Affordability, cooperation critical for housing development
Affordability was the key issue facing South Africa in terms of human settlements and housing development, South African Affordable Residential Developers Association committee member and Basil Read Developments MD Yusuf Patel said on Friday at the Banking Association South Africa’s 2014 Banking Summit.
Patel stated that there were several aspects that could bring down housing development project costs and make the units more affordable.
If regulatory approval and preparation time were reduced, project costs would be lowered.
Finance Minister Nhlanhla Nene said he was aware of this problem, noting that he understood that it took between 31 and 42 months to get a piece of land declared as a stand on which building could be done, adding up to 20% to the cost of the house.
Patel suggested that a special fast-track approval system, which integrated all sector requirements, be implemented for affordable housing priority projects.
Bulk infrastructure also had to be better planned and building standards be applied consistently, to create economies of scale. Innovation had to play a greater role in reducing costs, Patel added.
The appropriate public–private investment mix was also important, he said.
Housing Development CEO Taffy Adler, representing Human Settlements Minister Lindiwe Sisulu, stated that the banking sector also had a role to play and should be willing to provide lower-end customers with the same ingenuity and risk measures that were provided to high-end clients.
Nene added: “We cannot afford to pay for the long-term [costs] associated with locating our people far from jobs. We, therefore, cannot expect more grants from government to cover inefficient practices,” he said.
If coordinated through a city-based spatial plan, which would reduce travel times and improve access, investments could be maximised in terms of their developmental impact, he said.
He stated that South Africa found itself in a time of “prudent partnerships” where the investment risk had to be shared by all stakeholders – government, the private sector and households.
By: Leandi Kolver