in Sea Point 271 According to 2011 Census data, 52.84% of would currently have to earn above R23,000 212 Sea Point’s residential properties are rented. per month in order to afford most one- Most of these properties are flats, with the bedroom apartments in the area (with rent at majority of one-to-four-bedroom properties R7,000 or more per month). Even to afford in the area rented rather than owned. a one-bedroom apartment at R5,000 (which 272 A Tenant Profile Network (TPN) Credit constitutes 20% of the rental market distri- Bureau Rent Report for Sea Point,213 released bution), a household would have to earn above in the second quarter of 2016, includes an R16,000 per month. Today, a household in Sea analysis of the distribution of rental prices in Point would thus have to earn at least R23,000 the area (see Figure 17). A telling snapshot of to be able to afford most one-bedroom and the Sea Point rental market, it shows that rents two-bedroom apartments in the area. below R5,000 comprise a very small segment 275 The latest household income figures available of the rental market. Less than 10% of one- for Sea Point are from the 2011 Census218 (see bedroom apartments cost less than R5,000 Figure 18). It shows that, at the time, over 15% in Sea Point. Most one-bedroom apartments of all households in Sea Point earned between cost R7,000 or more per month. The average R1,601 and R6,400 per month. Almost a third rental price of a one-bedroom apartment was (30%) of all households in Sea Point earned 214 R 8,733. R6,400 or less per month, while 46% earned R12,800 or less per month.

Figure 17: Overview of the rental price bracket distribution for Sea Point (July 2016)215 50 Figure 18: Sea Point monthly household income, 2011219 middle-income households, eligible for social 276 Not only do low-income households con- housing according to their income bands. stitute a notable proportion of Sea Point’s Furthermore, a Black African and Coloured population, but they are also skewed dramat- household in Sea Point is significantly more ically by race. Black African and Coloured likely to be a low-income household than a households in Sea Point are significantly more White household. likely to fall into these lower income brackets. 279 Not only is a Black African and Coloured More than half of Black African households household more likely to be a low-income (58%) and Coloured households (53%) in Sea household, but a Black African and Coloured Point earned R6,400 or less per month. This is person living in Sea Point is also more likely in stark contrast to 22.2% of White households to be a renter than their white counterpart.220 that earned R6,400 or less per month. Further, 66% of Black African residents in Sea Point more than two-thirds of Black and Coloured were renters, while 60.3% of Coloured resi- Sea Point households earned R12,800 or less dents were renters. This is in contrast to 42.4% per month, while 39% of White households of white residents who were renters. earned R12,800 or less per month. 280 In 2011, affordable rent221 for a Sea Point 277 Although there is no current data on household earning R6,400 or less would have household incomes in the area, and there is been R1,920 or less per month. Considering no disaggregated data indicating how many of that 30% of all households and over half of these low-income households are pensioners, Coloured and Black African households the 2011 Census data is illustrative of the earned R6,400 or less per month, this is in- distribution of household incomes in the area. dicative of significant demand for affordable Of particular significance is the proportion rental housing in Sea Point. of low-income earners and how this is dis- tributed by race (a distribution that is unlikely 281 Considering recent property trends in Sea to have shifted dramatically over the past 5-6 Point, this demand is unlikely to have shifted years). over the past five-to-six years. Furthermore, the current distribution of rental properties 278 The Census data clearly indicates that a sig- in the area clearly indicates that the Sea Point nificant proportion of households in Sea Point could be considered low-income to lower 51 property market caters primarily for mid- development of any affordable housing. The dle-income households, with very few options co-operative disbanded, without the affordable for low-income households. housing being addressed. 282 Domestic workers, along with caretakers, 285 The recent emergence of Reclaim the City caregivers, cleaners, and gardeners, are among in Sea Point, driven by domestic workers Sea Point’s low-income earners who have been (many of whom were once part of Rainbow advocating for affordable housing in the area Housing) has shown how this need for af- since the early 1990s. In 1996, low-income fordable housing is still urgent. Testimonies people – mainly workers from the Atlantic by workers living in the area show that they Seaboard and some from the CBD – or- continue to experience unaffordable, undig- ganised to advocate for their housing needs as nified and precarious living conditions, with “Rainbow Housing”, registering as a co-oper- issues of landlord exploitation, overcrowding ative in 2003.222 and restrictions on family visits.226 Evictions 227 283 are commonplace as rents rise in the area A survey undertaken of 162 Rainbow and redevelopment leads to long-time tenants Housing members in 2005 provided insight being forced out. into the demographics of those requiring and advocating for affordable housing in the area. 286 Property developers and analysts have noted The majority were female domestic workers that the Atlantic Seaboard has experienced – between the ages of 31 and 50 – and were significant housing price growth over the working and living in the Sea Point/Atlantic past three years – outperforming many areas Seaboard area.223 The vast majority were in Cape Town.228 Sea Point itself has become long-time residents of the Atlantic Seaboard/ a high demand area for property (particu- CBD. 20% had lived in the area for six-to-ten larly residential property),229 with resulting years, while 33% had lived in the area for 16 growth in high-rise apartment buildings and years and longer.224 mixed-use developments.230 Between 2012 and 284 2014, property values in Sea Point increased Nearly three-quarters (72%) of members’ by 25%.231 Housing sale prices have increased households earned between R1,001 and significantly in Sea Point since 2007,232 along R3,000 per month. With their low-incomes, with average rental prices in the area.233 workers mainly lived in small rooms, sharing a kitchen or toilet, or the back of employers’ 287 As Figure 19 illustrates, the average sale price houses.225 Their housing needs were not being of an apartment in Sea Point increased from met, and state-subsidised housing in Sea about R 1 million in 2007 to R 2.75 million in Point became a site of advocacy in the area. 2016. In just two years, from 2014 to 2016, the Despite this, their efforts did not lead to the average sale price of an apartment increased

Figure 19: Annual no. of sales & average sale price of apartments in Sea Point234

52 from R 1.8 million to R 2.75 million. Today, population for whom there has been a his- the average asking price for a two-bedroom torical demand for rental housing, and who apartment as listed on Property24.com in Sea are now being squeezed out of the neigh- Point is R 5 million. bourhood by a burgeoning property market. 288 The high demand and escalating sale prices A good site for social housing are transferred to the rental market. Data collected by TPN Credit Bureau shows increasing rent prices across Sea Point, particularly for Contesting social housing at scale one- and two-bedroom properties. Figure 20 below shows how the average rent of one- and 291 The Western Cape MEC for Human Settle- two-bedroom properties increased between ments, Bonginkosi Madikizela, has previously the second quarters of 2014 and 2016. The av- made the point that social housing has to take erage rent for a one-bedroom in Q2 2014 was place at scale within a mixed-income devel- R 5,850 and by Q2 of 2016 this had increased opment in order to be viable.236 His argument to R 8,733. appears to be that when built at a large scale, 289 mixed-income housing developments allow The impact of a burgeoning Sea Point middle-income renters and/or homeowners property market will impact households to cross-subsidise poorer renters, ensuring the within a low-income range. Most rental long-term sustainability of a project. The idea housing in Sea Point is inaccessible to low- that a mixed-income development with social income households, and Black and Coloured housing has to happen at a large scale in order households are most likely to fall into this for it to be justifiable, feasible and sustainable income bracket. Increased evictions are a is a contestable one. symptom of this unaffordability. 292 290 As noted previously, the focus of social The private market is not catering to house- housing is to increase housing options by holds earning between R1,500 and R7,500 per providing an affordable rental alternative for month, let alone households earning R15,000. low-income families in well-located areas.237 Social housing on Tafelberg and other state- These families would otherwise not be able to owned land near the CBD would be a crucial afford market rental rates in these areas. This intervention in catering for a segment of the

Figure 20: Average rental prices for properties in Sea Point between 2014 & 2016235 53 intentional development of social housing in through mixed-income and/or mixed-use well-located areas distinguishes it from other developments. The nature of this cross-subsi- state-subsidised housing in South Africa. disation is a function of location. 293 Another key goal of social housing, which 297 In developments such as Cosmo City in distinguishes it from other state housing, is Johannesburg, Scottsdene in Cape Town, and to provide the affordable rental alternative what is being proposed for the Conradie site as infill developments.238 By virtue of being (one of the WCG’s “Game-Changer” projects), developed in already built-up areas,239 these the entry-level buyer of market/bonding infill developments usually take place on housing, from the emerging middle-class, smaller tracts of land than the majority of effectively carries the burden of cross-subsidi- the state’s greenfield housing developments. sation.243 In these instances, the location and Social housing caters for this limitation in size the nature of the housing – which cross-sub- by maximising housing output with higher sidises the social housing – necessitates large- housing densities, made up of three-to-four scale developments. storey buildings.240 298 The Conradie development is a large scale 294 Social housing supplements other state mixed-income and mixed-use development on housing programmes, like the RDP, where a 22 hectare site. 50% of the housing (approx- the aim has been to roll-out housing at a large imately 1800 units) will cater for income cate- scale to meet the housing backlog. RDPs have gories between R3,000 and R21,000, including largely been built as single-story freestanding social housing and Finance-Linked Individual homes on a small plot and thus have required Subsidy Programme housing.244 The rest of the large tracts of land with a high volume of units would be for sale for between R500,000 homes to exploit economies of scale. and R1 million to people earning R15,000 and 245 295 above. The development will also include Social housing thus focuses on providing retail and commercial space. affordable rental housing in apartment-style complexes on strategically well-located tracts 299 Large scale projects come with significant of land. Scale, relating to the size of a devel- risks associated with the high capital costs and opment as well as the number of homes, is PPPs. The Conradie Project, in the pipeline for thus not a defining factor of a good social almost 10 years, initially failed to get off the housing development. The Tafelberg site, at ground because a previous developer could close to two hectares, would be able to yield not meet contractual obligations. The N2 over 200 social housing units. This yield is Gateway Project also illustrates how a con- consistent with recent social housing devel- tractor’s financial challenges can compromise opments in Cape Town such as the Dromme- a project.246 If contracts involve private devel- daris241 and Bothasig242 developments, which opers, such partnerships require significant consist of 285 and 219 units, respectively. oversight to ensure affordable development is prioritised.247 Cross-subsidisation as a function of location 300 At government level, coordinating finances 296 What distinguishes the Tafelberg site from between different spheres of government is the Drommedaris and Bothasig developments also cited as a challenge.248 Conversations with is its location: along the Main Road economic government officials indicate that a project of corridor, close to the city centre, in an area Conradie’s scale requires significant human of high demand for high-end residential capacity and resources, to the extent that it property. As with other social housing de- becomes the sole focus of the Department for velopments, the sustainability of this devel- a long period of time.249 opment would be aided by cross-subsidisation 301 Although a large-scale mixed-income and mixed-use development has its merits, it also has its challenges. It is misleading to state that 54 such developments are the only way to ensure covered and the net present value of the social housing can be built sustainably. By project is positive, with only maintenance virtue of it being an infill development near to costs remaining, revenue from one project can the city centre, in a high-value, upper-income be used as equity to invest in another project. area, social housing on Tafelberg would offer Mature social housing projects thus cross-sub- an important and contrasting model for a sidise other projects. 251 social housing development. 306 Rather than isolated and piecemeal projects, The benefits of in-fill social housing develop- strategically located infill social housing de- ments velopments need to be coordinated across the city centre and well-located, well-connected 302 On the Tafelberg site, a market residential suburbs. Multiple developments of this kind component would require only a very small have the ability to cumulatively and decisively additional price in order to cross-subsidise shift racial and income segregation within our the SH component. This can arguably happen cities. Although infill mixed-income projects without a significant burden on the mar- may not have the political allure of megapro- ket-rate buyer/renter. This does not neces- jects, such developments are more sustainable sitate middle-income or market development and cost-effective in the long-term; they are built at scale to subsidise the social housing, also consistent with a global “consolidation but rather takes advantage of location and agenda” for compact cities.252 Importantly, as property demand in the area by adding a small mentioned in previous sections, this approach market residential component. Further, this is aligned with national, provincial and local sees real redistribution from the very rich to government policy for spatial restructuring to the very poor, rather than cross-subsidisation address historic patterns of spatial exclusion. by a nascent lower middle-class.250 Conclusion 303 Current evidence from SHIs and the SHRA also indicates a growing willingness to use 307 market-rate residential units to cross-subsidise The Tafelberg site presents an opportunity affordable rental units in South Africa. for infill development of affordable housing in an affluent suburb with a history of forced 304 Although it would require more research, a removals and failed restitution. This sets a mixed-income SH development like Tafelberg precedent not only for how to create affordable is arguably less risky and more efficient than a housing in well-located areas, but also as a mixed-income, mixed-use megaproject with symbol of the beginning of the structural multiple private-sector partners. Bound by reversal of apartheid. If it can be done in Sea legislation and policy to deliver an affordable Point, it can be done anywhere else in the housing mandate, it is more accountable for country. The Tafelberg site could be a blue- an SHI to “partner” with the state rather than print for change in South Africa’s segregated private developers. By involving fewer actors metros. and lower capital costs, smaller projects are less prone to the procurement and financial risks of large developments. Coordinating a few projects of this scale may also be within the ambit of the existing human resources and capacity of Departments. 305 One successful mixed-income social housing project can lead to the development of others. Rental income accrued in social housing covers construction, debt and maintenance costs. Once these costs have been sufficiently 55 Tafelberg: unjust and unlawful sale

