Cape Town is facing a huge demand for affordable rental accommodation. On the 29th of October 2020, the City of Cape Town’s Council approved interventions to facilitate and fast-track the provision of affordable rental opportunities by private property owners.
Apart from assisting with the dire shortage of affordable housing, the interventions have the potential to stimulate the local economy in the more informal and less developed areas.
The approved report concluded that the City should pursue incentives for private property owners in incremental housing zones to assist with the provision of affordable rental accommodation. The report is based on an in-depth analysis of the small-scale rental market in Khayelitsha. The study found that the market is thriving despite any assistance from government. This market is driven by private individuals who develop rental opportunities on their land by extending their homes or by adding separate rooms or structures – informal or formal.
The City’s Mayoral Committee Member for Spatial Planning and Environment, Alderman Marian Nieuwoudt says that property owners in Khayelitsha have demonstrated what is possible and that they can contribute on the supply-side of this market where there is a growing demand for affordable rentals.
“Following on from Council’s approval, the City will now investigate a wide range of interventions to further stimulate this potential, and to make it easier for individuals in incremental housing zones to pursue this form of development” she says.
A few of the interventions to be investigated include amending the zoning scheme in areas where the City would like to encourage this form of development – either 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 created a menu of proto-typical building plans for small-scale rental units from which the land owner 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 establish a list of accredited small-scale local building contractors; to petition National Government to consider housing subsidies for property owners who develop small-scale rental units on their properties; to establish a list of accredited registered credit providers interested in financing small-scale rental unit developments on private properties; to approach traditional financing houses like banks about the possibility of financing the roll-out of this programme and, to host workshops in targeted areas to create awareness and to inform property owners of the benefits of small-scale rental units.
The interventions are based on a recent study that confirms that many Khayelitsha property owners are creating additional housing opportunities on their erven. 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 analysis compared the relevant statistics from 2018 with those from the 2011 census.
According to the analysis 7 425 additional housing opportunities have been provided on 5 294 properties out of a total of 9 007 properties between 2011 and 2019. 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 National Building Regulations and a drive to replace existing wood and iron structures with formal units.
“The City must encourage this trend. We now have an opportunity to empower small scale entrepreneurs across the city to use their properties in this fashion”.
“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. With these interventions, 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”.
“The dire need for affordable housing is prevalent all around us. The interventions could benefit a wide range of sectors – from those who need accommodation, to property owners, and local building contractors. It could also stimulate the local economies in these areas and assist with job creation. Following from Council’s approval, the City can go ahead and explore these interventions in all earnest,” concluded Alderman Nieuwoudt.
