D e p a r t m e n t o f H o u s i n g

2013 1st DRAFT

Draft Municipal Housing Development Plan

2013/14-2015/16

City of Johannesburg Department of Housing

Contents List of Figures .......................................................................................................................... 3 1. Introduction ....................................................................................................................... 5

1.1. Intent............................................................................................................................ 5 1.2. Locating the current effort, and a note on methodology ............................................... 5 1.3. Overarching Strategic Framework: The Sustainable Human Settlements Mandate...... 7 1.4. The GDS as an overarching frame ............................................................................... 8 1.5. GDS: elements of a vision ............................................................................................ 9 1.6. GDS Proposed Response to the Housing Challenges ................................................10 1.7. GDS: Cluster Approach to City’s Planning Process.....................................................12 1.8. GDS: Mayoral priorities in decades .............................................................................13 1.9. Document Outline .......................................................................................................13

2. Analysis ............................................................................................................................15 2.1. Background.................................................................................................................15 2.2. Demographics .............................................................................................................16 2.3. Economy: Employment, Poverty and Inequality ..........................................................19 2.4. Brief Note on the Residential Property Market ............................................................25 2.5. Notable Trends ...........................................................................................................27 2.6. Summative Notes........................................................................................................29

3. Supply Systems and Market Dynamics ..........................................................................30 3.1. Housing Market Segments .............................................................................................30 3.2. Housing delivery methods and funding mechanisms ......................................................32 3.3. Limitations and Tentative Milestones ..............................................................................39 3.4. Institutions, Land and Infrastructure: Capacities and Deficits ..........................................41

4. The Critical Building Blocks: Towards Sustainable Human Settlements .......................46 4.1. Introduction ....................................................................................................................46 4.2. Typologies ......................................................................................................................47 4.3. Densities ........................................................................................................................54 4.4. Incentives .......................................................................................................................55 4.5. Strategic Areas ...............................................................................................................56 4.6. Concluding Notes: ..........................................................................................................60

5. Towards a (Housing) Programme (2013-2016) ...............................................................61

5.1. Introduction .................................................................................................................61 5.2. Initial programmatic proposition ..................................................................................61 5.3. Next Steps ..................................................................................................................67

Bibliography ............................................................................................................................67

List of Figures

Table 1: Schedule of Engagements .......................................................................................... 7

Table 2: City of Johannesburg Population and Household Forecast 2010-2030 (Source, Demacon Ex Global Insight, cited in the SHSUP, 2012) ..................................................... 17

Table 3: Johannesburg region (used here to refer to the Gauteng urban region) Metropolitan Economic Performance Profile pre-, during and post-recession (Source: Global Metro Monitor, 2010) ..................................................................................................... 21

Table 4: Criteria applied in compilation of respective Deprivation Domains (Source: SHSUP, 2012) ............................................................................................................................ 24

Table 5: Summary of various existing housing delivery methods and funding mechanisms (Source: SHSUP, 2012, with minor additions) ............................................... 38

Table 6: Summary of various informal existing housing delivery methods and funding mechanisms (Source: SHSUP, 2012) .................................................................................... 39

Table 7: Limitations of and tentative milestones in improving the existing delivery methods and funding mechanisms .......................................................................................... 39

Table 8: Administrative Functions Shifts through Accreditation and Assignment (Source: DHS, 2013) .................................................................................................................................. 43

Table 9: Proposed Housing Typologies for the City of Johannesburg (Source: SHSUP Annexures, 2012) ....................................................................................................................... 47

Table 10: Measures of Densification (Source: CitySpace, 2009) ....................................... 55 Table 11: Proposed Incentive Package for the City (SHSUP Annexures, 2012) ............ 56

Table 12 Strategic Areas for Development, City of Johannesburg (Sources: GMS, 2008; SHSP 2012) ................................................................................................................................ 56

Map 1: Key national spatial trends, Source: CSIR, 2008 ...........................................................15 Map 2: Spatial Distribution of Deprivation (Source, IDP 2013-2016) .........................................25 Map 3: SHSUP Strategic Areas (Source: SHSUP Model Phase 2 & 3 Presentation, 23 April 2012) ........................................................................................................................................59

Figure 1: SHS Strategic Framework: Legislation to Implementation .......................................... 7 Figure 2: Strategic Framework: Legislation to Implementation .................................................. 8 Figure 3: Joburg 2040 GDS and IDP relations (Source: IDP 2013-16) ...................................... 9 Figure 4: Sustainable Human Settlements plans in relation to the GDS .................................... 9 Figure 5: Size of the Economy, South Africa and Gauteng, 2010 (GVA at basic prices) (Source: Demacon, 2012) .......................................................................................................................16 Figure 6: CoJ Population and Households Movements 2001-2011 (Data Source: GSPCR, 2013) ........................................................................................................................................17 Figure 7: Population Pyramid of the City of Johannesburg, 2011 (Source: IDP 2013-2016) .....18 Figure 8: Migration Patterns by Region of Birth, 2011 (Data Source: GSPCR, 2013) ...............19 Figure 9: Composition and Trends in the CoJ Economy, 2006-2010 (Source: Demacon, 2012) .................................................................................................................................................19 Figure 10: (National) Average househould income by population group (StatsSA, 2011b) .......21

Figure 11: No. of Individuals per Income Group, Johannesburg, 2011 (Data Source: GSPCR, 2013) ........................................................................................................................................22 Figure 12: Johannesburg’s gini-coefficient (based on consumption, 2012) in comparison (Adapted from UN-Habitat, 2012) ..............................................................................................23 Figure 13: Nominal House Price Growth (Houses of 80m2-400m2, up to 3,1 million) ................26 Figure 14: Real House Price Growth (Houses of 80m2-400m2, up to 3,1 million) ......................26 Figure 15: Number of Households by type of dwelling for Gauteng, 2004-2010 (thousands) (Data Source: StatsSA, 2011a) .................................................................................................27 Figure 16: Number of households per dwelling type, Johannesburg, 2011 (Data Source, GSPCR, 2013) ..........................................................................................................................28 Figure 17: No of Households by Tenure Status (City of Joburg), 2011 (Data Source: GSPCR, 2013) ........................................................................................................................................29 Figure 18: Housing Market Segments (Percentage households per income groups) ................30 Figure 19: Housing market segments as defined by national housing policy (Rust, 2012) ........31 Figure 20: Process Plan for Assignment of the Six Metros (Source: DHS, 2013) .....................43

1. Introduction This, the City of Johannesburg’s Municipal Sustainable Human Settlement Plan 2013-2016, is developed in line with section 9(1) of the National Housing Act (no. 107 of 1997, herein after referred to simply as the Housing Act), and in terms of the Guidelines provided in the 2009 National Housing Code. Accordingly, this plan is envisaged in that legislation as a chapter of the City’s Integrated Development Plan—developed at the start of the five year local government term of office, and reviewed annually as contemplated in the Municipal Systems Act (no. 32 of 2000, herein after referred to as the MSA).

1.1. Intent It is intended as a platform for generating a single shared vision accomodation provision that unites all development partners critical in the housing delivery chain for and in the City of Johannesburg. It in that regard purports to guide investment decisions along the housing value chain and across the residential property market in a manner that helps the City achieve its long-term vision, contained primarily in the Joburg 2040 Growth and Development Strategy. It seeks to influence the location, timing, sequencing, resourcing and distribution of housing opportunities, and by extension the distribution of life chances in a manner that simultaneously assist re-structure the city’s form, fabric, and function.

1.2. Locating the current effort, and a note on methodology Four critical efforts with implications for the process and outcome of the current Sustainable Human Settlements Plan (SHSP), namely the 2011-2016 Housing Sector Plan (2011), the Housing Chapter (2012), and the Sustainable Human Settlements and Urbanisation Plan (SHSUP) 2012-2020. The first two processes—the former initiated by the City’s Housing Department and the latter initiated, contracted and funded by the Gauteng Department of Housing—were foundational in that they painted to varying degree the state of accomodation provision in the City, including detailed analysis of the state of informal settlements, and possible migration plans. However, they both did not sufficiently anticipate the changes ushered in by both the Joburg 2040 Growth and Development Strategies (and related strategies emerging nationally and provincially), and did not benefit from the various detailed studies that were done on the state of the residential property market and the strengths and fragilities of existing delivery mechanisms and funding instruments1, inter alia. This document, while drawing extensively from these two processes and their outputs, replaces both the 2011/2016 Sector Plan and the 2012 Housing Chapter. Once completed, and approved, it will become the Housing Sector Plan of the Housing Department and of the City, to be incorporated as a chapter in the IDP as contemplated in the Housing Act and the Housing Code. Given the comprehensive nature of the SHSUP, its engagement with the policy shifts and development dynamics in the city and in the country, and its emergence as the City’s overarching long-term plan for accomodation provision; the current efforts draws from, builds on and complements the SHSUP. It is the five-year plan through which the SHSUP is to be

1 See reference list

implemented, but also one through which it is to be enriched in the frictions of that implementation. At the time of distribution, this initial draft of the document had relied primarily on secondary research (drawing extensively from the City’s own engagement processes and outcomes); and is to evolve into finalization through a series of consultations with critical stakeholders, to be structured as proposed in table 1 below. Stakeholder Group Dates Purpose CoJ Housing (incl. JOSHCO)

08 May 2013 Solicit agreement on draft MHDP objectives; demand, supply options, and market dynamics analysis; and building blocks Deliberate and agree on programme propositions; priorities; targets; and indicators; Revise current projects; generate new projects in line with building blocks and priority programmes

CoJ Housing (incl. JOSHCO)

17 May 2013 Consolidated programmes, and projects presentation

CoJ Departments/MOEs 24 May 2013

Solicit input into and commitments on the draft MHDP

Housing (National/Provincial)

28 May 2013 Solicit input into and commitments on the draft MHDP

Housing Portfolio Committee

June 2013 Solicit input into and commitments on the draft MHDP

Sustainable Services Cluster

June 2013 Solicit input into and commitments on the draft MHDP

Stakeholder Forum (Housing Summit)

June 2013 Solicit input into and commitments on the draft

MHDP

Circulate final draft to all for final input 17 June 2013 CoJ Housing 20 June 2013 Consolidate MHDP for

submission to

Mayoral Committee July 2013 For approval Council July 2013 For approval Table 1: Schedule of Engagements

The sections below reflect, in brief, the strategic framework within which sustainable human settlements are to be built. The chapter engages at some length with Joburg 2040 Growth and Development Strategy (GDS), as it sets the stage more concretely for understanding the development path the City wants to chart more general, and hints about the approach to accomodation provision more specifically.

1.3. Overarching Strategic Framework: The Sustainable Human Settlements Mandate

The City’s vision for housing is to be ‘a home for all to stay and grow – where different housing needs are met in sustainable human settlements providing a range of well-located, good quality, adequately serviced, safe and affordable accommodation opportunities’. It is a vision that is derived not only from an analysis of developmental challenges (relating to sustainable human settlements and sustainable, affordable, quality accomodation) in the City over the years, but also from a national legislative and policy framework anchored primarily around the ‘Housing Act’ and the National Housing Code. From this perspective, it is the National Development Plan 2030 (NDP, more specifically chapter 08: transforming human settlements) and the National Outcome 08 (sustainable human settlements and improved quality of household life) that constitute the latest statements on housing policy in the country (see Annexure A for detailed summaries). Although a far more detailed and comprehensive summary of legislation and policies relating to sustainable human settlements and sustainable accomodation is included as annexure B at the end of this plan, figure below provides a synoptic picture of the legislative framework, the policy and strategic thrusts (national, provincial, and local), and implementation instruments (specific to Johannesburg).

