FAQs

Housing is complex, and there are difficult questions to consider. But there is good research to back up how affordable housing can work on the Atlantic Seaboard.

WHAT IS INCLUSIONARY HOUSING?

With inclusionary housing, a private developer sets aside a portion of the units in a new building for affordable housing – available for rental or purchase for less than the market would allow. Inclusionary housing is a set of rules a municipality applies to new developments.

WHAT IS THE DIFFERENCE BETWEEN AFFORDABLE HOUSING, INCLUSIONARY HOUSING, SOCIAL HOUSING, FLISP HOUSING AND RDP/ BNG HOUSING?

Affordable housing is an umbrella term for all of the types of housing listed below that rent or sell for less than market value. In South Africa the government created many types of affordable housing after 1994 to cater to the different needs of different families. Inclusionary housing aims to make affordable housing available through the private property market and work to reduce the exclusionary nature of well located, high value property markets that keep people priced out of good areas. Social housing is a specific type of state subsidised affordable rental housing targeted at households earning R1 850 – R22 000 per month. Social Housing is governed by the Social Housing Act, 2008 (Act 16 of 2008). Inclusionary housing policy may include that private developers can contribute to social housing as one of the options through the policy. FLISP (Finance Linked Individual Subsidy Programme) provides a subsidy for first-time home buyers to assist with purchasing a home. The subsidy is paid to the beneficiary’s bank or financial institution and will reduce their monthly loan instalments, making it more affordable to purchase a home. Households with a monthly income between R3 501 and R22 000 may qualify for the FLISP subsidy if they meet all the criteria. The subsidy amount depends on the income of the applicant and ranges between R27 960 – R121 626. A developer may use the FLISP in its development to further improve affordability. RDP or BNG housing is fully subsidised housing (free houses) provided by the state to households earning less than R3 500 per month. This type of housing is separate from inclusionary housing. This type of housing is not possible to build in our areas because the land is too expensive.

WHAT CAN DEVELOPERS DO TO MAKE NEIGHBOURHOODS INCLUSIVE?

Private developers play a role in shaping neighbourhoods. They are creating our city bit by bit every time they build something! They have a social responsibility in creating inclusive and equitable communities and cities. Inclusionary housing policies require private developers to set aside a portion of the units in a new building for affordable housing – available for rental or purchase for less than the market would allow. In some cases, developers will be allowed to make an inclusionary housing ‘contribution’ – this is money set aside for affordable housing on another location. The area must be well served by facilities and amenities. They must have good access to employment opportunities, and they must be areas where developers are interested in developing.

WHAT ABOUT PROPERTY VALUES?

There is often a fear that having affordable housing built in our area will decrease property values of existing homes. We think that affordable housing will be ugly, badly built, badly maintained, poorly managed, will increase traffic and will increase crime. These worries are based on assumptions and perceptions – let’s look at the facts! It’s important to remember that there are lots of different types of affordable housing. While some of these can be built badly and have other issues, the type of affordable housing that would be built in our area would be social housing or inclusionary housing. Social housing consists of rental apartment blocks that are rented out and managed by a Social Housing Institution (similar to an NGO), overseen by the national government. It builds, manages and maintains the building. Social housing is generally built very well and can be designed very beautifully, including playgrounds and social spaces. You can trust that the Social Housing Institution will take care of the building well and will keep it clean and well-maintained. Inclusionary housing is built by private developers so it will look just like any other apartment in our area! Social and inclusionary housing are not the type of developments that will drop our property values. Research from Cape Town found that “Social Housing was estimated to have no effect” on property values of surrounding homes. Internationally, the US has the most research on this topic. For example, a review of 62 studies on the effects on affordable housing on property values across the US found that 90% of the studies proved a positive or neutral effect on surrounding property values. Overall, just under half of the studies actually found that affordable housing being built had a positive impact on housing values! Only 8% of the studies found mixed effects and only 2% of the studies found that affordable housing negatively affected property prices.

WHAT ABOUT CRIME AND SAFETY?

This is a fear which is unfounded in the developments that have been built across the country. Inclusive housing is for people who are regularly employed – the domestic workers, nurses, cashiers, and cooks who already spend their days in the area.

WHAT ARE THE RULES FOR SUBLETTING AND SELLING AFFORDABLE HOUSING?

Nobody is allowed to sub-let and there is a limit on the number of people who can live in each home.

WHAT ABOUT HOMELESSNESS?

Inclusionary housing is for people who can afford rent or bond repayments. However, YIMBY Seaboard believes inclusive housing should be part of a holistic approach to housing in our areas. Homelessness is not going away by itself, and those who live in the street need extra social support. The City’s plans should include forms of housing that are humane and supportive of homeless people on the Atlantic Seaboard.

WHO IS INCLUSIONARY HOUSING FOR?

