Inclusionary housing (IH) is an important example of a land use regulatory instrument inspired by the concept of land value capture. The IH mechanism encompasses a broad range of applications in which land value increments resulting from changes in urban regulations are recouped by the public sector. The broad range of applications currently being considered in ongoing draft policy instruments include onsite, offsite and payment in lieu of inclusionary contribution by the benefited property owner.
The idea of Inclusionary housing as a land use planning tool to advance spatial transformation is not new in South Africa, it emerged from 2004/ 2005 policy initiatives responding to concerns, that too little had been done to redress the fragmented and divided apartheid city, and that a more interventionist approach was required.
The 2004, Comprehensive Plan for Sustainable Human Settlements Breaking New Ground’ (BNG) outlined at least three things relevant to Inclusionary Housing:
- The creative use of planning instruments to promote densification and integration
- a broader redefinition of the mission of the national Department of Housing so that it would now focus on the quality of planning and human settlement generally
- A greater role for the private sector.
The BNG policy provisions were further reinforced and clarified by the 2005 Housing Indaba whose key outcome was the signing of a Social Contract for Rapid Housing Delivery. The Social contract declared that that “every commercial development including, housing developments that are not directed at those earning R1500 or less, ought to spend a minimum of 20 % on the construction of homes within human settlements for those who qualify for government subsidies”.
In June 2007, the ministry published a policy framework for future legislation, which was followed by more detailed guidelines in 2008. The 2007 policy framework called for a two-part inclusionary program namely:
- ‘‘voluntary pro-active deal-driven component’’
- ‘‘compulsory but incentive-linked regulation-based component’’
- Incentives such as tax credits, land, fast-tracking of approvals, density bonuses, bulk, and link infrastructure.
An analysis on the implications of the past IH policy initiatives (dating back to the period between 2004 – 2007) indicates that the impact of inclusionary housing policy and practice vary greatly especially between the two key components outlined in the 2007 draft framework for inclusionary housing. Various legal issues and institutional constraints are believed to have hampered effective application of the inclusionary housing program. The key concern raised was the lack of national legislative frameworks that provide either express or implied statutory legal provision for municipalities to impose and enforce the land use planning related inclusionary housing policy requirements. The 2007 national policy on inclusionary housing drafted to foster the provision of affordable housing within private property developments was never signed into official legislation. So, the lack of legislative and institutional support for inclusionary housing from the other spheres of government meant that there was no real way of enforcing the policy and its uneven implementation through protracted negotiated agreements on a case-by-case basis was potentially open to challenge in court.
The SPLUMA legislation has to a large extent resolved this legal concern. SPLUMA spells out quite a strong legal obligation for both local and provincial government to make the necessary actions that ensures that land use planning process advance spatial justice principles. As a result, we find ourselves in a space where Inclusionary housing is no longer just a political statement of commitment to change or an alternative vehicle to create affordable housing but rather an important land use planning and management mechanism to fulfil the statutory requirements enshrined in SPLUMA legislation. While various local government and provincial administrations are currently making concerted efforts to develop inclusionary housing policy and programmes, some private sector developers, have already begun taking initiative to make provision for inclusionary housing units as a precautionary measure.
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Quick Links to our publications on Inclusionary Housing in South Africa:
Unpacking the Western Cape Draft Inclusionary Housing Policy Framework:
The Western Cape provincial government released a Draft Inclusionary Housing Policy Framework for public comment on 14 May 2021. It lays out important definitions and concepts, as well as outlining how Western Cape municipalities should go about developing municipal inclusionary housing policies.
We’ve unpacked the content of the draft policy framework for you, so you can understand what it is all about.
Click through our storyboard below to understand the important points.