1.4. The GDS as an overarching frame The City’s Joburg 2040 Growth and Development Strategy (GDS), adopted in October 2011, is the overarching long-term strategy embodying the development trajectory the city envisages. It serves as the primary source setting parameters framing all strategies and plans in the City, and contains outputs, outcomes and indicators that the resourcing and implementation of such plans and strategies should contribute towards. It is translated into a five-year (and annually reviewed)

Figure 2 Strategic Framework: Legislation to Implementation

integrated development plan in terms of the MSA and the Municipal Finance Management Act (56 of 2003) as depicted in figure 1.1 below.

Figure 3: Joburg 2040 GDS and IDP relations (Source: IDP 2013-16) In the same vein, the GDS underpins the Sustainable Human Settlements Plan (SHSUP) developed in 2012 (as a 20-year sustainable human settlements plan for the City), which in turn serves as the base upon which the incumbent document (i.e. the Municipal Housing Development Plan (MHDP)) is presaged and premised (see fig. 2.2.)

Figure 4: Sustainable Human Settlements plans in relation to the GDS

1.5. GDS: elements of a vision The GDS commences with an analysis of the current state of development, including dominant trends and challenges that will directly or indirectly affect what the City can and cannot do. These trends include climate change, increasing resource scarcity (mainly water and energy), food insecurity, and rapid population growth. Moreover, it highlights new developments including the adoption of the twelve national outcomes, the global economic crisis, the release of the new growth path, and the formation of the national planning commission; all of which have implications for the City.

The trends emerging means the City must generate capacities to adapt to change, or to be resilient, in order to continue to deliver on its vision and mandate even within the context of limited resources. Human and economic development must occur in ways that do not destroy the natural environment or deplete the natural resources required for the continuation of such development. Such an approach to development is sustainable development. Furthermore, development should produce a city that is liveable, where people’s quality of life is improved by their access to housing, services, infrastructure, leisure, economic opportunities, and decision-making processes.

Resilience, liveability and sustainability are central pillars of the development paradigm of the City, and have to be manifest in the City’s drive for economic growth, human and social development, environment and services, and sound governance. The vision of the City therefore, is to be a resilient, liveable, and sustainable city by 2040.

This vision of the City is broken down into four inter-related outcomes. Outcomes are the state of development we wish to achieve, which are the following:

Outcome 1: improved quality of life and development-driven resilience for all;

Outcome 2: a resilient, liveable, sustainable urban environment—underpinned by infrastructure supportive of a low-carbon economy;

Outcome 3: an inclusive, job-intensive, resilient and competitive economy that

harnesses the potential of citizens; and the Governance Cluster for outcome; and

Outcome 4: a high performing metropolitan government that pro-actively contributes to and builds a sustainable, socially inclusive, locally integrated and globally competitive Gauteng City Region.

Each outcome is further broken down into specific outputs (what we must produce or deliver) and indicators (what we use to measure progress). The outputs for outcome 2, where the Housing Department’s work is primarily located, are:

Sustainable and integrated delivery of water, sanitation, energy and waste;

Eco-mobility;

Sustainable human settlements; and

Climate change resilience and environmental protection.

1.6. GDS Proposed Response to the Housing Challenges The GDS identifies a number of challenges in relation to sustainable human settlements (output 3 of outcome 2), which include among other things, (a) focus on growth management, housing development that follows infrastructure and cheap land (even if poorly located), and (b) housing development delinked from amenities, economic activity and other livelihood resources. These have consolidated apartheid spatial patterns in terms of the distribution of life chances.

The alternative proposed is one that treats sustainable human settlements as part of a bigger agenda of building liveable communities. This will require the City to move beyond managing the outward growth of the City (which is important) to identifying a set of projects whose primary aim will be to transform the form and structure of the city. These can range from large scale transportation projects to housing projects, among other things.

There will be a need to focus more on mixed housing developments that provide a range of tenure options (rental and ownership), and typologies (detached, semi-detached, high-rise, etc). Low (or affordable) rental options should be prioritised, to help the City absorb the high numbers of people entering the city in search of work on a daily basis. Strategic land banking and release is recommended to help reverse the habit of housing development on the periphery of the City where land is cheap and available. Housing development must be linked to economic development, where residential development becomes a critical element in nodal and corridor development initiatives of the City. Linkages with transport planning and land use management will be crucial, to assist among other things with densification. Even as it adopts the pessimistic but perhaps sober view that informal settlements may never be eradicated, the GDS places putting informal settlements on the path to sustainability at the heart of the housing agenda for the medium term. This is to be achieved through ensuring access to basic services and amenities, facilitating own construction of housing (self-help), and insisting on mixing incomes in existing and new projects.

Progress made on sustainable human settlements will be measured primarily against a Sustainable Human Settlements Index, which will be the main indicator for sustainable human settlements in the City. Further, as part of the process embarked upon to solicit independent input into the GDS, a panel of the experts in the housing field were commissioned to write papers on sustainable human settlements. These papers were intended to make a contribution towards assisting the City to translate the GDS ideals into concrete programmes for the medium term. The first proposal is the need for the City to speedily acquire Assignment of Housing Functions (formerly known as level three accreditation status). The Assignment will allow the City to do the following:

Beneficiary management, subsidy budget planning and allocation, and priority programme management and administration;

Full programme management and administration of all housing instruments/programmes; and

Financial administration.

Thus far, the City has in the 2011/12 financial year acquired Level 2 Accreditation status, which entails all of the above with the exclusion of financial administration. The Department targets acquiring Assignment in the 2013/14 financial year. The second proposal relates to finding new ways of building, designing and providing energy sources to the City’s integrated human settlements (i.e. build green houses). The third is designing a coordinated approach to land identification, acquisition, and development; and diversify sources and instruments of housing finance.

If these alternatives are translated and/or integrated into the work of the Department and its entities in the next four years to 2016, the City will be building sustainable human settlements, contributing to the resilient, liveable, sustainable urban environment (underpinned by infrastructure supportive of a low-carbon economy) that the City aspires to.

1.7. GDS: Cluster Approach to City’s Planning Process In order to give effect to the GDS and to ensure the alignment among the departments and the entities that contribute towards similar targets, the Mayoral Committee approved a cluster approach to the planning process which focuses on the medium term. Four clusters were created, namely:

Sustainable Services; Human and Social Development; Economic Growth; and Governance.

The Cluster approach is designed to improve integration between the various departments and entities. This means that the various work streams that each cluster focuses on must feed into the other outcomes, for instance, it is a well-governed city that can deliver sustainable services (roads, electricity, etc.), and grow the economy in a manner that improves the quality of life for everyone. These linkages will enhance cooperation between departments and entities towards the realisation of these outcomes. Generally, built environment programme interventions are largely located within the Sustainable Services Cluster, which is accountable for outcome 2, namely ‘a resilient, liveable, sustainable urban environment—underpinned by infrastructure supportive of a low-carbon economy’. The Sustainable Services Cluster Plan, its outputs and IDP master programmes therefore amount to critical deliverables that must underpin all efforts at building sustainable human settlements in the City. These IDP master programmes are:

Integrated planning, policy development and standard setting; Land management and acquisition; Urban water management; Green ways and mobility; Integrated waste management; Shift to low-carbon economy; Transit orientated development; Resilience for climate change; Informal settlements to sustainable human settlements; and Growth Management Strategy (GMS) High Priority Area Based Planning and

Implementation. Five of these 10 programmes were presented by the Executive Mayor in his 2012 State of the City Address as part of the City’s Flagship Projects for the current Mayoral term. These are:

• Urban water management;

• Green ways and mobility; • Integrated waste management; • Shift to low-carbon economy; and • From informal settlements to sustainable human settlements

These master programmes and flagship projects point to the shifts that must be made in the delivery of housing (a central element) (and) in the building sustainable human settlements in the City. First, integrated planning, policy development and standard setting; and land management and acquisition relate to the consolidation of processes and instruments that are critical inputs into city building. Second, urban water management; integrated waste management; shift to low-carbon economy; and resilience for climate change relate to changes in practices (to be reflected in both design and use) that will minimize the resource inefficiencies currently characterizing built environment design and use. And finally, Growth Management Strategy High Priority Areas and Transit Oriented Development point mainly to the desired spatial form that all public (and private) investments within the city should directed towards (re-)producing.

1.8. GDS: Mayoral priorities in decades In October 2012, a Mayoral Lekgotla resolved to consolidate the GDS outputs and outcomes and the various programmes that followed into a set of priorities to be prioritised by decades. This was done, inter alia, to ensure that there are visible efforts (by departments, municipal entities and by extension clusters) towards changing course as envisaged in the GDS; that there is integration across clusters and across programmes; and that direct links are made between the long-term outcomes and annual outputs2. The City’s priorities as per the resolutions of the said Lekgotla are as follows3:

1. Financial Sustainability and Resilience 2. Agriculture and Food Security 3. Sustainable Human Settlements 4. SMME and Entrepreneurial Support 5. Engaged Active Citizenry 6. Resource Resilience 7. Smart City 8. Investment Attraction, retention and expansion 9. Green economy 10. Safer Cities

Although the focus of the current term of office will be on the first five of the ten priorities, the current document, and the business implementation plans that will evolve from it, will have to align to all of the ten priorities. The implications of these priorities for housing development are explored programmatically in the last chapter of this document, which proposes housing interventions for the remainder of the term of office.

1.9. Document Outline The remainder of the document is organized as follows: (a) chapter two provides a situational analysis to gauge (even if not comprehensively) the level of development in the City (more

2 IDP 2013-2016, City of Johannesburg 3 See Annexure C for a detailed summary

generally but with particular emphasis on trends affecting or determinant of accomodation demand and supply); (b) chapter three reflects on the housing market in terms of the segmentation, delivery instruments and funding mechanisms; (c) chapter four unpacks the critical building blocks critical to strategies for accomodation provision in the city measured against the City’s and national developmental priorities; and (e) chapter five concludes with propositions upon which programme targets, projects, and indicators are to be anchored4

4 These will be detailed once internal deliberations in the Department have unfolded, and will form the last chapter of this document, i.e. chapter six

2. Analysis

2.1. Background

Gauteng occupies 16 548 square kilometers of South Africa’s total area, yet hosts 12,3 million people (StatsSA, 2011a). This translates to 22.39 percent of the country’s population concentrated in only 1.4 percent of its total square kilometers area. The small but densely populated province’s overtaking of KwaZulu Natal as the province with the largest population is partly accounted for by the high inflows (34 percent of all intra-provincial migration flows) from other provinces and the sub-continent (StatsSA, 2011a). These high rates of inflows owe to the strategic role the province plays in the country’s economy. Comprised of three of the six metros and several secondary cities and towns, the province contributed about 39.8 percent to the country’s gross domestic product by 2007, and about 30 per cent to the employment (CSIR, 2008a). It is home to about nearly 50 percent of all high-income people in the country, but also to about 13. 61 percent of people living below the minimum living level (ibid). It is a polycentric city-region and forms the economic and financial hub of the country.

Map 1: Key national spatial trends, Source: CSIR, 2008b

The concentration of economic activity and population in small urban regions, dominated by Gauteng as shown in map 1 above, represents the uneven development characterizing South

Gauteng

Africa’s space economy. The city of Johannesburg is at the core of the Gauteng city-region, economically and geographically. It is surrounded by the metropolitan areas of Tshwane and Ekurhuleni, and the West Rand and Sedibeng Districts, which together constitute the remainder of the 16 545 km2 Gauteng province area. Figure 5 below, it contributes some 38.9 per cent to the province’s economy.