Introduction Town Stadium, with an estimated total of 46,000m2 potential bulk available. The site 308 The decision by the Department of Transport is located on future portion 1, remainder and Public Works (DTPW) to dispose of the of erf 1559, Green Point, on the corner of 255 Tafelberg site is a cause for great concern. Granger Bay Boulevard and Beach Road. It has implications that extend well beyond • Top Yard: Part of the Government Garage Tafelberg as an isolated incident. It points to Precinct, located in the Cape Town CBD an overall lack of accountability and trans- less than 500 metres from the National parency in the sphere of spatial justice and Parliament and the Company Gardens. The the dominance of decision-making based on Property is currently utilised as ground- short-term financial gain. level parking facility with tarmac surfacing. 309 The concerns raised in this section show that A total of 46,484 m2 is estimated to be the 256 Cabinet has a responsibility to intervene in potential bulk available on Top-Yard. the Tafelberg matter by taking into account • Tafelberg: Also known as the “Main Road alternative ways to dispose of the site – ways Precinct” in Sea Point, the site of the former that simultaneously create financial return and Tafelberg Remedial High School, located at advance social objectives. 355 Main Road, Sea Point east. It is approximately three-and-a-half kilometres from A series of failures Cape Town’s CBD. The site consists of erven 1424 and 1675 and comprises a total site The first phase of the Regeneration Programme area of 1.7054 hectares. It offers a development yield of approximately 20,000m2 2 310 The Provincial Regeneration Programme is of mixed-use space, comprising 12,200m 2 2 divided into phases, “set in accordance with residential use, 1,700m retail use, 700 m 2 the readiness of the individual properties to restaurant and 5,000m business use. The be marketed as well as in accordance with Main Road Precinct benefits from dual the needs, budget, staffing and availability of zoning including mixed-use and general relevant resources of the DTPW.”253 residential. In terms of this use class, the use of the site for blocks of flats, double 311 The first phase (or tranche) includes four dwelling houses, groups of dwelling houses, properties known as the Four Sites, described places of worship and residential buildings in the Expression of Interest (EOI) as in- is permitted as of right.257 cluding: 312 All four properties are located either within • The Alfred Street Complex: A property the CBD or within a short distance of it – that situated in Alfred street in the Prestwich is, within a 3.5 kilometre radius. Their prime Precinct, linking Cape Town CBD and the locations, combined with the size of the prop- V&A Waterfront with an estimated total erties, represents an immense opportunity to 2 of 65,000m potential bulk available. The make the CBD and surrounding areas more property is erf 564 and is zoned mixed use socially inclusive while also assisting densifi- (MU3) under the 2012 zoning scheme and cation efforts. general commercial (C4) under the 1990 313 zoning scheme regulations.254 Despite the strategic importance and high value of these properties, there appears to be • The Helen Bowden Nurses Home Site: insufficient linkages between the Provincial Situated in the Somerset Precinct, neigh- Regeneration Programme and the priorities bouring the V&A Waterfront and the Cape and strategies identified in the SDF, PSDF, 56 and the Built Environment Performance Plan will (in say 30 or 50 years’ time) again have an (BEPP). Decisions to sell land parcels under opportunity to decide how to utilise the most the Regeneration Programme appear to be ad valuable, finite and irreplaceable resource, hoc and focused primarily on generating an namely property … Considering the objec- immediate income stream for the WCG. tives of the Regeneration Programme these 314 proposals will be assessed in a balanced way The dangers of this piecemeal approach to so as to ensure that only the highest and best land disposals were exposed by the recent sale use solutions are taken forward” (emphasis of the Tafelberg to a private developer with no added). 261 conditions for affordable housing attached. As the first property to be sold as part of the 319 The notice of intention to dispose of Taf- Regeneration Programme, Tafelberg requires elberg was published in mid-December 2015. an intervention to ensure that an appropriate The deadline for the comments period was 1 precedent is set. January 2016. Despite the assurances made by the MEC above, none of the civil society The decision to sell outright organisations party to the original objection to the lease was contacted. This refusal to alert 315 In May 2014, the Chief Directorate of Im- concerned stakeholders, together with the movable Asset Management at the WCG’s timing of the notice, clearly indicated malfea- DTPW used the media in order to invite inter- sance within the DTPW. ested parties to submit offers for the disposal of the Four Properties via an EOI. Surplus declaration 316 The EOI stated that: “with respect to the 320 According to GIAMA, the DTPW, as the first tranche of properties of the Provincial custodian of provincial immovable assets, can Regeneration Programme, the WCG and the only dispose of assets if they are declared as DTPW have made a policy decision that the surplus and no longer support service delivery WCG will retain ownership of the properties objectives.262 in order to capture the broader benefits of property regeneration. An outright sale of the 321 In relation to land disposal, GIAMA pre- properties is therefore not under consider- scribes that the department concern must ation” (emphasis added).258 consider whether the immovable asset in question can be used;263 317 Between April and June 2014, NU, the Social Justice Coalition (SJC) and Equal Education • by another user (i.e. a national or provincial (EE) exchanged correspondence with the department) or jointly by different users; DTPW, objecting to the above notice of disposal. It was argued, given the severe shortage • in relation to social development objectives of housing in the metro, that the Province was of government; and not going about its business in a responsible • in relation to government’s socio-economic manner.259 This was followed by a second objectives, including land reform, black letter, addressed to Premier Zille, MEC Alan economic empowerment, alleviation of Winde and MEC Donald Grant, dated 11 June poverty, job creation and the redistribution 2014.260 of wealth. 318 In a response dated 11 June 2014, MEC 322 Leading up to the surplus declaration, there Grant indicated that: “... in the Investor Con- had been a considerable amount of work ference the group of four sites referred to is done by City and Provincial officials, as well a first tranche and that more are to follow. In as representatives of the social housing sector, all these the market was presented with an to secure the Tafelberg site for affordable opportunity to utilise the development po- housing. This included a high-level feasibility tential of the sites but without ever owning them. This is done so that future generations 57 study conducted by SHRA and NASHO in 327 GIAMA defines a “user” as “a national or 2012, which concluded that 214 social housing provincial department that uses or intends rental units were feasible on the site. to use an immovable asset in support of its 323 service delivery objectives. Clearly the above During consultative meetings between letter indicates that the property was indeed NASHO, SHRA, the MEC for Human Set- needed by the Western Cape DHS. tlements and other officials regarding the Tafelberg site, the then-head of the DHS, 328 In a meeting held between the DTPW and Mbulelo Tshangana, stated that the original the DHS on 15 May 2013 then-MEC Robin mandate (which emphasized revenue returns Carlisle advised that the Tafelberg site was not at the expense of possible social equity and in fact available, describing it as “prime land” long-term integration) should be reconsidered that “can be sold for approximately R80m”. as inappropriate given Province’s strategic Beside the site’s market value, the MEC gave objectives.264 no other reasons to support the decision.270 324 This culminated in a letter from the DHS, 329 As early as 2012, the issue had been raised dated 26 March 2013, requesting that the site when Joel Mkunqwana, then-chair of NASHO, was needed to further the WCG’s Provincial informed Premier Zille of a series of work- Objective 6, which speaks to developing inte- shops held around social housing and urban grated and sustainable human settlements.265 regeneration in three metropolitan cities The letter stated: “The demand for affordable (including Cape Town). Attached was a brief rental opportunities, situated within the close summary of the key issues related to the proximity to economic opportunities, trans- Tafelberg site and the broader provincial land portation nodes and social infrastructure release programme for urban regeneration in can thus not be under-estimated, nor can the Cape Town. opportunities the sites present for racial and economic integration.”266 Mkungwana’s letter went on to argue that: 325 It went on to say that: “The Tafelberg school “[t]he main common conclusion that property is very well-suited for residential resulted from the above workshops points use, and social housing in particular. It is well to the importance of ensuring that this serviced by public transport and engineering property, together with other similar prop- services. It is recognised that careful thought erties on offer, provide a strong argument and design are required for an appropriate use to realise affordable rental housing op- and response to the existing school buildings, portunities to low- and moderate-income which enjoy heritage protection and cannot households in the inner city areas of demolish or altered. The opportunity for the Cape Town. This is critical because it is development of some retail and commercial clear that the lack of such opportunities uses on the Main Road frontage should be ex- re-enforces the perception that the City ploited as it has the potential to provide some of Cape Town is a socially divided city. If cross-subsidisation for social housing.”267 such opportunities are not pursued, then it will send the wrong signal and question 326 Finally it concludes: “Cape Town is one of our commitment to realising sustainable the most segregated cities in the world.268 and integrated communities in line with With this in mind, land cost is so significant the Provincial Strategic Objectives. The in the Province that we could not afford to government therefore needs to develop purchase market-related land which offered effective mechanisms to access the ‘social even slightly similar opportunities to this one. value’ out of development proposals, oth- Were these portions of land disposed of, the erwise this becomes a lost opportunity.”271 opportunity cost for integration within the borders of the city could potentially be lost to us forever.”269 58 A mistake in law recommendation, in terms of Reg 4(5), that the Provincial Cabinet dispose of the Tafelberg 330 On 23 March 2016, NU addressed a letter properties for R135 million. The justification to Premier Zille and MEC Donald Grant given for the disposal request was that the requesting them to furnish reasons, in terms properties were neither being used nor were of section 5(1) of the Promotion of Adminis- they required for government purposes. The trative Justice Act 3 of 2000 (PAJA), why the letter alluded to deliberations over the de- Tafelberg site declared surplus (in terms of cision, but made no mention of the DHS’s re- GIAMA) and put on the market.272 quest for previous high-level feasibility studies for social housing conducted on the site.276 331 On 1 April 2016, the DTPW responded to the request, stating that the Tafelberg Property 336 The PPC was conceived in order to exercise had become surplus during June 2010 by op- oversight and monitor the administration of eration of law and that PAJA was accordingly provincial state land. It consists of officials not applicable. It was also stated that although from provincial and national government the DTPW was of the opinion that PAJA did departments, as well as four external members not apply, it would still furnish its reasons “as with proven property expertise who are not soon as is reasonably possible.”273 employed by government. The PPC’s Annual Report, as provided for in its Regulations, 332 The decision to sell the Tafelberg site was has not been tabled in the Provincial Par- accordingly made on the basis that the user liament this year – meaning that the intended was the Provincial Department of Education parliamentary oversight has been lacking.277 and that the property had been surplus ever Moreover, it is unclear whether these annual since June 2010, when the Tafelberg Remedial reports have ever been submitted to Par- High School had relocated to Bothasig. This liament. was incorrect, however – not only because the site was requested by another user, but also be- 337 According to a damning email by Bovain cause GIAMA clearly lays down prerequisites Macnab, one of the independent members of for the disposal of land. the PPC: “The provincial portfolio is in excess of R75 billion. The way this is operated, in my 333 Given these false assumptions, and the ab- view, repeatedly fails our people and is in com- sence of any other decision since March 2013, plete contravention of the constitution, the it is respectfully submitted that there is no law, and the regulations ... Worst of all, no one basis on which the DTPW can rightfully sell ever seems to be held to account … Often the the property. PPC is only quorate on account of the external Western Cape Land Administration Act and the members and PPC meetings are only called dysfunctional PPC (late in this instance) when the Department has a crisis.”278 334 The Western Cape Land Administration Act 338 274 At a PPC meeting just after Macnab sent his (WCLAA) provides for the acquisition and email, another external member – Osman disposal of immovable property belonging to Narker – complained that the external the WCG. Its Regulations establish the Pro- members “feel like they attend the meetings vincial Property Committee (PPC) to monitor purely as a rubber-stamping exercise”.279 the administration of provincial state land, as well as to advise the Cabinet and the Minister 339 Of particular concern is the fact that the on matters relating to the administration of PPC does not have a representative from the provincial land, including offers of acquisition DHS. This, combined with a lack of over- and disposal.275 sight, has meant that the DTPW does not 335 facilitate the type of ‘whole-of-government’ On 3 July 2015, the head of Property Man- decision-making envisioned by GIAMA and agement at the DTPW wrote to the Chair- the 2005 Government-Wide Immovable Asset person of the PPC, asking for a written Management Policy.280 59 Options Analysis site be subdivided. The subdivision strategy would result in the creation of at least three 340 The DTPW produced an Options Analysis281 new properties and that this would de-risk the for the Tafelberg site before it launched the transaction by eliciting more competitive bids EOI. This document canvassed three main as well as provide an opportunity to impose options: Option 1 – Lease voetstoots (‘as is’); obligations in terms of affordable housing. Option 2 – Lease with development obligations; and Option 3 – Sale to the highest Expression of Interest bidder. 344 Despite the EOI not being structured fa- 341 For the purposes of the Option Analysis, vourably for affordable housing, three of the each disposal option was considered against 21 respondents to the EOI displayed concern: the following specific objectives: “Communicare, My Campus and Ludwe • To retain the property for future service de- Consulting requested the DTPW to seriously livery objectives (i.e. the property is of stra- consider using the site for a more inclusive tegic importance to the future operational mixed-use development incorporating social needs of the WCG). This option generates housing, although this mix would compromise annuity revenue to the WCG from the long- financial returns the DTPW may have sought 283 lease of the property; from the disposal.” In addition, “[s]ignif- icant interest (33%) was demonstrated by Re- • To maximise the commercial returns from spondents for some of the site to be developed the disposal. This option seeks to generate for inclusionary housing or affordable student the highest capital receipt from the dis- accommodation.”284 posal of the WCG’s freehold interest in a 345 property; The DTPW’s approach to Tafelberg and the other three properties embodies the Housing • To maximise the “regenerative effect” of the Development Agency’s critique Regeneration disposal. Programmes, which concerns South Africa at large: “The major mechanism to stimulate the 342 Interestingly, Option 3, which was ultimately regeneration is for the release of provincial- chosen, was not only prescriptive about at- ly-owned land and buildings to support the taching conditions to ensure the provision of roll-out of the strategy. However, to date there affordable housing (even though it included is no substantial programme for delivery and the ability to impose conditions): certainly no linked initiative that has helped shape residential access.”285 “The DTPW may seek to attach conditions to the transaction, including but not 346 The document goes on: “The current policy limited to providing a proportion of ac- framework does not facilitate a stronger commodation for affordable housing. Any linkage between social housing and urban such obligations would be placed on the regeneration. The weakness of the housing land and not the developer and must be component in the existing urban regeneration enforceable, including a mechanism such strategies is all the more critical in that there is that if the developer fails to deliver the a major push in the National Housing Policy obligations or seeks to have the obligations for a better integration of housing within removed, they should be valued at the time inner cities.”286 of removal (like a restrictive covenant). 347 This flaw was exposed by the fact that the Consequently, contracts should include EOI for all four properties did not require a clawback conditions to be imposed on the minimum portion of residential stock to be successful bidder.”282 used for affordable housing. This approach 343 The paper concluded with a recommendation contrasts strongly with the approach taken by that a ‘Hybrid Option’ be taken and that the the WCG on the Conradie site development 60 in Pinelands, a “catalytic project” for mixed- national, provincial and local government’s income development on public land unveiled spatial policy objectives. at this year’s State of the Province Address: A conflict of interest289

