SOURCE: City of Cape Town
The City of Cape Town has provisionally approved the release of eight tracts of land totalling some 42 hectares to be developed by banks for affordable housing for the so called GAP market.
This follows the signing of a groundbreaking agreement by Executive Mayor Helen Zille with three commercial banks - Absa, Nedbank and Standard Bank - in May this year. A fourth bank, First National Bank, may also be participating.
The GAP market consists of people who earn between R3,500 and R10,000(household income) per month. Within this bracket they do not qualify for state housing subsidies, but also don’t earn enough to participate in the competitive property market in Cape Town which escalated dramatically over the last five years. People who are earning between R3,500- R7,500 will qualify for a subsidy deposit from government, about 50% of the required deposit.
“We estimate that 165,000 people in the city fall in the GAP and affordable housing markets,” says Cllr Dan Plato, Mayoral Committee Member for Human Settlements.
“With innovative financial mechanisms we can help Capetonians who are living in backyards or informal settlements to buy their own homes. This will go a long way in alleviating the massive housing shortage in the city.
“Latest figures indicate a backlog of some 400,000 units, which is virtually impossible to eradicate. The City can deliver a maximum of 7,500 houses per year whilst the influx of new residents stands at some 2,000 per month,” he says.
The home loan packages could include set-up loans whereby the interest rate is increased over the duration of the loan period, a system where equity on the housing unit is shared between the owner and the financial institution, or the reduction of legal and registration fees.
“The Council has identified eight areas where such innovations could be offered. These are Wallacedene (3,4ha), Maitland (0,87ha), Rugby (1,8ha), Westlake (22,1ha), Ottery (2ha), Wetton (6,6ha), Southfield (2,9ha) and Langa (2,4ha).
“These land parcels are well located in terms of public transport, access to work opportunities, educational facilities and recreational facilities, and can be easily incorporated into the City’s municipal service structure,” he says.
Once all provisions have been met, the City Manager will be authorised to approve the allocation of individual parcels of land to the bank which devises the most innovative development options.
“Plans are under way to establish a show village where prospective home buyers will be able to see what type of accommodation could be obtained within their specific income brackets. These eight pieces of land are the first to be identified, but several more are currently under investigation for release. Details of the show village will be announced once it is ready,” says Cllr Plato.
Issued by:
Directorate: Communication and Marketing
City of Cape Town
Tel: 021 400 2201
Fax: 021 957 0023
The City of Cape Town has provisionally approved the release of eight tracts of land totalling some 42 hectares to be developed by banks for affordable housing for the so called GAP market.
This follows the signing of a groundbreaking agreement by Executive Mayor Helen Zille with three commercial banks - Absa, Nedbank and Standard Bank - in May this year. A fourth bank, First National Bank, may also be participating.
The GAP market consists of people who earn between R3,500 and R10,000(household income) per month. Within this bracket they do not qualify for state housing subsidies, but also don’t earn enough to participate in the competitive property market in Cape Town which escalated dramatically over the last five years. People who are earning between R3,500- R7,500 will qualify for a subsidy deposit from government, about 50% of the required deposit.
“We estimate that 165,000 people in the city fall in the GAP and affordable housing markets,” says Cllr Dan Plato, Mayoral Committee Member for Human Settlements.
“With innovative financial mechanisms we can help Capetonians who are living in backyards or informal settlements to buy their own homes. This will go a long way in alleviating the massive housing shortage in the city.
“Latest figures indicate a backlog of some 400,000 units, which is virtually impossible to eradicate. The City can deliver a maximum of 7,500 houses per year whilst the influx of new residents stands at some 2,000 per month,” he says.
The home loan packages could include set-up loans whereby the interest rate is increased over the duration of the loan period, a system where equity on the housing unit is shared between the owner and the financial institution, or the reduction of legal and registration fees.
“The Council has identified eight areas where such innovations could be offered. These are Wallacedene (3,4ha), Maitland (0,87ha), Rugby (1,8ha), Westlake (22,1ha), Ottery (2ha), Wetton (6,6ha), Southfield (2,9ha) and Langa (2,4ha).
“These land parcels are well located in terms of public transport, access to work opportunities, educational facilities and recreational facilities, and can be easily incorporated into the City’s municipal service structure,” he says.
Once all provisions have been met, the City Manager will be authorised to approve the allocation of individual parcels of land to the bank which devises the most innovative development options.
“Plans are under way to establish a show village where prospective home buyers will be able to see what type of accommodation could be obtained within their specific income brackets. These eight pieces of land are the first to be identified, but several more are currently under investigation for release. Details of the show village will be announced once it is ready,” says Cllr Plato.
Issued by:
Directorate: Communication and Marketing
City of Cape Town
Tel: 021 400 2201
Fax: 021 957 0023
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