By: Lizette Zuniga, Senior Technical Advisor, Rooftops Canada
Over the past few months, my work on the Equal Spaces: Social Housing to End Spatial Apartheid in South Africa Project has led me to engaging with public, private sector and community stakeholders in several South African metros. These people represent departments and organizations working on key precinct level land release, urban regeneration and social housing initiatives.
In eThekwini (Durban), we have been helping municipal officials and other actors to review future municipal land release on six large precinct sites. This includes looking at the development potential and proposing reasonable conditions for public, private and social housing partnerships.
In Cape Town, I am helping with an accelerated proposal for a transitional shelter solution to re-house homeless people currently occupying land that has been allocated to a social housing institution for social housing development. This is an important pilot initiative because many South Africans have been driven both by apartheid era evictions and by poverty to occupy inner city vacant land or extremely run-down apartment, office and industrial buildings. Finding viable alternatives to re-house people is a necessary first step for urban regeneration.
I have also been part of a reference group led by an advocacy coalition which is pushing for alternatives that will support allocating a premium Cape Town site owned by the Province for social housing development rather than sale to the highest market bidder. We are developing a win-win set of principles to redevelop the site using cross-subsidies to maximize the number of social housing units and reduce the contended land value subsidization. This involves using the site’s “as of right” maximum development potential to achieve financial viability for urban intensification with a mix of mid-rise social housing and ownership “sectional title” units (condos in Canada) for sale. The approach is based on a joint venture or business partnership with a private market developer to achieve an optimum combination of revenue sources.
Soon to be announced changes in the government program that supports building social housing are making this work very interesting. For the first time in many years and after much lobbying, the national government is expected to increase the main capital grant for social housing and adjust the target income bands. Social housing in South Africa is entirely financed by capital grants and mortgage financing with no operating grants. I recently finished updating NASHO’s financial sustainability model with the new grants, applicable income bands and current development and construction costs. We hope to address new challenges and opportunities. These include securing adequate financing for high density social housing projects in apartment buildings with elevators which are so critical for urban intensification in areas with rising land values; and still have the rental revenues to fund long term replacement reserves with no operational subsidies.
This preliminary work is also helping the Equal Spaces Project team better understand the local constraints and opportunities. Very importantly, it is also guiding a process that I am managing to formally select four of South Africa’s eight metros to be the main focus of the Equal Spaces urban regeneration program. The application and selection process is well under way, and I will report on it in my next post.