“Over the last year there has been major 350 progress in our plans to redevelop the well Gary Fisher was already a property developer located urban site where Conradie Hospital before he was hired to head the DTPW from once was. The site is 22 hectares in size, 2011 to March 2014. He is currently an ad- and is adjacent to the suburbs of Pinelands visor to the Premier on the Conradie meg- and Thornton, and surrounded by access to aproject. Since 2010, he had been Chair of public transport. A total of 22 hectares of the Board of Capitalgro, his brother-in-law’s well-located urban land is a fantastic space company. During his tenure as Head of the in which to launch this game changer. We DTPW, he also took charge of the Inner-City have called it the “Better Living” model Urban Regeneration Programme (CT-CCRP) because of its potential to pioneer a new ap- launched in 2011, which focused on urban proach to inclusive urban development, not regeneration inclusive of the delivery of af- just for Cape Town, but for all South Af- fordable housing. rican cities that have similar apartheid-era 351 In 2012, the DTPW supported a feasibility spatial challenges.”287 study to investigate the development of af- What is needed is an approach similar to the fordable housing on the Tafelberg site (also Better Living Model (BLM), which requires known as “The Sea Point Main Road Pre- that 49% of the Conradie site’s 3,000 housing cinct”). This was coordinated and funded units are allocated to affordable housing – i.e. by SHRA and NASHO. Fisher instead dis- social housing, FLISP housing and rent-to-buy couraged the use of the Tafelberg site for social housing units.288 The EOI for the Conradie housing and offered the Woodstock Hospital site states that the WCG intends to replicate as an alternative. aspects of the BLM on other well-located 352 Meanwhile, in 2013, Capitalgro bought The urban sites in the future. Regent for R95.7 million and, a year later, 348 However, neither the Conradie Site nor the The Equinox for R94.6 million. Both are in BLM is discussed in any of the Provincial Sea Point, close to Tafelberg. In March 2014, Regeneration Programme documents. This Fisher published EOIs for Tafelberg, an- indicates a disconnect between the Regener- nouncing that it would be sold to the highest ation Programme and other provincial efforts bidder. Ultimately, this would boost property to create integrated, sustainable and affordable values for both The Regent and The Equinox. residentially-led, mixed-use neighbourhoods 353 Knowledge of this context makes it clear on state-owned land. that the purchases of The Regent and The 349 Attaching progressive conditions for af- Equinox were speculative moves informed by fordable housing on the lease or development government (DTPW) plans in spite of Fisher’s of state-owned land is crucial to the reali- obvious conflict of interest as head of both sation of urban restructuring. The City and the DTPW and the Inner-City Urban Regen- Province have shown an inclination to do so eration Programme. By the time the transfer with the large-scale Maiden’s Cove and Fore- of The Equinox was completed, Fisher was no shore projects. Conditions should not only be longer in the DTPW, having taken up a new applied to large sites; they are also paramount position as the Premier’s advisor, again in to maximising social returns for high-value, property-related matters. state-owned land conducive to in-fill projects. Yet such conditions are glaringly absent from the decision to sell the Tafelberg site. Man- aging land in this way is inimical to realising 61 Structure of the tender pro-poor projects and infrastructure elsewhere. However, the decision was driven by an 354 Despite the stated objectives of the Regener- affordability deficit related to another DTPW ation Programme, the tender for the Tafelberg project, known as the Dorp Street PPP, a pro- site amounted to nothing more than a search posed high-rise office block for the Western for the highest bidder. Out of 100 points, a Cape Education Department (WCED) on maximum of 90 points was awarded for price provincially owned land (known as the Leeu- and ten points awarded to a bidder for at- wen-Loop site on Bree Street). taining a BEE status in terms of Regulations 5 359 (2) and 6 (2) of the Preferential Procurement The Dorp Street PPP is part of a larger Regulations.290 This is type of tender does ‘Provincial Office Precinct’ – the first of the nothing to leverage the private sector. six precincts contained in the 2010 CT-CCRP. The Provincial Office Precinct involves the 355 The structure of the sale is a clear indication clustering of existing and new provincial gov- that Province applied a narrow conception of ernment buildings in Wale and Dorp Streets. value to what it felt it could derive from the 360 land. By offering it up for sale to the highest According to a 2012 KPMG feasibility study, bidder, the WCG sought only to realise fi- the project constituted a megaproject to the nancial return, despite long-standing pro- tune of R1.2 billion. Between 2012 and 2014, posals for social housing on the site. the estimated capital contribution required from the WCG ballooned from R210 million 356 It is not clear if the Province considered “best to R540 million.292 This left the DTPW with value” in terms of the three provisos set out an affordability deficit of R330 million, flagged by the GIAMA. Ultimately, however, it sup- as a major concern by Provincial Treasury in ported the decision to call for bids and the November 2014.293 disposing of the Tafelberg site to the highest 361 bidder. And yet its responsibilities in terms of In a June 2014 letter, Transport and Public the management of its land assets are much Works MEC Donald Grant claimed that: “[t] wider than the realisation of a financial return; he disposal of Tafelberg under the Regener- the potential to use the site for social housing ation Programme was to attract maximum would certainly fall within the “social return” value from the most valuable inner-city prop- objectives in the GIAMA’s definition of “best erties to create an income stream and a devel- value for money”. opment fund from which projects for the poor can be cross-subsidised”.294 357 A straightforward sale is inappropriate as it 362 fails unlock the value of the site for the benefit During a parliamentary session on Thursday of the people of the province given its consid- 24 March 2016, MEC Grant repeated this lie erable strategic value and development po- in response to written questions from Mr L H 295 tential. Given that the WCG’s property port- Max. folio is worth R80.1bn, about R2bn more than 363 Questions the largest locally based listed property fund, Growthpoint,291 the lack of a strategic ap- • Whether the disposal of the Tafelberg proach is alarming. The potential opportunity property as part of the City of Cape Town’s costs associated with this approach must be Regeneration Programme will enable the seen in light of this enormous portfolio. Province to extract the maximum value from the most valuable inner-city properties A motive for disposal to create an income stream from which projects for the poor can be cross-subsidised? 358 Throughout the campaign to stop the sale of Tafelberg, senior officials and politicians • Whether the increasing cost of urban sprawl have argued that the disposal of Tafelberg was taken into account when this model was justifiable as a means to raise money for was adopted? If not, why not? If so, what are the relevant details? 62 • Whether any mechanisms are in place to DTPW, “in consultation with the Provincial ensure that the cross-subsidisation of so- Treasury, agreed that a capital contribution cio-economic objectives through the sale of [for the Dorp Street PPP] will be made out of state land and that they are transparent? if funds set aside in the Asset Finance Reserve so, what are the relevant details? (AFR) and an additional contribution to be 364 derived from the proceeds of sale of prop- Answers provided erties, which proceeds will be ring-fenced for • But for one correction in that it is a Pro- this purpose”.297 This proves that the DTPW vincial Regeneration Programme relating to planned to help fund the Dorp Street PPP the inner city of Cape Town, the answer is with the proceeds from selling public land. yes. 367 Correspondence between DTPW’s manager • The Constitutional Court has recently of accounting and the HOD of Provincial established that Municipal Planning is Treasury dealing with the ‘Roll-over of an exclusive municipal function and as unspent voted funds and the retention of such the determination of the urban edge, over-collected own receipts from 2014/15 to Spatial Development Frameworks and 2015/16’ for the DTPW states that:298 other municipal instruments factor in the containment and cost of urban sprawl most “This means that the AFR provision for the directly, and by which laws or instruments Dorp Street PPP project is reduced from every landowner within the City, including R628,827m to R460,116m. In order to the Province, is bound. This notwith- compensate for the “loss” of the motor ve- standing, it is my understanding that the hicle licence, increased revenue to the AFR Western Cape Government is alive to the provision for the Dorp Street PPP project, issue of urban sprawl and takes it into the yield of R135,000m from the sale of account in its planning and environmental erf 1675 in Sea Point needs to be allo- policy determinations as well as its support cated to the AFR for the Dorp Street PPP and oversight of municipalities. project purposes. This will re-instate the AFR provision to R595,116m (R460,116m • Given the fiscal constraints facing the state + R135,000m). Cabinet will have to take currently; and particularly in relation to the a specific decision in this regard, which budget cuts that have been applied to our the Provincial Treasury needs to strongly provincial coffers, the achievement of all our support. The Cabinet submission regarding socio-economic objectives are cross-subsi- the sale of erf 1675 in Sea Point is en route.” dised by way of revised budget determinations following all required processes. An 368 On 27 October 2015, Provincial Treasury increasingly vital element of these budgets approved the roll-over of the DTPW’s unspent is the realisation of revenue by provinces amounts to be used in 2015/16. This included directly; through inter alia the disposal of approximately R44 million to be reserved for assets the AFR for the Dorp Street PPP. The Pro- vincial Treasury also stated that: 365 During a June 2016 Cape Talk Radio interview, Western Cape Human Settlements MEC, Bonginkosi Madikizela, then stated “With regards to the sale of Erf 1675 in Sea that: “with the sale of the land we can ac- Point, the Provincial Treasury will not tually provide more than 1,200 people with have any in principle objection to utilise [housing] subsidies.” 296 Again this reinforced the proceeds of the sale of the property to the notion that the Tafelberg sale proceeds augment the capital portion required for would go towards uplifting poor communities. the PPP. It must be noted that approval of such a transaction lies in the ambit of the 366 However, in a Cabinet submission dated No- Provincial Cabinet.” vember 2014, MEC Grant explained that the 63 Dorp Street: Value-for-money, affordability and concerns regarding the value-for-money risk and affordability of the PPP. It submitted a report accompanying the feasibility study to 369 In order to cover the increasing capital costs National Treasury, noting the “narrow” value- and ensure value-for-money of the Dorp for-money margin of the PPP.302 It also ques- Street PPP, the DTPW chose to ring-fence tioned assumptions in the study – including revenue derived from the sale of the Tafelberg a lower-than-recommended Internal Rate of site. This approach to financial management Return303 which, if changed, would negatively by the Province was problematic – an imme- impact the affordability of the project. diate capital need for an increasingly unviable 374 office project was to be covered by the sale of Provincial Treasury concluded that: “the a highly valuable and strategic land asset with Project demonstrates that it meets the three long-term value. This raises questions around criteria of a PPP, but that close monitoring and how expenditure is managed in the DTPW, in control will be required throughout the du- addition to why other revenue streams could ration of the Project to ensure that it remains as 304 not have been utilised. such”. The DTPW assured both National and Provincial Treasury that it would be able to 370 From the outset, the Dorp Street PPP was cover the costs for the project. marred by questions over its viability. To 375 proceed as a PPP, a project must undergo a Following this, Provincial Treasury docu- series of approvals from both National and ments between 2012 and 2014 indicate in- Provincial Treasury. The first of these is that an creasing concern around the growing capital organ of state must submit a feasibility study contribution required by the DTPW to ensure report to National Treasury. This feasibility the project’s value-for-money, and accommo- 305 study is conducted by an independent Trans- dating delays. Crucially, doubts were raised action Advisor. over whether the project should go ahead as a PPP. 371 A feasibility study includes multiple stages, 376 including a needs analysis, an options analysis, By the time the report was released in No- a value assessment, and an economic valu- vember 2014, the value-for-money of the PPP ation.299 This is used in determining whether was only 1% and the proposed capital contri- a project displays value-for-money, afforda- bution for the project had more than doubled 306 bility and risk-sharing – seen to be the key from R210 million to R540 million. With a criteria of a PPP. The report is thus crucial in higher capital contribution required from the evaluating the viability of a project as a PPP. It Province, the public sector partner was thus influences National Treasury’s decision over taking on increased risk. One of the under- whether to grant initial approval. pinning principles of a PPP is that the capital risk that comes with a large project is trans- 372 In the case of the Dorp Street PPP, the ferred to a private partner. Transaction Advisor was KPMG. The fea- 377 sibility study report noted that a capital The Annual Report for the 2013/2014 Fi- contribution of R210 million was needed to nancial Year for the DTPW noted the fol- make the project affordable.300 Further, the lowing with regard to the Dorp Street PPP: PPP was shown to have a 3.2% higher value “The budget to erect and maintain the office for money than if the public sector (Public block will mainly [emphasis added] be pro- Sector Comparator) took on the project alone. vided by the successful bidder, but with a 307 It also concluded that through a PPP, a total capital contribution from the Province.” By risk of around R100 million would be trans- the 2014/2015 Annual Report, it had become ferred to the private party. In total, the value clear that Province would be contributing a of the project was estimated to be around R1.2 substantial amount of money to the project: billion.301 “The design, construction and maintenance of the office block at 13 Dorp Street will be 373 From the outset, Provincial Treasury raised provided by the successful bidder, but with 64 a capital contribution from Province.”308 This Government Motor Transport and R750m was indicative of the fact that the private investment partner was no longer the main bearer of risk. 379 In the same financial year that the Pro- 378 The DTPW pushed ahead with the Dorp vincial Treasury granted DTPW permission Street PPP despite evidence that the project to dispose of scarce and strategic land assets was barely satisfying the three criteria of a to plug the affordability deficit vis a vis the PPP. By 2014, it was clear that its structure Dorp Street PPP, Provincial Treasury was also required an extensive capital contribution by herding off substantial funds from the same Province to ensure affordability. It placed in- department via Government Motor Transport creased risk on Province and barely achieved (GMT). value-for-money. Tellingly, the project has not achieved final approval from National 380 Government Motor Transport (GMT) op- Treasury, five years after its initial registration erates as an independent business unit respon- as a PPP. sible for vehicle fleet management services to provincial and national government as well as other entities. It is the only trading entity that

Figure 21: Rendering of the Dorp Street PPP building 65 is administered by the DTPW. GMT’s main Conclusion source of income is derived from the charging of daily and kilometre tariffs. 384 The disposal of Tafelberg to the highest 381 In the 2012/2013 financial year, GMT’s accu- bidder exposed the government’s failure to mulated surplus increased from R 1.2 billion appreciate the multiple values of land. The as of 31 March 2012 to R 1.35 billion (increase disposal was ad hoc and unlawful, especially of R135 mil) as of 31 March 2013. In the given Province’s obligations for urban re- 2014/2015 financial year, GMT had a surplus structuring. It highlighted a dominant focus of R227 mil (increase of 17.3% from 2013/14: on short-term cash injections over long-term R 193.5 mil).309 According to a 2016 Report integration. 310 of the Parliamentary Oversight Committee, 385 What is required is a shift in mind set that GMT’s accumulated surplus increased from leverages well-located land to realised multiple R1,763 billion in 2014/2015 to R2,024 billion values including both financial and social. In in 2015/2016. This equates to a R261m surplus our view, the Cabinet must: for the 2015/2016 year alone. • Reverse the “decision” to declare Tafelberg 382 In 2015, Provincial Treasury was so con- and Wynyard Mansions surplus; fident in the financial soundness of the GMT that it invested R750m of this surplus in order • Resile from the sale to the Phyllis Jowell to “utilise the funds for projects that have a Jewish Day School; and strong transversal impact to the benefit of the • Ensure access to housing for Black and Provincial Government in its priority pro- Coloured working class people on the site. grammes”.311 The R750 million was made up of two tranches: R500 million that was transferred in the 2015/2016 financial year and a further R250 million that was transferred in the current financial year. 383 However, despite these surpluses, the amounts were not included in the Vote 10 roll-over when the Provincial Treasury was discussing whether or not to dispose of properties.

