Western Cape study aims to make homes affordable: 'Market isn't working for most households'
This study is crucial as housing is unaffordable for many Cape households, says Allan Rhodes, Chief Town and Regional Planner at the Western Cape Government.
Housing complex, satellite. Pixabay/Miguel Á. Padriñán
John Maytham, standing in for CapeTalk's Lester Kiewit, speaks to Allan Rhodes, Chief Town and Regional Planner in the Spatial Planning Directorate at the Western Cape’s Department of Environmental Affairs and Development Planning.
Listen below:
Rhodes discusses the Western Cape Housing Market Studies Round II project, which aims to provide insights into the formal housing market in select municipal areas and determine if they can implement an Inclusionary Housing Policy.
This plan is crucial as housing is unaffordable for many Cape households.
"We embarked on this study because in 2022, the municipality adopted something called the 'Inclusion, Equality Housing Framework', which is an empowering framework for municipalities to develop their own inclusion and housing policies... the formal housing market, largely, in the Western Cape isn't working for most households..."
- Allan Rhodes, Chief Town and Regional Planner - Western Cape Government
"The latest research is showing that the average house price in 2024 is about R1.6 million, whilst the average household can only afford approximately R600,000. So, there's a clear affordability gap between what a house costs and what households can afford. So, the Housing Market Studies were developed to help municipalities understand their local supply, demand, pricing and affordability dynamics, to understand any gaps in the housing ladder... and it's to assess whether or not any housing is feasible in a particular municipality."
- Allan Rhodes, Chief Town and Regional Planner - Western Cape Government
While studies show that most South Africans can afford state-supplied homes between R300,000 and R900,000, few homes in this price range are built.
Rhodes believes these are the reasons for that:
- Limited land availability, which limits the production of housing;
- High land costs;
- Privatised and state-locked land;
- Restricted zoning policies;
- Planning and compliance processes are expensive;
- NIMBYism (not in my backyard) from residents in the area who resist housing development.
- The land transaction system is difficult to navigate - lower-income households don't have access to these systems;
- Title deed issues;
- Profitability bias - developers favour building units in the R1.2 million+ range
- Low average incomes, informal and unstable employment make it difficult for people to get finance for housing.
This is why the Inclusion, Equality Housing Framework, one of many potential affordable housing enablement policies, can be used to unlock supply in this critical affordable range of housing, says Rhodes.
"Responding to the affordability gap... You need multiple actions to be taken at various scales... the principles at the end of the day are around de-risking the markets and diversifying that market... We need to increase supply in places where supply hasn't historically been created..."
- Allan Rhodes, Chief Town and Regional Planner - Western Cape Government
Scroll up to the audio player to listen to the full conversation.