Households earning between R3,501 and R22,000 a month who are able to pay rent or a mortgage. The provincial average income is R19,491. Many of our key workers (nurses, teachers, police officers or municipal workers) earn salaries in this region and could benefit from living closer to better opportunities and spending less time and money travelling to work. The COVID pandemic proved to us that these workers are completely essential to the life of our city, yet they remain stuck living far from the opportunities and amenities that our areas allow. Cape Town’s poorest residents spend 46 percent of their monthly household income on transport, when they could be living closer to their jobs and using the up to 4 hours a day that many people spend commuting living their lives. Municipalities should consider other criteria too, like gender, youth and single-headed households.

WHO IS INCLUSIONARY HOUSING FOR?

WHO WILL GET INCLUSIONARY HOUSING UNITS AND HOW WILL THEY BE CHOSEN?

Units should be reserved for Black, Coloured and Indian households, women, the youth and people living with disabilities, with priority being given to qualifying households that were historically excluded and disadvantaged, and • Shall be drawn from the City’s housing waiting list, or • Shall be drawn from a lottery system or another suitable mechanism.

HOW MUCH DO YOU NEED TO EARN TO QUALIFY FOR INCLUSIONARY HOUSING?

Ideally, we’d like to see these conditions applied: • The affordable homes should be reserved for qualifying tenants with a total combined household income of between R3,500 and R18,000 per month • This should be further broken down into income bands. We suggest the income bands of R3,500 – R5,500; R5,501 – R11,300; R11,301 – R18,000 • The homes must be spread evenly across the three income bands, i.e. 33% of the affordable homes must be made available to rent to households in each of the income bands • Monthly rental or bond repayments may not be more than 30% of total household income (inclusive of rates and taxes); • The rent or value of the property may not escalate annually beyond inflation (based on the Consumer Price Index) Based on the rule of thumb that housing costs should not take up more than ⅓ of income, this means that more than half of Cape Town’s population cannot afford rentals or mortgages of more than R3,333 per month Other cities around the world that use the ⅓ rule include Berlin and New York. In Canada 30% of household income for housing is considered affordable. In South Africa, the Social Housing Act and its regulations regulates the social housing sector by using the ⅓ of income rule. While not perfect, this ratio gives us a gauge of how much housing costs should be compared to income.

WHO WOULD ALLOCATE INCLUSIONARY HOUSING?

The owner of the development where the inclusionary housing units are provided. A household interested in a unit would apply and would need to meet the criteria agreed to between the municipality and the developer. Inclusionary units available to buy would be priced below the units available on the open market in that development. The household may still need to be able to qualify for and repay a bond. The developer must be sure that the household can afford to buy that unit. If the available unit is for rent, the landlord must be sure that that household can afford the rent and will pay the rent, and they will be responsible for managing the tenant going forward.

APARTHEID IS OVER – WHY DO WE NEED A HOUSING POLICY?

Apartheid is over but ‘spatial apartheid’ remains. It shows up as the 40x40x40 syndrome — many people living in a 40m2 house, situated 40km from work, and with transport costing up to 40% of a household’s income. This puts most Capetonians at a serious disadvantage, making it extremely difficult to build a better life.

APARTHEID IS OVER – WHY DO WE NEED A HOUSING POLICY?

WHY SHOULD PRIVATE PROPERTY DEVELOPERS CONTRIBUTE TO MORE INCLUSIVE NEIGHBOURHOODS?

Inclusionary housing policies do not simply require developers to pay for affordable housing out of their own pockets – they seek to recoup some of the significant value that is unlocked when a property’s developable potential is increased by a municipal land use decision. For example, the City might allow a developer to build higher, or relax parking space requirements. More generally, land value is socially created and not created only by private developers and landowners. The value of land depends on public infrastructure and services and how economic activity has been generated in the areas by society and government, as a whole, over time. Inclusionary housing is one way to fairly distribute these unearned increments in land value more fairly in the broader public interest. In other words, the value is being shared between the developer and the public good.

ARE THERE OTHER CITIES THAT HAVE HAD SUCCESS WITH AFFORDABLE HOUSING?