66 Endnotes

1 City of Cape Town Built Environment Performance 14 Ibid. Plan, 2015/16, p. 19. 15 Turok, I., Sinclair-Smith, K., & Shand, M. (2010), 2 Western Cape Provincial Spatial Development The Distribution of the Residential Population Framework, 2014, p. 24 (See: https://www. across the City of Cape Town’ in Environment and westerncape.gov.za/eadp/your-resource-li- Planning A, vol. 42 (2001), p. 2295. brary/western-cape-provincial-spatial-develop- 16 Western Cape Provincial Spatial Development ment-framework). Framework, 2014, p. 24; City of Cape Town Spatial 3 ‘Comment about refugees haunts Zille’, in Mail & Development Framework, 2010, p. 20. (See also Guardian, 20 April 2012, (See: http://mg.co.za/arti- The Presidency, RSA, National Spatial Devel- cle/2012-04-20-comment-about-refugees-haunts- opment Framework, 2006, p. 8-9. zille). 17 Turok, I., Sinclair-Smith, K. & Shand, M. (2010). 4 ‘Will Wolwerivier be a model development 18 Statistics South Africa, 2011, Income & Expend- for development, or the next Blikkiesdorp?’, in iture Survey 2010/11, (See: http://www.statssa.gov. GroundUp, 20 March 2015 (See: http://www. za/publications/P0100/P01002011.pdf). groundup.org.za/article/will-wolwerivier-be-mod- 19 Statitics South Africa, Living Conditions Survey el-development-or-next-blikkiesdorp_2773/). 2014/2015. 5 ‘Protestors picket outside Sea Point devel- 20 Schoonraad M., ‘Cultural and institutional ob- oper’s apartment’, in GroundUp, 14 December stacles to compact cities in South Africa’, in Jencks, 2016 (See: http://www.groundup.org.za/article/ M. & Burgess, R. (eds.). Compact Cities: Sus- protesters-picket-outside-sea-point-develop- tainable Urban Forms for Developing Countries, ers-apartment/). London: Spon Press (2000), pp. 219-230 6 ‘Cape Town anti-land invasion unit acting illegally, 21 ‘Economic and Fiscal Costs of Inefficient Land-use lawyers say’, in West Cape News, 6 March 2017 Patterns’, Financial And Fiscal Commission, 2011. (See: http://westcapenews.com/?p=2960). 22 Western Cape Provincial Spatial Development 7 ‘De Lille seeks second term as Cape Town mayor’, Framework, 2014. in Times Live, 25 January 2016 (See: http://www. timeslive.co.za/politics/2016/01/25/De-Lille-seeks- 23 Siemens A. G., African Green City Index: Assessing second-term-as-Cape-Town-mayor). the environmental performance of Africa’s major cities (2011). 8 ‘De Lille: I’m tackling apartheid spatial planning legacy’, in Cape Times, 17 January 2017 (See: http:// 24 City of Cape Town, Low Carbon Central City www.iol.co.za/news/politics/de-lille-im-tackling- Report (2014). apartheid-spatial-planning-legacy-7432070). 25 Schio, N. & Fagerlund Brekker, K., The Relative 9 ‘Spotlight on ‘apartheid’ city planning’, in Saturday Carbon Footprint of Cities (2013). Argus, 7 May 2016 (See: http://www.iol.co.za/news/ 26 City of Cape Town, BEPP 2016/17; and Sin- south-africa/western-cape/spotlight-on-apartheid- clair-Smith, K. (unpublished, 2009) used in the City city-planning-2018753). of Cape Town Spatial Development Framework 10 ‘Can Patricia de Lille finally get around to dealing (2010); Sinclair-Smith, K. & Turok, I., The changing with apartheid in Cape Town?’, in Rand Daily Mail, spatial economy of cities: An exploratory analysis of 19 January 2017 (See: https://www.businesslive. Cape Town (2012). co.za/rdm/politics/2017-01-19-can-patricia-de-lil- 27 City of Cape Town BEPP, 2016/17. le-finally-get-round-to-dealing-with-apartheid-in- 28 Sinclair-Smith, K. & Turok, I. (2012). cape-town/). 29 Socio Economic Rights Institute (SERI), Edged 11 ‘Mapping South Africa with Dot Distribution’, Out: Spatial Mismatch and Spatial Justice in South based on Census 2011 (See: http://dotmap.adrian- Africa’s Main Urban Areas (2016). frith.com/). 30 Ibid., p. 278. 12 Statistics South Africa, 2016; ‘Housing from a 31 Ibid. p. 73. human settlement perspective: In‐depth analysis of the General Household Survey data’, in GHS Series 32 City of Cape Town, BEPP (2015), p. 39. Volume VII, 2002–2014. 33 City of Cape Town, BEPP (2015) p. 43; Transport 13 US Census Bureau Housing Patterns (See: http:// Development Index. www.census.gov/housing/patterns/about/mul- 34 City of Cape Town, Transport Development Index ti-group.html). (2015) 35 kerr, A., Tax(i)ing the Poor? Commuting Costs. South Africa Labour and Development Research 67 Unit Working Paper, 2015, Cape Town: University (IDI) ranking (70th) in the world. of Cape Town. 49 Stats SA, Labour Market Dynamics in South Africa 36 National Planning Commission (NPC), National 2014 (2015). Development Plan 2030 (2011); Organisation for 50 Affordable Land and Housing Data Centre, Filling Economic Co-operation and Development, (2011). the Gaps: Affordable and other housing markets in 37 Department of Transport, Technical Report (2003); Cape Town, 2012. The First South African National Household Travel 51 Payprop Rental Index, The State of the Residential Survey. Rental Market in South Africa (See: https:// 38 kerr, A., ‘Commuting costs the poor dearly’, in Mail za.payprop.com/docs/annual_market_report_2015. & Guardian, 13 November 2015 (See: http://mg.co. pdf), 2015. za/article/2015-11-15-commuting-costs-the-poor- 52 Western Cape Provincial Government, Provincial dearly). Economic Review and Outlook, 2016. 39 Turok, I., South Africa’s new urban agenda: Trans- 53 SARS, Guide to the Urban Development formation or compensation? (2016), p. 13. Zone (UDZ) Tax Incentive, 2014 (See: http:// 40 ‘Vandals have the upper hand against metrorail’, www.sars.gov.za/AllDocs/OpsDocs/Guides/ Cape Chamber of Industry and Commerce, 29 LAPD-IT-G12%20-%20Guide%20to%20the%20 November 2016 (See: http://capechamber.co.za/ Urban%20Development%20Zone%20Tax%20In- vandals-upper-hand-metrorail/). centive%20-%20External%20Guide.pdf) 41 Rubin, O., ‘Contact between parents and adult 54 Ibid. children: The role of time constraints, commuting 55 A low-cost unit is identified as a unit (either and automobility’, in Journal Of Transport Geog- apartment or building) where the cost of apartment raphy, 2015, pp. 4976-84. does not exceed R350,000 or the cost of a building 42 UK Office for National Statistics, Commuting does not exceed R300,000 and the rent is less than and Personal Well-being, 2014 (See: http://webar- 1% of the cost of the unit. chive.nationalarchives.gov.uk/20160105160709/ 56 According to the SARS Guide to the UDZ, a http://www.ons.gov.uk/ons/rel/wellbeing/measur- developer can claim 25% of the cost of building a ing-national-well-being/commuting-and-person- low-cost residential unit in the first year, 13% of the al-well-being--2014/art-commuting-and-personal- cost for the next five years, and 10% for the seventh well-being.html). year. 43 Lorenzo, T., ‘“We are also travellers”: An action 57 Allemeier, J., Urban Development Zone 2020: story about disabled women mobilising for an ac- Inclusive Urban Regeneration, 2014 (See: https:// cessible public transport system in Khayelitsha and www.capetownpartnership.co.za/2014/05/ Nyanga, Cape Metropole, South Africa,’ in South urban-development-zone-2020-a-success-sto- African Journal Of Occupational Therapy, 2008, ry-for-inclusive-urban-regeneration/). 38(1), pp. 32-40; Exstrom, O., ‘Gender activists take 58 City of Cape Town, Zoning Scheme, 2017 (See: on SA taxi driver’, IOL news, 2016 (See: http://www. https://www.capetown.gov.za/en/Planningportal/ iol.co.za/motoring/industry-news/gender-activists- Pages/Zoningscheme.aspx). take-on-sa-taxi-drivers-2024760) 59 Property24, Woodstock Property Trends and 44 CoGTA (Department of Cooperative Governance Statistics, 2016 (See: http://www.property24.com/ and Traditional Affairs), Integrated Urban Devel- cape-town/woodstock/property-trends/10164). opment Framework: Draft for Discussion, 2014, Pretoria. 60 Dayton, S., ‘UDZ not doing enough for affordable inner city housing’, in Polity, 13 August 45 South African Cities Network, Understanding 2015 (See: http://www.polity.org.za/article/ Housing Markets in South Africa, 2014 (See: http:// udz-not-doing-enough-for-affordable-inner-city- sacitiesnetwork.co.za/wp-content/uploads/2014/08/ housing-2015-08-13). File-1-Overview.pdf). 61 Pillay, S., ‘The displacement phenomenon: Wood- 46 Western Cape Department of Human Settlements, stock and Salt River’, in GroundUp, 21 September Housing Market Segment Report, 2015, p. 8 (See: 2016 (See: http://www.groundup.org.za/article/dis- https://www.westerncape.gov.za/assets/depart- placement-phenomenon-woodstock-salt-river/). ments/human-settlements/docs/demand-profile-analysis/human-settlements-housing-mar- 62 Ibid. ket-segment-report-25march2015.pdf) 63 Joseph, R., ‘Down and Out in Tin Can Town’, 47 South African City Networks, Understanding March 2015 (See: http://www.contributoria.com/ Housing Markets in South Africa, 2014. issue/2015-03/54aebd86d790234d4100001b/). 48 According to the latest Inclusive Growth and Development Report, South Africa has the biggest range between Gross Domestic Product per capita ranking (19th) and Inclusive Development Index 68 64 Peterson, T., ‘We have been sent here to wait until allocations are for ‘planning’. we die - Wolwerivier residents’, in News24, 3 Feb- 82 See: Western Cape Transport and Public Works ruary 2017 (See: http://www.news24.com/SouthA- Department Budgets from 2011/2012 to 2015/2016, frica/News/we-have-been-sent-here-to-wait-until- and Annual Reports from 2011/2012 to 2015/2016 we-die-wolwerivier-residents-20170203). 83 Western Cape Provincial Budget, 2016/2017, p. 512. 65 Reed, Russell, ‘City & Coloured: Race, Space and 84 Cape Town Central City Regeneration Programme, Redistribution in Cape Town’, in Harvard Political 2010. Review, 16 September 2016 (See: http://harvard- politics.com/covers/covers-fall-2016/city-colour- 85 Department of Transport and Public Works: ed-race-space-redistribution-cape-town-2/). Annual Reports 2012/2013, 2013/2014, 2014/2015, pp. 92, 21, 24 respectively. 66 Ibid. 86 McKune, C., ‘Helen Zille’s advisor and ex-public 67 Napier, M. Competing for urban land: Improving works head in R190 million Conflict of Interest’, in the bidding power of the poor, 2008, Cape Town: Amabhungane, 17 July 2016 (See: http://amabhu- Urban LandMark. ngane.co.za/article/2016-07-17-helen-zilles-advis- 68 This is especially so in the absence of state reg- er-and-ex-public-works-head-in-r190m-conflict- ulation requiring the provision of affordable of-interest). housing on privately owned land and a reticence to 87 Western Cape Provincial Treasury 2016: Adjusted expropriate well-located land for the purposes of Estimates of Provincial Expenditure (See: https:// affordable housing. www.westerncape.gov.za/sites/www.westerncape. 69 Radio interview on Cape Talk: “How is Gov- gov.za/files/assets/departments/treasury/Docu- ernment making housing available to lower ments/Budget/2016/wc_2016_adjusted_estimates_ income” (See: https://www.google.com/ to_printers_19_nov_2016.pdf). url?hl=en&q=https://soundcloud.com/primedia- 88 Ibid, s. 6(1). broadcasting/how-is-government-making-housing-available-to-those-with-lower-income&- 89 See: http://unhabitat.org/the-right-to-adequate- source=gmail&ust=1487085624933000&us- housing-fact-sheet-no-21rev-1/ g=AFQjCNH_imZm4LgOm05OMmfpa4x- 90 Western Cape Provincial Spatial Development JQh5nig). Framework, 2014, p. 90. 70 City of Cape Town, BEPP (2015), p. 41. 91 Department of Monitoring and Evaluation, Devel- 71 See: http://www.capetownpartnership.co.za/wp- opment Indicators 2014, 2014, p. 34. content/uploads/2009/08/CCDS-POP-DOC_opt. 92 City of Cape Town, BEPP, 2015, p. 33. pdf, p. 8. 93 Western Cape Government, ‘Inside Government: 72 Western Cape Department of Human Settlements, Affordable Housing: The policy gap we need to fill’, Provincial Rental Housing Strategy (2010–2014), at 2015 See: https://www.westerncape.gov.za/news/ p. 8. inside-government-affordable-housing-policy-%E2 73 MEC Donald Grant: Western Cape Transport and %80%9Cgap%E2%80%9D-we-need-fill Public Works Provincial Budget Vote 2015/16 94 City of Cape Town, BEPP, 2015, p. 33. 74 Western Cape Government, Working Paper: Asset 95 Testing & Refinement of the Draft Integrated Management Review (200) p. 19 Human Settlement Framework for Cape Town, p. 5. 75 Housing Development Agency, Reviving Our Inner 96 Western Cape Government, ‘Inside Government: Cities: Social Housing and Urban Regeneration in Affordable Housing: The policy gap we need to fill’ South Africa, 2013, p. 12. (2015). 76 Ibid., p. 4. 97 See: http://www.miworc.org.za/docs/Mi- 77 Zille, H, Western Cape State of the Province WORC-FactSheet_1.pdf Address, 2016, (See: https://www.westerncape.gov. 98 Western Cape Government, ‘All you need to Know za/speech/premier-helen-zilles-state-province-ad- about Housing Subsidies’, in https://www.west- dress-2016) erncape.gov.za/service/all-you-need-know-about- 78 Provincial Government of the Western Cape: housing-subsidies (2017). Department of Transport and Public Works, 2010, 99 Department of Monitoring and Evaluation, Devel- See: https://www.westerncape.gov.za/text/2011/10/ opment Indicators 2014, 2014, p. 34. cc_regenerationprog.pdf 100 National Department of Human Settlements, 79 Ibid p. 9 Annual Report, 2016, p. 35. 80 See: Annexure 1 81 From 2011/2012 to 2014/2015, it is specifically 101 Public Affairs Research Institute, The Contract indicated that allocations – and hence corre- State: Outsourcing & Decentralisation in Contem- sponding expenditures – are for ‘professional fees’ porary South Africa (2014) and ‘planning fees’. From 2015/2016 to 2016/2017, 102 Socio-Economic Rights Institute (SERI), Edged 69 Out: Spatial Mismatch and Spatial Justice in South 123 National Association of Social Housing Organisa- Africa’s Main Urban Areas (2016). tions (NASHO) and Housing Development Agency 103 City of Cape Town, Five-Year Integrated Devel- (HDA), ‘Reviving Our Inner Cities: Social Housing opment Plan 2012-2017: 2016/17 Review and and Urban Regeneration in South Africa’, 2013. Amendments, p 156-159 See: http://resource. 124 Social Housing Policy, 2008, p. 11. capetown.gov.za/documentcentre/Documents/ 125 Ibid, note 122, p. 8. City%20strategies%2c%20plans%20and%20frame- 126 NASHO & HDA, ‘Reviving Our Inner Cities: works/20162017%20Review%20and%20Amended. Social Housing and Urban Regeneration in South pdf Africa’, 2013. 104 Ibid. 127 Defining Restructuring Zone for Social Housing, p. 105 Author’s map using City of Cape Town’s ECAMP 2 (See: http://www.stellenbosch.gov.za/documents/ data, housing projects from City of Cape Town, municipal-policy/human-settlements-a-prop- Integrated Development Plan 2012-2017, 2015/16 erty-management/3483-defining-restructur- Review and Amendments. ing-zone-for-social-housing/file 106 Cape Town Partnership, Central City Development 128 NASHO & HDA, ‘Reviving Our Inner Cities: Strategy, 2016, p. 4 Social Housing and Urban Regeneration in South 107 Ibid., p. 31. Africa’, 2013, p. 7 108 Ibid. 129 Government Gazette, No. 34839 15, 2011. 109 Department of Monitoring and Evaluation, Devel- 130 Social Housing Act, 2008, S1(a) opment Indicators 2014, 2014 See: http://www.poa. 131 Social Housing Policy, 2008. Pg. 19 gov.za/news/Pages/DEVELOPMENT%20INDI- 132 Development Action Group (2008) Sustainable CATORS%202014%20final.pdf medium-density housing, A resource book. 110 Department of Planning, Monitoring and Evalu- 133 Ibid. ation, Development Indicators, 2014 See: http://bit. ly/2km3e2y 134 Social Housing Policy, 2008, p. 17. 111 City of Cape Town, Open Data Portal: Rental 135 Matthee, M., ‘Many ways to overcome Stock Data set, 2016 See: https://web1.capetown. city’s housing crisis’, 2016, See: https:// gov.za/web1/OpenDataPortal/DatasetDetail?Da- www.pressreader.com/south-africa/cape- tasetName=City%20rental%20stock&Content- argus/20160929/281779923614374 Type=Data%20set 136 Department of Human Settlements, Annual 112 Western Cape Government, Building Sustainable Report 2015/2016 See: http://www.gov.za/sites/ Communities: Rental Housing Strategy 2010-2014, www.gov.za/files/HumanSettlements_Annual_ in 2016 See: https://www.westerncape.gov.za/ Report_2015_2016.pdf text/2010/6/western_cape_rental_housing_strategy. 137 NASHO & HDA, ‘Reviving Our Inner Cities: pdf Social Housing and Urban Regeneration in South 113 McCarthy, M., ‘Affidavit TA3’, in Thozama Africa research report’, 2013, p. 4. Adonisi & Others v MEC for Public Works and 138 Ibid. Others, 2016 (See: http://nu.org.za/wp-content/up- 139 Ibid. p. 5. loads/2016/04/TA3.pdf). 140 Western Cape Provincial Government, Provincial 114 Western Cape Government, 2010. Building Sus- Spatial Development Framework (2014), p. 90. tainable Communities: Rental Housing Strategy 141 National Department of Human Settlements, 2010-2014. Annual report, 2015/2016 (2016), p. 35. 115 McCarthy, M., ‘Affidavit TA3’, 2016. 142 McCarthy, M., ‘Affidavit TA3’, (2016). 116 Cape Times, 2012 (See: https://www.pressreader. 143 Ibid., p, 9. com/). 144 McCarthy, M., Affidavit TA3, (2016). 117 Ibid. 145 Ibid., p. 11. 118 Security guards have been living there to protect the building. 146 Ibid., p. 11. 119 Housing Act, No. 67 of 1995 3(4)(g). 147 City of Cape Town, Social Housing Progress Report - April 2008 See: http://www.woodstock. 120 Social Housing Act, No 16 of 2008. org.za/wp-content/uploads/2008/06/cct-social- 121 Social Housing Act Regulations, No. 34970 of housing-progress-report-april-081.pdf 2012. 148 Ibid., pp. 2-4. 122 Social Housing Policy, 2008. 149 Western Cape Government, Building Sustainable Communities: Rental Housing Strategy 2010-2014, 2010. 150 McCarthy, M., Affidavit TA3, (2016). 70 151 See: http://www.groundup.org.za/media/uploads/ 172 Ibid. documents/Tafelberg/P11049_PRESENTATIONS_ 173 McCarthy, M., Affidavit TA3 (2016), p. 15. Feasibility%20Report%20Presentation_Rev5.pdf 174 Spatial Planning and Land Use Management Act, (See Annexure 12). 16 of 2013. 152 Hogg, C., ‘City Promises Social Housing in 175 Spatial Planning and Land Use Management Act, Woodstock’, in GroundUp, 2016 See: http://www. 16 of 2013. groundup.org.za/article/city-commits-social-housing-woodstock-clinic-site/ 176 National Development Plan 2030, Transforming Human Settlements (2012), Ch. 8, p. 266. 153 ‘Cape to Use Prime Property for Housing’, in Cape Argus, 26 March 2013 See: http://www.iol. 177 President Thabo Mbeki, State of the Nation co.za/capeargus/cape-to-use-prime-property-for- Address (2004) See: http://www.sahistory.org.za/ housing-1491933 archive/state-nation-address-president-south-africa-thabo-mbeki-11-sitting-houses-parliament-cape 154 State of Cape Town Central City Report, 2015. https://issuu.com/capetowncentralcityimprove- 178 Ibid. mentdistrict/docs/the_state_of_cape_town_ 179 National Housing Code, Chapter 3 (2009) p. 6 central_city 180 Department of Human Settlements, Breaking New 155 Chetty, R., Hendren, N., & Katz, L. F., ‘The Effects Ground: A Comprehensive Plan for the Devel- of Exposure to Better Neighborhoods on Children: opment of Sustainable Human Settlements (2004) New Evidence from the Moving to Opportunity Ex- p. 14 periment’, in American Economic Review, 106(4), 181 Western Cape Land Administration, Act 3 of 2014. pp. 855-902. 182 Western Cape Land Use Planning Act ; Chapter VI 156 Social Housing Policy, 2008. (2014) p. 28 157 De Wet, P., ‘Up to 21% of land is state owned, says 183 Ibid p. 29 surveyor general’, in Mail & Guardian, 2013 See: 184 Ibid pg 30 http://mg.co.za/article/2013-09-05-up-to-21-of- land-is-state-owned-says-surveyor-general 185 Western Cape Government, Provincial Strategic Plan 2014-2019. p. 43. See: https://www.west- 158 National Development Plan, 2011; Medium Term erncape.gov.za/text/2015/October/western_cape_ Strategic Framework, 2014. provincial_strategic_plan_2014-2019.pdf 159 Western Cape Provincial Government, Provincial 186 Western Cape Government, Western Cape Pro- Spatial Development Framework (2014); Western vincial Spatial Development Framework, 2014, p. Cape Provincial Government, Strategic Plan 2014- 22 See: https://www.westerncape.gov.za/eadp/sites/ 2019 (2016). eadp.westerncape.gov.za/files/your-resource-li- 160 City of Cape Town, Integrated Development Plan brary/2014%20Provincial%20Spatial%20Devel- 2012-2017, 2016/2017 Review (2016); City of Cape opment%20Framework%20%28PSDF%29_0.pdf Town BEPP (2015). 187 Ibid. 161 The Constitution of the Republic of South Africa, 188 Ibid. No 108 of 1996, Preamble. 189 Ibid. 162 Sendin, J. ‘City land sale will deepen class and race divide in Cape Town’, in GroundUp, 2016 See: 190 Ibid. http://www.groundup.org.za/article/city-land-sale- 191 Ibid., p. 88. will-deepen-class-and-race-divide/ 192 Ibid, p. 29. 163 The Constitution, No 66, s 237. 193 Western Cape Provincial Treasury, Provincial 164 Ibid, s 9. See also the Promotion of Equality and Economic Review and Outlook, 2016, p. 10 Prohibition of Unfair Discrimination Act, 2000 See: https://www.westerncape.gov.za/assets/de- 165 Ibid. s9, 10, 12. partments/treasury/Documents/Research-and- Report/2016/2016_pero_to_printers_23_sep- 166 Ibid. s 24. tember_2016_final.pdf 167 Ibid. s 25. 194 Ibid., p. 59. 168 Ibid. s 26. 195 Ibid, p. 62. 169 Shoprite Checkers (Pty) Limited v Member of the 196 Cape Town Spatial Development Framework: Executive Council for Economic Development, Statutory Report, 2012, . p 70 See: http://planning. Environmental Affairs And Tourism, Eastern Cape cityenergy.org.za/Pdf_files/south_africa_cities/ and Others 2015 (6) SA 125 (CC) – See: paras city_of_capetown/Cape%20Towns%20Spatial%20 48–51 Development%20Framework.pdf 170 Government Immovable Asset Management Act, 197 Ibid p. 71 19 of 2007. 198 Mesthrie, U. ‘The Tramway Road Removals 1959- 171 Ibid. 61’, in Kronos, 214 (1994), pp. 61-78. 1994. 71 199 Ibid. 222 Tonkin, A., ‘Forum Contribution – The plight of 200 Ibid. domestic workers: The elusiveness of access to adequate housing’, in Law, Democracy & Development, 201 Ibid. 14(1), 2010, p. 4. 202 See: https://www.property24.com/articles/r750m- 223 Ibid. ultra-luxury-estate-launched-in-cape-town/23780 224 Ibid. 203 City of Cape Town, Planning Viewer, 2016 See: http://emap.capetown.gov.za/egispbdm/ 225 Ibid. 204 City of Cape Town, Municipal Planning By-Law, 226 Hirsch, M., ‘Sea Point residents ready for a fight’, 2015 (2016), p. 96. See: https://www.westerncape. in Atlantic Sun, 19 June 2016 See: http://www.iol. gov.za/eadp/files/basic-page/uploads/City%20 co.za/atlantic-sun/news/sea-point-residents-ready- of%20Cape%20Town.pdf Accessed 07/02/2017 for-a-fight-5243517; Thozama Adonisi and Others v MEC for Public Works & Others, WCD 5800/16 205 Ibid., p93. See: http://nu.org.za/law-centre/ 206 ’Mixed-use development is changing the city land- 227 Hendricks, A., ‘Reclaim the City demands end to scape’, in SA Property News, 2016 See: http://www. Sea Point evictions’, in Daily Maverick See: https:// sapropertynews.com/mixed-use-development-is- www.dailymaverick.co.za/article/2016-11-30- changing-the-city-landscape/ groundup-reclaim-the-city-demands-end-to-sea- 207 ’The Atlantic Seaboard’s Shifting Market’, in point-evictions/#.WIm-JryaFSU Property Wheel, 2017 See: http://propertywheel. 228 Mahlaka, R., ‘The Atlantic seaboard: A magnet for co.za/2017/01/2016-the-atlantic-seaboards-shift- apartment developments’, Moneyweb, 2016 See: ing-market/ http://www.moneyweb.co.za/investing/property/ 208 Western Cape Government, Western Cape Pro- the-atlantic-seaboard-a-magnet-for-apartment-de- vincial Spatial Development Framework, 2014, velopments/; Property Wheel, The Atlantic p. 84 See: https://www.westerncape.gov.za/eadp/ Seaboard’s Shifting Market 2016, 2017 See: http:// your-resource-library/western-cape-provincial-spa- propertywheel.co.za/2017/01/2016-the-atlan- tial-development-framework tic-seaboards-shifting-market/; Fin24, ‘Atlantic 209 Ibid., p. 84. Seaboard apartments shine with price growth’, ROI, 210 City of Cape Town, City of Cape Town Spatial 14 June 2016 See: http://www.fin24.com/Money/ Development Framework, 2012, p. 70 See: https:// Property/atlantic-seaboard-apartments-shine-with- www.capetown.gov.za/en/Planningportal/Docu- price-growth-roi-20160614 ments/SDF_Technical_Report_2012_Interactive. 229 Pam Golding Properties, ‘Sea Point’s renaissance pdf sees high demand for accommodation’, 28 April 211 City of Cape Town, City of Cape Town TOD Stra- 2015 See: http://www.pamgolding.co.za/proper- tegic Framework, 2016, p. 16 See: http://www.tct. ty-news/2015/4/28/sea-point-s-renaissance-sees- gov.za/docs/categories/1788/Approved%20City%20 high-demand-for-accommodation of%20Cape%20Town%20TOD%20Strategic%20 230 SA Property News, ‘Mixed-use development is Framework%20V1.0.pdf changing the city landscape’, 2016 See: http://www. 212 TPN Credit Bureau, Rent Report: Sea Point, Cape sapropertynews.com/mixed-use-development-is- Town, 11 July 2016, p. 2. changing-the-city-landscape/ 213 Ibid., p. 8. 231 Pam Golding Properties, ‘Sea Point’s renaissance sees high demand for accommodation’, 28 April 214 Ibid., p. 7. 2015 See: http://www.pamgolding.co.za/proper- 215 Ibid. p. 7. ty-news/2015/4/28/sea-point-s-renaissance-sees- 216 Ibid. p. 7. high-demand-for-accommodation 217 Woetzel, J., et al., 2014 See: http://mckinsey. 232 Property24, ‘Sea Point Property Trends and com/global-themes/urbanization/tack- Statistics’, 2017, See: https://www.property24.com/ ling-the-worlds-affordable-housing-challenge cape-town/sea-point/property-trends/11021 218 Statistics South Africa, 2011, Census Data 233 TPN Credit Bureau, Rent Report: Sea Point, Cape 2011: Suburb Sea Point See: http://studylib.net/ Town, 11 July 2016, p. 7. doc/10726166/–-2011-census-suburb-sea-point- 234 Property24, 2017. city-of-cape-town-july-2013 235 TPN Credit Bureau, 2016, p. 7. 219 Statistics South Africa, 2011. 236 Madikizela, B., Interview on 567 Cape Talk, 220 Statistics South Africa, 2011. Census Data January 2017 See: https://soundcloud.com/prime- 2011. Suburb Sea Point. http://studylib.net/ diabroadcasting/how-is-government-making-hous- doc/10726166/–-2011-census-suburb-sea-point- ing-available-to-those-with-lower-income Accessed city-of-cape-town-july-2013 06/02/2017 221 Using an affordability measure of 30% of 237 NASHO, Reviving Our Inner Cities: Social household income Housing and Inner Regeneration, 2013 See: http:// 72 www.nasho.org.za/wp-content/uploads/2012/03/ 259 See: Joint Submission, Annexure 2. HDA-NASHO-Reviving-Our-Inner-Cities-SH-UR- 260 Letter to MEC Grant. See: http://bit.ly/2lXudPe in-SA-Reseach-Report-2013.pdf 261 See: Grant Response, Annexure 3. 238 Ibid. 262 GIAMA, 2007, S13(3) 239 Sustainable Cities Institute, Urban Infill and 263 GIAMA, 2007, S5(1)(f) Brownfields Redevelopment, 2017 See: http://www. sustainablecitiesinstitute.org/topics/land-use-and- 264 See: Meeting between DHS, the City, DTPW and planning/urban-infill-and-brownfields-redevel- SHRA, Annexure 4. opment 265 See: Letter from DHS, Annexure 5. 240 NASHO, 2013. 266 Ibid p. 1. 241 ‘Sexwale launches R75 million social housing de- 267 Ibid p.3. velopment in Cape Town’, January 2011 See: http:// 268 Besterman, C. L., Transforming Cape Town, 2008, www.gov.za/sexwale-launches-r75-million-so- p. 47; Samara, T.R., Cape Town After Apartheid: cial-housing-development-cape-town Accessed Crime and Governance in the Divided City, 2011, 31/01/2017 p. 42. 242 Communicare, Project Launch – Bothasig See: 269 See Annexure 5 p.3. http://www.communicare.co.za/project-bothasig. 270 See: Annexure 4. asp 271 See: Letter to Premier Zille, Annexure 6. 243 Allemeier, J. email correspondence, 03/02/2017. 272 See: PAJA Request, Annexure 7. 244 Western Cape Government, Conradie Better Living Model Gamechanger, 2016 See: https://www. 273 See: PAJA Request, Annexure 8. westerncape.gov.za/betterlivingmodel/conradie- 274 Western Cape Land Administration Act, No. 6 of better-living-model-game-changer 1998. 245 Morris, M., ‘Multibillion Conradie site set to house 275 Western Cape Land Administration Act, Regula- 11,000’, 17 September 2016 See: http://www.iol. tions, s3. co.za/news/south-africa/western-cape/multibillion- 276 See: Letter to PPC Chair, Annexure 9. conradie-site-set-to-house-11-000-2069461 277 ’Report of the Parliamentary Oversight Committee 246 Bejoy, R., ‘Experts caution government over new on the 2015/2016 Annual Report of the Western housing mega-projects’, in GroundUp See: http:// Cape Provincial Parliament’, 16 November 2016, p. www.groundup.org.za/article/not-too-big-fail-ex- 287. perts-caution-government-over-new-housing-meg- 278 Email correspondence. aprojects/ 279 Minutes of Provincial Property Committee 7 Sep- 247 Development Action Group, ‘N2 Gateway: Trials tember 2015. and Errors’, in Urban Land Matters, Issue 2, Vol. 1, 2010 See: http://www.dag.org.za/images/pdf/ 280 Government-Wide Immovable Asset Management publications/2010_Urban%20Land%20Matters_ Policy approved by Cabinet on 17 August 2005. Volume%201/ULM_Vol1_Issue2.pdf 281 See: Main Road Options Analysis, Annexure 10. 248 The Social Housing Foundation, Consolidated 282 Ibid., p. 15. review of subsidised rental housing projects 283 See: Main Road EOI Report, p. 27. including policy lessons learned See: http://www. 284 Ibid., p. 28. shra.org.za/images/stories/2011/pdfs/PRS_Consoli- 285 Housing Development Agency, 2013, p. 14. dated_%20Report.pdf 286 Ibid., pp. 16-17. 249 See: https://www.westerncape.gov.za/news/ new-development-conradie-hospital-site 287 SOPA, 2016. 250 Allemeier, J., email correspondence (2016). 288 See: http://www.iol.co.za/news/south-africa/western-cape/multibillion-rand-plan-revived-for-old- 251 NASHO, 2013. conradie-site-1988649 252 Turok, I., South Africa’s New Urban Agenda: 289 See: https://stopthesale.net/developments/ Transformation or Compensation?, 2016 See: http://www.erln.org.za/images/jevents/5624b- 290 Invitation to Submit Offers, Offer Number fa28bcf33.24776321.pdf PM001/15. 253 EOI, p. 9. 291 See: http://www.eprop.co.za/commercial-property-news/item/19129-western-cape-provincial-gov- 254 EOI, pp. 10-31. ernment-aims-to-sell-or-rent-out-underused-prop- 255 EOI, pp. 10-35. erty-in-its-portfolio.html 256 EOI, p. 10. 292 KPMG, ‘DTPW Feasibility Study Report: Treasury 257 EOI, p. 10, p. 49. Approval | Submission’, 2012 See: http://bit. 258 EOI, Annexure 1, p. 16. ly/2kEWZYu 73 293 See Annexure 10. 294 See Annexure 3. 295 See Annexure 11. 296 Madikizela, B., Interview: Cape Talk, June 2016 See: http://bit.ly/2kz7l8X 297 Western Cape Provincial Cabinet Submission to Dorp Street, p. 5 See: https://drive.google.com/ file/d/0B3DdAG7RICF8bDRKbWxlcHRQNXc/ view 298 See: http://bit.ly/2kjftO1 299 National Treasury Public Private Partnership Manual See: http://ppp.worldbank.org/public-private-partnership/sites/ppp.worldbank.org/files/ ppp_testdumb/documents/SouthAfricanManual. pdf 300 KPMG, 2012. 301 Ibid. 302 Western Cape Government: Provincial Treasury, ‘Assessment Report: Application for Treasury Approval 1 (TA: 1) - Potential Public Private Part- nership: New Head Office Accommodation’, 2012 See: http://bit.ly/2jTFDYl 303 The Transaction Advisor had previously recommended a 15% IRR – the IRR used in the report is 13,5%. 304 Ibid p.6. 305 Correspondence with former Provincial Treasury Official. 306 Western Cape Government Transport and Public Works, Tender No: TPP 002/13 Value-for-Money Report, 2014 See: http://bit.ly/2lg19n7 307 Department of Transport & Public Works, Vote 10, Annual Report 2013-2014 See: https://www.westerncape.gov.za/assets/departments/transport-public-works/Documents/ar_2013_2014_combined_ with_organogram.pdf 308 Department of Transport & Public Works, Vote 10, Annual Report 2014-2015 See: http://www.wcpp. gov.za/sites/default/files/Department%20of%20 Transport%20and%20Public%20Works.pdf 309 GMT, 2014/15 Annual Report. 310 Report of the Parliamentary Oversight Committee on the 2015/2016 Annual Report of the Western Cape Provincial Parliament, 16 November 2016 See: http://www.wcpp.gov.za/sites/default/files/ Atc96-2016%2028%20Nov.%202016%20annual%20 reports%20prov.parl_tpw-environ%20_agri_econ_ locG_eng.pdf 311 Ibid., p. 287.

