Newland, a new informal settlement near Dunoon. Picture: Henk Kruger/African News Agency (ANA)
Newland, a new informal settlement near Dunoon. Picture: Henk Kruger/African News Agency (ANA)

City has power to tackle Cape housing hurdles but opts to wash its hands of the issue

By Opinion Time of article published Mar 30, 2021

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The following article addresses points raised in the piece by Malusi Booi titled, “Managing informality and growing affordable Cape Town housing through partnerships”:

by Michael Clark

In an opinion piece published on 21 March 2021, the City of Cape Town’s Mayoral Committee Member for Human Settlements Malusi Booi outlined the City’s approach to the delivery of housing, in which he acknowledges that “formal state-subsidised housing cannot be the primary vehicle to tackle the challenges” of housing and that the City needs to “innovate” and to find “new ways of thinking”.

He also writes that they are prioritising “greater partnerships, collaboration, inclusivity and innovation in the human settlements sphere”.

The City’s comments indicate what has increasingly become obvious to poor and working-class people themselves: Cape Town is suffering from an acute affordable housing crisis and something has got to give.

Twenty-seven years after apartheid, Cape Town remains one of the most spatially divided cities in the world with inequality still following race and class lines.

Poor and working-class families (many of whom are Black and Coloured) live in densely populated townships and informal settlements on the outskirts of the city where jobs, transport and social amenities are few, while wealthier families (most of whom are White) live in the well-located and less densely populated areas where jobs, transport and social amenities are plentiful.

While this inequality has its origin in the segregationist colonial and apartheid eras, it has been exacerbated by an affordable housing crisis.

The City’s persistent failure to regulate land and property markets, has resulted in stubbornly high rents and property prices that have excluded poor and working-class families (and disproportionately affected Black and Coloured families).

According to the Centre for Affordable Housing Finance, the average sale price for a home in Cape Town in 2019 was R1 513 254 (the highest in South Africa), a price that less than 5% of households were able to afford.

Cape Town has the largest share of the luxury residential property market (with 41% of the market aimed at providing luxury properties valued at over R1.2 million).

This year, Knight Frank projects that Cape Town is set to have the highest year-on-year property inflation in the world (in line only with Shanghai). And the effect of property inflation is even more worrying when broken down by market share as property prices in middle- and lower-income markets continue to increase pricing lower-income earning families out of the market.

In practical terms, this has meant that the number of available affordable housing units in Cape Town has actually decreased in recent years.

According to data published by Ndifuna Ukwazi (based on 2011 Census figures as adjusted for inflation), 75% of households in Cape Town earn less than R18 000 a month (the figure rises to 92% for Black households), and most people cannot afford to pay more than R3 000 a month in rent or R281 000 to own.

This puts rent and homeownership in well-located areas close to Cape Town’s economic nodes out of reach for most middle-class South Africans, let alone the poor or working class.

And the economic fall-out of the Covid-19 pandemic has only perpetuated existing social and spatial inequalities.

According to the South African National Income Dynamics Study – Coronavirus Rapid Mobile Survey (NIDS-CRAM), the economic impact of the Covid-19 pandemic led to significantly higher rates of unemployment, diminished incomes and higher rates of hunger. Between February and April 2020, 3 million South Africans lost their jobs, and a further 1.5 million lost their income (through being furloughed).

The vast majority of these job losses were concentrated among already disadvantaged groups, with women accounting for up to 2 million of the 3 million job losses.

The second wave of the NIDS-CRAM survey shows that economic impact of the Covid-19 pandemic was also unevenly distributed spatially – with people in rural and peri-urban areas (on the outskirts of cities) being twice as likely to be unemployed when compared to people living in the suburbs.

The exorbitant cost of housing close to Cape Town’s well-located areas has forced most poor and working-class households out to peripheral areas further entrenching spatial apartheid.

