Neil Fraser
May 3, 2004
LET me say at the outset that although I am focusing on Cape Town in this issue I do so only as an example and a platform to voice some issues that are of increasing concern. As I have written in previous Citichats, the investment in high-income residential property in both Cape Town and Joburg is more than welcome and is an essential part of the revitalisation process that both cities are undergoing as they work towards 24/7 status. But my question is whether we are harnessing the new investment in a way that will benefit all of our citizens or just an advantaged few.
I found myself, for a variety of reasons, in Cape Town on a number of occasions recently. Earlier this week I had another look at the literal explosion of residential projects in the heart of the city.
The central city has always been almost ringed by residential development, much of it occupied by what one article I read whimsically describes as the "working class". Bo-Kaap and Schotsche Kloof to the west on Signal Hill, District Six before its ignominious extinction by the apartheid government, and Woodstock, Observatory and Salt River in the east, a crescent of suburbs to the south in the City Bowl, Tamboerskloof, Kloof Nek, Higgovale, Oranjezicht, Gardens, Vredehoek, and a sprinkling of residential accommodation on the Foreshore, north of the city centre. Historically, much of this was lower-to-middle income residential. Over the past few years, high-income, perhaps better described as generally exclusive apartments in the Waterfront development, have attracted a great deal of foreign investment and the historic pattern is undergoing a massive change that will have a profound effect on the city.
Walk through the cobbled streets of the so-called Malay Quarter on the slopes of Signal Hill and the area, once quite dowdy and fraying at the edges, sparkles with a plethora of brightly coloured traditional homes, those on the edge of the Hill with breathtaking views across the city and bay, many undergoing major extension or alteration. Very exciting, because it appears to have gone through a metamorphosis without displacement and it is attracting tourists wandering through its narrow alleyways. Directly below is De Waterkant, its equally narrow streets lined with historic houses, B&Bs and funky restaurants in buildings that have been refurbished over the past decade. Directly below this area is the growing modern chrome and glass residential component overlooking the Waterfront activities.
Wednesday's 'Property Times' had the following adverts for Waterfront apartments: Large 1 Bedroom, R 2.6 million; 2 bedroom, R3,3 million; 3 bedroom fully furnished R6,9 million. Luxury Penthouse, R10 million and 580m2 Penthouse R14,8 million. Phew!
Salt River, Observatory and Woodstock, with streets lined with semis, is little changed below the Main Road, still run-down and decaying, but the upper areas have witnessed a major face-lift. South of the city, the suburbs of the City Bowl, also reflect massive upgrading with pockets of quite beautiful refurbishment of historic properties. These areas seem to still retain most of the communities that inhabited them previously but prices are like wow!
But it is the centre city or traditional CBD itself that is now reflecting the results of the new interest in investment in inner city living. Over 30 new residential projects are in various stages of development, offering nearly 2 000 new living-units. Over R3 billion is reported to have been invested in such projects in the first half of last year alone. Amongst the largest are the conversion of the Old Mutual Building corner Darling and Parliament Streets (173 units); Cartwright's Corner, corner of Adderley and Darling Streets (120) and the Eurocape/BOE development block, on Wale, Church, Burg and St George's Street Mall (180 units plus other amenities).
The art deco OM building, once the head office of that corporation, is being refurbished at a cost of approximately R100 million. Its 'mezzanine apartments', ranging from 40 to 98 square metres are priced at between R273 000 and R390 000. Next are the 'loft apartments' - (I thought lofts were related to industrial refurbs!) - R400 000 to R900 000; then 'atrium apartments' of 139 to 166 mē costing R1.25 to R1.45 million; a 351 mē 'boardroom apartment' at a cool R5 million and penthouses ranging from 141 to 257 mē priced at R2.75 to R4.5 million. Whoops, I left out the 'fresco hall' at R10 million! Don't rush, they were all reportedly sold out in three weeks! Oh, and parking bays are R60 000 - at least there is something in my price range!
