Workable solution for inclusionary housing in Johannesburg

Yesterday a public hearing between developers, property practitioners and representatives of the City of Johannesburg Metro Centre was held to discuss the way forward for inclusionary housing. The hearing was attended by Councillor Reuben Masango, MMC Development Planning; Thandeka Mlaza-Lloyd, Assistant Director: City Transformation and Spatial Planning; Dylan Weakley, Senior Urban Specialist: City Transformation and Spatial Planning; Eric Raboshakga, Director: City Transformation and Spatial Planning and Amolemo Mothoagae, Executive Director: City Transformation and Spatial Planning.

“This meeting resulted in an incredibly positive outcome,” according to Chris Renecle, MD of Renprop, who says that “the city really listened to the objections the property industry raised to the initial inclusionary housing proposal and took cognisance of the concerns to find a workable solution going forward.”

The initial proposal stipulated that in order to obtain development rights for residential housing projects consisting of more than 10 units, 20% of the property would have to consist of inclusionary housing, which could not be sold, and which had to be rented out for R2 100/month.

“This was not an economical solution, and would have drastically slowed or even stopped residential property development in the City of Johannesburg,” says Renecle, “which would have serious consequences for the general economy and the property market.”

Instead, he is pleased that the Department of City Transformation and Spatial Planning has amended the initial proposal slightly and included three additional options, which make more economic sense for developers, and which has now created a highly workable solution to inclusionary housing.

The initial option has been amended to require residential housing developments consisting of more than 20 units, to ensure that 20% of the units would be inclusionary housing, to be rented out for R2 100/month.

Another option for developers is to ensure that 10% of units in a residential development are an average of 24m2 in size, which can be sold or rented out on the open market at market-related prices. The city will increase the bulk of the development rights to allow for this 10%.

Developers could also choose to create units that are 50% of the average size of units within their development, to make up 20% of the development total. Again these units can be sold or rented out on the open market at market-related prices, and the bulk of development rights will be increased to allow developers to create to these additional units.

Thirdly, developers are able to submit a tailor-made proposal for inclusionary housing that suits the development site to the Department of City Transformation and Spatial Planning for consideration. These proposals will be negotiated between the department and the developer.

The city hopes to have this proposal approved in their September Council sittings.

“There is no doubt that more affordable housing is required in the city, and these proposals are a good marriage between meeting the need for reduced entry-level housing, while still being economically viable for residential property developers,” says Renecle. “Renprop is happy with the outcome and looks forward to implementing inclusionary housing measures in its future developments.”

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