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29 May 2024

IVAN TUROK: A guide through the minefield of affordable housing in cities

Human Sciences Research Council (HSRC)

Report demystifies complex procedures and lays out steps for effective social housing. By Professor Ivan Turok.

The presidency’s recent 30-year review admitted scant progress in undoing spatial apartheid and called for a renewed effort to make public land available for affordable housing in the heart of cities.

The high cost of property close to jobs and amenities has been a persistent obstacle to urban integration and inclusion. Well-located neighbourhoods are out of reach for most low- and moderate-income households, and the land is too expensive for the developers of affordable homes.

Yet all three spheres of government and their entities are sitting on much vacant and underused property in and around cities. This surplus land should be used for productive purposes and to support spatial transformation, instead of sterilising development by speculating on the prospect of receiving a lucrative offer in the future.

Releasing this unused land at below market value would make it possible to construct thousands of affordable dwellings, thereby improving access to economic and social opportunities for many hard-working families.

The social housing programme offers a proven model for delivering low-cost rental accommodation in desirable locations. Binding agreements with the developers and managers ensure that the rents remain low and affordable in perpetuity. The programme is also designed to help turn around rundown areas and to prevent unauthorised land occupations.

Social housing usually takes the form of multistorey apartment blocks in safe, well-managed precincts. This kind of residential density is essential to use valuable urban land more efficiently than free-standing houses. About 46,000 units have been constructed to date, with considerable scope for scaling up.

When the policy was introduced more than a decade ago, municipalities were expected just to donate their surplus land to social housing developers, but the financial, administrative and legal complications were not thought through.

A landmark report published this month by a partnership of research and civil society organisations analyses the experiences of the four largest metropolitan municipalities in releasing surplus land for affordable housing. It demystifies the complex disposal procedures and lays out the essential steps to ensure that the land that is sold is actually used for its intended purpose. 

Onerous conditions

The report reveals a minefield of bureaucratic, political and financial hazards and hurdles that cause confusion and impede delivery. Get things wrong or take too long and the land is never developed. Indeed, there have been many examples in which cutting corners caused serious project delays, undermined developer confidence and damaged their relationships with city authorities.

For instance, the legal and regulatory framework that governs land release imposes onerous conditions and consultation processes that cause multiple holdups and make it difficult for municipalities to discount the price of land for social housing.

Many municipalities also lack the development know-how and technical capabilities to prepare land parcels for effective disposal through feasibility assessments, due diligence, legal agreements and formal approvals.

Furthermore, municipalities have not put in place the robust administrative systems and structures required for efficient, responsive decisions. Instead they face repeated internal disagreements about the appropriate price of land and whether it should be used for affordable housing. Progress is piecemeal and depends on sympathetic individuals, when the procedures should be more standardised, embedded and institutionalised.

Political instability and weak leadership mean that sound decisions are not followed through to implementation or are left to be challenged by sceptical residents’ associations and other vested interests. Communities often don’t know what social housing is and default to resisting plans to construct such projects within their areas.

The report also reveals how selected cities are getting to grips with these problems and devising simpler, more transparent procedures that help to create a conveyor belt of appropriate land and to streamline decision-making. This is helping to create greater certainty for developers, restore trust and strengthen delivery.

Shovel ready

The first step is to identify a pipeline of land parcels that are ideally suited to affordable housing. This means investigating the topography of the sites, available infrastructure, transport connections and any restrictions on development. It also means setting aside the land for housing and protecting it from competing claims.

The next step is to package and prepare the sites through basic conceptual designs, feasibility studies, granting planning permission and other formal approvals. This requires better internal co-ordination and more technical skills. When sites are made “shovel ready” for developers in this way, there is a much better chance that projects will get off the ground and far less prospect of things going awry.

It is necessary to agree on the price and method of disposal. Competitive bidding offers advantages in opening up opportunities to new and emerging developers, whereas a negotiated arrangement can do more to build trusting relationships and strengthen institutional capacity. Legal agreements are required at this stage to safeguard the municipal interest in these valuable public resources.

Community participation is essential at several points in the process to improve understanding of what’s involved and to encourage constructive engagement in shaping the outcome. Local knowledge can be highly beneficial, and community consent can play a big part in preventing court disputes, deferred decisions and even physical disruption by disaffected groups.

Public land is clearly a vital but neglected asset for building more equitable and efficient cities. More explicit and deliberate efforts to make this land more readily available would spur public and private investment in affordable housing. The opportunities are immense considering the scale of property lying idle and undeveloped. 

• Turok is chair of City-Region Economies at the University of the Free State. ‘Releasing Municipal Land for Affordable Housing: The Experiences of Cape Town, Johannesburg, Tshwane and eThekwini’ is published by the Development Action Group in collaboration with the Human Sciences Research Council and National Association of Social Housing Organisations. The report can be viewed and downloaded here.

The piece first appeared in Business Day Live on 27 May 2024.

Human Sciences Research Council (HSRC)