Areas and Places

Khayelitsha property owners could receive incentives to provide affordable rentals

Cape Town

Cape Town is experiencing a huge demand for affordable rental accommodation. The City of Cape Town’s Mayoral Committee has recently approved recommendations that will enable property owners in less formal areas to develop small scale and affordable rental accommodation that complies with the National Building Regulations.

The City of Cape Town conducted an in-depth analysis of the small-scale rental market in Khayelitsha.  The study found the market is thriving, despite any assistance from government. This market is driven by private individuals who develop rental opportunities on their land, either by extending their homes or, by adding separate rooms or structures, informal or formal.

This trend was identified through an analysis of properties in Khaya, Eyethu, Ekuphumuleni, Graceland, and portions of Ilitha Park and Mandela Park – a study that covered about 22% of the Khayelitsha area.

The report that served before the Mayoral Committee concluded that the City should consider incentives for private property owners in incremental housing zones to assist with the provision of affordable rental accommodation.

The recommendations to stimulate this trend and to make it easier for individuals in incremental housing zones to pursue this form of development, will now serve before Council for approval:

  • to amend the zoning scheme in areas where the City would like to encourage this form of development by creating an overlay zone or, by adding small scale rental units as an additional use within areas zoned as ‘Single Residential 2: Incremental Housing’.
  • that the City creates a menu of proto-typical building plans for small scale rental units from which the landowner can choose and submit to the City for approval in terms of the National Building Regulations.
  • to prioritise the assessment of building plans in these areas and to wave fees subject to the property’s rates and service payments to the City being up to date.
  • to increase the service infrastructure capacity in these areas.
  • to establish a list of accredited small-scale local building contractors.
  • to host workshops in the targeted areas to create awareness and to inform property owners of the benefits of small-scale rental units.

According to the trend analysis study, 7 425 additional housing opportunities have been provided on 5 294 properties out of a total of 9 007 properties and, of the 7 425 opportunities, nearly 40% are formal additional housing structures.

Nearly half of these small-scale rental units are formally constructed. There is also an increase in the number of formal rental units that comply with the National Building Regulations with a drive to replace existing wood and iron structures with formal units.

The City’s Mayoral Committee Member for Spatial Planning and Environment, Alderman Marian Nieuwoudt comments:

The question now begs: what role can the City play to encourage this trend? We know there is a huge demand for affordable rental accommodation, and we see that many property owners in Khayelitsha are pursuing this as an income generator. There is also an opportunity here for the City to empower small scale entrepreneurs across the city to use their properties to generate an income”.

By investing in their properties, the small-scale rental landlords can become owners of on-site long-term capital assets that will grow in value over time. Furthermore, in this manner, we can also address the structural safety of new rental accommodation by encouraging that units comply with the National Building Regulations and are built in accordance with an approved building plan” she says.

To incentivise this trend, it has been recommended that the City of Cape Town consider amending the development rules applicable to ‘Single Residential 2: Incremental Housing’ in the Development Management Scheme in the City’s Municipal Planning By-Law. It has also been recommended that the City makes it easy for property owners to provide formal rental accommodation that complies with the National Building Regulations as opposed to the provision of informal structures.

It has been proposed that the City makes available ‘off the shelf’ building plans which the owner can submit to the City for approval together with a site plan.

The City of Cape Town will commence with the above should Council approve the recommendations.