About 40 years ago, I worked in a small construction company whose offices were a few blocks south of both the OM building and the original Cartwright's Building - home I seem to remember to Cartwright's Curry Powder. I did some valuations for an elderly and extremely wealthy gentleman who wanted to purchase the Cartwright's Corner site for redevelopment and was told that I was never to walk past the building and even glance at it in case anyone would link us together and thus affect the price he was negotiating. The monumental concrete office development that resulted is now going to have its bland facades partly improved by the addition of balconies and other architectural tat. Here prices will range from R320 000 for 43 mē studio apartments to R1 940 000 for 2- and 3-bedroom units - the 'rooftop duplex penthouses' are SQ!
The 'West City Precinct' is an investment by an Irish consortium, Eurocape investments. Their assembly includes some beautiful historic Cape Town buildings and the redevelopment will include residential, retail - of which some is going to be rather unique - and a hotel development. Incidentally, another hotel, retail and residential development is a block east of the Eurocape investment which fronts onto Adderley Street incorporating some fine historic buildings. Construction of this latter R20 million project, a boutique hotel and sectional title flats selling at half- to one-million rand, is already under way.
An article in the new 'Property' magazine quotes the architect of Old Mutual Heights as saying: "When our Mutual Heights development was launched last year, respectable women (? my question mark ) were clawing at each other to get their offers-to-purchase signed up. Those prices were at
R8 000/mē and the inner city benchmark now sits at R12 000/ mē to R15 000/ mē just nine months later." The article, which suggests that what is happening in Cape Town is in line with 'new urbanism' philosophy, devotes one paragraph, the last one, to "the working class" - the author stating:
"But it's the rebuilding of District Six on the outskirts of the CBD that will really transform the city and re-establish a sense of community. The first returnees will be handed the keys for their completed houses by 24 April, and over the next three years, 4 000 homes are to be built. Whilst the CBD developments are geared towards middle- and upper-income groups, the rebuilding of District Six and the return of working class families from its Cape Flats to the area will serve as a powerful symbol of Cape Town's post-apartheid regeneration."
It sure will - a symbol that Cape Town's post-apartheid regeneration (as with most cities and towns in South Africa) is little different from its apartheid development with "working class families" being relegated to the outskirts of the CBD and not integrated into the heart of the city. And, are "working class families" going to be able to afford "working class" housing at today's building costs?
Isn't it time to stop and take a hard and honest look at where we are going with inner city residential development? Isn't it time that we used our collective expertise and imagination to devise a 'South African new urbanism' that caters for the low-income in a way that will bring hope to the vast majority of our people and really start building a unique new community instead of paying lip service to concepts that we twist to our own means?
Maybe we in Johannesburg could start by reviewing the Better Buildings programme so that a large proportion of the buildings are handed over for redevelopment to organisations with a proven record of the non-profit management of residential buildings such as a Johannesburg Housing Company or Johannesburg Trust for the Homeless. Provided with a once-off capital subsidy their brief would be to house "working class" people at affordable rents but also to provide the kind of social training and education that the JHC is so good at. Possibly 10 percent of that accommodation could be set aside for student accommodation to encourage them to integrate into a new economy and new community living.
Where does the capital subsidy come from? Well, what about placing a small surcharge on development costs of middle- to upper-income projects. I hear screams of anguish from developers - "you'll frighten away investors". The redevelopment of Mutual Heights certainly wouldn't have been affected, in light of the statement "respectable ladies clawing at each other to get their offers-to-purchase signed up. Those prices were at R8 000/ mē and the inner city benchmark now sits at R12 000/ mē to R15 000/ mē just nine months later." The developer could comfortably have upped his selling price by 10 percent!
Or maybe a by-law requiring new apartment developments to provide 10 percent of their space for the "working class" - I seem to recall that being done successfully in Ireland and in parts of London. 24/7 cities need integrated residential development, a preponderance of urban poor will not provide disposal income necessary to generate 24/7. A preponderance of high-income property might well provide impetus, but we in South Africa cannot allow another skewed society to develop. We must generate a mix.
The President, at the start of his second term, has placed a large emphasis on the upliftment of the poor and I, personally, do not think that moving the urban poor from the city to Orange Farm is going to necessarily improve their standard of living nor enhance their job opportunities. The second decade of democracy must be used to conceptualise and implement radical inner city residential solutions or we will have failed in using our cities as the platform for true economic integration and empowerment.
