Cyber-networking Reflections on the property industry

Reflections on the property industry: A social impact for Cape Town

As the COVID-19 virus started to send people indoors – and various seminars and networking events got cancelled or postponed – SAPOA Western Cape initiated a keynote presenter seminar using Zoom. We recorded and edited the proceedings, and are pleased to make Dr Crispian Olver’s presentation available to all SAPOA members

By Mark Pettipher

As SAPOA’s Western Cape members joined the session on 20 March, Simon Nicks, SAPOA Western Cape Chairman, welcomed the guests to what was possibly SAPOA’s first cybernetworking event.

Dr Crispian Olver, author of A House Divided and How To Steal A City, has been a medical doctor, political leader, environmental activist and public servant. He joined Nelson Mandela’s office in 1994 as the head of planning for the Reconstruction & Development Programme (RDP), and went on to run the Department of Environmental Affairs and Tourism as DirectorGeneral. He’s had a lifelong interest in local government issues and, in 2015, took on the most challenging assignment of his career: heading up an intervention to clean up corruption in the Nelson Mandela Bay metro.

The 15-minute presentation touched on a number of salient points, including that Cape Town is a bifurcated city, and that affordable housing is appreciating out of the lower-value segment. At the same time, that market is not keeping up with demand, with an estimated 360 000 people on the housing waiting list. Due to the lack of affordable housing, lower- and middle-income families are finding it increasingly difficult to buy or rent in well-located areas.

Olver mentioned the concept of property as a key vehicle for accumulating and transferring long-term value, and highlights that there is a certain amount of underhanded dealings in the political arena, with the control of development in the hands of a bureaucratised administrative environment where officials are adverse to taking risk. As part of that bureaucracy, Cape Town’s efficiency rating is beginning to slip. However, the city is still out in front when it comes to issuing building permits.

He went on to explain the value depreciation of projects that experience delays in the planning process, stating that, over a five-year period, the potential loss with regards to return on investment can be as much as six percent. Considering that developers and property owners look to get as much yield as possible, a 9% ROI means that, in some cases, developers won’t break ground.

Community protests also cause delays in developments. Olver showed a slide that indicated there were almost no disruptions in 2006, leading up to 237 in 2018 and a reported 218 disruptions in 2019. He further pointed to a movement – Ndifuna Ukwazi – which has been actively demonstrating against the exclusive use of public land in areas such as Rondebosch, Buitengracht, Harrington Square, Green Point and Fish Hoek. They want to see the land being used to develop affordable housing.

Inclusionary housing has been muted by a number of metros. According to Olver, “Inclusionary housing will not on its own solve segregation and unaffordable housing – but it can work in neighbourhoods that attract market-rate developments.

He spoke about a National Development Plan that incentivises property developers to include a level of affordable housing in their developments, and informed us that the City of Cape Town commenced a feasibility study in January 2020. We look forward to seeing the results when drafting begins in July.

In concluding his presentation, Olver said that cities work through informal arrangements, in which the government and private players work together to make and carry out decisions that shape the way cities function. “This requires partners with a capacity to do something and the will to do it – and a relationship between them that allows them to work together,” he said. “That relationship will depend on common cause, reciprocity, mutual loyalty and trust.”

APRIL 2020

MAY 2020

JUNE 2020