On the 22nd of August 2023, the Cape Town Municipal Planning Tribunal (MPT) approved a Rawson development in Rosebank on condition that it pays a financial contribution towards affordable housing in Cape Town. This forms an inclusionary housing contribution, which is a mechanism used widely across the globe, to ensure that private development contributes towards race and class integration.
Since 2017, these types of private contributions have started to become common practice in Cape Town with other big developments (such as Harbour Arch, and River Club) both including affordable housing in their developments. Typically, a contribution can either be built as affordable housing within the development (on-site), affordable housing on another nearby piece of land (off-site), or as a payment of money towards the building of other well-located affordable housing (fees-in-lieu).
What makes the Rawson development unique is that it is the first in Cape Town to make an inclusionary housing contribution in the form of financial contribution to the City towards affordable housing. This cash payment can be used to support and incentivise the development of well-located social housing.
Because the financial contribution can be used to reduce social housing rentals or increase the number of social housing units built, this option is able to benefit a lower income group rather than on-site or off-site inclusionary housing. This option is also likely to be most appealing to developers. The City of Cape Town has promised an inclusionary housing policy, that would provide much needed guidance to private developers and the MPT, since 2019.
“The four-year delay is unacceptable, considering the appetite among big developers to contribute towards affordable housing (something normally unheard of considering the profit motives of the private sector),” comments Ndifuna Ukwazi, a non-profit advocacy organisation.
“The Western Cape Provincial Cabinet has also approved a Policy Framework, giving the political go-ahead and guidance to municipalities to draft their policies. Added to the pressures, last week, Stellenbosch Municipality adopted its own inclusionary zoning policy.”
“Financial contributions from private property developers directly towards social housing in well-located areas is an exceptional display of public or private partnership, showing that working together to resolve the legacy of spatial apartheid is possible,” says Dr Jonty Cogger, an Attorney at Ndifuna Ukwazi.
Read Ndifuna Ukwazi’s ‘Regulating the Private Sector’ report here.
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of Property Wheel.