Liza Cirolia

The need for a land and asset strategy for the City of Cape Town

Dear Premier Zille,

Nowhere in the world are there limitless resources to address social issues. Cape Town faces extreme constraints and conflicting demands on its limited resources. With a 2.57% annual growth rate, the population is expected to reach 4,42 million by 2030. The majority of this growth is expected to be in the lower quintiles. Existing need and projected growth places increasing demands on the state. Never, therefore, has it been more important that the state use its resources effectively and coherently, within a framework which supports transparency, posterity, and just resource allocation.

Land and property are critical assets. When these are held by the state, it forms part of a collection of public assets. These public assets, can and should be used by the state to fulfil the developmental duties which are its mandate. It is within this context that we need to discuss the value of (public)land, and other immovable assets, which can contribute to the state fulfilling its obligation.

In South Africa, these obligations include 1) to ensure access to adequate housing, as spelled out in the constitution, and 2) to reform the spatial legacy of apartheid, as spelled out in the National Development Plan (NDP) and the Integrated Urban Development Strategy (IUDF). In the Western Cape, the Provincial Spatial Development Framework (Western Cape Government, 2013), and the Cape Town Spatial Development Framework (CTSDF) (CoCT, 2012) consolidate this perspective.

It is nearly impossible to get a firm grip on land assets held by the national, provincial and local government in the City of Cape Town. Without a clear understanding of the extent and quality of vacant and underutilised property which is held by the state, it is nearly impossible to assess if and when land should be bought, banked, developed, or released – and with what (if any) terms attached.

When land and property decisions are made on an ad hoc basis, it is nearly impossible to enable strategic trade-offs between competing imperatives or to ensure that the social, economic, and environmental ‘returns on investment’ can be achieved.

There is clearly a need for a tool which can assist in this process. There is a clear need, before any more choices are made about how to manage government assets, for a move to a ‘portfolio approach’ to the management of land. This requires:

  • Identifying and mapping all state assets (importantly, this means all spheres of government must be included)
  • Building criteria around social, economic/fiscal, and environmental ‘value’ which can be used for assessment
  • Understanding the opportunities for value creation which exist within the portfolio as a whole, including options for trade-offs and balancing

This tool should take into account the short and long terms costs and benefits. A number of studies have shown that the long term costs of sprawling development (i.e. conventional RDP housing) falls heavily on the poor and on local governments operational budgets. See, for example, the FFC (2011) study on ‘The Economic and Fiscal Costs of Inefficient Land Use Patterns in South Africa’ and the Western Cape (2014) study on ‘Municipal Financial Sustainability of Current Spatial Growth Patterns’ – both of which show the incredible benefit of compact development.

Compact development requires densifying existing areas and undertaking the hard work of ‘infill development’ – this could be on existing state land or on land bought with the funds of the sale of other parcels. Currently, these types of projects are a niche, undertaken in parallel to large scale greenfield and peripheral developments, such as the WesCape or (parts of) the Southern Corridor project. This means the majority of the development is on the periphery.

The city’s infrastructural footprint is growing at 1,232ha per annum, thus adding kilometres of new infrastructure which needs to be serviced and maintained. This, in a context of unmaintained existing infrastructure networks/investments, is a clear crisis which can be combatted.  Combatting this requires a complete reengineering of the current system of addressing the needs of the urban poor. This includes radically scaling BACK on sprawling urban expansion and focusing resources and capacity on unlocking and (re)developing on well-located land.

Core to this endeavour is changing the way in which the government departments are assessed. There are clearly conflicted mandates and targets, for example, between the departments responsible for housing delivery and the department responsible for land disposal. Within this context, the departments of human settlements in National, province and the city are all aiming to meet (very ambitious) delivery targets framed largely in terms of ‘sites’ and ‘top structures’.

It is, therefore, not surprising that the focus would be on conventional projects (which can be developed more rapidly), rather than more complex infill developments.  In Cape Town, for example, only 1% of the housing subsidy budget (Human Settlements Development Grant) goes toward Social Housing while over 75% goes into conventional RDP delivery and rollover upgrading (which is basically conventional delivery).  This is in part because it is easier to spend on the latter than the former. [KA3] It is also in part because the Social Housing Sector has slowed down because SHI’s cannot make projects work financially and thus have not invested further into packaging projects.

The Tafelberg Site in Sea Point and its sale, represent:

  1. The importance of having a long term and portfolio-based approach to the management of urban land in the City of Cape Town. If the site was being sold as part of a larger strategy and transparently, perhaps it would be possible to reconcile the trade-offs being made. Until there is a strategy, a bold stance should be taken and no public assets should be sold.  
  2. An opportunity to build higher density and affordable housing for low income people in Cape Town’s CBD.  The site is located along a major transport corridor where densification is both possible and desirable.  This is an ideal location for Social Housing and an area where the private sector would be interested in building gap market housing.

Sincerely,

Liza Cirolia

Researcher at the African Centre for Cities

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