AFFORDABLE ACCOMMODATION - AN INVESTMENT CASE FOR THE TYGERBERG AREA - The Greater Tygerberg Partnership
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AFFORDABLE
ACCOMMODATION
AN INVESTMENT CASE FOR THE
TYGERBERG AREA
Cape Town City Centre The Greater Tygerberg Area Bellville
MESSAGE FROM THE GTP CEO
South African cities are grappling with the The Western Cape Government and the
double dilemma of trying to redress their City of Cape Town have created a matrix
segregated past while also planning for a of policies, frameworks and development
more urbanised future. Cape Town is no incentives designed to address spatial
different. inequality and facilitate the construction
of affordable accommodation. These
If a society is to thrive, its people need to mechanisms need to be married with sound
be empowered to find work. They need investments from committed developers,
to be able to access safe, reliable public investors and institutions who have the
transport. And they need to live in decent visionary will to create safe and sustainable,
accommodation that they can afford. For accessible and affordable neighbourhoods
years, the city’s spatial segregation, a legacy in our city centres, close to transport, work
of apartheid planning, has excluded the opportunities and social amenity.
majority of the population from accessing
convenient work opportunities and We have created this guide as a tool
affordable accommodation. for developers seeking to maximise the
opportunity for building affordable housing
Affordable and inclusionary housing, in Bellville and the Greater Tygerberg area.
developed around transit hubs in active The details contained in here should be
economic centres, is the key. used to inform development decisions that
will build on the existing potential of our
We have a vision for an economically vibrant, city, and drive the growth of a prosperous,
connected community that lives, works and economically active urban centre.
plays in a quality, safe and accessible 24-hour
urban environment. Sustainable, intelligent We look forward to building future Bellville
densification targeted at creating affordable, with you.
decent accommodation is one of the most
important elements that will support the - Warren Hewitt
society we envisage.
1
CONTENT
MESSAGE FROM THE GTP CEO...............................................................1 MAJOR INVESTMENTS............................................................................26
CONTENT Ideal location
Employment.............................................................29
OVERVIEW Schools......................................................................29
Investment at a glance................................................................3 Amenities and Services
The Urban African opportunity..................................................4 Public spaces............................................................30
The South African urban challenge..........................................4 Health.......................................................................32
Libraries....................................................................32
WHY AFFORDABLE ACCOMMODATION ? Retail and shopping................................................32
Why invest in affordable accommodation in the Greater FINANCE AND FUNDING OPPORTUNITIES.......................................33
Tygerberg Area?.........................................................................6
What is affordable accommodation?.......................................7 HOW TO INVEST.......................................................................................36
Why invest in affordable accommodation?.............................8
KEY CONTACTS........................................................................................37
WHY THE GREATER TYGERBERG AREA?
Residential investment and development trends...................9
Development Readiness
Availability of land ready for development............11
Zoning......................................................................14
Development incentives.........................................14
Planning priority.......................................................19
Infrastructure
Transport..................................................................20
Bulk infrastructure...................................................25
2
OVERVIEW
Invest in affordable accommodation in the
Greater Tygerberg Area
A s one of Cape Town and South Africa’s priority areas for investment and development, the
Greater Tygerberg Area provides an outstanding mix of opportunities for new investment
in affordable accommodation. With its enviable location close to a high concentration of jobs,
schools and amenities, several sites from Goodwood to Bellville are
ready to be unlocked to house integrated future communities.
INVESTMENT AT A GLANCE
Growing confidence in the last decade with over R4 billion public and private property investment, along with
stable property value growth
Advanced planning stage for the release of land across five major precincts with supportive zoning, particularly
along the Voortrekker Road Corridor
Tax incentives and heritage exemptions in place, with further incentives being considered
The delivery of major new transport infrastructure, along with significant bulk infrastructure expansion
High levels of accessibility to schools, tertiary institutions, parks and public spaces and health facilities
National, regional and city level planning priority status
A growing list of financing opportunities through funds, banks and partnerships
3
It is estimated that over 900 million people, mostly youth, will move into African cities in the
THE URBAN coming few decades. This represents significant urban growth at a rate outpacing that of
Asia and the rest of the developing world. While this presents a major challenge for housing
AFRICAN provision, infrastructure, amenities and social and cultural cohesion, it also represents
a major opportunity.
OPPORTUNITY The opportunity arises when cities and countries tap into the energy, ingenuity of the younger
and creative population, while leapfrogging the developed world to a more sustainable,
inclusive and resilient future.
reduced the possibility and accessibility Studies also show that cities thrive both
THE SOUTH of well-located affordable housing. This
entrenches class division and racial
economically and culturally when they are
denser and have a mix of uses. Despite these
AFRICAN segregation, forcing the poor to spend an
unsustainable amount of time and money on
challenges, Cape Town is still considered
a major investment opportunity, with PwC
CHALLENGE transport. These factors have contributed to
South Africa having the highest income Gini
ranking it as Africa’s top city of opportunity
in 2018.
coefficient in the world.
S outh African cities, and Cape Town in
particular, are struggling with a shortage
of well-located affordable housing. This
Excluding MyCiti bus trips, which still form a
small minority of total trips, data from 2015
is part of a larger housing backlog that is shows that average travel time for trips to
growing annually. work on public transport range from 53 to
63 minutes and 19 to 23kms. This means that
The legacy of Apartheid planning means the average resident is spending around two
affordable housing, particularly low-income hours making a 40km return trip every day.
housing, is largely located far from jobs
and other facilities like healthcare, quality The average direct transport cost for the
education and recreational offerings. This low-income public transport user group
trend has continued post-1994, with a low has risen to 43.1% of monthly household
supply of government housing stock in well- income — almost four times the national
located areas, and little to no contribution objective of 10%.1
from the private sector. Increasing land
values, particularly in Cape Town, has further 1 National Land Strategic Framework 2015
4
BELLVILLE AS A
SECONDARY
CITY WHAT IS A SECONDARY CITY?
B ellville and the Greater Tygerberg Area is a
diverse financial, medical and educational
urban centre that plays an important role
In a functional system of cities each major city (primary
and secondary) has a unique and complementary
as a highly connected hub at the heart of role. The primary city may well have an international
the metropole. It can be considered as the
Secondary City of the metropolitan region outlook, while secondary cities complement it
which has an important role to play in by hosting activities that require the lower costs
supporting the primary city. associated with smaller size or proximity to inputs such
as agriculture or natural resources.