Figure 5: Size of the Economy, South Africa and Gauteng, 2010 (GVA at basic prices) (Source: Demacon, 2012)

2.2. Demographics

The 2011 Census places the city’s population at approximately 4.4 million people, which constitutes about eight percent of the national population (and 36 percent of the Gauteng population), and represent a percentage population increase of about 37 percent in the ten-year period between 2001 and 2011.

The number of households has increased from 1.1 million in 2007 to 1.4 million in 2011, an increase by some 23.2 percent. Measured over a ten year period, the rate of household formation in the City has outpaced that of population growth5.

The population and households movements depicted in figure 6 outpace both the base and high growth scenarios in the population forecast (2010-2030) done by Demacon in 2012 for the City’s 2012-2030 Sustainable Human Settlements Urbanisation Plan (SHSUP). As shown in table 2, the current population of approximately 4.4 million is put at year 2030 in the base scenario and at year 2020 in the high growth scenario, whereas the current 1.4 households are envisaged for 2015 in both the high growth and base scenarios. This discrepancy is critical, as the Housing Demand and Supply Opportunities Model developed as part of the SHSUP was based on the base scenario, which was itself based on the ‘“best guess” for the various demographic

5 CoJ GSPCR, (2013). Census 2011 Analysis and Results for the City of Johannesburg: A Comparative Analysis between 2001 and 2011

variables, and includes a trend of urbanisation decreasing over time’ (SHSUP, 2012: 32). New projections are required, for greater accuracy in the quantification of housing demand and supply in the City up to 2030 and beyond.

Total Population

2010 2015 2020 2025 2030 Difference 2010-2030

Low 3 650 310 3 715 745 3 744 788 3 741 030 3 709 514 59 203 Base 3 710 295 3 893 159 4 053 491 4 191 258 4 300 882 590 588 High 3 753 316 4 083 156 4 496 996 5 078 780 5 814 687 2 061 371 Total No. of Households

2010 2015 2020 2025 2030 Difference 2010-2030

Low 1 263 557 1 367 524 1 445 215 1 503 016 1 548 375 284 817 Base 1 278 814 1 417 617 1 538 149 1 645 588 1 744 881 466 068 High 1 288 384 1 467 136 1 660 849 1 918 908 2 230 807 942 423 Table 2: City of Johannesburg Population and Household Forecast 2010-2030 (Source, Demacon Ex Global Insight, cited in the SHSUP, 2012)

Figure 6: CoJ Population and Households Movements 2001-2011 (Data Source: GSPCR, 2013)

There was a 2.1 percentage increase in the number of male-headed households and a corresponding decline in the number of female-headed households; this against a population comprised mainly of males (50.2 per cent) than females (49.8 per cent). The population growth was marked by a notable increase in the number of Africans (3.4 per cent increase) and a considerable decline in the number of Whites (-3.7 per cent), coupled with a slight increase and decrease in the number of Indians and Coloureds respectively. In its spatial trends report, the

CSIR concludes that when analysing the racial distribution of population growth in the period between the years 2001 and 2007; the biggest percentage increase (14 per cent) in the Black population growth occurred in the City of Johannesburg (CSIR, 2008a). Consequently, Africans are the dominant group (at 76.4 per cent) and Indians/Asians are the smallest at 4.9 per cent.

As is discernible from fig. 2.3 below, the City’s population is comprised mainly of young people between the ages of 25-29, and between the ages 20-24 and 30-34. These are the people constituting much of the economically active population, and are therefore the preponderant proportion of the 25 per cent unemployment rate in the City.

Figure 7: Population Pyramid of the City of Johannesburg, 2011 (Source: IDP 2013-2016)

About 562, 952 people living in Johannesburg (12.7 per cent of total city population) are international migrants, 7.5 percent of which come from the South African Development Community (SADC) region. This represents the group with the highest percentage in-migration increase (9.8 percent) in the city between 2001 and 2011, followed by Limpopo (at 8.6 percent increase) and KwaZulu-Natal (at six percent increase). As shown in figure 8 52 per cent of migrants came from the Gauteng province itself, 12.5 percent from outside the country, and Limpopo, KwaZulu-Natal and Eastern Cape stand out as dominant provinces of birth for most of the City’s migrant population. On the overall, 48 per cent of the city’s population was born outside of the Gauteng region.

Figure 8: Migration Patterns by Region of Birth, 2011 (Data Source: GSPCR, 2013)

2.3. Economy: Employment, Poverty and Inequality

Johannesburg is arguably the largest local economy in the continent. In 2001 alone, the City’s economy generated 40 percent of all exports and sourced 21 percent of imports (CSIR, 2008a: 19). With a growth rate of about 4.3 percent per annum between 1995 and 2007, the City’s economy generated an employment growth of 2.7 percent (which translates into 29 639 job opportunities) annually (SHSUP, 2012: 31).

Figure 9: Composition and Trends in the CoJ Economy, 2006-2010 (Source: Demacon, 2012)

Even as it started off as a mining town; the finance, insurance, real estate (FIRE) and business services sector dominates the City’s economy, contributing some 33.5 percent to the City’s economy by 2010; whilst manufacturing declined by some 2 percent between 2006 and 2010 (See figure 9 above). While figure 2.5 shows that this sector overall stabilised at some 33 percent between 2006 and 2010; finance (the fastest growing industry since 1997-1998) dipped from a high of 12.3 percent in 2007-2008 to an all-time low of -2.3 percent in 2008-2009 (Demacon, 2012).

This can be explained by the fact that the finance sector was at the centre of the recent global economic recession as a source and a transmission channel, and its dominance in Johannesburg economy should account partly for the City’s steep decline in economic growth performance in 2008/2009 to -1.5 percent from some 6 percent the previous year. For as the 2010 Global Metro Monitor Report concluded, the ‘Johannesburg metropolitan region holds the unfortunate distinction of being among the few metros outside Europe and the United States that were hit hardest by the recession’6.

As shown in table 3, while both Gross Value Add (GVA) per capita and employment showed a marked decline in the recession period; employment continued on a downward spiral even as the economy was regaining momentum (even if slow and marginal) in the recovery period (2009-2010). According to Quantec Data (2012, cited in IDP, 2013/16), the City’s economy is expected to recover to some 5 percent growth rate by year 2016; with possibility to stimulate investment and risk appetite starting in the current financial year (2012/13). These trends in the economy, not only affect investment decisions in the property market (including the residential property market), including decisions by finance to extend mortgage finance to households, but also households’ own ability to access credit, to make repayments and/or to pay for municipal services. Pre-

Recession (1993-2007)

Recession (2008-2009)

Recovery (2009-2010)

Population 2010(million)

GVA per Capita 2007 ($)

GVA per Capita Change

Employment Change

GVA per Capital Change

Employment Change

GVA per Capital Change

Employment Change

Johannesburg

7.261 8.507 1.9percent

2.5percent

-3.7percent

-4.8percent

1.4percent

-4.2percent

South Africa

49.173 5.052 2.0percent

0.8percent

-2.6percent

-4.2percent

2.4percent

-3.3percent

6 Global Metro Monitor, 2010 The Path to Economic Recovery: A Preliminary Overview of 150 Global

Metropolitan Economies in the Wake of the Great Depression. Metropolitan Policy Programme, The Brookings Institution

Table 3: Johannesburg region (used here to refer to the Gauteng urban region) Metropolitan Economic Performance Profile pre-, during and post-recession (Source: Global Metro Monitor, 2010)

Income/inequality The average annual household income for South African households increased from R48 385 in 2001 to R103 204 in 2011 (a percentage increase of 113 percent). Gauteng has the highest average annual household income at R156 243, and Limpopo the lowest at R56 844. These sharp contrasts might mean that the high population outflow from Limpopo into Gauteng may continue unabated in the next few decades, if the public investment prioritisation advanced in the 2006 National Spatial Development Perspective is anything to go by7. This means increased service delivery pressures for Gauteng and its metros (in particular). The doubling in the general income of individuals in the ten years between 2001 and 2011 in the city has not amounted to the narrowing of the inherited income inequality gaps. As the Built Environment Performance Plan (BEPP) (CoJ: 2011b: 10) sums it, ‘the income of the richest 10% of the population increased at an even faster rate and if a comparison is made between the rich and the poor, a deep structural nature in South Africa is exposed’. Apartheid distributed life chances unevenly across the different population groups, and the current patterns of income distribution reflect these etched disparities. In Johannesburg, Whites still earn 5.3 times more than Africans, 2.5 times more than Coloureds, and 1.4 times more than Indians/Asians (see figure 10 for the average household income by population group in 2011).

Figure 10: (National) Average househould income by population group (StatsSA, 2011b)

Even as there was a 4.6 percent decline in unemployment, it remains at 25 percent in 2011 (at 30 percent if calculated using the broad definition). Income inequalities, as reflected by the Gini Coefficient measure, stood just 0.6 in the City in 2009 (CoJ, 2011b). This means the City

7 The NSDP argues that ‘government spending on fixed investment should be focused on localities of economic growth and/or economic potential in order to gear up private-sector investment, to stimulate sustainable economic activities and to create long-term employment opportunities’ (The Presidency, 2006: iii)

remains one of the most unequal in the world (see figure 12 below). According to the BEPP, citing Global Insight, about 21.6 percent households lived below poverty income in 2008.

Figure 2.7 shows that about 3 151 203 people in the City earn between R0 and R6 400, translating into some 71 percent of households belonging in the subsidized and finance-linked subsidized housing markets where the state is the primary delivery agent. About 5 percent are in the entry level bonded market, earning between R7, 500 and R15 000. Only about 9.1 percent of the population constitutes the high to middle income bonded market.

10117

15607

50694

122274

205638

234291

293329

398055

336829

111158

311086

1700764

0 1000000 2000000

R204 801 or More

R102 400-R204 801

R51 201-R102 400

R25 601-R51 200

R12 801-R25 601

R6 401-R12 800

R3201-R6400

R1 601-R3200

R801-R1 600

R401-R800

R1-R400

No income

Number of people perIncome Group 2011

Figure 11: No. of Individuals per Income Group, Johannesburg, 2011 (Data Source: GSPCR, 2013)

Figure 12: Johannesburg’s gini-coefficient (based on consumption, 2012) in comparison (Adapted from UN-Habitat, 2012)

Poverty

The University of Oxford and the Human Sciences Research Council collaborated with the City in 2008 to develop a Deprivation Index, measuring poverty across themes of income, employment, health, education and living environment (see table 4 for criteria applied under each theme). The outcomes of the research on the deprivation index in the City show spatial concentrations of poverty across all measures in certain parts of the City. Interestingly, as can be seen in the map 2.2 below, some of the starkest concentrations of poverty are in what the City acknowledged as the Marginalised Areas, represented more vividly by what were hitherto dormitory townships.

