Building viable human settlements through inclusionary housing programme

Disturbing as it may, the reality that confronts us on a daily basis is that our cities and towns still reflect the hallmark of apartheid spatial designs. Our current spatial development patterns have not yet adequately align themselves to the government's broader transformation agenda for viable human settlements. They have not had desired impact on our cityscapes. Inadvertently, these housing developments continue to perpetuate racial and class differentiation contrary to the remarkable strides we have made in other aspects of our societal life. The economy is growing and expanding and yet the critical toilers of the very same economic infrastructure are perpetually confined in the periphery of our urban centres. The resultant property boom that the country is experiencing continues to benefit the materially advantaged classes while the lower class remains barricaded in poverty-riddled areas. This situation, if allowed to continue unattended, will have dire consequences for our society.

In order to achieve the creation of sustainable human settlements, innovative ways of spatial development have to be explored. Taking a critical look at the government housing strategy it transpires that the idea of mixed-income, mixed-products and mixed-tenure is very central and paramount in changing the face of our suburbia and estates. In essence, the Breaking New Ground (BNG) housing strategy places accent on building settlements that promotes both racial and class integration whilst at the same time promoting economic growth.

In Gauteng , the provincial government proactively commissioned a study on Cost Benefit of Low Income Housing to determine the value and impact of affordable housing on well-located land as opposed to peripheral sites. The study recommended amongst other things that:

• All subsidy linked housing be located in mixed income settlements, on suitable land with higher density mix
• Regulatory and market tools be used to encourage the inclusion of subsidy linked housing in private development
• The development of inclusion zoning standards by local; and provincial authorities requiring certain quotas for low, middle and high income to be met in the site layout of greenfields developments.

As a result of the findings and recommendations of the study, in Gauteng we have come to realise that in order to translate BNG and give impetus to the notion of mixed-income housing development the inclusionary housing policy has to be introduced.

Surely, the concept of inclusionary housing invokes a number of questions which beg for rational answers and exposition. Many of our people will ask: What is inclusionary housing policy all about? How does it differ from many other housing policies this government has promulgated? What benefit does it have for the country?

Prior to addressing these significant questions, it is necessary that we first understand the context in which the idea was first discussed in this country. And it is worth noting and appreciating that inclusionary housing as an international phenomenon is not new but has been applied with great success in many countries of the world such as USA , Canada , Malaysia and many others.

The whole concept first came to the fore for discussion officially in September 2005 during the Housing Indaba initiated by the Minister of Housing, Lindiwe Sisulu, held in Cape Town in which financial institutions, property developers, estate agencies and non-governmental organisations were represented to examine matters relating to housing delivery. Out of intense deliberations a Social Contract for Rapid Housing Delivery was crafted and agreed upon. The contract, in a nutshell, postulates that every commercial housing development not directed at individuals who fall within and below the threshold of R1500 allocates or dedicates a certain percentage of value towards the construction of units for the benefit of those individuals who are largely dependent and qualify for government housing subsidies.

Basically, the inclusionary housing programme is about allowing affordable housing to become an integral part of commercially-driven development aimed at higher income groups. In other words, the high premium housing developments that we have grown accustomed to which are normally executed in affluent areas of our cities and towns modelled in the main on traditional Italian architectural designs of Tuscan clusters, townhouses and expansive golf estates will have to put aside a reasonable value within a certain price range for development of low-income housing units. When we refer to low-income housing, we don't mean the normally “RDP” house but a product that is of good quality and is affordable by people within the lower end of the market and this can be done in various ways using different housing typologies available within government subsidy.

However, in our context in Gauteng we have come to terms with the fact that there is layer of market that both the government and the banks have been neglecting when it comes to housing delivery. This is the market which falls within the threshold of R3 500 to R7 000 and generally regarded as lower middle income market. According to our proposal, the housing products for this category will vary from R87 500 to R175 000 depending on the interest rate and lending criteria of the banks.

Since we have secured the banks' commitments to enter into this market, we are confident that the housing delivery for all will be accelerated. Notwithstanding various issues such as mortgage deposits, registration and transfer costs which are still to be negotiated, the ray of hope is in the horizon.

Furthermore, in Gauteng we have proposed various options for the developers and Financial Institutions to consider regarding inclusionary housing initiative. Without giving details of the proposal, the options include:

• Allocation of 20% of the low middle-income residential developments adjacent to the commercially-driven projects. This option will cover the beneficiaries from matters of high property rates, levies and others.
• Allocation of 20% of these units to be mixed within the main commercially-driven projects. In this option the issues of cross-subsidization or provision of rebates to beneficiaries by the municipalities to be considered.
• Combination of splitting location for lower middle-income residential development.

If this is properly managed, there is no doubt, as shown by empirical evidence in countries such as USA and Malaysia, that at one level the strength and merits of the market induced housing developments will accelerate the delivery of housing for low-income earners. At another level, it will go a long way in addressing the challenges of skewed spatial development patterns by entrenching the fundamental principles of racial and class integration as espoused by our democratic dispensation.

Above all, the inclusionary housing programme is one of the critical instruments we require for deconcentration of poverty and creation of greater access to skill development and job opportunities in the region. It further reinforces the notion of smart growth through the construction of high densities and preservation of space which can be utilise for social amenities. The inclusionary housing programme also creates diverse housing market for diverse labour force which helps to bring all the resources particularly workers close to their places of employment and cutting down on time spent commuting.

Inspite of all the conspicuous merits of the inclusionary housing policy, there are those groups and individuals who still want to hold on myths and fallacious arguments about this policy. Some of their favourite myths are that affordable housing is unattractive and a blight to the neighbourhoods as well as having adverse impact on the values of adjacent residences. This is far from the truth because research has shown that mixed-income housing help raise the standards for good designs in affordable housing and by creating residences that appeal and blend in with the surrounding communities. It has also been shown that mixed-income housing hardly has a bearing on the value of the adjacent properties.

It therefore stands to reason that inclusionary housing policy is what the country needs in order to deal with the issues of racial and class integrated settlements created on the basic values of humanism and economic growth. In addition, this initiative is in concert with our strategic goal in Gauteng to build a globally competitive City Region. I am confident that with the introduction and proper consultation and implementation of this policy coupled with support and co-operation from various stakeholders and institutions we can really make Gauteng a much better place to live in for millions of people.