Like most major urban centres, Cape Town is
facing pressure from growing urbanisation,
characterised by increasing congestion, rising Regional links and corridors influence the division
accommodation costs and limited space for of functions among cities and the inter-city transport
inclusive development. As a key node, given networks. Links to international and regional markets
the City of Cape Town’s strategy to bring
people closer to their workplaces, Bellville are an important component of such a system,
has an important role in supporting Cape which requires internationally coordinated policies
Town, by shifting towards a mixed-use centre and investments to establish the right supportive
with well-connected, multi-modal transport environment.1
linkages and well-established service
infrastructure.
1 2017 United Nations, Economic Report on Africa 2017: Urbanization and Industrialization
for Africa’s Transformation
5
WHY AFFORDABLE
ACCOMMODATION?
WHY INVEST IN population growth and the viability of new
development. WHO SHOULD
AFFORDABLE With three major industrial nodes nearby, the INVEST?
area has a high concentration of jobs.
ACCOMMODATION It also has a rich and dense spread of
amenities, which includes existing and
Opportunities are available for :
IN THE GREATER new public spaces, schools and tertiary
institutions, health facilities, libraries and
• Fund managers considering capital
investment in the residential sectors
TYGERBERG AREA? shopping centres. • Entrepreneurs or individual investors
looking to diversify their investment
Investors also benefit from a growing list portfolios
T he Bellville central business district
(CBD) and its near-neighbour, Parow
CBD, are packaged and ready for the
of funds and financing opportunities which
provide capital and technical support focused
• Small, medium and large scale property
developers
on the affordable accommodation sector. • Investors looking to take equity in an
development of more inclusive housing. Each
existing or new residential investment or
has a substantial number of land parcels
To register your interest in investment building
and buildings of varying scales ready for
opportunities in affordable • Existing investors and developers in the
affordable accommodation development.
accommodation, please contact: region planning to expand and leverage
new infrastructure investments.
Planning priority at a national, regional
+27 (0)21 823 6713 • Private or government corporations
and local level has cemented an enabling
Bell Park Building Unit 3A, Corner of wishing to construct staff housing in
environment for investors, through a suite of
De Lange Street & Durban Road, Bellville, the area
incentives and supportive zoning designed to
7535, South Africa
expand project viability.
info@gtp.org.za
Major new investments in public transport
and water and waste infrastructure have been
committed, which will support the area’s
6
WHAT IS
AFFORDABLE
ACCOMMODATION?
For investors in property funds and indices, For particular areas or contexts which do
e.g. the Absa MSCI index: not rely on fixed thresholds of affordable
• Housing aimed at households that can values or household incomes:
afford monthly rentals up to R8 000 per • For the stretched middle-income market,
month with household incomes between
• Housing that is valued up to R800 000 R15 000 and R40 000 per month
where the bank provides end-user • Units being rented or sold for less than
finance the median value of properties in the
• Bonded homes with a sales value area, due to subsidies, incentives and
deemed ‘affordable’ to those who have policies
a median income of R12 500 - R17 500 • Households who can access finance or
per month afford the rent in an area below current
open market rates
For national government that provides
housing subsidies: For particular groups, where developments
• Households earning between R3 500 are aimed at specific groups not entirely
to R15 000, earning above the limit served by the open market:
to qualify for government-subsidised • Student rental accommodation
housing and who are required to apply and key service or essential worker
for a mortgage loan to buy a house accommodation (e.g. nurses, teachers,
(R15 000) on the open market police etc.)
• Social housing rental accommodation
for households with stable incomes
between R1 500 and R15 000 per month
7
WHY INVEST IN
AFFORDABLE
ACCOMMODATION?
T he investment case for any asset class
rests on the potential for above-inflation
returns based on a large demand. For
• Offer a more stable investment as the
capital and income growth of the fixed
asset is less volatile compared with
2. Total returns were comparable to other
accommodation (12.3% vs 13.4%),
despite the significantly lower costs. This
affordable accommodation, as a fixed real equities means affordable housing investments
estate investment, the large and growing • Provides stable rental income which are an option for a wider number
demand for housing outstrips the pace of can be pegged to inflation and is more of investors
supply within the South African context. This responsive to the state of the economy
is expected to continue for decades to come.
For the institutional investor who is Price growth
required to deploy significant scale of Between 2012 and 2015, the affordable
capital over a longer term horizon as part housing segment outperformed the overall
of a diverse portfolio of assets, affordable housing market. House price growth of “The affordable market is one
accommodation can : properties in the bottom quartile (i.e. less of the few in which demand
• Offer risk-adjusted returns over a longer than R330 000, excluding RDP houses) nearly
time period, due to the high demand doubled that of the second highest quartile
exceeds supply with strong
• Act as a hedge or counter-cyclical (R700 000 - R1.135m) and were four times fundamentals, given the
investment, which is more resilient greater than the highest quartile (more than ever-increasing trend in South
during downward trends in the economy R1.135m).
as vacancies remain low Africa towards urbanisation.
• Act as a defensive and secure The affordable market has
investment as the capital value of Affordable housing fund growth
the asset is likely to increase over According to the ABSA MSCI Residential
the lowest vacancy rate of the
the medium- to long-term if good Results for 2018, which tracks affordable residential rental market”
maintenance and operations systems housing as a separate category of residential Transcend Property Fund
are managed across 20 property funds:
1. Affordable accommodation posted
a higher income return than other
accommodation (8.9% vs 6.5%)
8WHY THE GREATER
TYGERBERG AREA?