Annexures

All annexures are available online at www.stopthesale.net

PART TWO

Comments on provincial public works’ 2017 Feasibility Model

Part One of this submission detailed the concept of spatial justice and how it applies to the disposal of Tafelberg. It also outlines why the original disposal is unlawful. Part Two is a critique of the existing financial model which was compiled by the Department of Transport and Public Works (DTPW). Part Three proposes an alternative development proposal for the site with two scenarios: one consists of four-storey, walk-up social housing units and the other is an intensification scenario with seven-storey social housing blocks. The financial details displayed are only a snapshot of a complex financial model that was produced with the assistance of number of experts in the field. The proposals below explore the potential massing on the site; they are not an architectural design for the site. Introduction 81 Background to the financial model 81 Difficulty accessing the model 81 Poor approach to developing the model 82 Comment on Model 83 Context: Zoning and heritage 83 Summary of the model 85 Limitations of a static model 86 Capturing the best return 86 Unrealistic land cost assumptions 86 Poor market and business intelligence 86 Falling short of new trends 87 Capital grants and income bands 88 Putting land to inefficient use 88 Inappropriate urban design parameters 89 Parking and public space 89 Underestimated costs 90 Inaccurate return assumptions 91 Flawed cash flow calculations 91 Social benefits overlooked 92 Conclusion 93 Endnotes 93

