As the barriers and incentives for private developers to approach the affordable housing market open further through new initiatives, this once “untouchable” market is showing huge potential.
An affordable housing unit is often not the “end state” for house ownership, but rather the first step on the housing ladder. Yet quality and location remain the key for sales and success, with a move towards urban densification. Herein lies the investment opportunity often overlooked.
In order to understand the affordable housing market in South Africa and its potential opportunities for both city governments and the private sector, we investigate the current state of this market, and the key considerations that, we believe, can drive its success.
How do we measure our success?
In our opinion, there are 5 top factors that should be considered when planning any affordable housing scheme in South Africa. As the team comes together, each member will be responsible for one or more of these factors, but every member can and should contribute their insights and knowledge to collectively ensure planning success.
These 5 factors are:
1. Land availability and location: The responsibility of the owner, developer, city council or provincial government.
Fundamentally, well-located land in or close to an urban centre will increase in value faster over time. This is in stark contrast to land on a city’s periphery. It not only contributes to the restoration of the urban centre, local businesses and the community, but also ensures residents has access and choice in respect of cultural, economic and living amenities.
However, land closer to cities is more expensive and is still subject to government initiatives to encourage redevelopment, for example discounts and tax breaks to appeal to developers. Current communities hamper development of cities buildings and land, and we hope city and provincial government will become more willing to work with developers given the successes of previous projects.
2. The Funding Model: determined by the developer or investor
Land cost, planning and engineering, implementation, and sales costs determine the Funding Model.
Affordable housing projects are hardly viable to fund and develop by one party. A mixture of public funding and private capital investments is needed. Therefore, cross-subsidisation funding should be used for integrated housing projects, in order to fund and coordinate engineering infrastructure more effectively.
3. Urban design maximized to add value: the urban designer and/or architect.
The value of good urban design should be not underestimated. Quality urban environments and affordable housing go hand in hand, in order to fully integrate these developments within their urban centre. Together, they strengthen the quality of our cities and public spaces and guarantee a great place where people will want to live – with connectivity to the community and everyday amenities.
Urban design also ensures housing projects are well connected to usable green spaces, and the conservation of our natural environment.
In the case of South Hills, the housing is designed to form the edge towards the natural environment. Without being the “back yard” towards nature the individual housing units responds to this green area with small spaces for people to sit and overlook green (safe space). Also, the development has a public park as a buffer between housing and nature. This park has permeable materials that allows for stormwater regulation and activities for children and adults alike.
4. Understand the needs of the end-user and market: collaboration between the developer/investor and the community?
The spatial needs of people living in affordable housing should be accommodated, but how do we know what people need? This step enables all parties to learn from the end-user, to insure a better citizen-based participatory planning and design process.
A look back to re-evaluate past projects, to see how needs change over time, and a look into future lifestyle trends can become important learning’s for future planning.
5. Building height: urban designer and/or architect
Our current South African Building Standards for housing dictates the width of passages and number of staircases for multi-story buildings. When this standard is balanced with affordability and efficiency, the three to four story building becomes the optimal model. This is in part due to the shared cost of staircases and passages in relation to the unit cost.
After many years of segregated urban planning and low-density suburbia, huge opportunity exists to optimise the land and connect our communities. Compact designs and densification within our cities are the best route forward.
The “elephant in the room” with three- and four-story affordable housing projects is always parking. We advocate the restructuring of public policy in this regard. Yet it brings us back to the connectivity and use of urban development (location) in point 1 – affordable housing can only be successful if it is within walking distance to quality public transport.
So how does South Africa score against our 5 Factors?
Land Availability: 8/10
We start with a relatively good score, with many affordable housing projects utilizing the restoration of existing urban centres to increase the long-term value of housing investment. So long as this trend continues, we will connect more citizens to our cities, providing them with opportunity and choice, and contributing towards the multi-cultural densification of our cities.
The Funding Model: 7/10
There is still a huge gap between government commitment to the funding process and implementation. Project and ideas can become slowed or paralyzed by bureaucracy. We face major problems such as stealing, looting and coercion of tenders that can bring a project to a standstill.
We need more coordination between local, provincial and national government to fix the issues in our current funding model.
Urban Design: 7/10
With a way still to go, the most successful schemes have made excellent use of urban design, creating an environment that users enjoy living in, and creating long-term value for the city and the quality of urban housing.
Understand the needs of the end-user: 6/10
This is often difficult to score, as the needs of the end user may have changed over time. Further consultations on past projects, and a look into lifestyle trends can inspire a more flexible urban model. Developers and designers should also consider affordable housing to be part of the housing ladder.
Use of 3-4 story buildings: 6/10
We find this often overlooked. In context of the South African city, density and compactness is key. Architects and developers can optimize our infrastructure and building regulations to maximise land use. The staircase is king!
What makes South Hills a perfect example of affordable housing in a South African context?
The South Hills project is one of the premier integrated housing developments in the City of Johannesburg, just 5km from the CBD. With a full range of mixed income housing, from community residential units to open market bonded housing, the development provides homes to approximately 32,000 people.
South Hills used the implementation model of the Sustainable Development Goals (SDG’s), creating a sustainable development with energy saving technologies for water and electricity needs. Urban design played an integral role to create a green community, with facilities on site that fulfilled user needs, including schools, parks and religious buildings. The site enhances surrounding communities by including an upgrade to the bulk and link infrastructure. Connectivity and community were key considerations, successfully integrated.
A showcase for urban densification and using a successful Public Private Partnership funding model, this project helps with the eradication of the current housing backlog in the City of Johannesburg, creating accessible, affordable housing in one of the largest cities in the world.