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Tuesday Aug 07, 2018

Joburg discusses inclusionary housing with property developers

A public hearing was held last week to discuss the City of Johannesburg's new proposal to force property developers to provide inclusionary housing in their new developments.

It was originally proposed 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.

After the hearing the proposals were altered to address the concerns of property developers.

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 Chris Renecle of Renprop.

"Renprop is happy with the outcome and looks forward to implementing inclusionary housing measures in its future developments."

Renprop Press Release


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