Banks have two weeks for housing plan

Three major banks have another two weeks to come up with housing development plans for people with an income of between R3 500 and R10 000 a month, so that homes can be built on 42 hectares of land recently earmarked in the city.

Absa Bank, Standard Bank and Nedbank will have to vie to build in the designated areas in Wallacedene, Maitland, Rugby, Ottery, Westlake, Southfield and Langa.

This week, the City of Cape Town gave notice in the press that it was alienating the land and invited comments before October 27.

The city had earlier said it wanted at least 1 800 units built on the earmarked land as a step to reducing its housing backlog of 400 000.

Basil Davidson, of the city's Land Acquisition and Alienation Department, said the proposals by the three banks would be evaluated on what the banks were prepared to pay the city for the land, as well as the type of housing development the banks planned to construct.

Davidson said a show village for potential residents to get a feel of the proposed housing developments was also planned.

"We are really trying to use this initiative to deliver as much as we can in that market," he said.

Davidson's research shows that those backyard dwellers who do have an income earn between R500 and R1 000 a month.

Many of them should be able to service a loan and acquire their own property at some stage, he said.

Davidson said the city was committed to making land available to help people in this income bracket get a house through the city's partnership with the three banks.

The partnership was signed in May.

People who earn between R3 500 and R7 500 will qualify for a subsidy deposit from the government - about 50 percent of the deposit that would be required to buy a house.

It is estimated that 165 000 people in the city fall into the gap and affordable housing markets.

Davidson said the home loan packages could include set-up loans where the interest rate was increased over the duration of the loan period - a system where equity on the housing unit was shared between the owner and the financial institution - or the reduction of legal and registration fees.

Article by: Linsday Dentlinger -