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Friday Sep 21, 2018

R144m land sold for R1.8m

To deliver on its social housing objectives, the City is selling a piece of prime property in Salt River to Communicare well below its market price.

Communicare bought the 1.7 hectares of land, currently valued at R144 million, for R1.8m to build a R715m high-rise building. In exchange, 300 of the 850 housing units in Salt River would be allocated to social housing – reserved for households with a monthly income of between R1 500 and R15 000.

The sale of the land in Albert Road was proposed by the City’s department of transport and urban development, and the council agreed to dispose of it.

The affordable rental units in high-rise buildings are only financially feasible and sustainable if the land is transferred at less than its fair market value and with a high level of cross-subsidisation from its mixed-use development concept, mayoral committee member for transport and urban development Brett Herron said.

This is key to densified social housing projects in Cape Town. This site is undeveloped and is associated with anti-social behaviour.

The proposed development presents the city with an opportunity to re-purpose the site to the benefit of the whole community, he said.

Herron said the purpose of the development was to mitigate the impact of gentrification on long-standing families from Woodstock and Salt River who cannot afford to rent or buy properties in the private market due to the unprecedented growth in values in these areas over the past decade.

He stated in the report the development cost of this City-owned site was considerably higher than would be the case for other social housing developments because it was required to meet the city’s densification objectives given its location, access to public transport services, and proximity to the CBD.

The proposed development will also assist in the regeneration of this area, given that a formal building will be built and managed by social housing giant Communicare. Currently, there are 29 families on this site who are living in informal structures.

Communicare will receive a subsidy of R80m for building the 300 units‚ and also 550 homes that would be rented at market prices.

 
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