RESIDENTIAL INVESTMENT
& DEVELOPMENT
TRENDS
Global residential property trends Greater Tygerberg area residential
property trends
A few global trends relevant to the South Residential property ownership:
African context: Character of the area
• Younger and first-time buyers are • A mix between stable owners who have
opting for smaller homes in more While the area is predominantly residential owned for 11 or more years, and new
medium-density developments, where in character, the Bellville and Parow CBDs owners
they can access a wider range of are characterised as predominantly business • First-time home buyers attracted to
amenities and services that are available and commercial use. Intense commercial the area. The area is relatively mixed in
24/7, and because of convenience, and retail uses are located on the first block terms of the age of homeowners. Stable
cost considerations and reduced on either side of Voortrekker Road and up owners tend to be the oldest while most
maintenance load Durban Road towards the N1. recent buyers are young adults (18-35
• The emergence of the micro-unit, years) or middle-aged (36-49 years)
which is 20% to 30% smaller than a Three industrial districts, Parow Industria,
conventional sized studio apartment Bellville South and Elsies River, are located
• First-time buyers focus more on location. south of Voortrekker Road, and adjacent
Factors like congestion, long work hours, to smaller but growing business and
increasing public transport costs and commercial uses.
increasing fuel prices mean people
are willing to sacrifice other factors in Three suburbs — Belgravia, Kempenville and
order to live in smaller, better-located Parow — are more mixed use, with residential
properties (often sectional titles) and business/commercial uses.
9Development trends over the last decade1 A comparison with other Cape Town
suburbs
• A predominantly residential area: Potentially lower development costs in Oversupply of upmarket residential units in
75% residential, 6% business/ Bellville Cape Town CBD
commercial, 2% industrial and 4.5%
vacant erven The costs and risks of developing affordable There has been a lack of new affordable
accommodation in the Greater Tygerberg rental supply in the Cape Town CBD, and
• A gradual and steady increase in flat area are potentially lower than the Cape an oversupply of upmarket apartments
rentals in line with the investment in Town CBD due to lower land prices per or units targeting higher income groups.
affordable accommodation square metre. This presents a potential opportunity for
the Greater Tygerberg area to cater for the
• Lower increases in sectional title Lower demand for commercial space demand for affordable accommodation
property values over 10 years compared and significant demand for affordable developments focused on lower-middle
to full title properties accommodation income groups.
• Greater demand for standard flats Since 2011/2012, Grade A and B office Steady property values relative to other
compared with upmarket flats, with vacancy rates have been decreasing in both suburbs
rental increases of between 80% and Bellville and Cape Town CBD, with vacancy
130% for standard units rates in Bellville being consistently lower. The average price per square metre of full-
title residential property within the Greater
Where supply of office space exceeds the Tygerberg area has remained relatively
demand, the conversion to residential space steady over the past 10 years, compared
is gaining popularity. This is especially true to other suburbs in Cape Town, namely
in CBD areas where there is a scarcity of Milnerton, Observatory and Woodstock.
mid-market residential property for young Woodstock and Observatory have
professionals looking to live closer to work. experienced very similar growth in residential
property prices, with growth rates of 256%
and 203%, respectively, over the past decade.
Steadily growing investor confidence
The Annual Residential Index has increased
gradually year on year for both full and
1 Based on a 2018 study on 24 suburbs within the Greater sectional titles within the Greater Tygerberg Area.
Tygerberg Area stretching from Parow to Bellville and
surrounding suburbs.
10DEVELOPMENT
READINESS
AVAILABILITY OF
LAND READY FOR
DEVELOPMENT
Precincts ready for investment
A number of brownfield and greenfield
sites across the Greater Tygerberg
area are either in the process of being
This will safeguard the accommodation
against income displacement (gentrification)
and ensuring accommodation for lower
The precincts identified include:
- Parow Station Precinct
developed, or have been earmarked as ideal income groups in perpetuity. - Tygerberg Station Precinct
for development by the City of Cape Town. - Goodwood and Elsiesriver
They form part of a phased release of public The precinct approach will address issues Station Precinct
land and buildings for the development of such as social development, movement - Avondale Station precinct
affordable accommodation by social housing patterns and the need to consider urban - Hardekraaltjie Precinct
institutions and the public sector. management in the area.
The City has identified the optimal sites
These sites could have a total development For investors: within these precincts. It will work with SHIs,
footprint of 10.5 hectares and over 5 800 other stakeholders and the private sector to
units across four station precincts, and 65 • With social housing institutions (SHI), the undertake the following tasks on these sites:
hectares of developed area with 6 000 to City will invite investors to participate in • Refurbishment of brownfield sites along
7 500 units at the Hardekraaltjie precinct. the redevelopment of its land parcels, the Voortrekker Road Corridor
bound by specific conditions that will • Buying buildings and land in the
The City of Cape Town’s goal is to secure assist in the regeneration of the area precincts along the Voortrekker Corridor
land for the delivery of affordable • The City and SHIs will also develop a • Releasing some land owned by the City
accommodation before an anticipated masterplan for the entire area to further and Western Cape Government for
upswing in property prices. grow investor confidence over the mixed-use developments
coming two decades • Working with Passenger Rail Agency
of South Africa (PRASA) on the
development of their land parcels
11Avondale Station Precinct Hardekraaltjie Precinct
Sites: Five publicly owned sites Sites:
(City and Province) The Hardekaaltjie Sports Precinct, Caravan
Location: Various sites near Avondale Station Park and Transnet land to the south
Development Area: 4.09 Ha Location:
Hardekraaltjie, Voortrekker Road
De Grendel
Development Area: 65 Ha
Avondale
Hardekraaltjie
Parow
Tygerberg
Goodwood and Elsiesriver
Tygerberg Station Precinct
Sites:
Parow Station Precinct
3 City-owned sites
Goodwood and Elsiesriver Station Sites:
Location:
Precinct 1 City-owned park
1 privately-owned vehicle showroom
Sites: 5 under-used parking lots
Corner of Voortrekker and Delaney Road,
5 unused private buildings next to City 1 private site (not prioritised)
Parow
buildings that are currently used as a Location:
Development Area: 1.17 Ha
second-hand car dealership and for car Between Voortrekker and McIntyre Road,
repairs. Parow CBD
Location: Development Area: 1.25 Ha
Corner of Voortrekker and Halt Roads
Development Area: 3.88 Ha
12Residential units
Density: Parking: Typologies: Status:
(potential):
3-, 4- and 11-storey
0.14 to 0.33 bays per
Parow Station Precinct 948 761 du/Ha walkups; 11-storey mixed- Planning
unit
use
99 surface parking for
Tygerberg Station
Over 698 residential units 596 du/Ha building 1, married 11-storey mixed-use; Planning
Precinct
quarters (0.14 ratio)
Goodwood and Approx. 550 bays with 11-storey mixed-use; 3- and Planning to advertise sites through an
Around 2 112 residential
Elsiesriver Station 544 du/Ha 0.14 to 0.34 parking 4-storey walkup; 8-storey RFP process and allocate to a social
units
Precinct ratio buildings housing company
Approx. 340 bays with
Avondale Station
2 080 residential units 508 du/Ha 0.14 to 0.34 parking 3- and 4-storey walkup Planning for land transfer
Precinct
ratio
Land Ownership:
6 000 – 7 500 residential units 3- and 4-storey walkup
0 to 0.5 bays per unit Hardekraaltjie Sports Precinct
Industry: 18 000m2 8-11 storey buildings
Hardekraaltjie Site 400-500 du/Ha along Voortrekker - City of Cape Town
Commercial: 75 000m 2
10-20 storey office
Road Remainder to the south - Transnet
Retail: 30 000m 2
buildings
Status: Concept stage
The Hardekraaltjie project aims to integrate Voortrekker Road with Tygerberg
Hospital to the south, in an area currently divided by railway lines and the
Tienie Meyer Bypass. The northern portion of the site would comprise a
mixed-use development and high-performance indoor sports precinct, with
mixed-income affordable accommodation introduced to the south between
Bellville Station in the east and Tygerberg Hospital to the west.
