First, the state has been at the centre of delivery - either as a developer (for low-income subsidised BNG-type housing), property manager (for about 50000 rental housing units) or as an investor/financier (in the form of social housing) for subsidised housing.
Despite all the resources invested in housing, Cape Town trends indicate we are decades from delivering any form of sustainable housing solutions for the city. This state-centred approach has precluded, and often discouraged, any form of private investment in low-income and affordable housing from individuals and from financial institutions such as banks.
Second, equally concerning is that most housing developments for the poor are far on the periphery of the city. This form of delivery on the margins of the city must be resisted and curbed in all respects, based on its implications on infrastructure, costly transport costs for poor and working-class households living on the periphery, climate change mitigation, scarce economic opportunities and general well-being of citizens.
The Social Housing projects in Woodstock and Salt River are a great start, but a drop in the ocean of housing demand.
Third, given that it takes the City of Cape Town seven to 11 years to upgrade one informal settlement, it would take close to a century to upgrade all 204 informal settlements. This is without factoring in further land occupations, urbanisation and resolving the issues relating to backyard renters.
Amid this apparent doom and gloom, there are small-scale entrepreneurs and developers who are delivering small-scale rental “micro-units”.
These micro-developers are true entrepreneurs - property owners, developers and property managers operating as one, operating with a shared vision to address market and housing gaps.
Driving through Dunoon, Illitha Park, Milnerton, Joe Slovo and Delft, one can see these new double and sometimes triple- storey buildings mushrooming.
They are offering studio rental accommodation for anywhere between R1500 and R2500. This year, Development Action Group has supported and documented a growing number of such “micro unit” schemes that are either already constructed or being planned at the moment.
Each new development reinforces the message that small-scale developers are delivering in the market segment much faster than the state, while providing locally relevant affordable housing solutions to a market segment that is under-catered at the moment.
Given that the estimated average rental for a one-bedroom apartment in Cape Town is R7000, more than double of what an average South African earns on a monthly basis, it is no wonder these units have a 30-minute vacancy rate.
The micro-units are in high demand and suit the needs of people earning incomes from R5000-R10000 that don’t qualify for a BNG-subsidised house or likely for bank finance. While this new form of micro-units present many opportunities, they also present many risks. There is clearly a niche in the low-income market for such developments. However, these developments need to be aligned with bulk infrastructure capacity (in the form of sewers, water, electricity etc).
Simultaneously, the over-regulation of such developments can inadvertently push the developers to cut corners and build illegally - often leading to building collapse or substandard housing stock.
The Development Action Group believes providing core technical support and encouraging this form of densification could relieve the pressure of housing.
They are also in the process of establishing a Developer Academy to assist small-scale developers in delivering such housing at scale. Financing such developments remains at the heart of such housing delivery.
Creating mechanisms that can provide low-interest equity for small-scale developers will go a long way in creating meaningful housing stock across the city.
Finally, providing property management and maintenance support is essential to ensure exorbitant rent escalation and evictions can be avoided at all costs.
If we have to move beyond the state- centred approach to housing, a complete overhaul of the National Housing Code and current subsidy schemes is needed.
This has to be in recognition of enabling small-scale developers to provide affordable rental housing at scale.
* Aditya Kumar is executive director at the Development Action Group. Previously he worked as deputy director at the Community Organisation Resource Centre.
** The views expressed here are not necessarily those of Independent Newspapers.