Real Estate Investor Magazine South Africa Real Estate Investor Magazine - Dec/Jan 2018 | Page 40
AFFORDABLE HOUSING
Unpacking Affordable Housing
Developers’ Opportunity
BY MONIQUE HORWITZ
O
pen any newspaper or online news site and you’ll inev-
itably find an article or two about affordable – particu-
larly the need for this within well-located urban areas
to increase inclusivity, integration and transformation. But what
exactly does it mean?
For years, the term ‘affordable housing’ has been bandied
about, but this has been used as a blanket term with little expla-
nation about what criteria it entails. This lack of explanation or
further details has caused confusion and conflict.
The overarching definition, used by Future Cape Town - a
leading platform in Africa promoting democracy in the future
of cities - is housing units that are affordable to a section of
society whose income is below the neighbourhood’s median or
average household income. “However,” says Future Cape Town
Director, Rashiq Fataar, “affordable housing comprises various
types of housing.”
The four affordable housing types found in government pol-
icy, local government developments and some of the national
government frameworks around human settlements are: gap,
transitional, social and inclusionary.
Gap Housing
The City of Cape Town defines gap housing as subsidies and
products provided by government and financial institutions to
enable households with a monthly income of between R3,500
and R20,000 to purchase property.
Transitional housing
According to the City, transitional housing is temporary hous-
ing afforded to individuals and households which helps them
prepare to transition to more permanent options. It is rec-
ognised that, because of the shortage of alternatives for low-in-
come households, some are likely to remain on a semi-perma-
nent basis.
Social housing
The City describes social housing as state-subsidised rental
housing for households with a monthly income of less than
R15,000 that is developed and operated by an accredited social
housing company or institution otherwise known as SHIs.
Inclusionary housing
Future Cape Town’s explanation of inclusionary housing is that
it is housing developed by the private sector for a market that
would not have otherwise had access to the development and/or
the area within which the development takes place.
Private sector’s call to action
National and local government have admitted that they lack
the resources to tackle the country’s housing issues alone,
which possibly makes inclusionary housing the most viable op-
tion. One way that developers are able to contribute, whilst still
ensuring the profitability of their projects, is through securing
additional development rights from the city for free. Julian
Sendin, a Senior Researcher at Ndifuna Ukwazi – an activist
organisation and law centre working to advance urban land
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DECEMBER 2017/JANUARY 2018 SA Real Estate Investor Magazine
THE 80:20 MODEL
In essence, the 80:20 housing model refers to devel-
opers reserving 20% of the development for lower
and middle income individuals. Examples of such
programs exist in cities like Toronto, New York, and
soon Cape Town.
BLOK has recently launched its latest urban develop-
ment, Forty on L. Speaking on this, Fataar explains:
“Due to limited land available in well-located parts
of the city, we need to reconfigure apartments, and
how we live, to ensure that apartment spaces are
used more efficiently to accommodate more people
and at the same time our civic spaces and buildings
are used more frequently.”
Located in Lion Street, Bo Kaap, the development
will range from 44m2 one-bedroom units, to 267m2
double storey penthouses. In total , there will be 54
apartments. Occupation is expected in 2019.
justice – says: “Inclusionary zoning is a basic intervention used
by top cities around the world to ensure that private developers
build a fair amount of truly affordable housing in exchange for
additional development rights.”
Up until recently, social housing was seen as the only way to
retain housing units as affordable in perpetuity. However, in-
clusionary housing might provide a better alternative as these
homes are purchased and not merely rented, thus promoting
ownership.
In order for South Africa’s cities to truly become inclusive,
integrated and transformed, affordable housing in urban areas
needs to not only cater for lower-income earners, but must
also incorporate the middle income market (earning between
R15,000 to R45,000), who are also unable to afford to live in
well-located urban areas. Doing so will ensure that more people
from a mix of income brackets benefit from urban opportuni-
ties.
SOURCES
BLOK, Future Cape Town, Ndifuna Ukwazi