Income and Material Deprivation Domain

Number of people living in a household that has a household income<40percent of the mean

equivalent household income without a refrigerator with neither television and radio

Employment Deprivation Domain

Number of people who are unemployed not working due to illness or disability

Education Deprivation Domain

Number of 10-65 year olds who have no schooling at secondary level or above

Living Environment Deprivation Domain

Number of people living in a household that have no access to a telephone has no piped water inside the dwelling or yard nearby has no use of electricity for lighting is a shack has neither a pit latrine with ventilation nor a flush toilet has two or more people per room

Table 4: Criteria applied in compilation of respective Deprivation Domains (Source: SHSUP, 2012) It is in Region G that the highest concentrations of poverty manifest themselves, followed by regions A and D8 (IDP, 2012/2016: 15). Region B has the lowest number of people living in poverty across the entire City. There is a convergence between the location of informal settlements and concentrations of poverty across the city, e.g. Region B has the lowest number (only four) of informal settlements in the City.

8 Includes the areas of Ivory and Ebony Park, Kaalfontein, Diepsloot, Zandspruit, Cosmo City, Princess Plots, Alexandra, Tshepisong, Slovoville, Braamfischerville, Stormhill, Greater Orange Farm/Drieziek/Stretford, Eikenhof, inter alia (SHSUP, 2012: 42)

Map 2: Spatial Distribution of Deprivation (Source, IDP 2013-2016)

2.4. Brief Note on the Residential Property Market Drawing from ABSA’s House Price Indices, a low nominal year-on-year house price growth was recorded in 2011 for the houses in the 80m2 -400m2 size category i.e. small, medium-sized and large homes in the middle segment of the South African housing market (Demacon, 2012). Partly accountable for this decline in house price growth is rising inflation, high debt levels, damaged credit records and tight labour conditions, which together had the cumulative effect of undermining demand for housing and mortgage finance (ibid). Even within the ambits of this overall trend, the small-sized home price growth outperformed the more expensive medium and larger-sized home prices growth rates, and the Full Title segment’s house price growth (6.3 percent year on year, 3rd quarter, 2011) outperformed the Sectional Title’s house price growth rate in the same quarter (1.1 percent year on year, 3rd quarter, 2011) (Demacon, 2012). It is interesting that in the same year, even as the house prices were growing negatively, there was a 12.8 percent increase in the number of building plans approved, from some 32 666 units

in 2010 to 36 863 units in 2011. The highest proportion of this growth was in the high-density segment, of townhouses and flats. However, there was a decline in the same segment in terms of actual residential building activity in the form of building plans completed.

Figure 13: Nominal House Price Growth (Houses of 80m2-400m2, up to 3,1 million)

Figure 14: Real House Price Growth (Houses of 80m2-400m2, up to 3,1 million)

There was, despite the slowdown in total residential transactions volumes in 2011, a significant increase in the percentage of first time home buyers, from 17 percent in 2010 to 23 percent in 2011; the highest since 2005 (FNB Estate Agent Survey, 2011, cited in Demacon, 2012). The same survey reveals that there has been improvement in the capacity of first time buyers to produce money for deposit and transaction fees. Assesed in terms of price relative to average employee remuneration, home affordability for the average income earner has improved signicantly owing variously to (a) average wage growth outstripping growth in house prices; and (b) a major drop in interest rates. However, given other pressures weighing on the household sector (e.g. sharp municipal rates and tarrif increases, increasing fuel and food prices), and limited household income growth in the post-recession period, this improved affordability is likely to be undermined.

2.5. Notable Trends

Figure 15: Number of Households by type of dwelling for Gauteng, 2004-2010 (thousands) (Data Source: StatsSA, 2011a) In the years between 2004 and 2010, there has been an increase in Gauteng in the number of households living in backyard shacks in established residential from 215 000 to 382 000 (StatsSa, 2012, see figure 15). In contrast, the number of people living in informal settlements has fluctuated from 350 000 in 2004, reached a high of 481 000 in 2009, and declined once more to 409 the following year (ibid). The number of households living in a room/flatlet that is not in a backyard has hovered around approximately 100 000 since 2004, whilst the number of

households in a room/flat/house in a backyard increased from 158 000 in 2004 to an all-time high of 305 000 in 2006 and decreased back to 246 000 in 2010. It is interesting that whereas the number of households living in a town/cluster/semi-detached house has been declining from 2004 to 2006, the number rose sharply to 197 000 (from 120 000 in 2008) in 2009, in the middle of the global economic recession.

Figure 16: Number of households per dwelling type, Johannesburg, 2011 (Data Source, GSPCR, 2013) In Johannesburg, 53% of households lived in a house or brick/concrete structure on a stand/yard/farm in 2011. Only 10% of households lived in a town/cluster/semi-detached house (close to the total percentage for the province for 2010, which is 9.7%). 8.8% live in informal settlements, 8.6% backyard shacks, reflecting 3.9% decline in the number of households living in informal settlements and the 1.1% increase in the number of households living in backyard shacks. The 8.6% of households in backyard shacks, combined with the 6.7% of households in a house/flat/room in backyard and the room/flatlet on a property or a larger dwelling, represent the phenomenon of small-scale rental accomodation prevalent in the city as one dominant accomodation option.

Moreover, as depicted in figure 17 below, 24% of the households in the City own the properties they occupy, and 16% more are still repaying their bonds. Together, the two groups of households, account for 40% ownership by households in the City of the property they occupy. On the other hand, 41% of households are renting the properties they occupy whilst another 16% occupy properties rent-free. The tenure status of 3% of households is unaccounted for.

Figure 17: No of Households by Tenure Status (City of Joburg), 2011 (Data Source: GSPCR, 2013)

2.6. Summative Notes

The large number of international immigrants increases the demand for especially rental accomodation in the City, and may compound the challenge of non-qualifiers in the formalisation of informal settlements.

The dominance of financial services in the City’s economy exposes it to the volatilities of the global economy, in which finance was the main source and dominant transmission mechanism in the last crisis. These volatilities inevitably affect investment appetite, scale and scope in the residential property market; the ability of banks to extend mortgage finance and credit to consumers; and the ability of consumers to repay their bonds and pay for municipal services.

The growing regional disparities reflected in the income disparities of households in the

different provinces, coupled with the migration patterns that follow are likely to result in increased urbanisation pressures in Gauteng. These pressures include a growing housing and services backlog that the City will have to meet.

The increase in the number of households in backyard shacks and rooms/flats/house in backyard might be symbolic of an increased need for small-scale rental accomodation in the City; while the growth in town/cluster/semi-detached houses might be signaling a necessary move away from the stand-alone top-structure characteristic of current public housing projects and golf-estate developments.

3. Supply Systems and Market Dynamics 3.1. Housing Market Segments

Figure 18: Housing Market Segments (Percentage households per income groups) (Source: NHFC, undated) The South African housing market can be segmented into the income groups and corresponding funding mechanisms illustrated in figure 18. Using the 2001 figures (which are retained here simply for illustrative purposes9), about 94.1 percent are in the subsidy housing market. These benefit directly and fully from the various government housing programmes and 9 For the 2011 Census results may change the actual picture in terms of percentage under each income

category, although it would not change the funding mechanisms corresponding to each of those categories

funding mechanisms, while about 12.2 percent of households in the middle to upper income rely on either financial institutions for home loans and/or micro-lenders for micro-finance. Between these two extremes are those that cannot access both the full housing subsidy from the state (they earn too much), and mortgage finance from the financial institutions (they earn too little). These qualify for assistance under the Finance Linked Individual Subsidy Programme (FLISP) administered by the National Housing Finance Corporation (NHFC). This segmentation is summed by national housing policy as comprised of the RDP subsidy housing market; FLISP housing market; and the normal housing market (see Rust, 2012). Brought together, if the funding instruments and delivery mechanisms are harmonized in systemic and systematic ways, these together constitute the totality of the South African housing property market.

Figure 19: Housing market segments as defined by national housing policy (Rust, 2012)

The current housing budget translates into a delivery rate of just below 250 000 units per annum at national level, enough to eradicate the current backlog if achieved in actual terms but not sufficient to deal with the total backlog growing annually through urbanisation and new household formation (Rust, 2012). The dominance of grant funding from the national fiscus in housing finance may be unsustainable in the long term as demand for shelter is already high and growing, and there are continued escalations in the prices of land, building material, and the cost of infrastructure development10. The cheapest newly-built house in the market is at present at about R300 000 is beyond the means of household earning about R7000 a month, limiting options for those in the FLISP market. This affordability challenge prompted the Financial and Fiscal Commission to argue that ‘the current subsidy system distorts prices in the gap market’, a situation whose gravity is deepened by ‘the current levels of unemployment and household debt that affect households’ 10 Yasmin Coovadia Development Consulting: A Cursory Assessment of Funding for Human Settlements

ability to save and raise finance’11. Moreover, the rate of construction of housing units in the affordable housing segment (i.e. houses between R250 000 and R300 00) has been negative since 2009; registering only about 6.252 new units priced between R250 000 and R500 000 in 2010 (according to the Affordable Land and Housing Data Centre, cited the FFC, 2012). This reflects low levels of delivery in a submarket with high levels of demand. The traditional mortgage market (or the normal market), despite the defaults that accompanied the 2008-09 economic crisis, has the highest proportion of mortgages. According to Melzer (2010, cited in the FFC, 2012), residential mortgages as a percentage of total credit extended to private sector stood at 39 percent, which also translates to 31.7 percent of the GDP. However, this market, as already alluded to, caters only for about 10-15 percent of households.

3.2. Housing delivery methods and funding mechanisms Table 5 provides a summary of the various housing delivery methods and funding mechanisms currently existing that constitute the supply streams in the residential property market.

Formal Housing Delivery Method

Funding Mechanism Tenure Options

Type of Response/ Solutions

Subsidy

Subsidized Income Group: R0-R3,500 (per household per month) “RDP” Housing Delivery-National

Subsidy provided by National Government for the construction of housing units (top structure). The subsidy amount is dependent on the amount and quality of housing units to be built. The beneficiaries of each housing project are selected according to the national housing waiting list Certain RDP projects may qualify for the USDG-developed as an instrument to address linkages between public housing and economic growth to simultaneously contribute to human

Full ownership

New house on owned stand

Project linked

11 Financial and Fiscal Commission: Report on the Public Hearings on Housing Finance

settlements. It achieves this through:

Land acquisition Bulk

infrastructure provision

Informal settlements upgrades

Reticulation of services for integrated housing developments;

Project packaging

Better alignment of priority programmes in funding sources given to national, provincial and local government

Gauteng Backyard Rental Programme

The Affordable Rental Accomodation Grant is given to qualifying landlords to repair and rebuild backyard accomodation

Rental Informal and backyard solution

Individual Subsidy

Upgrading of informal settlements programme (UISP)-National The upgrading of informal settlements programme (UISP) is a policy

Municipalities will assume the role of developer and will identify informal settlements to be upgraded and apply to the Provincial Housing Department for funding. Subsidies are given to individuals. These projects may also qualify for the

Full ownership

Individual Subsidy Project Linked

response to the growth of informal settlements and supports the Presidency’s Outcome 08, to upgrade 400, 000 households in informal settlements through provision of secure tenure and access to emergency and basic services

Urban Settlement Development Grant (USDG)

People’s Housing Process (PHP)-National If individuals want to build homes themselves, this programme supports them to access various kinds of subsidies

A support organisation must be established that then approaches the provincial/regional office to make a project application on behalf of applicants. Access is then provided to subsidies as well as other support measures

Full ownership

New house on owned stand

Consolidation Project-linked Institutional & Rural Subsidies

Community Residential Units (CRU)-National Development or refurbishment

CRU programme provides a subsidy for the total costs of project preparation and development of public property and a once-off maintenance grant after 5 years

