By Lusanda Netshitenzhe, CEO of TUHF21
When I consider the vast sprawl and low densities in most townships across South Africa, the first thing that becomes apparent is that there are abundant opportunities. Notably, there are significant opportunities for densification and to integrate mixed-use developments within these areas. This I believe will invigorate township economies, which is an exciting source of future economic growth for the country.
However, realising these opportunities needs to be done the right way, as the journey of building new, inclusive and affordable housing in townships is a multifaceted one.
Property entrepreneurs need to understand how to secure financing from the likes of uMaStandi, and they need to find the right project team, vet tenants and ensure compliance with municipal regulations, to name a few. Equally as crucial and not as frequently discussed is the importance of ensuring one has the “rights to build” in terms of the applicable town planning and land-use regulations; and this is usually where most roadblocks are met by property entrepreneurs.
At its heart, town planning is the management of how land is developed and it ensures that development happens in an orderly fashion. Historically, there were reasons why most of our high-rise buildings were in the CBDs and low-density residential properties in suburbs and townships. But times have changed, and regulations need to consider systematically allowing medium-density developments in townships because building activity happens daily and mostly without formal approvals. These uncontrolled densities are putting strain on the already burdened bulk infrastructure and municipalities need to proactively manage this to avoid total infrastructure collapse.
Property entrepreneurs need to be cognisant that town planning takes place at the very beginning of the development process. At this stage, they must obtain all the required permissions from the relevant municipality to ensure the necessary services, such as water, electricity and sewage are taken into account for their developments.
Secondly, property entrepreneurs must factor in the length of time applications can take to be approved. This can take from between six months, to a year, depending on the municipality. Rezoning approvals can take between eight months to two years in some municipalities and this has serious cost implications for developers. This is where collaboration between property entrepreneurs, financiers such as uMaStandi and municipalities is needed. Costs and time associated with these processes need to be reviewed and necessary changes to streamline these processes must be considered, otherwise, we run the risk of continued uncontrolled densities and potentially disinvestment by capital providers who are currently committed to the economic development of townships. The simple truth is that capital will move elsewhere where it is easier to do business, leaving townships entrepreneurs with no long-term and competitive financing options for their projects.
Property entrepreneurs and those in need of quality affordable housing in townships cannot afford to have providers of capital moving out; and municipalities need the increased rate base to invest in the maintenance of existing and to build new infrastructure. Intentional collaboration between all stakeholders is the only way forward.
Collaboration in Town Planning Reform is Key to Unlocking Township Real Estate Read More »
Johannesburg, Wednesday, 06 September 2023 – The recent spate of serious events in Johannesburg CBD – including the tragic fire in Marshalltown that has claimed 77 lives and the devastating gas leaks in De Korte and Bree Streets – continue to raise concerns over poor urban management, lack of by-law enforcement and inadequate governance within the CBD.
Paul Jackson, CEO of TUHF, says: “Though the media coverage of these devastating events draws a much-needed spotlight towards the challenges faced in the inner city of downtown Johannesburg, these events are regrettably not isolated and in fact are a consequence of a much longer-standing issue. One that must be addressed as a matter of urgency.”
As an invested stakeholder in the inner city for the last 20 years with more than R5 billion invested in the Johannesburg CBD, TUHF continues to actively engage with local government regarding the prevailing and underlying issues that have preceded these most recent headline events. “From the lack of service delivery, the increased scourge of hijacked buildings, damage to properties caused by the 2021 riots, xenophobic attacks and dangerously insufficient maintenance of infrastructure; we have relentlessly voiced our concerns and engaged with the local government to find solutions,” Jackson says. “There is an urgent need for improved management and intervention in the CBD to ensure the safety of the people who live here and the imperative growth of this vital economic hub, which is not achievable without local government action.”
TUHF is a leading impact investor in South Africa’s inner cities, and for 20 years has promoted the inner city of Johannesburg as an investment destination, particularly for ordinary South Africans.
“Regeneration in the inner city has seen ordinary people, with street smarts and knowledge, turn rundown buildings into successful affordable rental housing businesses,” Jackson points out. “TUHF has empowered aspiring property entrepreneurs to create safe homes and jobs within the inner city and to make an impact on communities that live, work and play here. We remain committed to the property investors we support, and as such, we must call for urgent change in the way the Johannesburg CBD is being managed.”
TUHF is deeply saddened by the recent events in the Johannesburg CBD. Such incidents reflect a critical systemic issue which affects the capital markets, the insurance sector, rental housing suppliers and the tenants they serve. TUHF strongly advocates that this is an issue of lack of execution by City management. Urban management, compliance and administration must be improved as a matter of urgency to prevent further incidents from occurring.
“The well-being of the residents and businesses in the CBD should be a top priority for the City,” Lusanda Netshitenzhe, CEO of TUHF21 says. “TUHF urges the City of Johannesburg to prioritise improved management and better governance of the inner city and to take concrete steps to address its deterioration. TUHF believes in the investment case of inner cities as essential to inclusive and transformative economic growth. Inner cities have the potential to drive real growth at a local level, provide economic opportunities to SMMEs and low to moderate income households.”
With the lives and livelihoods of so many people under threat in the CBD, TUHF calls on the City of Johannesburg’s leadership to take immediate action to address these urban management and investment infrastructure concerns.
“We maintain that collaboration is essential to address the challenges that are apparent in Johannesburg,” says Netshitenzhe. “A coordinated and comprehensive approach is needed to restore confidence in the CBD for all the City’s stakeholders. This reality cannot be ignored any longer, and TUHF joins all invested stakeholders of the inner city in calling for urgent action and changes to the way the City is managed. We are committed to collaborating with the City and other stakeholders to find sustainable solutions to the issues facing the CBD and believe that a united effort is essential to create a more prosperous City.”
Joburg City crisis – a reality that can no longer be ignored Read More »