2 June 2016

Dear Premier Zille,


NASHO is responding to the Western Cape Provinces Department of Works’ announced intention for the freehold disposal of the Tafelberg School site for the use as private school.

We are opposed to the decision on the basis that this is an excellent opportunity for the city of Cape Town and Western Cape Province to work towards greater economic integration of a City that is often considered highly economically and racially segregated. Especially this can be achieved in an economically sustainable basis.

Instead of using this opportunity the Province is intending to use the sale of the site in a way that will entrench economic segregation by making it available for a private school that will anyway serve mainly the well off in Cape Town. In doing so it ignores the opportunity to use the land to achieve important social development objectives that could leverage additional social financial investment from both government and the private sector. In addition, in its original proposals it was intended to release the site on a leasehold basis to let the Province exercise future control over the use of the site. Instead now it is choosing to dispose as freehold thus placing a valuable government asset in the private property market, permanently losing control over its future use.

NASHO is a federation of non-profit Social Housing institutions responsible for the development and the management of well located, good quality, and well managed rental housing stock for people on low and moderate incomes (household incomes R2800 – R7500). Its members have an estimated 30 000 well managed rental housing units mainly in the major cities of South Africa. They work within the framework of government policy and legislation to couple government investment with leveraged loan finance to provide good quality, affordable, well located housing. This in line with the intent of social housing programme to provide the required instruments to help restructure South African Cities economically and racially segregated by apartheid law and practice. The approach is now well tested in many places and is based on a proven business plan.

NASHO has three members who operate in Cape Town and who have established partnerships with the City of Cape Town and who work closely with the Provincial Department of Human Settlements. They manage a total 4 200 units with a proven track record of delivery including rental collections of between 97 and 99%. Historically the Province has provided them with land e.g. Scottesdene but it is more peripheral land that is not at all changing the pattern of inequality of the city.

NASHO did engage with the Province when it first announced its intent to dispose of inner city sites and buildings as part of its urban regeneration programme. Part of this programme intent was to provide more well located ‘affordable’ housing. At this time this seemed very promising commitment from the Province. However conditions in the Terms of reference for calls for the first land/buildings for release made it impossible to achieve viable affordable housing projects in the area.

NASHO and other stakeholders engaged both officials and politicians in the city on these issues. The initial reaction was that there is no ‘business plan’ that permits such provision in better located areas. This was refuted given the existing legislative, policy, and financing framework for social housing. As a result of this dialogue it was agreed to give NASHO and other stakeholders the opportunity to demonstrate a business model for the development of the Tafelberg site. While the WC Department of Human Settlements constructively engaged with this, the department handling the disposal would not participate in any discussion about the prepared feasibility, despite agreeing to it in the first place. Eventually this Department followed a procurement course that excluded the social development dimension as a possibility, despite offers from NASHO to find ways to assist the department at structuring an assessment process that could measure social development value relative to a straight capital return on the land. In April 2014, in response to another call for expressions of interest on the site, a NASHO member Communicare, did submit and outline proposal for a social housing development but received no response. It was only at the end of 2015 that NASHO heard indirectly of the City’s intent to sell the site on a freehold basis for use as a private school.

So our concerns are manifold. In the first place the stated intent of release of land for urban regeneration, and as part of this provision of affordable housing, is not in any way incorporated in the structuring of the conditions of either the proposal call or its assessment. The original intent to use the sale of a valuable government asset for urban regeneration purposes is not manifest in the actual decision to whom and for what to sell. The sale for the purposes of private school, with no future projection on the use of the site, means it is targeted primarily for us by the people in the highest income percentiles in the country, exacerbating the economic spatial divisions in the city. In reaching this decision the Province has ignored the existing examples of good quality sustainable social housing in the city in its consideration of the most appropriate use of the site is a further concern. In addition, this disposal if it goes ahead, it could well act as precedent for the disposal of the rest of the sites, meaning that a number of valuable government assets will be placed in the private market without due regard for their potential to achieve important social development goals. Further there is no guarantee that the capital generated from this sale is ring fenced for re-investment in specific projects that work towards the greater economic integration of the city.

While NASHO initially welcomed the positive and proactive manner that the Province announced its intent, the way in which it has implemented it to date and particularly in relation to this site, belies this intent. On the basis of this NASHO calls for the cancellation of the sale of this and other land and buildings a part of this programme until there is a proper transparent process put in place to ensure that the disposal of such important and valuable assets are assessed for their medium to long term social development potential, rather than merely for their capital return at a point in time. NASHO is very committed to work positively with the Province, City, and other stakeholders to see how this can be done to ensure the achievement of economic integration of the City in line with the stated policies of both the Province and the City.

Also, since NASHO has often before experienced a conflation of social housing with free BNG housing, I attached some photographic examples of Social Housing Projects in Cape Town to show the difference. If anyone involved in this process wants more information please do not hestitate to contact me.

Yours sincerely,

Lawrence Ramashamole

President of NASHO

PDF here.



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