SA Affordable Housing July - August 2019 // Issue: 77 | Page 24

FEATURE: TOWN PLANNING
it a smart city development. It includes mixed residential
components (government subsidies housing units or low-
cost housing, GAP housing, fully bonded units), commercial,
retail, light and heavy industrial development.”
To ascertain what can be constructed on the identified
portion of land requires preliminary assessment of the local
council's development and planning policies.
Limacher adds, “Mixed-use integrated developments are
what are done these days, combining full-subsidy homes
with partial ones, FLISPs (Finance-Linked Individual Subsidy
Programme), rental properties and bonded homes, with
communal facilities like schools and parks. Old style
townships are not developed anymore - only viable and
sustainable suburbs. You therefore need to ascertain that
the development of the farm portion is supported by the
municipal development framework which will indicate
which land you can develop.
“At the same time market demand in the chosen area
needs to be gauged; in other words, what type of dwelling
would sell or lease well because, let’s face it, you want to
design and build a project that has optimal marketability.”
Mhlaba suggests this can be done by gathering available
information from various institutions like the Rand West
City Local Municipality, provincial government and Statistics
SA. “It is also important to hire independent professional
companies to do demand studies research, in our case, in
relation to the entire Montrose City Mega Development.”
Limacher says, “Your geotechnical report, bulk services
and environmental checks are the initial steps in assessing a
piece of land before any work commences. You look at the
big issues – not the small ones,” he says. “If it passes all
those tests, you move on to the feasibility study of the
planned development. This involves looking at the potential
market in a location and affordability of houses based on
the going rate for homes locally. An ‘affordable project’ will
aim at families earning around R20 000 a household.”
He add that it is important to undertake detailed analysis
of the neighbourhood character, as maintaining the
traditional nature of an area is an important consideration
for local council and their town planning requirements and
regulations. It’s also a good idea to consider any neighbours
to the site and potential objections they might have to
the project.
Ultimately the final decision to buy or not to buy your
proposed site will come down to the number crunching of a
pre-purchase feasibility assessment. This critical
assessment should include timelines, all costs including
consultants and construction as well as likely end sale
values and the profit margin desired.
“When a municipality provides the bulk services, you
have to provide a development contribution which can be
as high as R70 000 a stand. If the municipality does not
have the capacity to provide electricity and water, then
again the development may not be viable,” says Limacher.
Thereafter, he explains, you look at the available
geotechnical information, such as whether the proposed
site is in a dolomitic area, which may require additional
foundation work potentially meaning the costs of
reticulation of stormwater and water services may be much
more expensive. That doesn’t make it non-viable – if a
prime location does not compensate for the geological
disadvantage, says Limacher.
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JULY - AUGUST 2019
FEASIBILITY STUDIES
The drawings for Montrose City Mega City.
“Then there are environmental considerations. The
municipal plan may reveal that the site is in a sensitive area
requiring a 500m buffer for red species, again affecting the
viability of the site if much of your land becomes
unavailable.” If the development is deemed financially
viable, it is then time to consider putting in an offer to buy
the land at a price that will permit a commercial profit.
Succeeding steps include a town planning application
that is submitted to the municipality, advertised and
circulated to any affected parties such as municipal and
provincial departments like roads departments, Eskom,
Rand Water or companies with servitudes over the land
such as Gautrain. Limacher notes that this is supposed to be
completed within 60 days but rarely is. For this reason,
Urban Dynamics typically puts the application personally
into the hands of the individual concerned at various
affected departments to ensure it does lie unopened in
somebody’s in tray.
“That would take around 90 to 120 days, because in
many cases it is a process of negotiation to address
whatever concerns arise. That’s just normal procedure. The
council then decides and in perhaps 70% of cases it is
unopposed as we have proactively addressed all their
concerns. Thereafter, the process is quicker.”
The council then issues preconditions of establishment
containing the preconditions arising from affected parties,
including road servitudes and land for schools or parks. The
plan goes to a land surveyor who pegs the site, then the
plan goes to the surveyor-general for approval and then a
conveyancer opens a township register in the deeds office.
“Now your farm portion is known as, for example, Cosmo
City Ext 12 with, say, 145 stands and it delineates what is
each stand: perhaps a home, another park and yet another a
school. The we can on-sell the various erven to a developer
and building can commence. Before that can happen the
services have to be connected to each stand, though
because of time constraints a stand is usually sold ‘subject
to’ services being installed and deposits are placed into a
trust account,” says Limacher. These services include
stormwater, roads, electricity, water and sewerage.
In the case of Montrose, Mhlaba outlines the process,
“Once the demand studies are finalised then the next step
is to put it on a layout plan through a registered town
planner. In our specific case a layout plan needs to be
submitted to the Rand West City Local Municipality for
approval and supported by the following for approval.
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