Within the next 10 years, there will be a shortfall in the development of formal housing opportunities of approximately 30 000 every year, assuming the average annual rate of supply by both the private and public sectors remain unchanged. The consequences of a business as usual approach will be felt in all corners of our society. This is why the City has been doing extensive work for some years to map a way forward to enable greater participation in the housing market. Over this time, Cape Town will grow by roughly 800 000 inhabitants. To accommodate this growth as well as manage the existing housing demand, it is estimated that roughly 500 000 housing opportunities need to be created between now and 2028.

National economic conditions will continue to place severe pressure on residents
Between 1996 and 2016 Cape Town’s population increased by 56% to more than 4 300 000 residents, and over the same period there was a 94% increase in the number of households, to around 1,36 million.

Approximately 17% of households in Cape Town live in informal dwellings, many with inadequate security and shelter. The provision of basic services is heavily impacted on the degree of informality and where an informal dwelling is situated. For instance, if it is on privately-owned land, the City may not install services or the settlement or backyard is too densely populated to allow for the installation of services.

Urbanisation will continue and the associated growth in informality, especially considering the dire national economic conditions in South Africa. This is not a problem that is unique to Cape Town, but it is perhaps exacerbated by the limited suitable land and topography of Cape Town as a Peninsula.

Strategy focuses on housing need of those earning less than R22 000 pm
‘The City must consider how this scenario will impact on it and its communities. Importantly, this is not a City of Cape Town strategy, it is a Cape Town strategy. Human settlements affect us all and it must increasingly, and constructively become part of the mainstream conversation. People are the most important component of the functioning of the urban environment. This strategy starts to move residents from recipients to participants within the urban environment.

‘The strategy however emphasises that there will need to be a far greater acceptance of a different mix of accommodation types and that formal State-subsidised housing cannot be the primary vehicle to tackle the challenges. It will take the efforts of all market actors and extensive community participation and a new normal consensus to meet the demand for more inclusive and affordable housing stock in Cape Town.

‘Human settlements delivery is beset with challenges, including R1,3 billion in housing projects under threat from ongoing orchestrated land invasions, national budget cuts reducing our Urban Settlements Development Grant by R118 million this year, a weak economy and regulatory red tape. Innovative, partnership-driven and more cost-effective human settlements delivery options are required. While the City on its own cannot build its way out of informality within the foreseeable future, we can innovate within our ambit, and advocate for a more sensible national human settlements framework,’ said the City’s Executive Mayor, Alderman Dan Plato.

Homeownership remain elusive for majority of households
‘In the 2018/19 financial year, the City’s Human Settlements Directorate spent approximately 95% of its Urban Settlements Development Grant funding and for the 2019/20 financial year, despite the substantial impact that COVID-19 had on its operations, it spent 94% of the allocation. This illustrates the City is able to deliver on State projects as earmarked but the need is pronounced and a new, whole-of-society approach is required. All suitable City-owned land must continue to be assessed including suitable land in and near the Cape Town CBD and other urban centres with various different uses from golf courses to mixed use areas to determine whether some of these properties could be developed for affordable housing opportunities among others. All workable options continue to be explored to see how to increase the affordable accommodation stock in Cape Town or to help enable the provision of more stock in the market.

‘The City and its partners need to increasingly adapt to systems of informality, emphasising the creation of liveable, dignified, and integrated human settlements that support the well-being of residents. We need to think innovatively about accommodation types and suitable land, from unlocking and enabling partnership-driven developments in urban centres, incorporating land not used before for housing such as golf courses and mixed use areas to modular housing, micro-developers, large developers and large-scale managed settlement interventions such as site and service offerings and the roll out of far more upgrading of informal settlement programmes.

‘It’s estimated that entry-level formal housing within the formal market costs between R400 000 and R500 000 in Cape Town. A household would require a minimum gross monthly income of R20 000 to afford such a dwelling. As between 60 and 65% of Cape Town households earn less than R20 000 per month, ownership of a house is generally beyond their financial reach. For these households there are alternatives, including various forms of State-subsidised and State-supplied housing as well as private rental accommodation. However, the State doesn’t have the available resources on its own to provide the range of housing necessary to address the demand at the required income levels, and the private sector isn’t delivering supply at the scale or affordability levels necessary to ease the demand. For those households who are not supported by the State or serviced by the private sector, informality often becomes one of the only options for housing. The desired outcome of the Strategy is for a Cape Town housing market that is able to produce a diversity of safe, valued, accessible, and well-located housing opportunities, which meets the demand of Cape Town’s residents, especially households who earn up to R22 000 per month. We encourage the people of Cape Town to have a look at the draft strategy, to help us reimaging a more future-fit Cape Town,’ said the City’s Mayoral Committee Member for Human Settlements, Councillor Malusi Booi.

Market and State failure calls for major reform
This strategy recognises the extent of the informal housing that is prevalent within Cape Town. It argues that this informality is partly due to market failure, whereby the cost to produce a house in well-located areas has outstripped the ability of a household to afford it, and due to State failure, whereby government’s national housing programmes have been unable to keep up with the increasing and widespread housing needs of households, particularly those with a monthly income of R22 000 and below. The strategy talks to major government reform. It requires that government is more inclusive, more consultative, and more aware of the impact of the human settlements system on individual households.

The Strategy presents seven strategic shifts that should be made by the City and its partners to help realise these objectives:

• Reduce or remove the barriers to expanded housing provision that are within the City’s authority and ambit
• View housing provision as an inclusive process involving a number of actors and stakeholders where the City is an enabler, advocate for inclusive housing and provider
• Acknowledge the importance of location for integrated and sustainable human settlements
• Recognise the necessary balance of rental and ownership to meet affordability demands
• Develop practical and realistic compliance regulations that ensure the safety of residents
• Incentivise the transformation and regularisation of informal dwellings into formal housing
• Implement measures that affect human settlements overall and not just housing opportunities

                                                                                                    
Although the primary targets for this strategy are households earning less than R22 000 per month who are either living in inadequate conditions or are new households. However, housing markets are inter-connected; what happens in one end will affect the other. The City wishes to support housing markets that meet the needs of all who participate within it. Therefore, the principles of the Human Settlements Strategy are applicable to households of all income levels.

View and comment on the strategy
Please visit www.capetown.gov.za/haveyoursay.  In addition, the executive summary of the strategy will be available in the three official languages recognised by the City at subcouncil offices during the public participation period.

Submit comments

• By email: Hspolicy.Research@capetown.gov.za
• In writing: to be submitted at any of the City’s subcouncil offices
• Online: www.capetown.gov.za/haveyoursay
• Via WhatsApp: 063 299 9927

The City’s Public Participation Unit will assist people living with disabilities who are unable to submit written comments to have their objections recorded and submitted to the City.

For special assistance please contact: Mbuthokazi Patience Kubashe at 021 400 9808 or Mbuthokazi.Kubashe@capetown.gov.za

For more information contact Hspolicy.Research@capetown.gov.za

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