13DEVELOPMENT
READINESS
ZONING
Supportive zoning Zoning along the Voortrekker Road
Corridor
Z oning determines the particular land uses
which are permitted on a site, as well as
factors like height, setbacks and density of
The Voortrekker Road Corridor (VRC) contains
sections of mixed land use consisting of
“Well-located affordable rental
housing, when properly managed,
offers investors a defensive and
buildings. ground level retail or business with two- to
counter cyclical asset class. Global
four-storeys of residential above it. Land use
The Voortrekker Road interface of many in areas further away from Voortrekker Road
precedent, as well as data from
suburbs in the area is zoned as General displays limited diversity of land use. the recently introduced MSCI
Business or Local Business. This allows for South Africa Residential Property
medium- to high-density developments A good balance and high volumes of Index, shows that centrally located
comprising residential and commercial lands uses that both attract and generate residential rental property returns are
or retail uses. This zoning is ideal for the employment are present. The corridor resilient in economic downturns and
development of affordable accommodation. currently attracts a range of investment and exhibit many of the characteristics
It allows for taller and more dense buildings, development opportunities along its length,
required by risk averse, long-term
while encouraging an active street level with great potential to grow and intensify
through the benefit of commercial and further. 1
institutional property investors.”
retail spaces. Where these sites also fall Carel Kleynhans
into PT1 or PT2 zones, the reduced parking Managing Director of Divercity Urban
requirements would also significantly reduce Property Fund
the development cost.
DEVELOPMENT READINESS.
1 City of Cape Town Metropolitan Spatial Development
Framework p257.
14DEVELOPMENT
INCENTIVES
Urban Development Zone tax incentive
• South Africa Revenue Services The Urban Development Zone (UDZ) tax • Erection, extension, improvement or the
tax incentives through the Urban incentives administered by the South African inclusion of low cost housing within an
Development Zone and Section13Sex Revenue Services (SARS) aims to promote urban development zone
• Parow Station Precinct heritage the upliftment and regeneration of particular
exemptions to streamline and areas by rewarding private sector residential The UDZ incentive is calculated in different
encourage development and commercial developers who build ways, depending on the type of development
• A suite of local government incentives or refurbish in these areas. SARS seeks to that is improved, added to or low-cost
being considered to accelerate address the issue of urban decay within inner housing included. Below is a table showing
inclusionary housing development cities and to maintain existing infrastructure how the UDZ can be used and the provisions
while encouraging investment in certain it makes in the form of allowances.
properties.
The Parow - Bellville UDZ boundary
comprises 83 hectares extending from
Bellville to Parow, primarily wrapped around
the VRC (east- west) and from the Bellville
CBD to the N1 intersection with Durban Road
(north-south).
The incentive is an accelerated depreciation
allowance on the cost of buildings erected,
added to, or improved and which are within URBAN DEVELOPMENT
the designated UDZ areas. The allowance is ZONE TAX INCENTIVE
applicable in respect of:
• Erection, extension and improvement of CURRENTLY BEING
•
or addition to an entire building
Erection, extension, improvement
REVIEWED WITH
or addition of part of a building POSSIBLE EXTENSION
representing a floor area of at least
1 000m2 BEYOND 2020
15N1
CURRENT BOUNDARY N1
Due to expire 31 March 2020
PROPOSED EXTENSION N1
The City of Cape Town
MIKE PIENAAR
together with the GTP
motivates to extend this
incentive beyond 2020 and in
RD
boundary
BAN
GIE
DUR
BLVD
L BA
VOORTREKKER RD
SSO
N DRI
BELLVILLE STATION
VE
TYGERBERG
DE LA
PAROW
REY R
BEA
CO
OAD
WAN
Y
New/ Improvements Use Allowance
Commercial/residential 20% year 1 and 8% years 2 – 11
Deemed cost = 55% of the purchase price
Purchased from a developer
Erection/extension/addition (deductible over 11 years)
25% year 1 and 13% years 2 – 6
Low-cost residential unit
10% year 7
Commercial/residential 20% years 1 – 5
Improvements Deemed cost = 30% of purchase price
Purchased from a developer
(deductible over 5 years as above)
Low-cost residential unit 25% years 1 – 4
16Section 13 Sex tax incentive
Under section 13 Sex of the Income Tax Act,
SARS permits a significant tax benefit on
residential property. This incentive allows
purchasers of new residential units in South
Africa, in the same or different developments
and across financial years, to write off a
percentage of the cost of buildings, or
improvements to buildings acquired or built
after 21 October 2008.
The following criteria applies:
a) The taxpayer must own at least five
residential units mainly used for residential
accommodation excluding properties uses
New/
for business purposes, e.g. hotels Developer/Purchaser Allowance
Improvements
b) Residential units must be new and unused
c) The units must be used solely for the Deemed cost = 100%
purpose of a trade, i.e. residential letting, Developer - 5% p.a.