Introduction

B ackground to the financial model Difficulty accessing the model

1 On 21 November 2016, the Department of 6 It should be noted that no effort was made Transport and Public Works (DTPW) released by the Department to unpack the model in a a financial model to determine the feasibility way that could be understood by the general of social housing on the Tafelberg site.1 public. The model was released online as a 2 three-page Excel spread sheet with no ac- This model was requested by Provincial companying narrative – despite the following Cabinet through a resolution contained in statement by the Department in an open letter minute no 214/2016, “so as to enable the cus- to the editor of the Cape Argus: todian and Cabinet to rationally and compre- hensively consider the comments that have been received in respect of the proposed sale.”2 “Given the Province’s commitment to transparency and consultation, it was further 3 The Western Cape’s MEC of Transport and agreed that the public would be invited to Public Works, Donald Grant, advised that: comment on the content of any financial “Cabinet is not in a position to make a de- model sourced by [the Department], before cision with respect to the proposed sale of it would be put to Cabinet … The model the Tafelberg Properties as it is not able to has now been published for the purpose of meaningfully consider the rationality of the enabling any member of the public (who comments that have been submitted in terms previously commented or not) to provide of the re-opened public participation process, input on the content, assumptions, meth- without a full financial model with respect to odology and conclusion contained in the the implications of the construction /devel- model.”8 opment of social housing units on the said 7 site.”3 In the same letter the Department explained that: “the financial model is a PDF spreadsheet 4 ‘Social Housing’ refers to high-quality, well- containing the base financial assumptions, located, subsidised rental housing managed conditions, and methodology that are material by viable sustainable, independent institutions when considering the financial implications of on participatory management principles. It is any Social Housing development on the site.”9 aimed at providing rent to low-to-moderate- 8 income families, earning between R1500 and It should also be noted that a number of stake- R7500 per month. These rental units are not holders – including the Phyllis Jowell Jewish available as rent-to-buy.4 Day School and NU – requested access to the Excel spread sheet on which the model was 5 Globally, social housing is used as a blanket based. These requests were declined outright, term to refer to subsidised housing in general. however. Even the City’s request for the model In South Africa, social housing is a specific was rejected.10 Clearly, Province needed to re- National Housing Programme in terms of think the best mechanism that would facilitate the Housing Act (1997)5 and is governed meaningful participation. 6 by the Social Housing Act and its Regula- 9 tions.7 Social housing is a distinct housing This is concerning given that access to the programme, separate from other subsidised spread sheet would have greatly enhanced the housing programmes defined in the National public’s ability to interrogate the Financial Housing Code. Model’s proposed costs, funding and income estimates. It would have empowered stakeholders to explore iterations of the Financial Model, such as anticipated changes to the 81 SHP income bands, alternative urban design probably explains the shortfalls identified in concepts and different mixes of market and the Financial Model. The output of the Model subsidised land uses. clearly indicates a misunderstanding of the realities facing the sector. 10 Denying interested stakeholders the underlying spread sheet meant they could only 15 Province stated that it consulted SHRA with engage with other iterations of the devel- regard to the feasibility study. However, the opment by creating a completely new financial present study is indicative of the fact that this model themselves. This not only made the alleged consultation was far from fruitful. process more onerous but also introduced the 16 risk of their alternative models being too far Depending on the complexity of the social removed from the sector norm. Releasing the housing project, and the funds required, the original model would have allowed flexibility SHI could then decide how best to fund and and innovation while maintaining a degree of build the development. It members would alignment with the methodology employed by then choose to: the Department. • fund the whole project on their own with 11 By fostering such an engagement, Cabinet their debt, equity and government grants; ministers would have been given additional • enter into a partnership with a private de- assistance in making a reasonable decision on veloper in what are called ‘turnkey projects’. the proposed sale. It would have enabled them In such cases, social housing is built by a to explore different ways of structuring the private developer then bought from the development in order to realise the ‘best value developer. The SHI then owns and manages for money’ as defined in the GIAMA. the project as required by the Social 12 The section below includes a basic un- Housing Act and Policy. Turnkey projects packing of Province’s model. For a more are partly funded by government grants, the in-depth, yet publicly accessible narrative to SHI and the private developer; or the model, please refer to NU’s Companion • enter a formal joint venture – as in a PPP to the Model.11 This is the type of public – which would involve joint construction engagement which the Department made no and ownership of portions of the site. This attempt at all to make with regards to its own is done when the site is partly owned by the model. private developer, with market residential units for instance. Again, the SHI must own Poor approach to developing the and manage the social housing portions of model the development.

13 SHIs are non-profit organisations with the 17 Considering the above, Province should have mandate to build and manage social housing. instead solicited proposals from SHIs and They are regulated through the Social Housing other developers with experience in the sector Act and Regulations, together with the SHP to conduct feasibility studies of social housing which falls under the National Housing Code. on the Tafelberg site. The end product would SHIs have the most experience in developing have been a set of more plausible feasibility social housing projects and are therefore studies that would have better equipped best positioned to determine whether social Cabinet to make its decision. housing is feasible under any given circum- stances. 14 In practice, feasibility studies for social housing are conducted by SHIs after a clear land ownership or lease agreement is struck between government and the SHI. This 82 Figure 1: The SHA and the RCG have approved the purchase of 500 social housing units from Calgrow’s mixed-use mixed-income development in Scottsdene, Kraaifontein Comment on Model Context: Zoning and heritage 4. The zoning grants the site considerable development potential: 18 The property in question is the site of the former Tafelberg Remedial High School, “GB zonings provide for general business located at 355 Main Road, Sea Point. It is ap- activity and mixed-use development of a proximately three and a half kilometres from medium-to-high intensity. Very few re- Cape Town’s Central Business District (CBD). strictions relate to use because the aim is to The site consists of the remainder of erf 1424 encourage a range of uses – but industry is and erf 1675, comprising a total site area of not permitted.”13 1.7054 hectares.12 “The GR zonings promote higher-density 19 Erf 1424 contains the historic Ellerslie School residential development, including blocks Building which was utilised by the Western of flats ... GR3 and GR4 cater for flats of Cape Education Department until 2010. In medium height and floor space.”14 that year, the Tafelberg Remedial High School relocated to new premises in Bothasig, while 22 In 2011, a heritage specialist was commis- some tenants of Wynyard Mansions were sioned to prepare a Phase 1 Heritage Impact relocated to alternative accommodation and Assessment for the site.15 The study concluded others evicted. that the historic Ellerslie School building and the avenue of mature Cape ficus trees leading 20 The smaller erf 1675 contained the Wynyard to the school’s facade from the south-west Mansions, previously utilised by the Provincial entrance are both of significant heritage value DHS for residential rental accommodation. and would therefore need to be protected. 21 The site benefits from multiple zoning, which includes Transport Zoning 2, General Business (GB) 5 and General Residential (GR) 83 Figure 2: Satellite picture of the site – Source: EOI

Figure 3: Zoning diagram of the site

84 Figure 4: Development proposal from feasibility model Summary of the model 26 The 270 social housing units would consist of 80 bachelor units, 90 one-bedroomed 23 The financial model is based on the concept units and 100 two-bedroomed units which of a social housing-led, mixed-use, mixed- together utilize 13,590m2 (some 69%) of the income, in-fill development featuring 270 total available construction bulk (19 516m2), social housing rental units constructed at a according to the 2012 Urban Design Report cost of R80.2 million. The site’s retail facil- (UDR). ities will be constructed at an estimated R12 27 Although the general principle of developing million. In addition, the site will include a a social housing-led, mixed-use, mixed- community facility (the old Ellerslie School) income, in-fill development is supported by and a public open space. NU in the strongest possible terms, the organ- 24 There are no costs associated with the com- isation is of the informed opinion that the fi- munity facility as this would be sold voet- nancial model and its underlying development stoots. The model proposes that the proceeds concept are weak and can be improved. (In from the sale of the community facility and Part Three, NU respectfully submits two better the retail space should be used to cross-sub- models based on the same principle). sidise the housing component. Including pro- 28 NU believes that the financial model’s inad- fessional fees, contingency and landscaping, equacies are indicative of the Department’s the total construction costs altogether amount failure to honour the mandate given to them to R112.7 million. by Cabinet.16 Currently, the proposal fails to 25 The social housing units would be spread achieve the best value for money, prescribed across blocks A, B and C. Block A would in- by the GIAMA as “the optimisation of the clude some ground-floor retail along the main return on investment in respect of an im- road frontage and residential units above. movable asset in relation to functional, fi- Block D would remain a community facility nancial, economic and social return, wherever 17 – which could, for instance, become a school. possible.” Block E would become a public open space. In this way, the façade of the Ellerslie school building and the established garden would be protected while at the same time integrating the site with the surrounding neighbourhood.

85 Limitations of a static model Unrealistic land cost assumptions

29 The financial model is static in that it provides 34 The model’s base assumption is that the land one scenario: a social housing component, is a contribution towards the development. cross-subsidised with the sale of the retail The model calculates the opportunity cost and community facility. It does not entertain of R135 million – that is, how much the site the multitude of variables which affect the would have fetched on the open market from viability of a development of this scale. As the current purchaser. Spread across the 270 previously cited, the feasibility model does not social housing units, the per-unit land cost is show alternative feasible scenarios, such as one calculated as R500,000. in which the retail and community facilities 35 are not sold but leased out. The study also fails This is an exorbitant land cost (per housing to show alternative possible scenarios such as opportunity). When combined with gov- market residential units. ernment capital construction grants, it amounts to a per-unit cost to government of R764,000. This very high figure raises serious Capturing the best return questions of equity, given the already-daunting housing backlog that the WCG faces. 30 Like any other sphere of government, the 36 WCG must observe and adhere to the prin- The model is inadequate when it comes to ciples enshrined in the Bill of Rights and must exploring better ways for ensuring access to conduct its activities within the parameters low- and moderate-income households while that the Chapter provides.18 Within the re- maximising the opportunities for cross-subsi- straints of its available resources, Province is disation. It also fails to consider ways in which constitutionally obliged to foster conditions the land contribution could be minimised that enable citizens to gain access to land by achieving maximum return on land value on an equitable basis,19 and achieve the pro- from certain portions of the site which are not gressive realisation of the right to adequate required for social housing. 20 housing. 37 Whatever the remaining value of the land 31 As discussed at length in Part One, gov- contribution, no attempt has been made to ernment’s constitutional duty to progressively demonstrate the value as a site (or portion of realise the right to adequate housing cannot a site) dedicated to social housing. Especially be divorced from its responsibility to ad- problematic is the lack of a framework or vance spatial justice. Recently, this has been methodology that at least attempt to demon- legislated as an overarching principle in the strate what these benefits would be, and how SPLUMA21 and LUPA.22 they can accrue in the long-term. 32 With private developments, the value gen- Poor market and business intelligence erated typically refers to financial value generated for the developer, owner or relevant 38 investors. Other types of value created by Any attempt to capture the value of incor- appropriate developments may relate to, for porating market uses in a site like Tafelberg example, positive contributions to the local requires a market feasibility analysis. Without economy or the creation of vibrant, inclusive due consideration for market conditions, it is and sustainable urban environments. simply impossible to assess the effects of such an intervention on, for example, the access to 33 In order for Province to capture the best low- and moderate-income households, and return (in all its forms) from Tafelberg, it must the potential for cross-subsidisation. have a reasonable understanding of the site’s 39 potential development value, as well as the It is crucial to ask whether the sale of the retail long-term opportunity costs, benefits and im- space and community facility is the net market plications associated with the development. potential of the site (relative to the social 86 housing portions). Given the nature of the site, with 3375 rental units, has resorted to what it and the buoyant residential market conditions calls its “social enterprise funding model”:23 prevalent in Sea Point, it is astonishing that the development concept does not explore the “Compensating for the absence of oper- possibility of sectional title residential units ating subsidies from the state, our business to assist the project’s viability. Even the sim- model cross-finances affordable rental plest analyses of the supply side of the market accommodation with commercially viable (relative to the demand side) would reveal the property development and management. desirability of including market residential As property manager we hold residential units on a limited scale. properties for rental at affordable rates and 40 This is also contrary to international and local in the open market. As a property de- best-practice approaches to mixed-use, mixed- veloper we acquire and develop residential income developments, which incorporate property to hold long term or for sale. To sectional title sales because of their ability to improve our sustainability and impact in be sold off plan, contributing significantly to the affordable housing sector our medi- capital expenses. um-term strategy is to develop a substantial portfolio of residential apartments leased 41 The feasibility model assumes a cross-sub- in the open market. The annuity income sidisation potential of R41 million. This is from this portfolio will enable us to provide comprised of R15 million for the retail portion more affordable social rental stock and to and R26 million for the community facility. do so more sustainably. In the short-term Once the construction cost for the retail this means gearing our balance sheet for section is included, this reveals a cross-sub- growth, upgrading several aging prop- siding portion of only R30 million. Given the erties and adapting our service offering to enormous development potential of the site, tenants.”24 the cross-subsidisation potential is not fully 45 maximised. SHRA is now encouraging construction of market rental units for the purpose of 42 The financial model failed to depict evidence cross-subsidisation. Its Strategic Planning doc- of well-executed market analysis. Without ument states that: “Social housing products information on market analysis, and especially may accordingly include multi-level flat or analysis of demand, this feasibility study is apartment options for higher-income groups insufficient for Cabinet to make an informed (incorporating beneficiary mixes to support decision based on prevailing market trends. the principle of integration and cross subsidisation)...”25 Falling short of new trends 46 For example, the Drommedaris development in Brooklyn, completed in 2011, includes 219 43 The model indicates that the DTPW not only social housing rental units. The project in- has a limited understanding of prevailing cluded 20 sectional title freehold units which market trends but also that it is not keeping were sold off plan to assist with the capital abreast with emerging trends within the social costs of the project. These units were sold housing sector. through Yes Properties, the sales division of 44 SHIs are increasingly using market residential Communicare. Yes Properties has developed units to cross-subsidise affordable rental and sold out ten developments; it is currently units. This has been the organic response to constructing another two. This indicates a well-established capacity within the sector to the limits of the static grant regime discussed 26 above. Any engagement with the SHIs active develop and market residential units. in the sector would reveal this best-practice 47 Using market rental units to cross-subsidise approach. For instance, Communicare, the affordable units is also consistent with af- biggest service provider in the Western Cape fordable housing trends elsewhere in the 87 viability of the project as it has a direct and material impact on the amount of rental that can be charged for social housing units. An increase in rental amounts will positively impact the SHI’s ability to service debt and to facilitate internal cross-subsidisation between the primary, secondary and gap segments of the income bands. 53 Province’s response to this ‘sea change’ in the policy is at best ambivalent. This is because the rental income assumed in the model reflects neither the status quo nor the proposed new Figure 5: Drommedaris sectional title units income. For instance, the model assumes a world. Examples include Regent Park in rental income of R1,000 per bachelor unit but, Canada27 and Coin Street in London, where currently, policy limits it to R750 p/m.31 The onsite market residential units were used to amounts for the other categories are in line cross-subsidise social housing.28 with current industry regulations. 48 With sectional title residential units in place to bolster the capital costs associated with Putting land to inefficient use construction, government could explore other functions for the community facility, retail 54 Another weakness of the Province’s model is section, structured parking29 and additional that it is based on a 2012 Urban Design Report residential units to extract operational income (UDR) which did not have social housing as a via leasehold. land use, and used an outdated zoning scheme (i.e. 2002). Capital grants and income bands 55 According to the UDR, the old zoning scheme allowed for a maximum zoning of 49 The viability of social housing is largely de- 19,516m2. Under the current zoning scheme, pendent on the capital grants available, as well the development parameters allotted to GB5 as the rental amounts that can be charged. The is a floor factor of 4, coverage of 100% and a feasibility study does not give a scenario that maximum height of 25m. With GR4, there is factors in the increases in the income bands. a floor factor of 1.5, a coverage of 60%, and a maximum height of 24m. Deducting the bulk 50 The model assumes that the RCG will increase already used by the Ellerslie school, there is from R125,000 to R154,000. This shows that approximately 26,880m2 of bulk available for the DTPW is aware that the RCG – which has construction on the site as of right.33 not been adjusted for inflation since 2008 – is likely to be amended by national government 56 This must also be considered in a context in the near future. where contemporary developments in a dense urban setting such as Sea Point routinely 51 The model does not adequately take into ac- secure development rights that are consid- count that the income bands are also likely to erably in excess of the current development change in the near future from R1,500-R7,500 parameters. This is a fatal flaw in the financial to R1,500-R15,000.30 This will have a major model, which has a serious negative material impact on the feasibility of building social effect on the viability of the development as housing in well-located areas, on the liquidity proposed. and sustainability of social housing developments, and on their ability to cross-subsidise access to rental housing. 52 This is a critical factor in determining the 88 58 The site offers a development yield of approximately 20,000m2 of mixed-use space, comprising 12,200m2 residential use, 1,700m2 retail use, 700m2 restaurant and 5,000m2 business use.34 59 The previous design is not well suited to the design parameters associated with the social housing sector. Within the current business-funding context, the optimal social housing building typology is a four-storey walk-up. This is because it is the maximum height a block can go without incurring the additional expenses associated with mid-rise construction, including elevators and reinforced construction methodologies. The UDR, however, assumes that three-, four- and five- storey blocks are inappropriate. 60 The previous design also does not optimally utilise the GB5 zoning along with its main street frontage. It proposes a three-storey building – a conservative and unimaginative option given that The Equinox building across the road is seven storeys high. Figure 27: Development yields 32 Parking and public space Inappropriate urban design parameters

61 57 The feasibility study proposes 108 parking The financial model borrows from a UDR spaces for the 270 social housing units, with completed in 2012. The design was for a very 23 off-street parking bays for the retail facility. different form of development, which cannot The former allocation may prove to be ex- simply be translated to social housing without cessive. This is due firstly to the location of the any due regard to development constraints site and its accessibility to a well-developed specific to the social housing sector.