Rental/Sectional Title/Full Ownership

Brownfields upgrading/Regeneration

Consolidation Project-linked

of public housing stock including hostels

Enhanced Extended Discount Benefit Scheme-National This scheme promotes home ownership among tenants of publicly-owned rental housing (municipal and provincial)

Facilitated by Consolidation subsidy—transfer of long-term lease state funded housing. Purchasers can receive a discount on the selling price of the property

Rent-to-buy Brownfields upgrading/Regeneration

Individual Subsidy

Integrated Residential Development Programme (IRDP)-National The IRDP enables the development of well-located, socially diverse projects that provide for a mix of income groups and land uses

USDG-developed as an instrument to address linkage between public housing and economic to simultaneously contribute to human settlements

Rental/Sectional Title/Full Ownership

Greenfields/ Brownfields upgrading/ Regeneration

Project Linked

Gap Income Group: R3,501-R10, 000 (per household per month) Social Housing Institutions (SHIs)-

Social Housing Restructuring Capital grant complemented by institutional subsidies

Rental/Sectional Title/Full Ownership

Greenfields/ Brownfields upgrading/ Regeneration

Institutional

National Managed and implemented by institution which owns stock and is a legally constituted body. Social Housing is used locally to describe a very broad range of housing delivery and management mechanisms including housing stock which is: rented by

tenants from a private company in which they have some form of interest;

under the collective ownership of tenants;

delivered and managed by an independent, non-profit, privately-owned company with some sort of social

are available to qualifying housing institutions/Section 21 Companies. The subsidy is paid to approved institutions to provide subsidized housing on deed of sale, rental or rent-to-buy options, on condition that the beneficiaries may not be compelled to pay the full purchase price and to take transfer within the first four years of receiving the subsidy. Institutions must also invest capital from their own resources in the project. Furthermore, rental social housing is funded by the Social Housing Regulatory Authority (SHRA), Province and the City Note: Banks committed through the Financial Services Charter to providing loans to Social Housing Institutions

mission such as delivery lower-than-market to the poor;

delivered and managed by a local authority; and

may be rented for an initial and then purchased by tenants on a rent-to-buy basis under sectional title, etc.

Finance Linked Individual Subsidy Programme (FLISP)-National In order for those within the gap market to acquire existing properties or to buy a serviced site

The FLISP applies to people who earn R3 501 and R7 000 per month. These people may apply for a subsidy, which is determined by an increment band.

Full ownership

Individual

Gap: Inclusionary Housing Inclusionary

Inclusionary housing projects include both affordable housing and accomodation for middle income

Housing is a crucial rung on the housing ladder; it provides a stepping stone into the formal private market for those earning under R10 000 per month. No official programme/framework has been initiated by the state (except a proposal in that direction in the National Development Plan 2030)

households. This is usually done by regulated projects by private developers to providers to provide a percentage of affordable units benefiting households earning below R10 000 per month

Private Market: R10, 000 + (per household per month) Developer Implementation, Market Driven, Private Sector

Bonded; privately funded Usually provided to people earning between R7, 500 and R40, 000 per month

Rental/Sectional Title/Full ownership

Greenfields/ Brownfields upgrading/ Regeneration

Bank Loan

Table 5: Summary of various existing housing delivery methods and funding mechanisms (Source: SHSUP, 2012, with minor additions)

Delivery Method Funding Mechanism Tenure Options 1 Informal Settlement/Shack Short-term cash

basis/Services rendered in lieu of monetary rental

Rental/Ownership

2 Backyard/Granny flat Short-term cash basis/Services rendered in lieu of monetary rental

Rental

3 Invaded Hostels Short-term cash basis 4 Subletting of

rooms/informal

3.3. Limitations and Tentative Milestones

Table 7: Limitations of and tentative milestones in improving the existing delivery methods and funding mechanisms

subdivisions

5 Invaded/Hijacked buildings

Table 6: Summary of various informal existing housing delivery methods and funding mechanisms (Source: SHSUP, 2012)

National Housing Subsidy System (RDP type housing) Limits and Delimits

Positive Milestones (CoJ)

A ‘one-size fits’ all approach: stand-alone house in a demarcated stand Poorly located low-density housing projects (cheap land in the periphery of the city) Design of unit does not enable provision for incremental growth (extensions, etc.), and has as yet to integrate environmental planning and green building The approach does not take into account the differences in the character, life trajectories, accomodation needs of households (limited to one housing typology & delivery method) About just under half of all houses completed/under construction between 1994 and 2009 (i.e. 1.5 million of 2.94 million houses) had not been registered in the Deeds Registry, amounting to some 1.5 million housing subsidy beneficiaries receiving a house without a title deed. This undermines the security of tenure of households and constrains their ability to participate in the residential property market. The number of registered subsidy houses sold by beneficiaries between 1994 and 2009 remains low at only six percent of all houses registered. This is partly explained partly by the eight year sales restriction on subsidy houses. The higher rates of sales are in the Discount Benefit Scheme houses, and lowest in Project-Linked subsidy

K206 project in Alexandra attempts to integrate an option for unit extensions, to allow households to provide small-scale rental accomodation. About 700 RDP units in Cosmo City have been fitted with solar geysers In the Lufhereng housing development South of the City, there is experimentation in the design of houses with new typologies that include row houses and double-storey units, amounting to increased densities While all Metropolitan Municipalities combined account for 49percent of the total number of registered houses in the country, it is Ekurhuleni, Cape Town and Johannesburg that have the

houses (which are newer and to which the eight year restriction primarily applies). Despite the general increase in the nominal and real selling prices of first sales of subsidy houses between 1994-2009; project-linked houses (as opposed to discount benefit scheme houses) are selling at prices far below their development cost. The low selling pricing might be a signal that project-linked subsidy houses are undervalued in the residential property market. Subsidy beneficiaries have generally struggled to access mortgage finance, with higher levels of access to finance at the time of registration (credit-linked subsidies) that post-registration (for home improvements and extensions). Both in terms of volume and value, discount benefit scheme houses accessed mortgage finance than project linked subsidized houses.

highest number of registrations. Johannesburg is third highest among these with some 130,121 houses registered between 1994 and 2009. Western Cape, Gauteng and Kwa-Zulu Natal recorded the highest sales, showing the urban bias of such sales (61, 100 sales have taken place in metropolitan municipalities in the years 1994-2009, translating to some 9percent).

National Housing Subsidy System-Integrated Residential Development Programme (IRDP) In cases where bonded housing units are intended for low-income groups, the model is likely to amount to a situation where the poor subsidize the poor. If all IRDP projects are structured in a manner amounting to a 60: 40 (bonded to RDP) ratio, which is arguably a sustainable approach; the most likely result is the saturation of the bonded housing market, and a growing backlog of housing demand in low-income/subsidized housing

Pennyville in Soweto is a mixed income, well-integrated, medium density development that was developed using a percentage of IRDP subsidies (The programme is a pillar of the sustainable human settlements agenda)

National Housing Subsidy System-Social Housing Programme/Affordable Housing Households renting inner city dilapidated buildings, (backyard) shacks, and backyard rooms are a demonstration that the current volumes of social/affordable housing units supplied formally are not meeting the existing demand for rental accomodation Well-located land suitable for affordable residential development is limited, limiting the yields that can be delivered

Grant

Instrument Scope Commencement

Date Human Settlements Development Grant (HSDG)

A capital grant allocation from the national fiscus transferred to provinces then to municipalities in terms of the Housing Act, for housing development

1994

Urban Settlements Development Grant (USDG)

for land and infrastructure 1 April 2011

Neighbourhood Development Partnership Grant (NDPG)

To support neighborhood development projects that provide community infrastructure and create the platform for private sector development and that improve the quality of life of residents in targeted areas

15 February 2006

3.4. Institutions, Land and Infrastructure: Capacities and Deficits Accreditation and Assignment

The lower end of the gap market, i.e. households earning between R3 500 and R10 000, is displaced due to the amount of rents and/or rates required in social housing developments Unregulated and left to the market, the prices of well-located affordable housing can undermine the capacity of targeted households to afford The cost and complexity of reclaiming ‘hijacked’ and dilapidated buildings for renovation and redevelopment keeps stock that could be contribute to the affordable rental accomodation National Housing Subsidy System-Upgrading of Informal Settlements Programme (UISP) National Housing Subsidy/Private Delivery: Inclusionary Housing National Housing Subsidy/Private Delivery: Affordable Housing Market Private Housing Delivery: Formal Rental Market Private Housing Delivery: Formal Bonded Market

In line with the provisions of section 10 of the Housing Act no. 107 of 1997, the City was accredited to administer the housing function when the Member of Executive Committee (MEC) for Housing and Local Government in Gauteng signed a Memorandum of Agreement in June 2012. The MOA accords the City levels one and two accreditation status, which permits the City to exercise specific delegated functions on behalf of the MEC in addition (and not as a substitute) to current functions around policy and planning (Section 9 of the Housing Act), namely: subsidy budget planning and allocation process; full programme management/administration; and subsidy and property administration. These functions are delegated to the City so as to, among other things, (a) enhance coordinated development (horizontal integration), and (b) fast-track delivery (vertical integration). The City is expected to capitalize on this new status as an accredited municipality to evolve efficiencies that will both bolster its own capacity to administer national housing programmes and improve the quality, scale and pace of delivery in the construction of sustainable human settlements. To this end, the City has developed an Assignment Capacity Development Business Plan, identifying the various relevant and adequate processes, systems, competencies, and resources that are required to capacitate the City at the level of individual employees, the City (and Housing Department) as an institution and the housing delivery environment more generally12. Training programmes on beneficiary and subsidy administration have already commenced, and the Housing Subsidy System is already operational. In terms of a February 2013 Submission by the National Minister of Human Settlements on behalf of MECs responsible for Human Settlements in Gauteng, KwaZulu-Natal, Eastern Cape and Western Cape Provinces to the Financial and Fiscal Commission, the intention is to sign Executive Assignment Agreements with the metros by 30 June 2013. The submission follows a resolution of the 03 November 2012 MINMEC Resolution to accelerate assignment so as to: ‘give effect to the transfer of the function for the administration of national housing programmes; facilitate the necessary transfer of staff, assets, liabilities and contractual obligations; and, facilitate the shifting of financial flows’13. In a sense, the planning, budgeting, implementation and accounting will be located squared within the ambits of the City; which will (once assigned) receive both direct allocations from national treasury in line with the annual Division of Revenue Act (DORA), and all assets necessary to perform the assigned function.

