Human Settlements
Whether he and his Department have conducted any investigation into why the plans to build affordable housing on the site of the Salt River Market have been cancelled by the City of Cape Town; if not, why not; if so, what are the relevant details?
A meeting was scheduled between myself, my senior officials, City of Cape Town and Communicare to establish why the plans for Salt River Market development had been delayed. At the meeting the City and Communicare jointly responded to issues raised previously at Council.
The concerns that was raised regarding why the land is discounted by 90% and why is social housing only 33% were addressed.
It is a norm in a Social Housing for the land to be disposed at 10% discounted price in order to make the units affordable to the end user, the beneficiary - not for the benefit of the developer. In this development, only 33% will be Social Housing even though the land is discounted.
The reason for that is that Social Housing project consists of land from the City at 10% discounted price, subsidy from the Department of Human Settlements through Social Housing Regulatory Authority (SHRA) and 10% contribution by the Social Housing Company. Each unit costs between R400 000 to R500 000, the state contribution is R271 000 plus land at a discounted price, and the rest of the capital comes from the Social Housing Company.
The Salt River development has a different approach, however. The density will be higher than normal, which comes at an additional cost. This will result into the unit costing about R700 000, which make the R271 000 state contribution falls far short to make the project a success. In order to make the development viable, this must then be a mixed development which must conclude upper market and commercial in order to cross subsidize the lower market, this will take affordable housing market to 44%.
The matter is since gone back to Council and has received the green light.
