SA Affordable Housing January - February 2020 // ISSUE: 80 | Page 5

EDITOR'S NOTE Inclusionary housing for SA? i to T he City of Cape Town is looking at developing an ‘inclusionary housing’ policy for new developments in the city, which may set a precedent for the rest of the country. Whether based on race or class, South Africa remains a segmented country. It is also facing a housing affordability crisis. The lack of socio-economic integration means that the best land is reserved for wealthy population groups who can afford to live close to good jobs, schools and hospitals. Increasingly, poor and working class families find themselves struggling to find affordable housing options in the areas where they grew up or close to their jobs. The notion of inclusionary housing emerged in the US in the 1970s and later in Europe. Inclusionary housing policies are implemented to achieve two goals: to produce more affordable units; and to foster greater social integration. Local governments have adopted inclusionary housing in response to property booms to ensure that poor families are not ‘priced out’ of well-located housing. Inclusionary housing is effected through local planning systems: when a developer applies for planning permission, the local authority would require a private developer to make an inclusionary housing contribution in one of three ways: reserve in the development a fair portion of units to be purchased by low-income households; build affordable housing units on a near-by off-site development; or pay a fee to the local administration which it uses for affordable housing. The global spread of inclusionary housing reflects the acknowledgement that local authorities around the world will hold private developers to a higher standard of public responsibility. It is one tool in a range of tools needed to mitigate against South Africa’s dysfunctional and exclusive spatial design. High property prices, traffic congestion and long commutes on public transport make South African cities an unsustainable model. While there are early shoots of inclusionary housing, the policy requires greater certainty as to, for instance: which areas of the city will trigger an inclusionary housing contribution; what household incomes qualify as affordable; what would be the split in favour of inclusionary housing units; and who will be the beneficiaries? www.saaffordablehousing.co.za r "High property prices, traffic congestion and long commutes on public transport make South African cities an unsustainable model." Only a city council has the authority to answer these questions and create an enabling housing policy whereby affordable units start to be built by private developers. Some are willing to do so, but are constrained by uncertainty as to how it will work. In an uncertain environment it is likely that private developers will wait for the adoption of an inclusionary housing policy before proceeding with developments. This impacts economic growth, job creation and investor confidence. Elsewhere in the world, inclusionary housing policies are accompanied by a host of incentives to private developers in exchange for inclusionary housing, such as: fast-tracking the application process; providing density bonuses so private developers can build higher; reduce parking requirements; decrease in monthly bulk service contribution; or a bulk services infrastructure payment ‘holiday’. These can bring about considerable reductions in the overall cost of a unit and a faster return on investment. However, an inclusionary housing policy should be designed with care to ensure that it does not chase development investment away from the areas that need growth. Eamonn [email protected] JANUARY - FEBRUARY 2020 3