12 The following are some of the critical gaps identified: Competencies: beneficiary administration; subsidy administration; quality assurance; consumer education; contract administration; knowledge management; property management; partnership building; organisational development; finance; and Systems: Housing Subsidy System; Programme & Project Tracking System; Knowledge Management System; Quality Assurance System; Ring-fenced housing delivery finance (a secondary bank account); Guidelines (procedures and manuals). 13 Joint Submission to the FFC for the Assignment of the Function Shift for the Administration of National Housing Programmes from Provinces to Six Metros (p10)

Decision to initiate assignment by MECs responsible for Human Settlements

MECs to jointly consult with FFC to assess financial & fiscal implications of assignment : FFC Review of Assignment Implications

MECs to consult with the MECs for Local Government and Finance & organised local government within the province

National Minister & MECs to consult LG Budget Forum:Inputs

MECs to jointly submit to national Minister of Human Settlements and National Treasury a memorandum: DORA Alignment/ adjustment budget

Signed Executive Assignment Agreement effective from 1st July 2013Executive Assignment Agreement – takes effect by proclamation by Premier:

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03 Nov 2011

Jan –March 2013

Apr / May 2013

May 2013

30 June 2013

Figure 20: Process Plan for Assignment of the Six Metros (Source: DHS, 2013)

The fact that the City has been using service providers as implementing agents (as opposed to the City itself acting as an implementing agent), the process and extent of capacity transfer may be protracted (and by extension the cost of such transfer will be higher). It is envisaged that assignment will enable the City to (a) combine own sources of revenue and national grants and transfers in ways that will help overcome the limits of the subsidy instrument in the building of sustainable human settlements; (b) align housing with city planning, infrastructure provision, public transport, land use management, provision of engineering services and social amenities, inter alia; (c) have more autonomy in decision-making around the appropriateness of housing programmes and delivery models within its area of jurisdiction; (d) apply for direct allocation of other funds (like the Municipal Infrastructure Grant) to enhance its efficiencies in sustainable human settlements. For the City, the assignment of housing function means (a) internal capacity building to ensure relevant and adequate systems, processes, policies and competencies to successfully carry out the function; (b) mainstreaming the function into its planning, budgeting and monitoring/evaluation systems, processes and outputs; (c) negotiations with MEC for Housing in Gauteng around the transfer of staff, assets and liabilities, and contractual obligations. These three have to be immediate preoccupations for the City, if it is to carry out the function as and when assigned. Table 8: Administrative Functions Shifts through Accreditation and Assignment (Source: DHS, 2013)

FUNCTIONS Current Level 1 Level 2 Assignment

Policy and planning

Human Settlements strategy: (IDP) Municipality Municipality Municipality Municipality

Human Settlements plan and budget: (IDP) Municipality Municipality Municipality Municipality

Human Settlements policies: Procurement, allocation, Municipality Municipality Municipality Municipality

Subsidy budget planning and allocation process and priority programme management / admin

Human Settlements subsidy budget PDHS Municipality Municipality Municipality

Subsidy / fund allocations PDHS Municipality Municipality Municipality

Project identification PDHS Municipality Municipality Municipality

Priority programme management / admin PDHS Municipality Municipality Municipality

Full programme management / administration

Full Project / Programme approval PDHS PDHS Municipality Municipality

Full contract administration PDHS PDHS Municipality Municipality

Full programme management PDHS PDHS Municipality Municipality

Subsidy administration PDHS PDHS Municipality Municipality

Full technical (construction) quality assurance PDHS PDHS Municipality Municipality

Subsidy & property administration

Eligibility check PDHS PDHS Municipality Municipality

Subsidy applications PDHS PDHS Municipality Municipality

Allocation of subsidy / house PDHS PDHS Municipality Municipality

Project management PDHS Municipality Municipality Municipality

Financial Administration

Subsidy disbursements PDHS PDHS PDHS Municipality

Financial reporting and reconciliation PDHS PDHS PDHS Municipality

4. The Critical Building Blocks: Towards Sustainable Human Settlements 4.1. Introduction Housing—the processes and instruments invested towards its production; its form, location and fabric; densities it generates and mix of land uses and income groups it contributes to, tenure options it provides, the life chances it allocates—is a critical element of (the production of) the built environment, settlement formation and spatial restructuring more generally. In Johannesburg, housing is critical for the improvement of the quality of household lives, the systemic eradication of marginality14 and exclusion15 by dislodging the apartheid city form inherited, and the building of sustainable human settlements. Building on the efforts of the past decade towards sustainable human settlements, the City’s housing programmes for 2013/14 and beyond should be anchored on a set of building blocks that will contribute to a compact city trajectory that the City has committed itself to pursuing16. Such building blocks, around which this chapter is structured, are as follows: typologies, densities, strategic areas, and incentives. The first deals refers more specifically to the ‘physical structure of residential buildings’17; the second to ‘the increased use of space both horizontally and vertically with existing areas/properties and new developments accompanied by an increased number of units and/or population thresholds’18; the third to areas identified as most strategic for (housing) development (in particular) in line with the spatial development priorities set out in the various strategic frameworks in the City; and the fourth to instruments designed to incentivize desired (housing) development, at appropriate densities (and typologies), and in the strategic priority areas identified. The strategic priority areas then, become the primary sites for experimentation with the right mix of typologies and densities, and application of the right packages of development incentives. Even if changes in the spatial form of cities, embodied in the massive fixed investments in their built environments, move at a glacial pace; these experiments towards building sustainable human settlements in the strategic areas identified will be more than critical in allowing the city to change the current course of entrenching apartheid’s spatial form. In the long-term, investments made in the current and next few years, in housing, transport, infrastructure and engineering services will see the city transit from a low-density sprawling metropolis into one more compact, denser with very limited ‘spaces of urban relegation’19.

14 Where populations find themselves confined to a precarious existence in marginal spaces of the city, in informal settlements, backyard shacks, hostels, and bad buildings in the inner city (and other old Central Business Districts) 15 The Joburg 2040 GDS refers to three forms of exclusion, namely (a) exclusion by design (deliberate underinvestment in and location in the periphery of dormitory townships; (b) exclusion by decline (collapse in the inner city property market); and (c) post-apartheid exclusion in golf-estates (private developments), and informal settlements in the periphery of the city 16 See the City’s Spatial Development Framework and the Growth Management Strategy for a detailed outline of the main pillars of the spatial development trajectory envisaged 17 Urban Land Matters, Issue 9, Volume 1 (2010) 18 Cape Town Densification Strategy Technical Input 19 Loic Wacquaint, 2007. Territorial Stigmatization in the age of advanced marginality.

4.2. Typologies The housing typologies proposed should be an attempt to diversify from the two extremes of low-cost, government subsidized housing and upmarket, developer driven housing developments, both of whose lowest (design) common denominator is a detached house in a stand. The Gauteng Sustainable Human Settlements Strategy (GSHSS) proposes the following typologies within a 150-450 people/hectare range20: courtyard housing; clusters; single/double storey attached housing built up to the boundary line; row houses; 3-4 storey walk-ups; and up to six storey flats. In the City, a detailed study of typologies was conducted in 2012 as part of the SHSUP process, and a summary of the final list of proposed housing typologies (which include some of the proposed GSHSS ones above) is detailed here in table…below. These arguably constitute the set of typologies from which the City is to promote from in its own future housing developments, in those developments it facilitates in partnership with other stakeholders, and in the assessment of development applications it receives from private institutions and individuals. Table 9: Proposed Housing Typologies for the City of Johannesburg (Source: SHSUP Annexures, 2012)

20 The proposed density range which excludes stand-alone houses on plots (but includes detached houses with on-site, and high-density, multi-storey apartment blocks (except in inner cities)

Typology

Applicable

Income Group

Erf Configuratio

n

Erf Area

Gross Density (du/ha)

Unit Size (m2)

Coverage

Building

Height

Housing Tenure

Funding Option

Serviced Stand

Medium (R3501-R7000)

16 x 12,5m; 22 x 9m; 20 x 7,5m; etc with ratio of 1: 1,5 or 1:2

150-200m2

Min 45 varies

30 percent

na Ownership

FLISP subsidy and micro-financing

Single Storey Detached Housing

Low (<R3500)

16 x 12,5m; 22 x 9m; 20 x 7,5m; etc with ratio of 1: 1,5 or 1:2

150-200m2

45, increasing over time to 135 du/ha

40 20 percent-34 percent initially, 60 percent eventually

1 storey

Full ownership/ Future backyard rental

Individual Subsidy/Project Linked /Peoples Housing Process

Medium (R3501-R15 000)

16 x 12,5m; 22 x 9m; 20 x 7,5m; etc with ratio of 1: 1,5 or 1:2

200m2

45, increasing over time to 135 du/ha

40-60

20 percent-34 percent initially, 60 percent eventually

1 storey

Full ownership/ Future backyard rental

NHFC/FLISP subsidy linked to Financial Institution/ Entry level Bonded/ Possible micro-financing for expansion /Landlords offering

accomodation to households earning less than R7500 per month can apply for an institutional subsidy

High Market driven/specific Ownership/Rental

Private market

Typology

Applicable

Income Group

Erf Configuratio

n

Erf Area

Gross Density (du/ha)

Unit Size (m2)

Coverage

Building

Height

Housing Tenure

Funding Option

Single Storey Semi-detached Housing

Low (<R3500)

7x 16m; 11,25 x 10m

112,5m2

74

42

37percent initially, 50 percent eventually

1 storey

Full ownership/ Future backyard rental

Individual Subsidy/Project Linked

Medium (R3501-R15 000)

16 x 12,5m; 22 x 9m; 20 x 7,5m; etc with ratio of 1: 1,5 or 1:2

112,5m2

74

42

37 percent initially, 50 percent eventually

1 storey-expendable to two in the middle and higher income sector

Full ownership/ Future backyard rental

NHFC/FLISP subsidy linked to Financial Institution/ Entry level Bonded/ Possible micro-financing for expansion

High Market driven/specific Ownership/Rental

Private market

Typology

Applicable

Income Group

Erf Configuratio

n

Erf Area

Gross Density (du/ha)

Unit Size (m2)

Coverage

Building

Height

Housing Tenure

Funding Option

Low (<R3500)

15 x 7.5m; 12,5 x 9m

112,5m2

74

54

24 percent to 48

2 storeys

Full ownership/

Individual Subsidy/Project Linked

Duplex Semi-detached Housing

percent over time

Future backyard rental

Medium (R3501-R15 000)

15 x 7.5m; 12,5 x 9m

112,5m2

74

50

37 percent initially, 50 percent eventually

2 storeys

Full ownership/ Future backyard rental

NHFC/FLISP subsidy linked to Financial Institution/ Entry level Bonded/ Possible micro-financing for expansion

High Market driven/specific Ownership/Rental

Private market

Typology

Applicable

Income Group

Erf Configuratio

n

Erf Area

Gross Density (du/ha)

Unit Size (m2)

Coverage

Building

Height

Housing Tenure

Funding Option

Single Storey Row Housing

Low (<R3500)

15 x 6m

90m2

93 du/ha at outset, but could double to 186 du/ha

40

44 percent initially, 60 percent over time

1 storey-could be combined with 2 storey duplex typology to create variation

Full ownership/ Future backyard rental

Project Linked Subsidy

Medium (R3501-R15 000)

15 x 6m

90m2

93 du/ha at outset, but could double to 186 du/ha

40

44 percent initially, 60 percent over time

1 storey-could be combined with 2 storey duplex typology to create variation

Full ownership/ Future backyard rental

NHFC/FLISP subsidy linked to Financial Institution/ Entry level Bonded/ Possible micro-financing for expansion

High Not applicable

Typology

Applicable

Income Group

Erf Configuratio

n

Erf Area

Gross Density (du/ha)

Unit Size (m2)

Coverage

Building

Height

Housing Tenure

Funding Option

Walk-ups

Medium (R3501-R15 000)

Varies

Varies

60-130

Varies

38 percent

2-3 storeys

Full ownership/ Future backyard rental

NHFC/FLISP subsidy linked to Institution/ Entry level Bonded/ Bonded OR Institutional Subsidy if rental tenure

High

Varies

Varies

60-130

Varies

38 percent

2-3 storeys

Ownership/ Rental

Bonded

Typology

Applicable

Income Group

Erf Configuratio

n

Erf Area

Gross Density (du/ha)

Unit Size (m2)

Coverage

Building

Height

Housing Tenure

Funding Option

Incremental

Low (<R3500)

