Cape Town sells property valued at R144m for R1.8m in social housing deal

Cape Town sells property valued at R144m for R1.8m in social housing deal

- The City of Cape Town has sold a property with a market value of R144 million for R1.8 million to meet its social housing commitments

- The City sold a plot of land in Salt River to a property developer who will build a high-rise housing building

- In return for the incredibly low purchase cost, the developer will allocate 300 of the 850 units in the building to social housing reserved for families earning between R1 500 and R15 000 per month

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The City of Cape Town has sold one of its properties with a current market value of around R144 million for a paltry R1.8 million in order to meet some of its social housing commitments. The City sold a 1.7-hectare piece of land to a property developer who will build a R715 million high-rise housing building on the site.

In exchange for the rock-bottom price, the developer will allocate 300 of the 850 units in the building to social housing. These units will be reserved for low-income families who earn between R1 500 and R15 000 per month.

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Cape Town’s department of transport and urban development mayoral committee member Brett Heron said the affordable and social housing rental units in and around the CBD would only be financially viable if the city made land available at lower than market costs.

Briefly.co.za gathered that the city feels such projects would only be feasible if they formed part of mixed-use developments with above average cross-subsidisation.

Heron pointed out that the property in Albert Street, Salt River was currently not developed and had become known as a haven for criminals and anti-social behaviour.

IOL.co.za reported that Heron said the project would provide urban renewal opportunities to the entire community while eradicating some of the anti-social and crime in the direct area. The area would also benefit from the expertise brought by the building management company

The sale of the property was approved by the City of Cape Town council after the department of transport and urban development proposed a plan for the site which would benefit the community and the city.

Heron said the project was driven by the need to assist low-income families in the Salt River and Woodstock areas of the city who could no longer afford to buy or rent homes in the area because gentrification projects had led to property prices experiencing unprecedented levels of growth.

The deal will see the developer receive an additional R80 million subsidy to build the 300 social units. The developer will be free to rent the remaining 500 units at market price.

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Heron noted that there were currently 29 families living on the property in informal housing structures. He said the city would engage with these families and allocate units to those who qualify and provide alternative housing to those who don’t.

The City of Cape Town has in recent years been heavily criticised for a lack of social housing, particularly near the CBD. Reclaim the City said while it welcomed the news of additional social housing units being made available it remained opposed to selling public land.

Cape Town remains one of the most expensive home rental markets in not only South Africa but in Africa.

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Source: Briefly.co.za

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