New beginnings, new life for the affordable rental market in township areas

On the 1st of September, the City of Cape Town’s Mayoral Committee Member for Spatial Planning and Environment announced new measures to enable property owners in less  formal township establishment across Cape Town to develop small scale rental accommodation. This life-altering news marked a significant shift in housing delivery and in highlighting the role that the government can play in enabling the delivery of alternative tenure and housing models in Cape Town.

The announcement includes the much-needed amends to the current zoning schemes as it, provides proto-typical plans and goes further to certify small scale building contractors in the trade. Although the council is still looking at approving these measures, DAG welcomes this approach by the Mayoral Committee and would like to share the following thoughts on the new measures, based on our work at DAG:

Firstly, the City of Cape Town must recognize that the affordable rental housing market provides essential homes for many working class people. It should also recognize that each erf number of development through the subsidy programme is currently providing greater density than what was originally planned.

Secondly, this measure will allow appropriate planning for basic services, particularly water and bulk infrastructure. The micro-developments and backyard rental market are adversely affected by the water and electricity tariff system and in some areas, severely constrained the infrastructure bulk capacity, which can now be planned on more real densities and number of households.

Thirdly, the onerous measures of building and planning approvals may become simpler for property owners to provide essential housing on their erven. This will, in turn, not only strengthen the local economy through the construction value chain but also bring some form of semblance and measurement to the scale of this sector.

Since its launch 3 years ago, DAG‘s Contractor and Developer Academy (CDA) has been tirelessly supporting several micro-developers, building contractors, property owners and tenants in securing safer and better quality rental housing. For that reason, we truly welcome this approach by the City and hope those emerging developers will take advantage of this new approach. Over the years, it has been acknowledged that the housing backlog will continue to grow because urbanization is here to stay and the government programmes alone will never be able to meet the demand. Therefore, the different spheres of government and some private sector players need to embrace and support the creativity and contributions that are being made by the emerging developers towards addressing the housing demand at scale through building affordable rental accommodation.

There are a few specific suggestions that require further attention and should be considered as part of this process:

Firstly, the tenure security, particularly for larger micro-developments, is of paramount importance. In this regards, we hope that the development planning process is supplemented by the nuance of backyarding taking place in Cape Town. Oftentimes, the informal systems work, but recognizing this as form of tenure security is critical. Also, we encourage the Western Cape Rental Housing Tribunal to take a stronger role in matters relating to the rental market.

Secondly, while the City of Cape Town plays an enabling developmental role, we need some form of alignment between the existing financial institutions and mechanisms. There is a lot of scepticism from homeowners and micro-developers to access loan finance, and as such we recommend, that the City engages with such financial institutions and possibly offer them guarantees (through the property) to enable such developments.

Thirdly, the role of contractors and building construction value chain is essential. This is an opportunity to strengthen the skills and capabilities of local construction companies. It requires targeted training programmes, access to alternative building technologies, tools for enabling contractors to tender for work and quantity surveying. A combination of these would resuscitate an isolated, and often underutilized the construction sector in Cape Town.

Finally, we encourage the National and Provincial Human Settlements to support the City of Cape Town in finding creative solutions to address the challenges assocated with public housing delivery programmes.  DAG and the CDA will continue to work towards ensuring that such rental practices serve both the interests of the landlords but also protect the rights of the tenants.