- 10 % p.a. for low cost accommodation
and not be used for personal or family use
New or unused
Deemed cost = 55% of the purchase price
Purchased from a developer - 5% p.a.
- 10 % p.a. for low cost accommodation
Deemed cost = 100%
Developer - 5% p.a.
- 10 % p.a. for low cost accommodation
Improvements
Deemed cost = 30% of the purchase price
Purchased from a developer - 5% p.a.
- 10 % p.a. for low cost accommodation
* low cost accommodation defined as a stand-alone unit to the value of up to R300 000 or an apartment to the value of up to R350 000.
17The Parow Station Precinct Heritage Local government incentives for
Exemption inclusionary housing development
The City of Cape Town has selected the In 2018, the City of Cape Town released a
Parow Station Precinct as a pilot study area discussion document relating to inclusionary
for an application for exemption from the housing, which is defined as affordable
heritage requirements of sections 34(3) and housing delivered by the private sector. The
38(9) of the National Heritage Resources Act, document outlined key considerations it
No. 25 of 1999 (NHRA). will take into account when developing an
inclusionary housing policy.
The urban spatial incentive is intended
to streamline the application process for These incentives are considered vital
potential investors, by relieving the need to avoiding the perverse outcome of
for certain permissions. This incentive is disincentivising residential housing
designed to encourage development in development and ensuring that the
the Parow Prioritised Local Area, which is a affordable housing contribution is not an
key project for stimulating urban growth undue burden.
and renewal.
Investors will be exempt from the
requirements in respect of applications to:
• alter, improve or demolish buildings
older than 60 years; and/or
• consolidate three or more properties
within a defined geographic area.
Potential incentives could include:
Type Examples
Direct financial Density bonus, reduced parking requirements, lower municipal rates and taxes,
incentives and favourable lending rates
Planning and Fast-tracking approval processes by a dedicated project team, creating
regulatory process inclusionary housing overlay zoning, introducing a single comprehensive permit,
improvements alternative construction and design standards
Bulk infrastructure Reducing bulk services contribution, reducing connection time to bulk
incentives infrastructure, bulk services infrastructure payment holiday
18DEVELOPMENT
READINESS
PLANNING
PRIORITY
The Voortrekker Road Corridor Integration Integrated Development Plan Metropolitan Spatial Development
Zone Framework
T he City of Cape Town has identified two
integration zones, namely the Metro
South-East Integration Zone (MSEIZ) and the
The Integrated Development Plan (IDP) is a
five-year plan required by all municipalities:
The principal strategic planning
The MSDF sets out the spatial vision
and development priorities to achieve a
reconfigured, inclusive spatial form for
Voortrekker Road Corridor Integration instrument which guides and informs all Cape Town.
Zone (VRCIZ). planning, development and decisions in
the municipality. The MSDF has established an urban inner
The zones represents a joint commitment core (UIC) which represents the priority
between the City and the National Housing developments are being directed development and investment focus area for
Department of Treasury to plan, fund and along major transport routes, in line with the City at a metropolitan scale. The Greater
implement spatial restructuring projects the City’s Transit Oriented Development Tygerberg area falls fully within the UIC.
within the area. Framework (TODF). A major focus is on the This prioritises and supports investments
VRCIZ, which directly links the Bellville and in affordable accommodation in the area,
The VRCIZ’s primary spatial restructuring Cape Town CBDs. comprising:
objective is to link Bellville CBD with the
Cape Town CBD and the MSEIZ boundary. • National focus for the intensification of • Infrastructure focus: budget will be
For the Department of Human Settlements, development from Parow to Bellville, prioritised for upgrading infrastructure
the emphasis in the VRCIZ is focused on through the VRC Integration Zone and supporting efforts to intensify spatial
social housing to provide affordable rental • A government focus area to build transformation
opportunities at densities that support the partnerships to deliver housing • Incentives and regulatory reform:
public transport network and transit-oriented • City-level priority for investment in focused on the UIC, to stimulate co-
design (TOD) principles. affordable accommodation through operation and collaboration between
the Municipal Spatial Development other spheres of government and
Framework (MSDF) and Integrated the private sector to direct the capital
Transport Plan budget
19INFRASTRUCTURE
TRANSPORT
A new rail link from Khayelitsha, four Road infrastructure A major centre for public transport
planned high capacity MyCiTi trunk lines, a
transformed Bellville Station as well as three The Greater Tygerberg area is well served The Greater Tygerberg area is served
public transport interchanges will make this by road and rail infrastructure, providing by Cape Town’s busiest public transport
one of the most connected and accessible connectivity and accessibility on a suburban, interchange (PTI) at Bellville Station, with
areas in the city by 2032. metropolitan and regional scale. The existing 350,000 daily trips. Other PTIs are at
road-rail transit-oriented system serves as a Parow, Elsies River and Tygerberg stations.
• Bellville is the busiest transport strong platform to support the future intense These provide rail-to-road-based transport
interchange and minibus taxi rank in development across the area. connections to other parts of the city.
the city
• New Blue Downs rail line from Nolungile The road infrastructure in the area includes: Four rail links connect at Bellville Station, with
station to Kuilsriver station, providing a • the N1 to the north, providing nine train stations serving the area. These
direct link between the Metro South East connections to Cape Town CBD or lines are:
and Bellville nationally in the opposite direction • Wellington to Cape Town via
• Major transformation of Bellville station • Voortrekker Road, providing an east- Woodstock: 90 000 passengers
planned, with refurbishments to Parow, west connection between Bellville and daily (est.)
Tygerberg and Elsies River interchanges Cape Town CBD • Muldersvlei to Cape Town (two lines via
• T13, T14, T16 and T19 MyCiti trunk lines • the R300, linking to Khayelitsha and Stellenbosch and Esplanade): 30 000
to connect through the area via Mitchells Plain to the south passengers daily (est.)
Bellville CBD • the Durban Road link from Bellville • Strand to Cape Town via Bellville and
• Review of PT1 and PT2 zones to CBD to the N1 and Tygervalley, with Parow: 44 000 passengers daily (est.)
reduced parking requirements for future additional north-south links provided • Bellville to Cape Town via Esplanade
developments by Vasco Boulevard, Giel Basson Drive, and Langa: 35 000 passengers daily
• A proposed future airport rail link Mike Pienaar Drive (M16) and McIntyre (est.)