The provision of state-subsidised housing has done little to redress these unequal spatial patterns, with housing delivery failing to keep pace with the considerable backlog. In 2019, the City’s housing backlog stood at 365 000 households. And these figures only refer to the families that qualify for fully state-subsidised homes, approximately 75% of the population of Cape Town qualify for some form of housing assistance. In the 2018/2019 financial year, the City provided and upgraded only 5 692 homes.

The overwhelming scale of the need means that the City itself believes that it will be over 70 years before it can eradicate the housing backlog.

But the City’s primary response to the crisis has, in many ways, also exacerbated spatial inequality by prioritising the provision of state-subsidised housing in peripheral areas where land is usually cheaper, which has created ‘poverty traps’ on the outskirts of the city.

Where you live in the city matters – it determines a person’s access to opportunities and the quality of services. Many peripheral areas in Cape Town have limited access to basic services, schools generally perform worse, gang violence is rife, substance abuse is more common, and social amenities are harder to access.

Poor and working-class people spend a disproportionate component of their income and time on unreliable transport – the City itself has found that poor people in Cape Town spend up to 45% of their income on transport, well over the global average of 5-10%.

Critically, research conducted by the Socio-Economic Rights Institute shows that there is a direct relationship between where people live in South African cities and the likelihood that they will find employment. Living on the urban periphery in South Africa therefore ends up trapping the poor and working-class in a cycle of structural poverty.

All this points to a housing crisis where hundreds of thousands of poor and working-class families have been forced to live in undignified conditions in peripheral townships and informal settlements because the City has failed to satisfy the need for housing or redistribute well-located land.

The City is too busy washing their hands of the problem and laying their mess at the feet of anyone they can identify, including claiming the housing crisis is due to a market failure, the national government’s lack of funding and even the result of the very communities the City is constitutionally obliged to serve.

Yet the City has the power to address each of hurdles that it claims are so insurmountable. It has the power to regulate the property market, but has made a policy choice not to do so. This is clear from the Democratic Alliance’s rejection of adopting rent control measures in DA-run cities at last year’s DA Congress.

There are also echoes of this in the City’s resistance to embracing an inclusionary housing policy, which has only really gathered steam after Ndifuna Ukwazi instituted litigation against the City.

The City also has the power to use its own revenue - including the rates and taxes it collects - to develop affordable housing in well-located areas.

In fact, the Constitutional Court has required municipalities to do exactly this in relation to emergency housing in its high-profile Blue Moonlight case.

For all its talk about innovation, Councillor Booi’s comments also mask that the City has squandered every opportunity that has been presented to it to “innovate” and partner with communities – and has outright refused to find ways to “adapt to systems of informality”.

Instead, the City has opted to maintain the same segregationist status quo time while blaming outspoken community groups such as Reclaim the City for its own failures.

The City’s actions show that is frequently chooses eviction and displacement of vulnerable communities over innovation and inclusion.

For example, the City’s court application for a survey and eventual eviction of almost 900 poor and working-class occupiers from Cissie Gool House, the occupied former Woodstock Hospital.

For almost four years Cissie Gool House has offered a refuge and safehouse to poor and working-class families that would otherwise have faced homelessness and displacement as a result of rampant gentrification and evictions in the Woodstock and Salt River areas.

The City intends of pursuing with an eviction despite its own development consultants, Stedone Developments (Pty) Ltd, showing that alternative development options would ensure that any social housing development at Cissie Gool House would include the existing occupiers and prevent evictions or displacement.

The residents have repeatedly sought to engage the City to find “innovative” solutions, but the City has abandoned any engagement process.

Councillor Booi seems to be saying all the right things, but talk is cheap. How are poor and working-class families supposed to trust the City’s unsubstantiated promises, when its actions have proven time and time again that it does not, in fact, take spatial transformation and inclusion seriously? Or are the City’s empty promises just a diversion tactic designed to insulate itself from criticism in an election year?

If the City is genuinely committed to “inclusivity and innovation” it need to take responsibility for its failures, roll up its sleeves and put its money and actions where its mouth is.

* Michael Clark is the Head of Research and Advocacy at Ndifuna Ukwazi.

** The views expressed here are not necessarily those of Independent Newspapers.

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