This past week, the City of Cape Town auctioned off 53 parcels of municipal land.
On the surface, this may seem like routine property management – the sale of surplus assets to generate revenue. But a closer look reveals something far more consequential. Among these parcels are at least 14 sites that fall within the City’s Affordable Rental Overlay Zone – areas specifically earmarked to enable small-scale rental housing under the amended Municipal Planning By-law adopted in 2025.
In a city facing a deepening affordable housing crisis, this is not just an auction. It is a decision that has the potential to impact the shape and nature of our city for generations to come.
A missed alignment
When we undertook a desktop review of the 53 sites, we identified at least 14 parcels that sit within the affordable rental overlay – including properties in Mitchells Plain, Strandfontein, Atlantis, Bellville, Goodwood and other neighbourhoods where small-scale developers are already developing affordable and dignified rental housing at scale.
Some of these sites are zoned Single Residential 1, meaning that under the amended Municipal planning by-law, they could yield up to eight rental units, or more, depending on configuration and additional rights. A modest 300m² site in areas such as Eerste River or Blue Downs could potentially accommodate 8–12 well-designed affordable rental units. Translating to meaningful supply in communities where the demand for affordable rental housing is high and access to land is scarce.
According to the 2023 council resolution minutes these sites were approved for disposal in 2023, before the City’s Mayoral Priority Programme on small-scale rental housing gained traction, and before the bylaw was adopted in September 2025.
The result is a clear misalignment between the City’s evolving affordable housing ambitions, and its acknowledgment of the critical role city-owned land plays in promoting affordable housing development, and a land disposal process initiated under a different policy context.
This is not about bad faith. It is about timing – and about ensuring that past administrative decisions do not unintentionally undermine current strategic priorities.
Recognising progress and strengthening it
It is important to acknowledge that the City of Cape Town has made meaningful progress in recent years. Through its Integrated Development Plan (IDP), the City has identified Small-Scale Rental Housing (SSRH) as a critical housing sub-market with potential to address the spatial and affordability challenges facing the metro. In fact, the City estimates that by 2050, more than half of all new homes will be delivered through SSRH.
The Small-Scale Rental Housing Programme itself represents a significant policy shift, recognising the role of emerging and community-based developers in expanding affordable housing supply, and signalling the City’s intention to establish a dedicated pipeline for the release of municipal land to support this sector. At a time when cities across South Africa have historically overlooked or dismissed SSRH, this marks a decisive and welcome move towards enabling and supporting more inclusive forms of affordable housing development.
The question is how existing land disposal processes align with that emerging pipeline – and whether certain sites within the current auction could be better leveraged through that dedicated workstream.
The City has already demonstrated what is possible when land release is approached strategically. Recently the City announced the release of four sites for “affordable housing” through a Request for Proposals (RFP) process. Those sites have been packaged and de-risked. Development rights have been clarified. Market research has been conducted, and in some cases, land values will be discounted to support feasibility.
That is an enabling approach.
Auction vs. enabling housing delivery
By contrast, the auction process requires:
- A refundable R25,000 registration fee
- A 10% deposit payable on the day of a successful bid
- Commission fees based on the purchase price
- Full assumption of rezoning, planning and development risk
For large, well-capitalised developers, this may be manageable. For small-scale developers – many of whom are already operating on tight margins to deliver affordable rental units – it presents a significant barrier to entry.
When land costs escalate through competitive bidding, affordability is often the first casualty. Developers either exit the market or shift toward higher rental products to recover costs.
If the goal is affordable rental housing, the mechanism matters.
The risk of underdevelopment
There is a broader risk at play here – one that extends beyond process and into purpose. When public land is sold without being de-risked, without confirmed development rights and without planning certainty, the likelihood that it will be developed efficiently drops sharply.
Our research into the release of municipal land for affordable housing shows that when municipalities prepare and de-risk sites before release, the probability of timely development increases dramatically. Certainty reduces delay. Clarity reduces cost. Risk reduction improves delivery.
If we are serious about accelerating affordable housing supply, land cannot simply be disposed of – it must be prepared. But the challenge in this case runs deeper. The land is not only being released without adequate packaging or de-risking; it is also not being directed toward affordable housing at all. It is being auctioned to the highest bidder, free to be used for luxury redevelopment, speculative resale, or purposes entirely disconnected from the city’s housing crisis.
While fiscal returns matter, public land is a finite strategic resource. Releasing it without clear affordability conditions risks transferring public value into private hands, potentially leaving sites vacant for years while spatial inequality deepens. At a moment when the City should be leveraging every available tool to expand affordable housing, an approach driven primarily by revenue maximisation raises difficult questions about priorities.
The social function of land
Cape Town is one of the most unequal cities in the world. The affordable housing crisis is not abstract – it is visible in backyard rentals, overcrowded households, long commutes, and rising homelessness.
Municipal land is one of the most powerful tools the City holds to address this crisis.
Yes, land sales generate revenue. But land also has a social function. The City’s own policy direction – from the Small-Scale Rental Housing Programme to emerging inclusionary zoning frameworks and Local Spatial Development Frameworks – recognises that well-located land must be leveraged to promote inclusion and affordability.
Once land is auctioned without conditions, it can become almost impossible to secure affordability outcomes. And the impact of these decisions will last for decades.
A moment for pause and alignment
A number of civil society organisations called for the auction to be postponed. This was not a call rooted in opposition for its own sake, nor in a desire to stall development. It was a call for alignment.
Postponement would have created the space to assess which of these sites are strategically located within the Affordable Rental Overlay Zone, to evaluate their potential yield for small-scale rental housing, and to determine whether they would be better released through the City’s emerging small-scale rental housing pipeline rather than through a highest-bidder auction process.
In a policy environment that has shifted significantly since 2023, taking time to ensure coherence between land disposal decisions and current housing objectives is not a setback – it is responsible governance. A short pause could have prevented long-term misalignment that is far more difficult, and costly, to reverse.
A constructive way forward
We are not suggesting that all 53 sites should have been withdrawn. But in future cases of City land management, there is a strong case for:
- Identifying strategically located sites within the affordable rental overlay zone and assessing whether they should be moved into the small-scale rental land release pipeline.
- Ensuring that sites intended for affordable rental are packaged and de-risked prior to disposal.
- Linking land release to existing incentives, including reduced development charges, prototype plans, additional land use rights and access to planning support.
Cape Town has shown innovation and leadership in its affordable rental reforms. The next step is ensuring that municipal land disposal reinforces – rather than works counter to – those reforms.
Public land is not just an asset on a balance sheet. It is a lever for spatial justice.
Let’s use it wisely.