10 x 16m

160 m2

52 at the outset of the project, up to 260 over time

30m2

core +50m2 framework, platform and boun

50 percent

1-2 storeys

Ownership/Backyard rental units that comply with SANS minimum size requirements

Project Linked Subsidy, thereafter microloan or similar

dary wall

Typology

Applicable

Income Group

Erf Configuratio

n

Erf Area

Gross Density (du/ha)

Unit Size (m2)

Coverage

Building

Height

Housing Tenure

Funding Option

Backyard Rental/Mixed Tenure

Low (<R3500)

7 x 16m

112,5m2

140

40m2 core unit, 30m2 rental units

63 percent

Core unit=2 storeys, backyard rental units=1 storey

Ownership/Rental

Project Linked Subsidy with extra allowance for two backyard rooms and shared ablution—core unit of 40m2, backyard rooms/ablution unit of 30m2

Medium (R3501-R15 000)

7 x 16m

112,5m2

140

50

37 percent initially, 50 percent eventually

2 storeys

Full ownership/ Future backyard rental

NHFC-subsidy/ Finance-linked/ Entry level Bonded with extra allowance for two backyard rooms and shared ablution—core unit of 40m2, backyard rooms/ablution unit of 30m2

Typology

Applicable

Income Group

Erf Configuratio

n

Erf Area

Gross Density (du/ha)

Unit Size (m2)

Coverage

Building

Height

Housing Tenure

Funding Option

Mixed Use

Low (<R3500)

11x9m

100m2

150

Basic unit of 54m2 over two floors

54 percent

2 double storey units on one erf: commercial rights (spaza

Ownership/ Rental

Project Linked Subsidy with extra allowance for outside ablution facility and low walls

shops) on ground floor level only

Medium (R3501-R15 000)

11x9m 100m2

150 Basic unit of 52m2 over two floors (smaller to enable NHFC-subsidy)

54percent

2 double storey units on one erf: commercial rights (spaza shops) on ground floor level only

Ownership/ Rental

NHFC-subsidy/Finance Linked/ Entry level Bonded with extra allowance for outside ablution facility and low walls

Typology

Applicable

Income Group

Erf Configuratio

n

Erf Area

Gross Density (du/ha)

Unit Size (m2)

Coverage

Building

Height

Housing Tenure

Funding Option

Duplex Row

Low (<R3500)

15 x 6m

90m2

93

50

26percent

2 storeys

Ownership/ Future backyard rental

Project Linked Subsidy

Medium (R3501-R15 000)

15 x 6m

90m2

93

50

26percent

2 storeys

Ownership/ Future backyard rental

Rental (Institutional Subsidy); Ownership (NHFC-subsidy/ Financial linked/ Entry level Bonded)

High Market related

Market related

93 80 26percent

2 storeys

Ownership/ Future backyard rental

Private/bonded

Typology

Applicable

Income Group

Erf Configuratio

n

Erf Area

Gross Density (du/ha)

Unit Size (m2)

Coverage

Building

Height

Housing Tenure

Funding Option

Cluster/Hybrid

Low (<R3500)

Varies-could be a series of small 7.5x7.5m erven or one erven with several units

Varies-could be a series of small erven or one erven with several units

100-140

From 15m2

60percent

1-4 storeys

Ownership/ Rental/Leasehold

Project Linked Subsidy/Community Residential Units (CRU)/Transitional Subsidy/Institutional Subsidy

Medium (R3501-R15 000)

Varies-could be a series of small 7.5x7.5m erven or one erven with several units

Varies-could be a series of small erven or one erven with several units

100-140

From 18m2

60percent

1-4 storeys

Ownership/ Rental/Leasehold

Rental (Institutional Subsidy); Ownership (NHFC-subsidy/ Financial linked/ Entry level Bonded)

High Varies Varies 100-140 80 26percent

2-9 storeys

Ownership/ Rental

Bonded

Typology

Applicable

Income Group

Erf Configuratio

n

Erf Area

Gross Density (du/ha)

Unit Size (m2)

Coverage

Building

Height

Housing Tenure

Funding Option

Low

Low (<R3500)

Varies

Varies

140-290

Varies according to need from Bachel

n/a

2-4 storeys

Rental/leasehold

CRU or transitional housing

Medium (R3501-

Varies

Varies

140-290

n/a

2-4 storey

Rental/ Rent-to-

Institutional Subsidy

4.3. Densities Sprawling cities are costly cities: in terms of mobility (long distances and travel costs); the environment (traffic congestion and CO2 emissions; wiped ecosystems and open spaces); infrastructure (cost of extension and underutilization of existing); and economically (consumes good agricultural land, limits agglomeration and synergies); among other things. The Johannesburg produced by the differential development characteristic of apartheid, and one consolidated by the city-building efforts of the state, and the market in the post-apartheid era is largely a low-density sprawling metropolis. The 2008 Growth Management Strategy of the City represents one of the most targeted interventions to understand, and provide instruments for redressing sprawl and its effects on the accessibility of urban opportunities and experiences, efficiency of the city’s various components, and the sustainability of the urban environment21. Strategic Densification emerges as one of the main pillars of spatial restructuring in the City, seen as having potential to facilitate ‘sustainable settlement planning through more efficient use of spatial resources including bulk service infrastructure, energy sources and most importantly, an ever-decreasing supply of well-located land’22. The City’s Gross Base Density is 10 units per hectare; although Regional SDF proposed per area densities will prevail in instances where lower densities in such RSDFs and consideration for increased densities may be made in specific areas based on locational factors appertaining and the City’s densification priorities23. Locational factors include proximity (of site/area) to nodes (CBD, metropolitan, regional and district nodes); transportation routes (BRT stations, Mobility Spines and Roads, Activity Streets, Rail Stations); and subsidized housing initiatives. MEASURE DEFINITION Dwelling unit density

Number of dwelling units per hectare (du/ha)

21 Accessibility, efficiency, and sustainability are primary objectives underpinning the City’s Spatial Development Perspective 22 SDF, 2010/11 23 Ibid

Rise Flats

R15 000) or (18m2) to 1 bedroom, to 2 bedroom (44m2)

s own

Typology

Applicable

Income Group

Erf Configuratio

n

Erf Area

Gross Density (du/ha)

Unit Size (m2)

Coverage

Building

Height

Housing Tenure

Funding Option

Medium-High Rise Flats

Medium (R3501-R15 000)

Varies

Varies

180-290

Varies

n/a

1-4 storeys

Rental or Sectional Title

Institutional Subsidy/ Bonded

High

Varies

Varies

180-290

Varies

n/a

9-30 storeys

Rental or Sectional Title

Bonded/Private

Population density Number of people per hectare (usually calculated by multiplying the number of units by an appropriate average household size)

Building density Ratio of total floor area of buildings to the corresponding site (FAR)

Gross du/ha The number of dwelling units per hectare of land calculated in a designated area on the basis of land used for residential purposes and other land uses such as industry, commerce, education, transport and parks. Excluded are land-extensive land uses such as agricultural land and nature areas/reserves/parks

Nett du/ha The number of dwelling units per hectare of land calculated on the basis of land used for residential purposes, including the garden and off-street parking, if any

Gross base density The average number of dwelling units per hectare across large city district areas or the City as a whole, excluding land-extensive uses such as agricultural and rural land and large nature areas/reserves/parks

Table 10: Measures of Densification (Source: CitySpace, 2009)

Strategic densification is to be done through among other things adjustment of development rights; urban infill; promotion of additional dwellings on existing residential sites; as part of informal settlements upgrade; and plot sizes and sit reconfiguration24. The gross densities suggested per typology in the previous section should be explored differentially and accordingly, applied on a project by project basis.

4.4. Incentives Tax Increment Financing (TIF) Use of increased property tax by private

sector developers to finance engineering services over an agreed period

Planning Gain Extract some of the windfall gain that accrues to landowners from the sale of their land for residential development

Right Bonuses Permits developers to increase the allowable land use rights on a property (as permitted by the property zoning) in exchange for assisting a municipality in achieving its public policy goals, such as providing low-cost housing where developers to restrict rents or sales prices

24 GSHSS, 2012

of a certain number of units within their development for low-income household

Fast Tracking of Land Development Application and Waiver of Development Application and Building Plan Fee

A special provision for fast-tracking/streamlining of land-use application OR waive the Development Application Fee as well as the fee for submission of Building Plans in priority development areas

Special Rating Districts Mechanism for private investors to provide the necessary development and infrastructure an area needs over the short term (three years), where the City would only be able to provide this over the long-term (20 years)

Inclusive Housing Voluntary approach: provide land and/or other incentives (tax credit scheme, bulk and link infrastructure, government subsidies) to private sector developers, in return for a proportion of the units as affordable housing stock Compulsory approach: set national parameters to enable such

Housing Subsidies as Incentives Individual Subsidy; Consolidation Subsidy; Institutional Subsidy; People’s Housing Process Establishment Grants; Rural Subsidy; Project Linked Subsidy Finance Linked Individual Subsidy Programme

Table 11: Proposed Incentive Package for the City (SHSUP Annexures, 2012)

4.5. Strategic Areas Table 12 Strategic Areas for Development, City of Johannesburg (Sources: GMS, 2008; SHSP 2012)

Strategic Areas Characteristics/Comments Areas to be included 1. Public Transport Priority Areas TOD Stations

(PRASA & Gautrain)

Fundamental to current policy imperatives (SDF,

All commuter railway stations

Areas around

Priority BRT Routes Mixed Use Nodes

not linked to Priority Public Transport Network

GMS, Mayoral Priorities)

Centrally located in the city

Links to most areas of social and economic activity

Housing development will enhance viability of public transport infrastructure investment

Provides opportunities for infill development/densification and redevelopment

These are priority areas for engineering services maintenance and upgrading

Nodes, stations and BRT routes in southern extremities of CoJ would require supplementary regional investments to enhance urban potential

priority BRT routes

Areas around Gautrain stations

All mixed use nodes in the City linked to priority public transport network as well as four nodes of strategic significance which could be incorporated into the priority public transport network in future

2. Existing Housing Projects Vacant Land Parcels

(North) Vacant Land Parcels (South)

Projects already approved and underway

Informal settlement communities already identified as beneficiaries

Contribute towards Upgrading of Informal Settlements Programme

Housing projects approved in northern parts of City

Housing projects approved in southern parts of City

3. Redevelopment Areas Southern Suburbs Well-located relative to

Inner City Area ready for

redevelopment Falling outside the Priority

Southern suburbs, including Ormonde, Booysens, Turffontein, Rosettenville and

Public Transport Network footprint

Could facilitate densification and mixed income development while redeveloping

South Hills (Area between the M2 and N12 freeways)

4. City Region Consolidation and Infill Areas CoJ Mining Belt

Northern Eastern Large vacant land parcels

well-located in City and City Region context

Private sector already active in many of these areas

Some land parcels are under public ownership

Represent large scale opportunities to create ‘new towns in town’ and consolidating the regional urban fabric

Entire mining belt of the CoJ

Strategic land parcels at Huddle Park, Rietfontein Hospital, Linbro Park, Frankenworld, Waterfall City, Modderfontein, President Park/Glen, Austin/Austin View, Leeuwkop

5. Expansion Areas Planned/proposed

expansion (north) Planned/proposed

expansion (south)

Sites targeted for development due to existing informal settlements

Generally form part of Expansion Areas as identified in CoJ GMS, and thus fall within the Urban Development Boundary

Planning still at an early stage and can thus be reversed. Projects not approved

Mostly located on the urban periphery

Expansion Areas northern parts of city

Expansion Areas southern parts of the city

Map 3: SHSUP Strategic Areas (Source: SHSUP Model Phase 2 & 3 Presentation, 23 April 2012)

4.6. Concluding Notes: The strategic priority areas then, become the primary sites for experimentation with the right mix of typologies and densities, and application of the right packages of development incentives. Even if changes in the spatial form of cities, embodied in the massive fixed investments in their built environments, move at a glacial pace; these experiments towards building sustainable human settlements in the strategic areas identified will be more than critical in allowing the city to change the current course of entrenching apartheid’s spatial form. In the long-term, investments made in the current and next few years, in housing, transport, infrastructure and engineering services will see the city transit from a low-density sprawling metropolis into one more compact, denser with very limited ‘spaces of urban relegation’25. High densities and diverse typologies in strategic areas (ultimately strategically located land and/or underutilized buildings), and adequate incentive packages combine to escalate the cost of sustainable human settlements development. The current funding mechanisms, as alluded to in the preceding chapter, are inadequate. At the heart of this effort therefore, at each scale and in each project, will be the capacity of the City to mobilise sufficient resources—land and finance more specifically—and sufficient buy-in (and actual tangible commitments) from the various players in the residential property market.

