Salt River Housing
STATEMENT BY BRETT HERRON
28 August 2019
Delivery of affordable rental units at the Salt River Market has declined by more than one third – from 340 units last year to just 216 today.
When asked about the five cancelled affordable housing projects in Woodstock and the inner City that were cancelled by the Mayor earlier this month, a social housing expert in the room said that “the projects will just die.”
Affordable rental housing in good neighbourhoods is not radical. They enable lower and middle income earners to afford to live in well-located areas. What this would mean is that, like in New York or London, your housekeeper or your child’s teacher could have the opportunity to live in the same neighbourhood as you do. Thus we would begin the true reversal of apartheid legacy.
In South Africa, social housing is the term used to describe affordable rental accommodation managed by government-accredited non-profit housing companies.
This morning the Western Cape Provincial Parliament’s Standing Committee for Human Settlements received a briefing on the progress of the City of Cape Town’s Salt River Market social housing project and several other social housing projects in the Woodstock and Salt River area.
SALT RIVER MARKET PROJECT: PROMISES OF INCREASING THE NUMBER OF SOCIAL HOUSING UNITS EXPOSED AS A LIE
One affordable housing project, the Salt River Market site, has been repeatedly delayed.
In October last year one of the excuses used by the City, and all the DA leaders, for refusing to support the project was because they were unhappy with how many social housing units were included in the mixed use, mixed income, affordable housing development I was asking the Council to approve.
They boldly claimed they were concerned with securing more social housing units.
Today we received the evidence that the delivery of social housing units in that development has been drastically reduced as a result of these political games.
Last year I presented a plan that included 293 social housing units. This was down from the original 340 that was the original plan. That plan had to be reduced following an inexplicable hyper-inflation of the site’s value by the City.
Today the committee learnt that they City’s inflated valuation and delays results in a reduction to just 216 social rental units.
The rejection of my proposal in October 2018 has reduced the delivery of affordable housing, not increased it at was promised by Councillors who were simply reciting the statements prepared for them.
The viability of the Salt River Market project was undermined by gross inflations of the property value – of more than 500% increase in value in less than 4 years – as well as repeated petty delays.
The increased costs and delays have reduced the delivery of sustainable affordable rental housing units by more than one third.
This is tragic given that City experts today estimated that those rental units would be rented out at about 70% less than market-related rentals in the area – in a neighbourhood where more than half of households are tenants and thus highly at risk of rapidly rising rental prices.
THE FIVE WOODSTOCK & INNER CITY SITES WILL SIMPLY DIE
An external expert on social housing was invited to speak to the committee.
She advised that mixed use, mixed income developments was the most sustainable way to deliver social housing units given the high costs of construction and operating these buildings.
These are exactly the type of developments that we envisaged for the five sites in Woodstock, Salt River and the Inner City that have now been cancelled by the Mayor.
Subsidised rentals are made possible through a cross-subsidisation of costs between the social and affordable rentals and the apartments that will be sold or rented at market related prices.
When asked about the five cancelled affordable housing projects in Woodstock and the inner City, cancelled by the Mayor earlier this month, a social housing expert in the room said that “the projects will just die” now that the vision for mixed use, mixed income development proposals has been abandoned.
Pure social housing on any of those sites will be both financially and socially unviable.
This is a massive set back for the delivery of affordable housing in the inner city.
An Extract from an October 2018 City of Cape Town report confirmed 340 social housing units were to be provided in the proposed Salt River Market project. The valuation of the site was subsequently increased by more than 500% (from R13 million to R114 million), reducing delivery of units. Subsequent delays reduced this further still.