Figure 6: The original design was clearly aimed at a predominantly market-led 35 development 89 transport system (MyCiti, Golden Arrow and site has been understated at R112.7 million. minibus taxis). Secondly, the experience of Affordable housing developers, private devel- SHIs has shown that, given the income bands opers and other experts in the construction in- of residents in social housing, few among dustry36 have estimated that total construction them own vehicles. cost would be closer to just over R200 million – almost double Province’s calculation. 62 If the retail component were to be replaced with market residential units (a possible 68 This deficit is created by underestimated scenario), underground structured parking building costs combined with a number of could be constructed. This would cost more other cost items which were omitted and/or but may still be feasible due to the location understated. Such include: and the market residential units on-site. The underground parking could be rented to • Capital costs assumed to be zero or omitted neighbouring households, businesses and the altogether general public, generating more income for • Capital costs that are underestimated the site. • Operational costs that are underestimated 63 The greatest argument articulated by de- tractors of Tafelberg social housing is that • Inaccurate return assumptions Province will lose land to the value of R135 • Cashflow calculations million if it does not sell the site to the Phyllis Jowell Day School. • Capital costs assumed to be zero or omitted altogether 64 If the open public space is to remain open to the public, it should remain the property of 69 There are number of additional points that the government – ideally local government should be taken into account concerning the under City Parks – within the directorate of model’s cost inaccuracies: Community Services. Community Services • Development costs are assumed to be zero. would thus be responsible for maintaining the In practice, they may be reduced, but this is site. This would require a further reduction of contingent on City Council. This requires a the government contribution, and therefore commitment from the City. the opportunity cost of social housing. • No site preparation costs are estimated. 65 If the open green space is closed off to the There would be need for site preparation public, there is no reason why the whole such as land works and levelling. portion should remain an open space or park. Little or no value for money, or public good, • National Home Builders Registration would result from a closed-off green space. As Council fees are not included yet this is a an alternative, more retail or market resi- mandatory and substantial cost, usually dential units could be constructed on the site about 1.5% of the total building cost. while protecting the heritage trees. A portion of the open space could also be joined to the • Debt funding is a large component of community facility for lease. social housing funding. The model assumes debt of R20.9 million raised by the SHI. Debt funding comes at a cost, referred to Underestimated costs as bond-raising fees, which are not incor-

66 porated. The cost of bond raising fees are A cornerstone of any financial feasibility is its usually a minimum of R500,000; this is ability to accurately analyse the real costs of separate from the bond itself or the interest construction and maintenance over a build- on the bond.37 ing’s lifespan. There are, however, several glaring flaws in the financial model. • The landscaping cost of R240,000 for only a portion of the site (400m2) is understated. 67 The total cost of development on the whole 90 The consulted affordable housing devel- tax. In contrast, an IRR of about 18-20% is opers argue that this amount is more likely what is expected for successful market devel- to be above R300 000. opments. In practice, SHIs barely manage an IRR of 9-10% after investing large amounts of • The maintenance costs for the public space equity into the project, coupled with debt ser- are not specified. This is problematic as it vicing costs, and operating costs that will need is not clear who will bear them. It could be to be paid progressively. the SHI, it could be incorporated with the community facility to be sold, or it could 71 The feasibility study assumes a positive net be under the control of City Parks. This is a present value from 2022, a period of three contingency that relies on the City but it has years. The experiences of affordable housing not been explored in the feasibility study. experts, including social housing institutions, find that this is not the case in practice. It • The study distinguishes between profes- takes much longer than the period suggested sional costs for the social housing com- in the study (three years) to achieve a positive ponent (10%) and the retail component net present value. (13%). Based on consultation with affordable housing developers, the profes- Flawed cash flow calculations sional fees were underestimated. Profes- sional fees for social housing range between 72 8.5-12.5%.38 Due to the small retail com- There are a number of simple addition and ponent, professional fees of 13% are low subtraction miscalculations in the net cash since the professional fees are high on small flow shown on p. 1 of the feasibility study. projects and decrease as the project size These subsequently throw off all calculations increases.39 on total earnings, thus affecting the accuracy of the IRR and ultimately the feasibility of the • The assumption is made that the retail and project. community facilities will be sold, yet the 73 costs of marketing the facilities are not in- Observe Figure 7 overleaf, which highlights corporated into the study. where exactly in the feasibility study miscalculations are found: • Approval costs are also not factored into the 74 feasibility study. There is a subtraction miscalculation of the earnings before tax, interest deposit and • The model assumes that the annual in- amortisation for 2021. It is recorded as R1.35 crease in operational costs (referred to as million instead of R936,450 when recalcu- the operational cost escalation) is 6.4% and lated (see Box A above). A subtraction mis- seemingly increases closely with CPI in- calculation leads to the total earnings before flation. Affordable housing developers state tax, interest deposit and amortisation being that is likely to be a minimum of 8%. This is overestimated to R50.56 million. The devi- because operational costs are market driven ation is off by over almost 2 million (see Box and tend to rise at a faster pace than con- B). An addition miscalculation in tax expense sumer price index inflation. is given as R12.9 million. When recalculated it • Finally, the study does not include mar- amounts to R12.45 million (see Box C). keting costs for both retail and the com- 75 As mentioned above, the impact of these mis- munity facility due to be sold. calculations is that the credibility of the IRRs in this feasibility study are questionable. Inaccurate return assumptions

70 The Internal Rate of Return (IRR) expected for the project is hugely off the mark. The study assumes an IRR of about 21.47% before 91 Figure 7: Miscalculations on Province’s cash flow40

Social benefits overlooked

76 The financial model does not take into account the long-term economic savings for both the government and low-to-middle- income households. As described in Part One, spatial segregation imposes a number of costs on households, society and the state, which become difficult to reverse over time. 77 The financial model also does not take cog- nisance of the social benefits of residing in a well-located area such as Sea Point. A study of 5,000 families conducted by the Pew Char- itable Trust found that a child’s economic viability during adulthood can be strongly predicted based on the poverty rate in the neighbourhood where she or he grows up. The poverty rate in a child’s neighbourhood is even more influential on her/his economic future than her/his parents’ education level or occupation.41 To add to this, “neighbourhoods of concentrated low-income households experience disproportionate levels of crime, poor educational outcomes, higher incarceration levels and low levels of public health.”42

92 Conclusion 78 The principle of using well-located valuable land for mixed-use, mixed-income, social-housing-led developments is strongly supported; however, the model proposed does not make optimal use of the site, which therefore cannot realise its best value in terms of social, functional and financial returns. This makes it necessary to consider alternative scenarios, especially those that incorporate cross-subsidisation with market sectional title units given Sea Point’s property dynamics. This approach would not only ensure a social-housing-led development that is viable and sustainable in the long-term, but it would also provide the Department with a replicable model for other well-located parcels of land. 79 In the following section, NU presents Cabinet with two preferable alternatives.

Endnotes

13 City of Cape Town Municipal Planning By-law 1 See: https://www.westerncape.gov.za/assets/taf- (2015), item 59. elberg_school_site_proposed_housing_project_-_ 14 Ibid., item 40. hight_level_viability.pdf 15 See: https://drive.google.com/drive/search?q=hia 2 See: https://mail.google.com/mail/u/0/#search/res- 16 See: https://mail.google.com/mail/u/0/#search/resolution+mandisa/1563622b2d23b48e?projector=1 olution+mandisa/1563622b2d23b48e?projector=1 3 Letter to Mandisa Shandu from MEC Donald 17 GIAMA, 2007, s1. Grant: 19 August 2016 18 Constitution of the Republic of South Africa Act 4 Social Housing Policy, 2008. 104 (1996), s40. 5 Housing Act, 1997, S3(4)(g). 19 Ibid., s25. 6 Social Housing Act, 2008. 20 Ibid., s26 7 Social Housing Act Regulations, No. 34970 of 21 Spatial Planning and Land Use Management Act, 2012. No. 16 of 2013. 8 See: https://drive.google.com/open?id=0B3DdAG- 22 Western Cape Land Use Planning Act, No. 3 of 7RICF8aFc3TFpZNTJRRFBSbHJwN1Y1YU5Ian- 2014. BjUVhV 23 See: https://www.pressreader.com/south-africa/ 9 Ibid. cape-argus/20160929/281779923614374 10 See: https://drive.google.com/open?id=0B3DdAG- 24 Communicare, Annual Report 2015, p. 1 (See: 7RICF8YVVaU0ZWa25TdVUta0hTMmFpczc1b- Available here http://www.communicare.org.za/ FVSLUFj downloads/pdf_page/index.html#8/z). 11 See: https://drive.google.com/open?id=0B3DdAG- 25 SHRA, Strategic Plan 2014-2019 (See: http:// 7RICF8d0w3NkFoTkMtZjF2OV9BbDRad1RSRF- pmg-assets.s3-website-eu-west-1.amazonaws. cwVlNn com/SHRA_Strategic_Plan_2014_-_2019_- 12 Request for EOI Property Development Investment _04March2016_for_printing.pdf). Opportunities in the Cape Town Central City Re- 26 See: http://yesproperties.co.za/sold-out/ generation Programme (See: https://drive.google. 27 See: https://en.wikipedia.org/wiki/Regent_Park_ com/drive/search?q=main%20road%20eoi). Revitalization_Plan

93 28 See: http://coinstreet.org/what-we-do/co-operative-housing/ 29 The Steenvillas Social Housing in Steenberg provides secure parking for commuters, allowing them to park their cars on Steen Villa premises for a fee. An international example of well-located social housing which uses a structured parking conces- sionaire to cross-subsidise is Coin Street in London See: http://www.building.co.uk/cost-study-coinstreet-housing/1016354.article 30 Province acknowledges this increase on p. 3 of the feasibility study but does not factor in the impact of the potential increase in rental income. 31 In terms of the current call for proposals (SHIP 3A), rentals in the first year of operation must be below R2,250 per unit per month and 30% of these must be R750 per unit per month. 32 Western Cape Province, Urban Design Report (2012); Western Cape Province, Feasibility Study for Tafelberg (2016). 33 City of Cape Town, Cape Town Zone Scheme Regualtions, 2012 See: http://sans10400.co.za/ wp-content/uploads/2013/06/Cape-Town-Zone- Scheme_Regulations_Nov_2012_Part1.pdf 34 Request for EOI Property Development Investment Opportunities in the Cape Town Central City Regeneration Programme See: https://drive.google. com/drive/search?q=main%20road%20eoi 35 Ibid. 36 The group of experts requested not to be named. We consulted the heads of the finance departments and the costing modelling experts of affordable housing developers who offered guidance on feasibility studies in the affordable housing construction sector. We also did the same exercise with private developers who gave guidance with the construction industry and feasibility studies. We consulted town planners, property valuators, engineers private developers and real estate organisations. 37 Consultation with an affordable housing developer. 38 The Social Housing Foundation, Project Financial Viability Studies for Property Development in the Social Housing Sector (2006). 39 Ibid. 40 Western Cape Province, Feasibility Study, p. 1. 41 Sharkey, Patrick, Neighborhoods and the Black- White Mobility Gap (2009). 42 Badger, Emily, ‘The Real Cost of Segregation – in 1 Big Chart’, in The Atlantic (2013).

Annexures

All annexures are available online at www.stopthesale.net

PART THREE

necessary, affordable, feasible: a just vision for the tafelberg site Part One of this submission detailed the concept of spatial justice and how it applies to the disposal of Tafelberg. It also outlines why the original disposal is unlawful. Part Two is a critique of the existing financial model which was compiled by the Department of Transport and Public Works (DTPW). Part Three proposes an alternative development proposal for the site with two scenarios: one consists of four-storey, walk-up social housing units and the other is an intensification scenario with seven-storey social housing blocks. The financial details displayed are only a snapshot of a complex financial model that was produced with the assistance of number of experts in the field. The proposals below explore the potential massing on the site; they are not an architectural design for the site. Contents

Development concept and principles 101 site analysis 102 Development Concept 106 French School precedent (Tafelberg Primary) 107 Base Assumptions 109 Scenario one: Traditional four-storey social housing typology 110 Scenario two: mid-rise social housing typology 112 ENDnotes 118

Development concept and principles

1 The proposal is based on the legislated prin- 4 The proposed development is similar in principle of spatial justice as supported by the ciple to that put forward by the DTPW,4 except principle of cross-subsidisation. that it improves upon the flaws that were discussed at in Part Two of this submission. 2 Government’s constitutional duty to progressively realize the rights to physical housing 5 Critically, the proposal investigates a better structures and property cannot be divorced way of structuring the approach that ensures from its responsibility to advance spatial access to low and moderate households and, justice. This has recently been legislated as an in so doing, maximises the opportunities for overarching principle in the Spatial Planning cross-subsidising and achieving maximum and Land Use Management Act1 (SPLUMA) return on land value. It also achieves much- and the Western Cape Land Use Planning needed innovation in the spheres of public Act2 (LUPA). This requires the Western Cape housing and asset management that can Government (WCG) to redress past spatial effectively leverage the capacity of the private and other developmental imbalances through sector. improved access to - and use of - land. This 6 clearly dictates a direct and spatially targeted This approach is couched in a sound under- approach to restructuring the urban form of standing of the development potential of the Cape Town. site, prevailing market conditions, as well as the social housing rental sector.5 It is an 3 The development seeks to realise best value attempt to demonstrate to the Provincial for money from the disposal of the Tafelberg Cabinet how the development value of the site as understood as the “optimisation of the site can be captured, and how Province can return on investment in respect of an im- leverage the land assets it has in areas with movable asset in relation to functional, fi- extremely buoyant local property markets to nancial, economic and social return, wherever fulfill a broad array of policy objectives. possible”.3

101 Figure 1: Aerial of the site site analysis 7 The property in question is the site of the 10 In 2011 a heritage specialist was commis- former Tafelberg Remedial High School sioned to prepare a Phase 1 Heritage Impact located at 355 Main Road, Sea Point east; ap- Assessment (HIA) for the site.7 The study proximately three and a half kilometres from concluded that the historic Ellerslie School Cape Town’s Central Business District (CBD). building, and an avenue of mature Cape Ficus The site consists of the remainder of erf 1424 Trees leading to the school’s facade from the and erf 1675, comprising a total site area of southwest entrance, are of significant heritage 1.7054 hectares.6 value and would therefore need to be protected. See Figure 2 (below). 8 Erf 1424 contains the historic Ellerslie School Building which was previously utilised by the Western Cape Education Department until 2010 when the Tafelberg Remedial High School relocated to new premises in Bothasig. 9 The smaller erf 1675 contained the Wynyard Mansions and was utilized by the Department of Human Settlements for residential rental accommodation.