Several cities around the world have made efforts to implement inclusionary and affordable housing policies and initiatives. While the success of these efforts can vary, here are a few examples of cities known for their efforts in promoting inclusive housing: 1. Johannesburg, South Africa: In 2019, Joburg became the first South African city to implement an inclusionary housing policy. 2. Vienna, Austria: Vienna is often cited as a model city for inclusionary housing. The city has a strong social housing program that provides affordable and high-quality housing options for its residents. Nearly 60% of Vienna's population lives in social housing, which has helped maintain a diverse and mixed-income cityscape. 3. Singapore: Singapore has implemented various policies to ensure inclusive housing. The city-state has a comprehensive public housing program known as the Housing Development Board (HDB), which offers affordable housing to a majority of the population. The HDB aims to create sustainable and inclusive neighbourhoods by integrating residents of different income levels and ethnic backgrounds. 4. Copenhagen, Denmark: Copenhagen has focused on mixed-income housing developments to promote social inclusion and diversity. The city has implemented policies that require new housing projects to include a certain percentage of affordable units, ensuring a mix of income groups in each neighbourhood. 5. Portland, Oregon, USA: Portland has been recognized for its efforts in inclusive housing. The city has implemented policies to encourage the development of affordable housing units, including inclusionary zoning, which requires developers to include affordable units in new residential projects. Additionally, the city has supported community land trusts and cooperatives to create more affordable housing options. 6. Melbourne, Australia: Melbourne has implemented various initiatives to promote inclusive housing. The city's public housing program, managed by the Victorian Government, aims to provide affordable and secure housing options for low-income households. Melbourne has also focused on urban regeneration projects that incorporate mixed-income housing and provide opportunities for social and economic integration.

WHY NOT CREATE HOUSING IN AREAS POOR AND WORKING CLASS PEOPLE ALREADY LIVE?

The vast majority of state-assisted housing provision has entrenched, rather than redressed, spatial apartheid. The prioritisation of quantity has come at the expense of the quality and location of these homes and has created ‘poverty traps’ on the outskirts of the city far from job opportunities, social amenities and decent, reliable transport. Inclusionary housing is a tool for tackling segregation and contributions can only be recouped from the ‘hot’ property sub-markets in well-located areas. Our areas were declared ‘Whites only’ under apartheid and have largely stayed that way. The only way to break down racial segregation and fix the situation that apartheid created is to provide affordable homes in our area.

WHAT KIND OF UNITS SHOULD BE BUILT FOR INCLUSIVE HOUSING?

Units should be large enough that they don’t exclude the majority of households, which are between 3 and 5 people, and should welcome children, and women-headed households. The affordable homes must have a minimum floor area of 35m2 and the homes must include at least one bedroom, a kitchen and a bathroom. If built within a private development, they should be integrated throughout the development.

HOW MANY UNITS SHOULD BE FOR INCLUSIONARY HOUSING IN A DEVELOPMENT?

The proposed development must contain a fair and feasible number of affordable homes, which either amounts to 20% of the total homes or a contribution proportionate to 50% of the additional value gained through the land use application process.

CAN MICRO UNITS BE USED FOR INCLUSIONARY HOUSING?

Micro-units, some of which measure 25m2, can’t fit more than one or two people and most people who need affordable housing live in larger households. In Cape Town most families are 3 – 5 people and wouldn’t fit in these small homes. As a result, these small apartments aren’t spatially just They also end up being more expensive per square metre than bigger apartments, so people with less money are literally paying more for a square metre. Micro units are more prone to property speculation because they are suitable as “lock up and go” lets, student lets and short-lets such as Airbnb. Micro-units are therefore often treated primarily as commodities for profit and investment, and as a result are more likely to sit empty for large portions of the year as opposed to being used as homes for families. The proliferation of micro-apartments on the Atlantic Seaboard should be a concern for residents, because they change the nature of our neighbourhoods.

WHERE WITHIN A BUILDING ARE INCLUSIONARY HOMES PLACED?

Inclusionary homes must be spread throughout the development. If given a choice, developers are likely to place all the inclusionary homes in the lowest value part of the development to maintain their profits. This could result in the segregation of the lower income families, even within the development or building itself. Internally segregated developments undermine the purpose of building inclusionary housing which aims to break down race and class segregation in the city. To ensure social integration within the development and make sure that families are not stigmatised based on their incomes, it’s essential that the inclusionary homes are mixed within the rest of the development and are visually indistinguishable from the other homes.

HOW DO WE STOP RESIDENTS SELLING UNITS FOR MASSIVE PROFIT?

The simple answer is that there will be rules in place to make sure this is not allowed. One way to do this is to place a restriction on the title deeds that limit the resale value to CPI inflation. This means people will be able to resell for how much they paid for the home plus inflation. It would be the municipality’s responsibility to put these rules in place, make sure they work and make sure there is a good way for the next family to be selected to benefit from the affordable home.

WHAT CAN ATLANTIC SEABOARD RESIDENTS DO?

We need you to speak up! Private development has been allowed to happen and charge whatever they want on the Atlantic Seaboard largely unchecked by government. The result has been that apartheid’s race-based exclusion has been entrenched through class-based economic exclusion. We need you to join us to ensure that the State and the City live up to their obligations and act on their powers. Tell our ward councillor at XXX that you want to see an inclusionary housing policy in our city and in our area. Speak to your friends, neighbours, family and colleagues about why we need affordable housing on the Atlantic Seaboard! Follow us at nstagram.com/yimbyseaboard/ and stay up to date with YIMBY Seaboard news.