Low cost housing to abut mansions
A Proposed national policy that could force developers to build low-cost homes smack next to mansions would turn the house market on its head, according to Eastern Cape property experts.

There was outrage in national property circles when it emerged last week that the national Department of Housing had embarked on a consultative process over its Draft Proposal on Inclusive Housing.

In terms of the proposal, up to 30 percent of the value of each new property development should be put aside for low-cost housing. This could lead to a situation where state-subsidised houses costing less than R100000 are built next to houses topping R1 million in the same suburb.

In addition, low-cost houses must be integrated with the more-expensive houses in the same development, as in the case of townhouse and golf estate developments.

David Eastall, who is developing the Chintsa River Golf Estate, believes the policy would bring the property market to a halt.

“Building low-cost housing next to more expensive houses will mess with the demographics and the marketability of a development. I think it is unfair to buyers and it will be very difficult to implement.”

Eastall said developers were already making a huge contribution to state coffers in the form of property taxes, value added tax and levies. Asking for 30 percent for low-cost housing would be too much.

“It is the government’s job to redistribute money from taxes for social benefits. If developments are stopped (due to the policy) tax benefits won’t go to the government,” he said.

Port Alfred estate agent Heather Tyson said it would be very difficult to value properties if low-cost houses were scattered among them.

“We’ll just have to wait and see, but I can only imagine that it wouldn’t go well,” she said.

Developer Grant Wheatley, who is planning to erect a residential development in Beacon Bay, said there would be considerable consultation before such a policy was passed.

“I don’t necessarily say it’s a bad thing but it has to be handled in a sustainable way. It’s OK to build low-cost houses in a high-cost development but some people would not want to live in those houses because the rates and taxes may be too high.”

He said the policy could avoid a situation, like in Beacon Bay, where a suburb was developed, but a low-cost area was not planned for - giving rise to an informal settlement like Nompumelelo. “It’s all a matter of planning ahead,” Wheatley said.

A similar policy was approved by Tshwane last year. Large middle-class and low-cost residential areas are to be built next to the city’s affluent eastern suburbs within eight years.

Yesterday, the South African Property Owners’ Association (Sapoa) refuted media reports that claimed the government had finalised the draft policy without proper industry consultation.

“The point is that the draft proposal is exactly that - a draft housing policy paper. It is still very much open for discussion,” said Sapoa’s legal services manager, Tsakane Shilubane.

Daily Dispatch

"David Eastall, who is developing the Chintsa River Golf Estate, believes the policy would bring the property market to a halt "


"I think it is unfair to buyers and it will be very difficult to implement"


"If developments are stopped (due to the policy) tax benefits won’t go to the government"


"We’ll just have to wait and see, but I can only imagine that it wouldn’t go well "

Article by: Roux Van Zyl - www.sundaytimes.co.za