Street (M14)
20Monte Vista De Grendel BELLVILLE
Avondale
Oosterzee
T19
Bellville Station
GOODWOOD Tygerberg
Parow
Elsies River
PAROW
T14
ELSIES RIVER
Blue Downs
T16 Rail Link
T13
Future Transport Infrastructure : planned MyCiTi trunk routes and rail link
21The Bellville CBD and surrounds sees Future investments in public transport Four new MyCiti trunk lines
over 142 000 daily passenger trips with infrastructure
the Bellville Station taxi being the busiest According to the 2032 Integrated Public
location seeing 50 000 daily passengers The new Blue Downs rail link from Transport Network Plan for Cape Town, four
via 30 routes. This is compared with 48 000 Khayelitsha, along with four high capacity new MyCiTi trunk lines with a capacity of
and 31 000 daily passengers at Cape Town MyCiTi trunk lines and a transformed Bellville 10 000 passengers per hour in each direction
Station taxi rank and Khayelitsha respectively. Station will make this area one of the most will serve the Greater Tygerberg area.
The Elsies River PTI connects seven minibus connected and accessible in the entire
taxi routes. metropolitan region by 2032.
The Cape Town to Bellville Golden Arrow bus
service (GABS) is the fifth busiest GABS route
in the city, transporting 1 300 passengers
daily with over 31 000 passengers moving in
and out of Bellville daily.
No. of Constr. Period
Phase Route Code Route Description Length (km)
stations (years)
Symphony Way: a north-south line from Mitchell’s Plain CBD to Bellville CBD and
2 T13 23 33.0 3
continuing to Durbanville north
3 T14 Westlake-Bellville: A north-east line from Westlake to Bellville CBD via Parow Industria 25 35.10 3
Eersterivier - Blouberg: A north-south link from Eersterivier Station to Parow continuing
3 T16 35 50.80 4
to Sandown station
Kraaifontein - Century City: An east-west line from Century City via Goodwood and
4 T19 Parow along Frans Conradie Drive to Bellville at Boston and continuing north to 21 29.65 3
Durbanville and Wallacedene
Enclosed terminal stations will be built at Bellville Station at Charl Malan Street and Durbanville at New Street : T13 served by 3 feeder routes (D01, F40, F44)
22New Blue Downs Rail Link Bellville Station as a major multi-modal hub
PRASA and the City of Cape Town are The Bellville PTI is being prioritised for a
prioritising a new line from Nolungile Station major transformation, starting with various
to Kuilsriver Station through the Blue Downs short-term infrastructure upgrades feeding
area. This is expected to carry more than into the planned larger vision.
20 000 passengers per hour per direction
by 2030. The interchange is planned to become a
new, vertically integrated public transport
The double track line will be approximately interchange for rail, future MyCiti trunk lines,
9km long and comprise three new railway bus services, minibus taxi operation, long
stations between Noungile and Kuilsriver distance bus services and non-motorised
station, providing a direct link to the transport.
Metro South East residential suburbs and
Blackheath, Kuilsriver and Bellville commercial This plan is in the final stages and includes:
and industrial employment areas. • recommendations to enhance the
corridor’s image
The new proposed stations are at Mfuleni, • increased pedestrian and cyclist safety
Blue Downs and Wimbledon. and connectivity
• the modernisation and upgrading of
Bellville train station
• the integration of the planned Blue
Downs rail link, four new MyCiTi trunk
lines, six feeder routes and minibus
taxi services, as well as other transport
services
• opportunities to capture land value
from City sites for reinvestment into the
public realm and affordable housing and
opportunities to capture passenger value
to sustain economic development
• exploring the potential to unlock air
rights above the station
A consultation process is underway.
23PT1 and PT2 zones These zones also generate fewer car trips, Proposed airport rail link
which reduces congestion, encourages
PT1 and PT2 zones regulate the amount of public transport use, and potentially reduces Cape Town International Airport (CTIA)
parking required for developments. the carbon footprint of a development. falls within an eight-kilometer radius and
They make particular sense for developers approximately a 10-minute trip from the
PT1: A minimum requirement of one providing housing for lower-income earners Bellville CBD. In the longer term, PRASA
bay of off-street parking per dwelling who may not own a car and use public and the City of Cape Town are proposing
unit or main house. Refer to areas transport instead. a new 4km rail link to connect Cape Town
where the use of public transport International Airport to Bellville CBD. This
is promoted, but where the City The City is in the process of reviewing and may later extend to the Cape Town CBD and
considers the provision of public extending the area of these zones as a the south east.
transport inadequate or where the use result of the input of additional new data,
of motor vehicles is limited. particularly the inclusion of road-based trips
such as minibus taxi trips. It is anticipated that
PT2: A minimum requirement of 0 bays every 800m2 PT1 zone will be surrounded by
of off-street parking per dwelling unit a 400m2 PT2 zone.
or main house. In these areas the use
of public transport is promoted and the
City considers the provision of public
transport good, or where the use of
motor vehicles is very limited.
The City of Cape Town has designated certain
areas within the Greater Tygerberg area as
PT1 and PT2 zones, reducing the parking
requirements compared with standard areas
which require two bays per dwelling.
The new designation is designed to
encourage residential development by
reducing overall the costs of building
parking bays. It also increases revenue,
since the removal of parking bays enables
more development bulk to be allocated to
tradeable space, in the case of affordable
accommodation, housing units.
24INFRASTRUCTURE
BULK
INFRASTRUCTURE
W hile the Greater Tygerberg area
already has a well-developed
bulk infrastructure, a further R1 billion
Water
Cape Flats 1 and 2 bulk sewer mains
Waste
• A new R108 million upgrade is planned
public investment in water and sanitation rehabilitation for the Northern Regional Sludge Facility
infrastructure has been planned to serve the • Cost: R320 million over three years • A waste-to-energy project at the north
area. Other infrastructure projects include a • Importance: Facilitating inter-catchment area of Bellville Wastewater Treatment
new innovative waste-to-energy project and transfer Works (WWTW) will produce electricity
improvements to recycling facilities. • Status: Works commence in July 2019 and bio-solids for agricultural use. It will
over a three-year contract period include recycling and waste drop-off
facilities
Athlone Wastewater Treatment Works • R6.6 million Parow depot upgrade
(WWTW) • R25.8 million new facility at Beaconvale
• Cost: R771.5 million
• Benefit: 50Ml upgrade unlocks potential
for an equivalent 123 400 low-cost Fibre
housing opportunities for a population
of around 391 000 people. The WWTW The Greater Tygerberg area is well covered
catchment services the VRCIZ, which by ADSL and LTE services, with majority
includes Parow and other suburbs access to fibre internet, excluding Parow
• Status: The tender for upgrade has been (including Parow Industria) and portions of
issued the Bellville CBD south of Voortrekker Road.
