The City of Cape Town has filed a comprehensive report demonstrating clear affordable housing progress in line with constitutional obligations.
The report also sets out major challenges with a lack of national funding – which has dropped by 41% since 2017, with no project funding awarded in the last five years despite many qualifying developments. The report was filed following the Constitutional Court’s recognition that court records were eight years out of date in the ‘Tafelberg’ matter, ruling that fresh reports be filed on City and Western Cape Government initiatives. See the full submission here: https://bit.ly/4huhhzl
The City has so far released 14 sites for affordable housing purposes – including six inner-city sites – with a combined yield of 7 000 residential units, including 4 000 affordable housing units and 2 500 Social Housing units.
More sites have been released in this term of office alone than in the decade prior under the Mayoral Priority Programme to accelerate affordable housing land release.
A further 39 sites are in the release pipeline – including 11 in the CBD – with a 40 000-unit combined yield, including 21 000 affordable housing units and 1 500 social housing units.
This is aside from projects already completed and tenanted, including over 200 social rental units at the inner city’s Maitland Mews, over 1 000 units at Goodwood Station, and over 400 units at Bothasig Gardens.
The City is also supporting various province-led affordable housing projects in central Cape Town totalling thousands of units, including at 353 on Main (the ‘Tafelberg’ site).
Based on national Human Settlements Department data, more state-subsidised houses have been handed over in Cape Town than anywhere else in the past five years, and also the last 30 years since 1994.
In the last five years, 12 401 units were handed over in Cape Town, more than double the next metro, eThekwini (5 355). It is also more than all three Gauteng metros combined, with Ekhuruleni (5 167), Joburg (4 932), and Tshwane (1 811) still falling close to 500 units short of Cape Town’s total.
As part of its strategic shift to enable much more affordable housing, the City:
- passed land discount guidelines to make developments viable,
- funded bulk and site infrastructure
- offered rates discounts in perpetuity on properties used for social housing projects
- discounted monthly utility bills for tenants,
- used mixed-income and mixed-use development models to cross-subsidise affordable units.
- undertaken rezoning and project preparation to lower project costs;
- provided technical support to social housing developers
Micro-developer support
The City’s Concourt submission further highlights its innovative micro-developer support programme, including:
- Major Municipal Planning By-law amendments to make it easier for residents to build small-scale affordable units on their properties
- R20m incentive fund to help micro-developers fund the cost of bulk infrastructure connections
- New “Planning Support Officer” programme in informal communities to connect support staff directly with local micro-developers
City reforms to help micro-developers build affordable rental units are expected to make the largest difference over time in enabling residents of Cape Town informal settlements to escape informality and live in dignified, affordable, formal accommodation.
Council Rental Units
The City’s submission also sets out how the metro maintains a very large stock of around 50 000 Council Rental Units, with heavily subsidised rental units and maintenance to the tune of R977 million rand a year without any state grant-funding.
A unique new “No Cost Transfer Programme” has also been created to make homeowners of tenants who live in Council-owned properties which are free standing, semi-detached or maisonette style. Since 2017, over 14 000 of these transfers have taken place at no cost to the recipient, representing hundreds of millions of rands worth of asset transfers.
National funding constraints
Cape Town’s pioneering achievements are despite a severe lack of National Social Housing grant-funding, which remains extremely constrained and difficult to access.
Since 2017, there has been a 41,1% decrease in total national grant funding for affordable housing, when adjusting for inflation and population growth. Likewise, there is a 38% decrease in the other housing grants – HSDG, USDG, and ISUPG – nationally over the same period.
There are 2 500 social housing opportunities which the City and developers could immediately begin construction on in the CBD and identified areas but which have failed to receive funding from the SHRA.
For five years since the SHRA’s funding approval in 2021 for the metro’s inner-city Maitland Mews development – now complete and tenanted – there have been no further funding approvals for developments on City-released land despite six submissions.
Five of these six submissions were for inner-city land parcels, all of which qualified for funding, with none awarded.
The City also has a wider portfolio of construction-ready or near-ready social housing opportunities that cannot proceed without national funding approval. The resulting delay places previously prepared projects, development partnerships and the land at risk.
The City is now pivoting from state-subsidised social housing to affordable housing, as defined by the Financial Sector Code’s Affordable Housing Standard. Instead of national grant-funding, this is being subsidised by mixed-use development.
