|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
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
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
It is the governments job to redistribute money
from taxes for social benefits. If developments are stopped (due
to the policy) tax benefits wont go to the government,
Port Alfred estate agent Heather Tyson said it would be very
difficult to value properties if low-cost houses were scattered
Well just have to wait and see, but I can only imagine
that it wouldnt 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 dont necessarily say its a bad thing but
it has to be handled in a sustainable way. Its 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.
Its all a matter of planning ahead, Wheatley
A similar policy was approved by Tshwane last year. Large middle-class
and low-cost residential areas are to be built next to the citys
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 Sapoas legal services manager, Tsakane Shilubane.
"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
"If developments are stopped (due to the policy) tax
benefits wont go to the government"
"Well just have to wait and see, but I can only
imagine that it wouldnt go well "