Real Estate Investor Magazine South Africa August 2016 | Page 45

properties, such as townhouses or apartments, is
happening earlier now than previously as home owners
look to better security and lower utility costs and
convenience.”
The aforementioned principles of urbanism are
about adding benefit to four stakeholder groups:
residents, businesses, developers and municipalities,
and the primary mandate that governs this movement
into the city is about creating livable and sustainable
communities. As such it is of paramount importance
that all stakeholders take an active role in the cities in
which they live, and don’t only rely solely on their local
government to drive this mission.
With an increase in density, it is inevitable that
there will be additional pressures placed on an urban
environment especially when it comes to available
space, required resources, and the general economy.
The answer to these pressures is in the pooling of these
resources - what has become known as the “sharing
economy”, or collaborative consumption. This model is
most likely to be used when the price of a particular
asset is high and the asset is not fully utilised all the
time.
This is by no means new or innovative; the renting
or sharing of facilities or property has always been
readily available, but previously would likely require
far more effort to coordinate than it was worth.
Technology however has made enough data available
that it has become easier to match demand with supply,
and has simultaneously lessened the cost and effort of
transacting, as well as made it more secure with an
increase in the efficacy of security checking and safe
online payments.
These factors combined mean that shared resources
have lessened requirements on the city, and residents
lives are made more convenient with easier access to
supplies with less obligation or commitment. However,
when there is a high demand for a product the first thing
that is affected is the price of that product, making
it less accessible to the general community. That is
what is currently happening in cities around the world
with property prices skyrocketing, as well as parking
prices, office rental costs, and not least of all, the price
of property rentals. These factors combined mean that
residents are in danger of being forced out of the city as
living costs become more than they can afford.
Apps such as Airbnb that tap into this insatiable
demand are driving this issue, and fast becoming a
concern for conscious cities. Some, such as Berlin, have
even gone so far as to ban residents from renting out
their houses this way, instead allowing them to rent out
individual rooms only, or face a significant fine.
This recently implemented German law –
Zweckentfremdungsverbot – has been described by
Andreas Geisel, Berlin’s head of urban development,
www.reimag.co.za

as “a necessary and sensible instrument against the
housing shortage in Berlin…”.
The reasons for this are many: short-term or overnight
rentals are not only driving the price of rental property
through the roof, making it unaffordable for most longterm residents, but they are also dramatically affecting
hotels and the tourism industry, with hotel occupancy
suffering dramatically in many tourism-driven cities.
Both of these in direct contrast with the previously
mentioned principles of urbanism - benefits to business
and to the community.
“As an urban property developer, and thus a roleplayer in the changing landscape of the City of Cape
Town, I regularly remind people of the symbiotic nature
of the relationship between a city and its residents. As
much as the city is obligated to service its residents
in order to improve and facilitate their daily lives, so
are the residents an integral part of the city’s success.
Short-term rentals, while bringing people into the city
from other parts of the world, can also detract from a
permanent community and as such the opportunity
for this symbiotic relationship that is required to run a
successful and happy urban environment,” says Jacques
van Embden, MD of Blok, urban property developers
in the Western Cape.
Therefore, while bringing short-term visitors to
our city has obvious benefits in terms of tourism and
awareness, we must always be cognisant of not allowing
this to impact on our longer-term visitors and residents;
those that call Cape Town home, and take care of it as
such.

RESOURCES

JDA
AUGUST 2016 SA Real Estate Investor

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