It is expected that fibre coverage will be
Bellville wastewater treatment works extended to these areas in the near future,
R144 million future refurbishment to increase through public and private infrastructure.
capacity.
25MAJOR INVESTMENTS
COMPLETED CONSTRUCTION UNDERWAY
Karl Bremer Bellville health office building New City of Cape Town Water and Stellenbosch University Biomedical
2017 Sanitation Head Office Research Institute
R128 million 2018 R2,3 billion
A part of Karl Bremer Hospital, the new R270 million Construction of a Biomedical Research
R128 million Bellville Health Park provides The City’s new Water and Sanitation head Institute (BMRI) by the University of
accommodation for over 320 public servants office, situated on Voortrekker Road, was Stellenbosch has commenced at the Faculty
from the Department of Health across completed in 2018 at a cost of R270 million. of Medicine and Health Sciences in Bellville. It
14 000m2. The building was awarded a The four-storey, 10 000m2 building was is expected to be completed by 2022 and will
GBCSA 5-Star Green Star rating. It will create awarded a GBCSA 5-Star Green Star rating. be one of the most innovative and advanced
minimal waste, use passive solar design, and biomedical research centres in Africa.
offer bicycle-friendly facilities.
UWC Faculty of Community and Health
Stanford Industrial Park Sciences Bellville Campus
2017 2018
This industrial building is situated in Parow R244 million
Industria and comprises 2 000m2 of industrial The University of the Western Cape
space, which can be subdivided into two completed its conversion of the 10-storey
units of 1 000m2 each. Jan S Marais Hospital in Bellville CBD.
The new Community Health Sciences
building cost R244 million and will provide
state-of-the-art health-care training for
nearly 2 000 future nurses and other health
professionals.
26MAJOR INVESTMENTS
Over R4 billion has been invested in public and private property
investments over the last five years. Another R5 billion is
anticipated in the next five years.
KARL BREMER UNIVERSITY OF
BELLVILLE HEALTH STELLENBOSCH
OFFICE BUILDING BELLPARK HOSPITAL
PRECINCT
GIEL
BAS
SON
N1
DRIVE
PAROW CENTRE N1
N1 BELLVILLE VELODROME
RD
GALLERIA
AN
RB
DU
RD
TRE KKER
VOOR
DE LA RE
GOODWOOD SOCIAL
HOUSING PROJECT UWC COMMUNITY
Y ROAD
AND HEALTH SCIENCES
BELLVILLE CAMPUS
STELLENBOSCH
UNIVERSITY NEW CITY OF CAPE
BIOMEDICAL TOWN WATER AND
RESEARCH INSTITUTE STANFORD INDUSTRIAL SANITATION HEAD
PARK OFFICE
27PLANNED
Bellville Velodrome Galleria Goodwood Social Housing Project
R3 billion R380 million
The Galleria is a mixed-use development of Construction is underway at a R380 million
11.5 hectares around the Bellville Velodrome social housing investment providing 1 065
and Athletics Stadium. The Bellville rental housing units on a site parallel to
Velodrome arena will be redeveloped to Goodwood train station, targeting household
increase capacity to 18 000. The surrounding incomes between R3 500 and R15 000 per
land will be developed into mixed-use urban month. The housing will comprise six-storey
developments, featuring retail, business, apartment blocks on both sides of the railway
residential, hotel and conference facilities. line, offering units ranging from a bachelor’s
flat to two-bedroom flats. The project is a
Parow Centre partnership between the City of Cape Town,
R1 billion the Western Cape Government’s Department
The Parow Centre shopping centre will be of Human Settlements, the social housing
transformed into a mixed-use development, institution DCI Community Housing Services,
with R250 million already committed to PRASA, Intersite Asset Investments and the
the Phase 1 renovations and extensions National Housing Finance Corporation.
commencing in 2019. It is expected to
include 1 200 residential units and add over
40 000 m2 of space.
University of Stellenbosch BellPark
Hospital Precinct
R250 million
The University of Stellenbosch is planning
to develop a new 30 000m2 250-bed
hospital precinct. A new access road will be
developed to provide access to the hospital
precinct off Carl Cronje Drive.
28IDEAL LOCATION
EMPLOYMENT EDUCATION
A ffordable accommodation developed in
the Greater Tygerberg area would benefit
from high levels of accessibility to diverse
Over 120 educational facilities are housed
within the Greater Tygerberg area. This
comprises 13% early childhood development
employment opportunities in relation to the (ECD), 78% Grade R – Grade 12 and 9%
province and city region. tertiary education. As of 2017, 116 062
students were enrolled in the Greater
The Bellville CBD and Tygervalley area Tygerberg area. This number increases
are key nodes for large corporates and annually1. Eighty one percent of the
government agencies in the formal sector. geographical area is within a 1km walking
Century City, a major commercial node is distance (+- 12min) to a place of education,
also within easy access along the N1. This is whether ECD, primary, high school or tertiary.
further supported by major industrial nodes
within easy travel times of most parts of the Schools and other education facilities are
Greater Tygerberg area. essential to supporting a growing population
maintaining property values. Existing
The Greater Tygerberg area comprises amenities like sports fields and libraries could
approximately 500 000m2, equating to over benefit children living in new affordable
25% of all office space (A+, A and B) in the Cape accommodation developments.
Town metropolitan region. It is estimated that
the VRC accounts for 50% of formal employment Over 5 000 students are living in 24 major
and 85% of industrial employment in the Cape tertiary student residences both off- and
Town metropolitan region. on-campus. This is part of a trend, in
which investors are buying old buildings
and converting them into major student
accommodation residences.
