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Cities, land and expropriation – what our politicians should be doing

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Land Expropriation - [Google Images] Land Expropriation - [Google Images]

Our politicians would do well to look at the real obstacles to the demands for urban land rather than grandstanding about expropriation without compensation.

The recent land occupations in several cities and towns across the country have focused attention on the dire shortage of suitable land for low-cost urban housing. The public debate on land expropriation has clearly encouraged shack dwellers and homeless people to try to take matters into their own hands.

The frustration of those seeking permanent urban homes is understandable. The government’s housing programme is not keeping up with demand, let alone reducing the housing backlog.

Helen Zille has commented on the messy and violent land occupations in Cape Town which have set residents of Mitchells Plain against shack dwellers. She points to the opportunistic actions of land owners that have contributed to the current impasse, but doesn’t examine the historic role of municipal planning that has provided the impetus for the recent land occupations.

Since the 1990s, urban expansion in the form of shopping malls, office parks and sprawling estates has dramatically changed city landscapes, particularly along the most strategic transport routes. Billions have been spent on upgrading the roads serving these developments. But houses built under the government’s subsidised “RDP” housing programme have mostly been tucked away in remote urban areas away from the main transport routes. The most visible low-cost housing has been the mushrooming of informal settlements across the cities. Although the shortage of housing is often claimed to be the number one problem for cities, when it comes to land, subsidised housing comes last on the list.

The reason for this dichotomy is simple. Municipalities have allowed urban planning and expansion to be driven by private land owners and property developers. Because the primary incentive for land developers is to maximise income from the land development process, the higher the value of the eventual development, the greater the profitability of the project. Needless to say, there is very little incentive to build low-cost housing, especially the “RDP” houses needed for the majority of the poor and homeless.

This private sector driven urban expansion coupled with the government’s subsidised housing programme is increasing urban sprawl, lengthening transport routes and cementing inequality into the urban environment. Few, if any, private land developments anywhere in the country have included significant portions of land for low-cost housing.

One successful post-1994 urban project in which low-cost housing was built close to a city centre was Cato Manor in Durban. Only 5km from the CBD, Cato Manor is integrated into the urban fabric like very few other low-cost housing developments. But this was a publicly driven project, made possible by the long running impasse over the land after the 1948 race riots and the forced relocations under the Group Areas Act. This left the land largely vacant for decades. No large land developers were involved, the major driver being the Cato Manor Development Association, a non profit municipal/public partnership.

For privately owned land, there is no need for “expropriation without compensation” to ensure that strategic land is allocated to low-cost housing. The tools exist, and are relatively simple, consisting of zoning and land use legislation and regulation. Municipalities are able to zone land for housing, irrespective of current ownership.

The prioritisation of housing should not prevent the development of necessary new industrial and commercial areas. It need not even prevent the private sector from planning and designing these developments. But it would give public sector planners the responsibility to decide on the strategic locations of new residential, industrial and commercial space, the timing of the release of the land and the spatial relationships between the new and existing living spaces and between living and work spaces. In essence, it means that urban expansion will be planned to meet the long term needs of the cities’ residents rather than short term financial benefits to land owners and developers.

Will this approach not deprive municipalities the financial benefits derived from the rates from new private sector developments? For industrial areas, this would be true if municipalities failed to allocate enough land for new industry, or if they were unable to provide the required municipal services (often the case at present). For residential and commercial developments, much stricter planning and zoning would assist the state objective of cities to improve densities, and would increase the rates base on existing developed land. Municipalities could end the cycle of unnecessary large new shopping malls which increase travel distances and degrade existing commercial areas, whether CBDs or local shopping centres. But cities’ rates bases should broadly continue to reflect the level of economic activity within the city.

While this approach to housing is technically possible, it will of course bring the fault lines in our society into sharp focus. In 2007, national government introduced a policy of “inclusionary housing” to get developers to allocate up to 30% of new developments to “affordable” housing. The definition of affordable was rented housing in the R600 to R3,000 range. Despite the lack of any requirement for “RDP” housing, there was strong objection from the organised property sector to any compulsory affordable quota, and the government agreed that the inclusion of affordable housing should be voluntary, albeit with some incentives. The policy has left the “RDP” programme virtually untouched, and the success in expanding the affordable rental market has been mixed.

The impact of any rational and determined move by municipalities to reserve good land for low-cost housing would be huge, challenging many existing relationships. Once land has been zoned for low-cost housing, its market value will significantly decrease. The private sector will understandably fiercely resist what amounts to the destruction of their future income, and owners and property developers will inevitably hold out for as high a price as possible.

As with rural land, the constitution allows for acquisition of property for “a public purpose or in the public interest”. If no agreement between a municipality and a property owner can be reached, the land can be expropriated with the price determined by a court. The use of expropriation is what Helen Zille is advocating in the Mitchells plain dispute. A politician urging a sensible concrete solution to a specific problem is a significant step forward in the current land debate. But action against one or two rogue land owners will do little to address the underlying crisis.

Existing residents will inevitably object to low-cost houses being built in their neighbourhoods. With wealth disparities as large as ours helping to drive crime, good planning and careful mediation will be required.

Of course, the acquisition of land is but one of many components of a fair and equitable housing programme. But the past 20 years has shown that without adequate and suitable land, the government housing programme falls seriously short of providing acceptable living spaces.

As with rural land reform, the question of compensation for urban land is a secondary issue. The real challenge is to redress past inequalities while promoting integration of urban spaces and providing the spatial and physical infrastructure for industrial and commercial growth.

 


 

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