Leveraging the private sector to enable the delivery of well-located affordable housing in Cape Town
Master Thesis
2015
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University of Cape Town
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Affordable housing in Cape Town tends to be located far away from economic opportunities, social facilities and public transport infrastructure, which serves to reinforce inequality, burdening poor households and the City. This dissertation explores the current challenges in bringing well-located, affordable housing units to market in Cape Town; the opportunities for greater private sector participation; and the public interventions required in order to enable actors to overcome these challenges and capitalise on the opportunities. These issues were gradually refined from a global scale to a local area, beginning with a review of the relevant urban development and housing economics literature in order to form a theoretical framework, followed by an overview of the local housing market and national housing policy. Precedent, interviews and a workshop were then conducted with participants from the private and public sectors, NGOs and academia in order to explore the key challenges, opportunities and potential solutions in Cape Town. Finally, these challenges and opportunities were investigated and interventions proposed in a particular context, namely Parow train station precinct within the Voortrekker Road Corridor (VRC) in Cape Town. While a comprehensive review of national housing policy and funding is required, the focus of this dissertation is on the many city-scale interventions which are possible within a short- to medium-term, which tackle inefficiencies in the market and regulatory system in order to leverage the power of the private sector towards the goal of well-located affordable housing. The findings for Cape Town indicate that the greatest challenges for developers are the limited availability of well-located land at affordable prices; lack of depreciated, higher-density buildings for redevelopment; excessive parking ratios; delays in the development process; and a lack of nuanced market demand information. Fortunately, there are many opportunities, including a capable and facilitative municipality in Cape Town; growing private sector interest in affordable housing; the power of small-scale landlords and innovative design; a shift from ownership to rental; and potential synergy between affordable housing, transit-oriented development (TOD) and urban regeneration (provided policy and public spending are aligned). Key recommendations for public intervention, applicable both city-wide and to the Parow Study Area, are: firstly, to urgently develop programmatic (national and city scale) and area-based (precinct scale) strategies which position affordable housing (including social housing) as a catalyst for urban regeneration and TOD, and align public investment in order to incrementally densify appropriate areas; secondly, to protect and package public land for affordable housing and other public benefit uses; and thirdly, to remove obstacles to private sector provision of affordable housing by both institutional and small-scale actors (for example, by reducing parking requirements and restrictive development parameters (potentially through affordable housing overlay zones), making market data available and fast-tracking approvals). An essential institutional intervention is the creation of an inter-departmental 'affordable housing task-team' within the municipality to champion and facilitate such interventions.
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Hogarth, K. 2015. Leveraging the private sector to enable the delivery of well-located affordable housing in Cape Town. University of Cape Town.