Sapoa: All For Inclusionary Housing

As the voice of commercial and industrial property in SA, SAPOA in principle supports the need for IHP in SA and encourages the development of an inclusionary housing policy that is both incentivized and voluntary, and promotes effective public-private partnerships (PPPs).

The association is currently engaged in a consultation process with the National Department of Housing to assess and discuss the Draft Inclusionary Housing Policy (IHP).

SAPOA's point of departure, however, is that the market mechanism should drive the SA property market.

"SAPOA agrees with the view that inclusionary housing is not primarily aimed at accelerating the delivery of low-income housing, but is rather an opportunity to deliver housing solutions to different income groups in particular locations," explains SAPOA CEO Neil Gopal.

SAPOA feels that more discussion is required on a number of the Draft IHPs provisions, however.

The first is that a voluntary approach to inclusionary housing is preferable to a compulsory one.

The Draft IHP, points out Gopal, distinguishes between a Voluntary Proactive Deal Driven (VPADD) approach and Compulsory but Incentivised – Synchronized (CIS) approach.

"The CIS approach largely attempts to compensate private sector developers market for distortions that are created," explains Gopal. "SAPOA does not support this approach."

SAPOA proposes that the VPADD, or voluntary, approach should be incentivized, as has been successfully achieved with Urban Development Zones and City Improvement Districts.

"It is important that the benefits of such incentives be appropriately ring-fenced around the identified developer," adds Gopal.

A voluntary, incentivized approach could also differentiate between projects that include affordable housing on-site and those that develop it off-site.

SAPOA further proposes that on-site schemes should be further incentivized through relaxation of unit sizes; increased density allocations; reduced parking requirements; design incentives; and reduced bulk infrastructure contributions.

"The VPADD policy allows both the public and private sectors to identify projects that could benefit from an inclusionary housing scheme – and which are financially viable," adds Gopal.

Another area for discussion is that of the quotas outlined in the draft policy.

The IHP proposes that new developments include up to 30 percent of inclusionary housing units. SAPOA maintains a blanket requirement is not the way to go, and that projects should be assessed individually.

"We need to avoid a 'one size fits all' approach," explains Gopal.

SAPOA warns that the inclusionary housing could generate unintended costs to low-income households if not located in carefully considered locations.

"To be successful, inclusionary housing must be located in areas that offer social amenities such as schools, clinics and employment opportunities."

However, Gopal also indicates that the housing shortage is so critical that government and private sector should rather focus on building entire new towns. A site of 800ha and larger, with proper planning controls for a town centre, social amenities, job opportunities etc will reduce the housing shortages in line with the current backlog. "The magnitude of the housing backlog is so large that to rely on a few developers to deliver on a select few projects will not resolve the problem".

With land availability a growing constraint in the delivery of housing in SA, SAPOA encourages the establishment of PPPs. One way for government to play a constructive role, explains Gopal, is by becoming a partner in housing projects through the provision of state-owned land.

SAPOA believes that, in this way, public sector control would be enhanced and quality housing would be the result.

"Ultimately, the market mechanism should drive the SA property market and legislated distortions should be minimized," says SAPOA CEO Neil Gopal.

But at the same time, adds Gopal, the public and private sectors need to continue to work together to expand the property ownership base and enhance investment opportunities for different income groups.

For more information contact Neil Gopal at 011 883 0679 or 083 222 9608.

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