Salt River Market: An affordable housing project stonewalled by the City of Cape Town

21 Jan 2021

Salt River Market could have been perhaps the most well located and socially mixed affordable housing development in South Africa – instead, it appears that no one at the City of Cape Town is driving the development forward.

Cape Town, like all South African cities, is still grappling with the spatial legacy of apartheid and colonialism. Segregation is pervasive, access to safe and decent housing is largely determined along racial lines, and sprawl and fragmentation characterise the city’s urban form.

Yet, 26 years after the end of apartheid, not a single affordable home has been constructed in a former whites-only area of Cape Town during democracy. Policies and legislation at all levels of government recognise the importance of urban restructuring, and significant emphasis is placed on the delivery of well-located affordable housing. Why, then, has so little progress been made? And what can we learn from individual housing projects that have faced considerable delays?

Salt River Market is an exceptionally well-located piece of publicly-owned land near the Cape Town city centre. It has been proposed as a site for affordable housing since at least 2008. Numerous plans and proposals to develop Salt River Market have been put forward since then, yet none have come to fruition.

Most recently, the City of Cape Town announced in 2017 that it had partnered with Communicare, Cape Town’s oldest and most well-established social housing institution (SHI), to develop the site in a mixed-income model containing social housing, *GAP housing, and market-rate housing. The plans to inclusively develop Salt River Market have stalled. It is not clear how long it will take for the site to be developed, or if it will actually be developed at all.

Social housing in South Africa refers to a specific government housing programme that focuses on delivering well-located rental housing to households that earn between R1,500 and R15,000 per month. It can only be delivered in designated areas that have good access to jobs, schools, public transport, hospitals, and other social amenities and services. It is constructed by registered SHIs who use a combination of government subsidies and their own equity to fund development. The Social Housing Programme was specifically introduced to combat the legacy of spatial apartheid and is the only government housing programme that focuses exclusively on well-located land.

Although the potential of social housing to contribute to urban restructuring and more just forms of housing provision has long been recognised, the programme has only been implemented on a relatively small scale and receives just 2% of the overall human settlements budget.

One of the primary barriers to expanded provision of social housing is insufficient grant funding, especially to build at densities above four stories. In response, SHIs and policymakers are increasingly advocating for mixed-income models where additional revenue from wealthier residents is used to subsidise poorer residents and the costs of building densely.

Increasing the residential density of well-located areas in Cape Town is a social, economic, and environmental imperative. Planners working for the City of Cape Town identified Salt River Market as an ideal site for mixed-income housing roughly 10 years ago. They argued that mixed-income housing would engender integration, improve development feasibility, and make the most of a valuable and extremely well-located piece of public land.

The feasibility of developing social housing relies in part on municipalities selling public land to SHIs at discounted prices. However, when it came time to transfer Salt River Market to Communicare in late 2018, it appears that the city suddenly changed its mind. Communicare had been under the impression that they would receive the land at 10% of its R18-million market value, as is standard practice when land is disposed for social housing.

Shortly before the disposal was set to be approved, the city revised the value of Salt River Market up by 530% to R114-million, meaning that Communicare would need to pay roughly R12-million for the site, as opposed to the initial R1.8-million asking price. In response, Communicare has had to adjust their model and decrease the number of affordable homes planned for Salt River Market.

Salt River Market could have been perhaps the most well-located and socially mixed affordable housing development in South Africa – instead, it appears that no one at the City of Cape Town is driving the development forward.

While several concerns were used by councillors and the City’s Property Management Department to justify the increase, they generally centred around a claim that the value was too low and that the land was being disposed of to a developer rather than a social housing institution.

Some DA caucus members erroneously viewed Communicare as a private developer because the plans for Salt River included some market-rate housing. They claimed that they didn’t understand why land should be sold at a discount if a portion of the development would generate a profit. There was no acknowledgement of the fact that the profit generated from the market-rate component of Salt River Market would be used to subsidise the development costs and rental charges for the affordable component. As the decision was taken in a caucus meeting, officials from the Human Settlements Department were not able to counter these claims.

Councillors also raised allegations about Communicare’s management of Steenvillas (which is managed by an entirely different SHI), and Alderman Clive Justus claimed that there was instability in Communicare’s board because the chairperson and general manager had recently resigned. Both claims were incorrect, as the chairperson had simply come to the end of their term and the general manager had not resigned.

The demonstrably false nature of the arguments put forward by councillors makes it difficult to believe that they were genuine. Instead, it appears that doubt was intentionally being mobilised to block the project. This is certainly the view held by the former City of Cape Town politician Brett Herron, who was responsible for driving the development of Salt River Market forward before resigning in spectacular fashion.

In any case, it was the city’s own planners who motivated for a mixed-income model to be used that would allow profit from wealthier residents to subsidise those on lower incomes. As a result, Communicare was effectively punished for following the city’s own instructions. While the sale was eventually approved by the city, the land still hasn’t been transferred, and people close to the matter are unsure whether the development will ever go ahead.

There are other factors that have hindered the development of Salt River Market and well-located affordable housing more broadly. For instance, social housing subsidies have not kept pace with inflation, there is a lack of institutional capacity, and political support has generally been weak. In addition, city officials in the Human Settlements Department are not incentivised to focus on well-located housing. This means that vital project preparation and land packaging (getting land ready for development) do not take place unless the city’s planners do so on their own volition, as was initially the case with Salt River Market. The social housing sector evidently faces several serious challenges.

What is clear, as others have noted repeatedly, is that the process of releasing public land is a major barrier to the development of more just and equal South African cities. Access to municipal land is essential to the success of the Social Housing Programme, yet municipalities are under no obligation to release land for this purpose. The lack of clear obligations and processes means that doubt – whether genuine or intentionally created – will scupper many projects in the future.

South African housing policy is increasingly shifting towards a model that focuses on the provision of serviced land so that families can build their own homes. While this shift could yield progressive outcomes, there are legitimate concerns about implementation and a lack of detail. Another fear is that, similarly to the RDP and BNG housing programmes, only land that is relatively isolated will be released, thus entrenching the legacy of spatial apartheid. When viewed in this context, understanding and remedying the barriers to social housing provision becomes even more important.

Salt River Market could have been perhaps the most well-located and socially mixed affordable housing development in South Africa – instead, it appears that no one at the City of Cape Town is driving the development forward. Cape Town’s housing crisis is growing in scale and intensity every year. More and more people are being forced into precarious housing, and many people die while waiting for a home. If we want to build a city that truly works for everyone, it is time that projects like Salt River Market get the attention and support that they deserve. DM

*GAP housing caters for people who earn too much to receive subsidised housing and too little to afford housing on the open market.

Nick Budlender is a researcher working on housing, cities, and urban development. He holds a Master’s in Urban Planning from the University of Sheffield, where his dissertation focused on Salt River Market. He writes in his personal capacity.

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