102

C BELLEVUE

C C FIRDALE

C R R R R R R R R & R MILNER N A S A I L S R U E T C C I S C H E A E D D R R R V E N P A

COURT R D E G N I T L A R R T S E E S R B M POOL COURTS R E R R L

FORMER E

O STRUCTURE L H F PEDESTRIAN E WESTERN CAPE C ACCESS SOCIAL HOUSING APARTMENTS ACCESS R R

GRASS PEDESTRIAN ELLIS COURT HEATHFIELD R A S L S U

FORMER E C

PROVINCIAL C PEDESTRIAN VACANT I C BUILDING H A

ACCESS HERITAGE SITE E VACANT V R R R C BUILDINGS GARAGE

TAR MAP No.: 2 TAR Erf: 1424 and Erf 1675 (Portion of Erf 1424) PEDESTRIAN & VEHICULAR Ellerslie Girls/ Tafelberg High ACCESS TAR

N Sea Point, Cape Town

A R R I

VACANT S MIL VACANT TON R S

BUILDINGS BUILDINGS T E Current Conditions S BICYCLE SHED C E C D A E P THE GLEN

C R R R C R R R Residential R R C Commercial L E

HOLMFIRTH V E L H G

H N

HWC 3 BELLEVUE

M FIRDALE

MILNER E I T L R S

COURT POOL COURT E R B E R L E L H E

ELLIS HEATHFIELD

PROVINCIAL HERITAGE SITE

COURT MAP No.: 4 Erf: 1424 and Erf 1675 (Portion of Erf 1424) Ellerslie Girls/ Tafelberg High Sea Point, Cape Town MILTON Statuatory Constraints

THE GLEN Extent of declared Provincial Heritage Site

CCT identified Urban Conservation Boundary

L CCT identified Grade 3b Structures E

HOLMFIRTH V E L H G

I Buildings & structures older than 60 years H Buildings & structures younger than 60 yearsN

Figure 2: Statutory heritage constraints

103 Figure 3: Zoning of the Tafelberg site 11 The site benefits from multiple zoning, demolished, is 3771m2.11 There is approxi- which includes Transport Zoning 2, General mately 26 880m2 of bulk available as of right.12 Business (GB) 5 and General Residential (GR) See Figure 4. 4 - see Figure 3 (above). 12 Owing to its multiple zoning, the site has considerable development potential as of right. “GB zonings provide for general business activity and mixed-use development of a medium-to-high intensity. Very few restrictions relate to use because the aim is to encourage a range of uses but industry is not permitted.”8 13 “The GR zonings promote higher-density residential development, including blocks of flats. GR3 and GR4 cater for flats of medium height and floor space.”9 See Figure 3. 14 According to the 2015 Appraisal for Taf- 15 GB5 allows for a floor factor of 4, 100% cov- 10 2 elberg, the TR portion is 510m , the GB5 erage and a maximum height of 25m. GR4 2 2 portion is 2781m , and GR4 is 13059m . The allows for a floor factor of 1,5, 60% coverage existing school building, which cannot be and a maximum height of 24m. 16 The surrounding urban fabric is dense and fine-grained. There is a rich mixture of uses along the Main Road corridor, despite there being a number of tall buildings between Main Road and High Level Road which indicates a highly urbanized neighbourhood. See Figure 5. Figure 4: Current zoning yield

104 105 Figure 5: Urban fabric surrounding Tafelberg site Figure Tafelberg 5: Urban fabric surrounding Figure 6: Conceptual parcelling of the site Development Concept 17 The development concept proposed is a her- private institutional use. The funds generated itage-sensitive, mixed-use, mixed-income de- from these market uses would generate an velopment that is led by a social housing rental “opportunity value” in addition to the pro- component. The proposal includes two main duction costs of the units. This fund could scenarios: one based on current social housing contribute to the purchase of the land, or design typology and a second which explores subsidise the production of affordable units a higher-density alternative that maximises (including the retainment of reserve capital for the available bulk for the site. long-term maintenance), or a mixture of the two. 18 The design is contextually sensitive, both protecting and celebrating the site’s unique her- 20 Both development proposals envision the site itage and landscape features. It makes a signif- being divided into the following parcels: Block icant contribution to the public realm by way A/B, along the Main Road frontage; Block C, of a new multifunctional green space on Main along Milner Road; Block D, at the back of Road. It also provides a variety of outdoor the site; Block E, the historic Ellerslie school spaces, ranging from public to private, and building; Block F, the front portion of the site promotes a high-quality environment on its on the corner of The Glen and Main Street; public edges. Increased pedestrian perme- and finally Block G, a usufruct13 in favour of ability reinstates the finer-grain pedestrian the City of Cape Town for a stormwater pipe network through the site between High Level that runs horizontally through the site. and Main Road via Heatherfield Road. 21 Block A/B is mixed-use retail and market resi- 19 The conceptual approach taken is that a dential use; Blocks C and D are social housing portion of the site is used for market-priced rental units; Block E remains for institutional residential sectional title units together with use (and could be a school); Block F is a green commercial retail space. The historic Ellerslie space which anchors the site; and Block G is a school building is either sold or leased to pedestrian spine through the site. 106 French School precedent (Tafelberg Primary)

22 Tafelberg Primary was leased to the French between the two school grounds can be School in 2012 for an annual rental income of accounted for by incorporating a section of R1 800 000 p/a.14 In 2011, the site was valued Block F. at R42.783 million. Both sites are significant 23 heritage assets. Both were in poor condition Not only does this property give a good indi- at point of lease. The French School currently cation of what the Ellerslie School building is has 350 students whereas the purchaser of worth, it also sets a local precedent for what a Tafelberg has 200. Any discrepancy in size compact urban school can look like.

French School Tafelberg School 5 899m2 total size 4886 m2 total size 3300 m2 bulk 3771 m2 of bulk 612m2 for play space 325m2 for play space 146m2 for parking 930m2 for parking

Existing school hall

from 1970s

Existing school building

from 1930s

Figure 7: Aerial photo of the French School, Sea Point

107 before after

Figure 8: Various views of the French School before and after renovation

108 Base Assumptions

24 The property is transferred outright to a 30 Block A on the Main Road frontage con- Social Housing Institution (SHI) via com- sists of retail space on the ground floor, and petitive tender with a suitable Land Use basement parking below this for retail and Agreement. The SHI is then able to enter into sectional title units. Block B on the Main Road a partnership with a market developer/builder frontage consists of market sectional title resi- to develop a portion of the land. The SHI re- dential units from the first floor to the seventh tains ability to use land as an equity/financing floor. Blocks C and D make up the social lever in the partnership and a profit share rental housing component. Block E is used for agreement is made with the private developer a market-related institutional use - it is not through a consortium agreement. This is refurbished but leased or sold voetstoets. This essential for the SHI (non-profit) to negotiate portion of the site could return to its historical from a position of strength with the private use as a school, for example. Block F is left un- sector (which is driven by profit motive). developed and turned into a public open space which could function as market space. 25 The partnership profit for Block A/B is split: 50% to the private sector; 45% to the SHI; and 31 Sectional title residential units are 55m2 5% for broker sales/commissions. units. Two-bed, two-bath, and one basement 2 26 parking for R2,640,000. R48,000m discounted The Ellerslie school building remains. All from the average R53 000m2 of comparable other structures without significant heritage newly-built apartments in the area. status are demolished. This includes Wynyard manions given that the building is in bad 32 Housing typology for social housing units are condition and the costs of renovation are close bachelor (30m2), bed sit (36m2), and two-bed- to the same price as constructing new units. roomed units (42m2). Newer blocks will also utilise the space more 33 efficiently. Parking ratio for social housing assumed at 0.125 per unit, 1.2 per sectional title unit and 27 An application is made to transfer unused 2 bays/100m2 for retail. Surface parking for bulk from Block F (GB 5 portion) to Blocks institutional use is provided. C & D (GR4 Blocks). One motivation for this 34 departure is that Block F is left undeveloped to In 2017, the Restructuring Capital Grant protect and enhance the heritage assets of the (RCG) is expected to increase to R154,000, site and to create a public open space. Another along with the Institutional Subsidy Grant is that there is no additional height and no of R120,000 per social housing unit. There additional impact on neighbouring properties. has been an indication that the new grant quantums may be subject to VAT in the future 28 Minimal parking ratios are applied to the so this is explored as a variable. social housing units portion of the site. This is 35 justified by the site’s immediate proximity to Social housing income bands are increased three public transportation routes (including from R1,500-R7,500 (R1,500-R3,500 primary the MyCiTi bus and minibus taxis), and be- band) to R1,500-R15,000. cause previous cases have shown that social 36 New bands are assumed at: primary housing benefits from the relaxation of these R1,500-R5,000; secondary R5,000-R7,500; requirements. and GAP 7,500-15,000. Rental calculated as 29 Development phasing is adopted, with the the band median to get to R975 p/m (bachelor concurrent construction in Phase 1 of the first unit), R1,875 p/m (bedsit), and R 3375 p/m market block and the first social housing block (two-bedroom unit). or building. To limit risk, subsequent phases follow as per market conditions. This follows a ‘package of plans’ approach. 109 Scenario one: Traditional four-storey social housing typology

37 Blocks C and D are comprised of rental units R428,697 built in the traditional block typology of four-storey walk-ups. This is currently the • Block C7 is limited to two storeys to ensure industry norm because of the prohibitive sufficient light in its courtyard costs associated with building more than four • Capital reserve of R10,737,832 for the SHI. storeys (such as elevators and reinforced con- This is kept in reserve for long-term main- struction). It is generally accepted within the tenance sector that building higher is unfeasible within the current grant and income band regime. • Province Land Payment is: R75,000,000 • 297 social housing rental units and 89 market residential sectional title units • Total construction cost is: R389,552,475 • Total social housing construction cost is: R176,652,435 • Total sectional title residential construction cost is: R179,116,908 • Average cost of social housing units is:

Figure 9: Scenario One massing model

110

Park Retail Land Use Residential Residential Heritage School Heritage Max zoning zoning portion floor space per per space floor 6.9 6.9 6.9 6.9 1=5 Floors Res 1= Max permitted permitted Max Retail +/-3.5m, 24 24 25 24 24 24 Height m Figure Plan 12: Site 100 59.88 59.88 59.88 59.88 100.00 Available Available coverage % coverage 60 60 60 60 100 100 Coverage % Coverage 4 4 1.5 1.5 1.5 1.5 Floor Factor 2 1 1.2 0.125 0.125 0.125 1 5 4 4/2 1/2 Floors Ratio 5 0 17 37 32 107 15.5 176 GB 5 GB 5 GR 4 GR 4 GR 4 GR 4 Zoning Parking Bays Parking 89 36 124 137 297 386 - 5420 5266 3771 5038.2 4702.9 19159.9 space m² space NU Floor Units 55 43 36 33 37.7 - 942 1492 1338 2267 1073.9 7112.9 footprint) Area m² (built (built m² Area Unit Size (m2) Size Unit

F A C B D E ups Total Block storey walk walk storey low rise four Scenario one: 2 bed 2 1 bed 1 Studio Parking Total Residential Social Market residential Market Commercial Facilities Community Refurb Reisential (if applicable) (if Reisential Refurb Retail Figure One bulk/footprint 10: Scenario Units Figure 11: Total Figure 13: Social Housing Typology Block 112 Figure 14. Scenario One: Low rise Figure One: Low 14. Scenario

Figure 16. Cross-subsidising market component (sectional title, (sectional title, component Figure market 16. Cross-subsidising and institutional use retail and parking access Figure 18. Vehicular Figure 17. Pedestrian movement through the site through movement Pedestrian Figure 17. Figure 15. Land use: Retail, residential, community facility and community Figure residential, 15. Land use: Retail, open space Figure 14. Scenario One: Low rise Figure One: Low 14. Scenario Scenario one results summary Scenario one development costs and revenues

115 Scenario two: mid-rise social housing typology

38 This scenario assumes a successful application SHI below market value. for departure to increase the floor factor for the GR4 portions of the site to 1,8 (in lieu of • 316 social housing rental units and 121 market residential sectional title units 1,5) which gives a total bulk of 30,859.2m2. This allows all the social housing blocks to go • Total construction cost is: R389,552,475 to the maximum height of seven storeys. • Total social housing construction cost is: 39 Blocks C and D conform to the maximum R176,652,435 height allowed for the GR4 (i.e. seven storeys). In this scenario, the increased costs associated • Total sectional title residential construction with building higher are cross-subsidised by cost is: R179,116,908 the market portion of Blocks A/B. This pro- • Average SH unit cost is: R594,989 posal takes advantage of the underlying land value to allow social housing to densify in a • Capital reserve of R17,665,243 for the SHI manner appropriate with the surrounding • Province Land Payment is: R76 million built fabric. This innovation (higher density) within the sector is made possible by the cross-subsidisation potential that comes with making highly valuable land available to the

Figure 19: Scenario Two massing model 116 [1]

Park Retail Land Use Residential Residential Heritage School Heritage 6.9 6.9 6.9 6.9 1=5 Floors Res 1= Max permitted permitted Max Retail +/-3.5m, 25 24 24 24 24 24 Height m 2781 1386 Available Available coverage m2 coverage 100 100 42.00 42.00 42.00 42.00 Available Available coverage % coverage Figure Plan 22: Site 60 60 60 60 100 100 Coverage % Coverage 4 4 1.8 1.8 1.8 1.8 Floor Factor 2 1 1.2 0.125 0.125 0.125 1 7 5 7 7 Floors Ratio 0 13 18 19 51 32 145 228 GB 5 GB 5 GR 4 GR 4 GR 4 GR 4 Zoning Parking Bays Parking 121 105 147 154 406 527 - 4138 6810 6500 9152 3771 26233 Units Floor space m² 55 43 36 33 37.7 - 973 1074 1318 1307 2267 5865 footprint) Area m² (built (built m² Area Unit Size (m2) Size Unit

F A B C D E Block 2 bed 2 1 bed 1 Studio Scenario two: intensification medium rise Parking Total Residential Social Market residential Market Commercial Facilities Community Refurb Reisential (if applicable) (if Reisential Refurb Retail Figure 20: Scenario Two bulk/footprint Figure Two 20: Scenario Figure 21: Total Units Figure 21: Total 118 Figure 14. Scenario Two: Mid rise Figure Two: 14. Scenario

119 Figure 14. Scenario Two: Mid rise Figure Two: 14. Scenario Scenario two results summary

Scenario two development costs and revenues ENDnotes

1 Spatial Planning and Land Use Management Act 16 of 2013. 2 Western Cape Land Use Planning Act 3 of 2014. 3 Government Immovable Asset Management Act, s1. 4 Annexure 1 See: https://www.westerncape.gov.za/ assets/tafelberg_school_site_proposed_housing_ project_-_hight_level_viability.pdf 5 Social housing is institutionally managed rental housing in terms of the Social Housing Act 2008 and its regulations. 6 Annexure 2, Request for Expression of Interest Property Development Investment Opportunities in the Cape Town Central City Regeneration Pro- gramme. 7 Annexure 3, O’Donoghue, Ellerslie / Tafelberg High School Heritage Report (2012). 8 City of Cape Town, Municipal Planning By-law (2015), item 59. 9 Ibid., item 40. 10 Annexure 4, Appraisal Corporation (2015), C160017 Tafelberg School See: https://drive.google. com/drive/search?q=appraisel 11 Ibid., note 4. 12 Annexure 5 City of Cape Town, Cape Town Zone Scheme Regualtions, 2012 See: http://sans10400. co.za/wp-content/uploads/2013/06/Cape-Town- Zone-Scheme_Regulations_Nov_2012_Part1.pdf 13 Annexure 6 See: Erf 1424 SG diagrams

14 Annexure 7, Western Cape Government Property Efficiency Report 2013/14, p. 11.

Annexures

All annexures are available online at www.stopthesale.net 122

125 TAFELBERG

SUBMISSION ON THE FEASIBILITY MODEL FOR SOCIAL HOUSING ON THE TAFELBERG SITE

March 2017

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