25 Loic Wacquaint, 2007. Territorial Stigmatization in the age of advanced marginality.

5. Towards a (Housing) Programme (2013-2016)

5.1. Introduction

5.2. Initial programmatic proposition Below are a set of propositions that need to be consolidated into programmes for the remainder of the term.

1. Accreditation Intent: Coordinated development (horizontal integration) Accelerated delivery (vertical integration) Scope: The accreditation of the City involves the delegation and, subsequently, assignment of certain clearly defined functions in respect of the administration of National Housing Programmes, leading to eventual assignment of all the functions by formal proclamation of assignment by the Premier in the Government Gazette.

Level One: Beneficiary management, subsidy budget planning and allocation, and priority programme management and administration (delegated functions)

Level Two: Full programme management and administration of all housing instruments/ programmes (in addition to Level One) (delegated functions)

Level Three: Financial administration (in addition to Level Two) (All functions –Levels one, two and three are assigned)

2. Enhanced Extended Discount Benefit Scheme Intent: The Enhanced Extended Discount Benefit Scheme intended to stimulate and facilitate the transfer of public housing stock to qualifying occupants, by using subsidisation up to the full prevailing individual housing subsidy amount. Scope: Covers the following housing stock:

Free standing houses – individual housing units on defined and designated pieces of land. • Semi-detached houses – housing units that share common walls with their neighbouring units. • Terraced houses (row houses) – housing that have at least two common walls, usually on either side of the house, with its neighbours. • Duplex houses – generally referring to housing units that have two dwelling spaces one on top of the other but sharing certain facilities e.g. front doors and entrance ways. • High rise flats – referring to flats/apartments that are more than four storeys high and require elevators. • Low rise flats – buildings that are less than four-storeys high. • Communal housing – institutions/buildings that share facilities i.e. each household/individual may have its own sleeping quarters but cooking, washing, and socialising facilities are shared between all of the people who live in the building.

3. Emergency Housing Intent: To provide temporary assistance in the form of secure access to land and/or basic municipal engineering services and/or shelter in a wide range of emergency situations of exceptional housing need Scope: Covers those that: a) Have become homeless as a result of a declared state of disaster, where assistance is required, including cases where initial remedial measures have been taken in terms of the Disaster Management Act, 2002 (Act No. 57 of 2002) by government, to alleviate the immediate crisis situation; b) Have become homeless as a result of a situation which is not declared as a disaster, but destitution is caused by extraordinary occurrences such as floods, strong winds, severe rainstorms and/or hail, snow, devastating fires, earthquakes and/or sinkholes or large disastrous industrial incidents; c) Live in dangerous conditions such as on land being prone to dangerous flooding, or land which is dolomitic, undermined at shallow depth, or prone to sinkholes and who require emergency assistance; d) Live in the way of engineering services or proposed services such as those for water, sewerage, power, roads or railways, or in reserves established for any such purposes and who require emergency assistance; e) Are evicted or threatened with imminent eviction from land or from unsafe buildings, or situations where pro-active steps ought to be taken to forestall such consequences; f) Whose homes are demolished or threatened with imminent demolition or situations where proactive steps ought to be taken to forestall such consequences;

g) Are displaced or threatened with imminent displacement as a result of a state of civil conflict or unrest, or situations where pro-active steps ought to be taken to forestall such consequences; or h) Live in conditions that pose immediate threats to life, health and safety and require emergency assistance. i) Are in a situation of exceptional housing need, which constitutes an Emergency that can reasonably be addressed only by resettlement or other appropriate assistance, in terms of this Programme.

4. Integrated Residential Development Programme Intent: a) A comprehensive development approach to integrated township development which accommodates all the needs identified in a specific area or community. This relates to land use and the provision of municipal engineering services and sites for all land uses to ensure the development of integrated and sustainable human settlements; b) A phased development approach in terms of which a housing project is packaged in phases to facilitate effective project management and administration as well as effective expenditure and application of housing funds; c) The allocation and sale of serviced residential stands at the final stage of housing construction in a new development to qualifying beneficiaries, as well as the sale of other residential stands to persons who do not qualify for subsidies at a variety of prices depending on the income and profile of the households; d) Housing construction administered in terms of the basket of housing development options available within the National Housing Programmes for qualifying beneficiaries as the final phase; and Scope: The IRDP may be utilised where:

a) A project that is undertaken in an area where unoccupied vacant land is developed for an integrated Human Settlement; or

b) An integrated Human Settlement project is undertaken in an existing township where an undeveloped parcel of land is utilised for development purposes.

In order to deliver housing in terms of a procurement compliant process, it is necessary for:

c) A developer to manage the total development process and to administer projects in terms of the provisions of the Programme. A developer can either be a municipality or a PD where the municipality lacks capacity;

d) Professionals to establish the township, design and monitor the installation of the services and to design the housing units, and provide project management services; and

e) Contractors to construct the services and housing units.

5. Enhanced People’s Housing Process Intent:

The main aim of the EPHP Programme is to deliver better human settlement outcomes (at household and at the community level) based on community contribution, partnerships and the leveraging of additional resources through partnerships. This is achieved by developing livelihoods interventions which lead to outcomes such as job creation, developing a culture of savings, skills transfer, and community empowerment, building of community assets and social security and cohesion. Scope: The Programme applies to the following 2 options: a) Areas / projects where communities have already organized themselves and want to participate in the housing process. This requires predevelopment support and resource accumulation. The organized community then takes their request to the Local Authority through the local negotiating platform. This is a demand led approach. b) Areas / projects where there is an opportunity to mobilize communities to participate in the housing process as identified through the Local Authorities and Provincial Housing Plans. This will happen where Local Authorities have allocated a certain percentage of land to the EPHP programme in their Integrated Development Plan (IDP) / housing sector plan so that the programme is prioritized. Part of the IDP / housing sector plan will need to be negotiated with communities

6. Upgrading of informal settlements Intent: The key objective of this programme is to facilitate the structured in situ upgrading of informal settlements as opposed to relocation to achieve the following complex and interrelated policy objectives: • Tenure Security: to enhance the concept of citizenship, incorporating both rights and obligations, by recognising and formalising the tenure rights of residents within informal settlements; • Health and Security: to promote the development of healthy and secure living environments by facilitating the provision of affordable and sustainable basic municipal engineering infrastructure to the residents of informal settlements. This must allow for scaling up in the future; and • Empowerment: to address social and economic exclusion by focusing on community empowerment and the promotion of social and economic integration, building social capital through participative processes and addressing the broader social needs of communities. Scope: This programme is designed to facilitate the in situ upgrading of informal settlements in a structured way. It includes the possible relocation and resettlement of people on a voluntary and co-operative basis as may be appropriate. This programme will not apply to projects embarked upon in terms of any other National

Housing Programme or any Provincial Housing Programme that is inconsistent with National Housing Policy, nor will it apply to persons currently occupying informal houses/dwellings in the backyards of formal settlements. Informal settlements typically can be identified on the basis of the following characteristics • Illegality and informality; • Inappropriate locations; • Restricted public and private sector investment; • Poverty and vulnerability; and • Social stress. The programme is therefore applicable to all settlements that demonstrate one or more of the above characteristics.

7. Community Residential Units (CRU) Programme Intent: The Community Residential Units (CRU) Programme aims to facilitate the provision of secure, stable rental tenure for lower income persons. The programme provides a coherent framework for dealing with the many different forms of existing public sector residential accommodation. The previous allocation methodology for hostels only considered a “per-bed” approach which was not always favourable. Public stock was also not dealt with decisively and comprehensively. Scope: The CRU programme will cover: a) Public hostels that are owned by Provincial Departments and municipalities; b) “Grey” hostels which are hostel that have both a public and private ownership component due to historical reasons; c) Public housing stock that forms part of the “Enhanced Extended Discount Benefit Scheme” but which cannot be transferred to individual ownership and has to be managed as rental accommodation by the public owner; d) Post 1994 newly developed public residential accommodation owned by Provincial Departments and municipalities; and e) Existing dysfunctional, abandoned, and/or distressed buildings in inner city or township areas that have been taken over by a municipality and funded by housing funds.

8. Institutional Housing Programme Intent: The main objective of the Programme is to provide capital to housing institutions for the provision and maintenance of affordable rental housing. The capital so granted, must gear private sector financial investments, hence a precondition to access government assistance is the requirement for a financial contribution by the institution. Scope: The Programme applies nationally where there is a need for affordable rental or non-individual ownership tenure housing. The Programme may be utilised to develop a variety of housing typologies, adhering to the Norms and Standards, including but not limited to: a) New multi-level flat units; b) New row houses and/or semi-detached units of various design; c) New free standing units in a variety of layout; d) Refurbishing of existing units; and e) Conversion of non-residential buildings into residential use The Programme differs from the Social Housing Programme which targets specific urban restructuring zones and thus has a limited application. It complements the Community Residential Units Programme, which is a Government-owned rental housing scheme including but not limited to the Community Residential Units and the existing state-owned rental housing stock.

9. Social Housing Intent: The social housing programme has two primary objectives:

Firstly, to contribute to the national priority of restructuring South African society in order to address structural, economic, social and spatial dysfunctionalities thereby contributing to Government’s vision of an economically empowered, nonracial, and integrated society living in sustainable human settlements.

Secondly, to improve and contribute to the overall functioning of the housing sector and in particular the rental sub-component thereof, especially insofar as social housing is able to contribute to widening the range of housing options available to the poor.

Scope: A rental or co-operative housing option for low income persons at a level of scale and built form which requires institutionalized management and which is provided by accredited social housing institutions or in accredited social housing projects in designated restructuring zones.

5.3. Next Steps

Evolve propositions into priority programmes for the remainder of the term of office Generate a consolidated and detailed project list (including number units to be yielded,

target group/s, housing typologies, spatial location, relevant densities///implementation agencies/partners; timeframes; indicative capital value and operational budget implications)

Finalise targets and indicators for the interventions Finalise funding framework for implementation (Maximise sources of funding, and

mechanisms for leveraging additional funding) Risk Register for the MHDP Finalise draft Business Plans for remainder of the term (Implementation Plans for

MHDP) Annexures Annexure A: Summaries of the National Development (Chapter 08: Transforming Human Settlements), Outcome 08 and the Gauteng Sustainable Human Settlements Annexure B: Housing Policies/Legislation Annexure C: City Priorities

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