| Council approves subsidies for micro-developers in lower income areas | Council approves subsidies for micro-developers in lower income areas | | <img alt="" src="https://resource.capetown.gov.za/cityassets/PublishingImages/%28Treasury%29%20Policies%20and%20publications%20Header.jpg" style="BORDER:0px solid;" /> | <p>The City of Cape Town’s Council has adopted the creation of a Development Charges Fund to support micro-developers building affordable housing in lower income communities. The fund will subsidise development charges for small-scale rental unit developments to stimulate the affordable housing market and attract investment in targeted areas. <br></p> | <p>'We believe that the creation of a Development Charges Fund will unlock new investment for much more affordable housing development far faster than the government can build. This is harnessing the power of private investment to achieve an important public outcome: more affordable accommodation. </p><p>'We are kick-starting this new Fund with an initial R20 million to subsidise qualifying micro-developers on a first-come-first-served basis. Subsidies will be available to stimulate the development of more affordable housing in 194 targeted lower income areas. The subsidy will make it much easier for micro-developers to invest in the small-scale rental unit market, enabling much more affordable accommodation across Cape Town.</p><p>'To further drive investment and upgrading of Cape Town's fastest growing and poorest areas, a full 75% of the City's record R12,1bn infrastructure budget in 24/25 will directly benefit lower income communities and households, including better water and sanitation, roads, community facilities, and public transport infrastructure,' said Mayor Geordin Hill-Lewis.</p><p>The subsidy covers between 50% to 90% of Development Charges which the City generally uses to pay for bulk services to support new developments, such as roads, stormwater, water, sewerage, public transport and waste removal.</p><p><strong>Some of the qualifying criteria:</strong></p><ul><li>The applicant must be a micro-developer, intending to develop between three to 30 units at a site</li><li>The applicant must provide proof of the submission of building plans to the City for assessment and approval</li><li>The applicant must confirm that project funding is available before the payment of the development charges from the Development Charges Fund will take place. This is to ensure payments from the DC Fund are prioritised and paid to those developers who are ready to commence with the development. This requirement, however, does not exclude developers to apply for assistance from the fund, it is only a requirement before payment can happen.</li></ul><p><strong>The objectives of the fund are to:</strong></p><ul><li>Stimulate property investments in townships by reducing the entry barriers (among which development charges) for micro-developers</li><li>Attract investors to townships with a suite of financial and other incentives</li><li>Facilitate the expansion of township businesses and formalisation of township areas</li><li>Assist with greater compliance with the City's building plan approval processes</li><li>Reduce entry barriers for investors in targeted areas</li><li>Stimulate employment and skills development in the targeted areas</li></ul><p>'Cape Town has a thriving construction industry with micro-developers who are already developing affordable rental accommodation, mostly in formal neighbourhoods. These entrepreneurs are well-placed to provide this type of accommodation at scale, and to contribute to a more densified and inclusive housing market. Also, we are committed to supporting these micro-developers and property owners to build safer and better quality homes.</p><p>'A micro-developer is a land owner in one of these identified areas with an erf big enough to build small scale rental units on their land that are complying with building regulations, and connected to the City's services infrastructure. Now that Council has approved the creation of the Development Charges Fund, these property owners can apply to the City for their development charges to be subsidised from this fund, which will significantly bring down the cost of building the rental units. </p><p>'In so doing, the City can assist lower-income families to fully utilise their properties to earn an income from rental units, and at the same time these property owners and other micro-developers will assist with the supply of affordable rental accommodation in areas where it is most needed,' said the City's Deputy Mayor and Mayoral Committee Member for Spatial Planning and Environment, Alderman Eddie Andrews.</p><p>The City's Economic Development and Investment Department developed the proposal to drive investment and development in the target areas. The City will execute the project in partnership with the Development Action Group (DAG).</p><p>'The City is always looking for new ways to stimulate investment and development in our communities. We are currently developing a comprehensive economic package that will make it easier for businesses and homeowners to invest in these targeted areas. This initiative aims to increase housing and commercial options in townships by incentivising development through supportive measures such as removing red tape. </p><p>'We believe that these communities have immense untapped potential for growth. However, systemic challenges have hindered investment in the past. We are working on more incentives to attract investments in such areas. Our economic package will tackle the obstacles head-on. It will connect investors with opportunities, provide the tools and resources to navigate the development process, and foster an environment where businesses can thrive. </p><p>'Ultimately, our goal is to create a wave of new housing, retail, and other developments that will bring jobs and skills development, amenities, and economic opportunities to residents. This investment is critical to uplift these communities and ensure their continued success. We are dedicated to collaborating with stakeholders to shape policy that unlocks the full potential of our city's diverse range of communities,' said Alderman James Vos, the Mayoral Committee Member for Economic Growth.</p><p>Quarterly progress reports will be submitted to the Land Release Mayoral Priority Programme to track the uptake of this pilot initiative. Further funding post the completion of this pilot will require further approval by Council. </p><p>The 194 areas to be targeted have been identified by the City's Spatial Planning and Environment Directorate, and include Beacon Valley, Belhar, Bishop Lavis, Bloekombos, Crossroads, Delft, Dunoon, Enkanini, Fisantekraal, Grassy Park, Gugulethu, Heideveld, Joe Slovo Park, Khayelitsha, Kuyasa, Langa, Lavender Hill, Lentegeur, Lwandle, Mamre, Nomzamo, Nyanga, Ocean View, Parow Valley, Pelican Park, Philippi, Phoenix, Retreat, Seawinds, Sir Lowry's Pass, Strand, Strandfontein, Steenberg, Scottsdene, Saxonsea, Sun City, The Hague, Valhalla Park, Vrygrond, Wallacedene, Wetton, Witsand and Westridge in Mitchells Plain, among others.</p><p> </p><p><strong>End</strong></p><p><strong> </strong></p><p><br></p> | 2024-03-27T22:00:00Z | GP0|#1d539e44-7c8c-4646-887d-386dc1d95d70;L0|#01d539e44-7c8c-4646-887d-386dc1d95d70|City news;GTSet|#62efe227-07aa-45e7-944c-ceebacca891d | | | | | GP0|#a4eccbe6-2bec-49aa-ad58-8ed41a372c82;L0|#0a4eccbe6-2bec-49aa-ad58-8ed41a372c82|housing;GTSet|#2e3de6c1-9951-4747-8f53-470629a399bb;GP0|#2a129773-a46b-4460-9906-88a861c10b2a;L0|#02a129773-a46b-4460-9906-88a861c10b2a|communication;GTSet|#2e3de6c1-9951-4747-8f53-470629a399bb;GP0|#0ab901dc-08fc-4328-86e9-d67d3a0317b4;L0|#00ab901dc-08fc-4328-86e9-d67d3a0317b4|spacial planning and land use management;GTSet|#2e3de6c1-9951-4747-8f53-470629a399bb | 1 | | | | | | | | | | | 0 |