1 https://gtp.org.za/wp-content/uploads/2018/05/greater-
tygerberg-retail-survey-3.jpg
29AMENITIES AND SERVICES
PUBLIC SPACES
The investment in a high quality, accessible and installation of erosion protection and slope
Types Number
safe public realm supports the development of stability works
affordable accommodation by : Major Parks 4 Construction of pedestrian footpaths and an
Minor Community urban plaza public space
protecting and raising the long-term value of Circa 20 Landscaping with indigenous vegetation
Parks
the building Investment: R30 million
raising the viability of affordable 1 (Tygerberg Nature Status: Upgrade complete
Nature Reserves
accommodation projects which include an Reserve)
open market component, to make the project Kruskal Avenue upgrade
more appealing to residents of all income Jack Muller Park Upgrade Kruskal Avenue is a major pedestrian
tiers The Jack Muller Park has been significantly thoroughfare, running through the Bellville
promoting integration and cultivating a sense upgraded in recent years. These upgrades CBD to Bellville Station from Teddington Road
of community pride and social inclusion have included landscaping, multi-purpose across Voortrekker Road. The upgrade will
enabling communities to transition from hard surface upgrades and improved walking create a pedestrian priority route and will focus
single dwelling units to living in potentially and running paths. on widening the existing pedestrian crossing,
smaller units medium density Investment: R15 million adding additional lighting, planting trees and
encouraging non-motorised transport and Status: Final stage with hard surfaced installing new benches and public art.
movement, particularly walking upgrades underway Investment: R21 million
Status: Phase 1 underway, completion in
The wide range of existing community parks, Elizabeth Park 2020
recreational facilities and amenities within the Elizabeth Park is a valuable and strategically
Greater Tygerberg area is being expanded located open space asset within the Bellville
through new safety initiatives, upgraded CBD, surrounded by medium-density
parks, planned projects and new proposals. developments. The Bellville Public Library is
located in the northwestern part of the park
and is also being upgraded.
The recently completed upgrade includes :
Reshaping and rehabilitation of the
Elsieskraal River channel and banks, and
30Elsieskraal River Project Tygerberg Nature
The Elsieskraal Green Belt project forms part Reserve
of an essential green link that runs from the
Durbanville Hills through Tygervalley and
Jack Muller Park to the Hardekraaltjie Sports
Complex. It has great potential to function
as the connecting green spine and natural
environment that supports the CBD and
surrounding communities.
A conceptual design framework has
Jack Muller Park
been prepared in consultation with local
stakeholders, which presents a strategic
Elsieskraal River Project
vision for the Elsieskraal River.
Investment: R35 million Elizabeth Park
Status: Planning stage Kruskal Avenue
Klipkop Integrated Bellville Recreational
Facility Klipkop Smart Park
A new smart park is planned adjacent to the
Tygerberg Hospital Precinct
Investment: R13 million
Status: Scoping phase
31AMENITIES AND SERVICES
HEALTH LIBRARIES RETAIL AND
SHOPPING
The Tygerberg Hospital development has Libraries are important civic assets with the The area is well-served by a diverse number
stimulated the establishment of multiple potential to serve communities beyond of shopping centres and retail offerings.
secondary health and wellness industries in books, through internet access, community
the area. With over 20 hospitals, clinics and outreach, social events and safe spaces for Big-box shopping centres like Tygervalley,
specialist facilities and six medical institutions, children. A number of major libraries are Parow Centre, Middestad Mall (highest
the Greater Tygerberg area is a growing located within accessible locations close to footfall in the region), Willowbridge Mall and
medical hub with the potential to attract public transport and amenities. These include the nearby N1 City provide regional access to
health innovation and tourism investment. Bellville, Parow and Tygervalley public the area. There are also a number of smaller
libraries. suburban and community scale malls and
This sector employs more than 18 000 supermarkets, such as Maalin and Nobel Park
people and features 904 specialised medical shopping centres.
practitioners and over 3 000 hospital beds
serving a surrounding population of around These centres are supplemented by an
50 000 people. active and vibrant high-street along part
of Voortrekker Road which provides an
The University of the Western Cape has alternative to malls and have a more positive
recently moved into the Bellville CBD effect, enlivening the neighbourhood,
transforming the JS Marais building into the improving safety through passive surveillance
Bellville Community Health Sciences Medical and providing more accessible options for
Centre, a state-of-the-art teaching facility. consumers without cars. Diverse retail and
shopping opportunities are provided along
the Bellville CBD to Durban Road edge.
Independent trading communities from
across Africa provide additional retail options
for diverse income groups.
32FINANCING AND FUNDING
OPPORTUNITIES
A growing number of funding and financing INTERNATIONAL HOUSING SOLUTIONS
opportunities are specifically focused on the
affordable accommodation sector. About the fund: The multi-investor funds include:
International Housing Solutions (IHS) is the • South African Workforce Housing
• A number of major established leading fund and property manager in the Fund (SAWHF): low-cost housing
funds provide finance and technical affordable housing sector in Sub-Saharan opportunities for workers at state
support to existing and new affordable Africa. IHS currently manages three multi- agencies e.g. Eskom
accommodation projects investor funds, one single investor fund, and • IHS Fund II SA: a multi-investor fund
• National focus on public-private a publicly traded real estate investment targeting investments in affordable
partnerships through the newly formed trust (REIT). housing, including green housing
Human Settlements Development Bank projects, within South Africa
• Mature banking sector is expanding Investment focus • Transcend Property Fund: focused
finance to more affordable housing IHS invests equity alongside developer on delivering housing to a heavily
developments partners’ equity and local debt in for-sale or underserviced portion of the real estate
rental properties. market with affordable rentals ranging
from R3 000 to R7 000 per month
These equity investments are in:
• Either new construction or rehabilitation Suitability for investment in the Greater
• Typically located in large urban areas Tygerberg area
• Aimed at energy efficiency The Greater Tygerberg area would fit
• Aimed at generating social and with the investment profile of IHS Fund
environmental benefits beyond II SA and Transcend. It is a large urban
addressing housing need area, with several land parcels and
buildings planned to be released for
IHS also invests by purchasing turnkey the development and refurbishment of
developments from experienced developers. affordable accommodation.
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