Cape Town's CBD is packed with commercial property and parking garages - but little cheap rental housing. Here's why:
Under Apartheid, legislation such as the Group Areas Act forced black people to live in overcrowded and poorly serviced townships. If you stand outside the Cape Town train station at 4:30pm on a working day and watch as hordes of people cram onto Metrorail trains and taxis headed to Khayelitsha and Mitchell's Plain you could be forgiven for thinking that nothing has changed.
So what's going on?
A large part of the answer is that immediately after dismantling the NP's Group Areas Act, the ANC proceeded to enact the Prevention of Illegal Eviction Act (PIE) and the Rental Housing Act (RHA). The Rental Housing Tribunal now has extensive powers to alter and limit rents. Evictions have become heavily regulated to the point where a tenant (who consistently fails to pay his or her rent) may not be evicted unless there is alternative accommodation available. This typically requires the person in question to be placed on the housing waiting list which presently has a 50 year backlog.
The purpose of these laws was to protect poor people living in accommodation. The result has been the exact opposite. Property owners have calculated that it is more profitable to lease buildings to commercial tenants who are not affected by these laws. Low-income residents simply aren't welcome, lest owners get bogged down in lengthy litigation over unpaid accounts whilst the building in question turns into Senator Park or Hillbrow. It would be far easier to simply turn the property into a garage and take R 10 an hour off middle class people who need to park their cars.
As a result there has been an almost complete collapse in the supply of formal sector low-income rental housing opportunities. Our cityscapes are frozen in the early 1990's and it's no surprise that our architecture and urban design seem stuck there too. The cleaners and waiters of Sea Point and Sandton still devote a third of their salaries to transport costs and endure long and hazardous journeys to and from work. Our carbon footprint ranks amongst the highest in the world and, perhaps most poignantly, our living areas remain largely segregated along racial and class lines.
The ANC's response, as typified in its Breaking New Ground policy, has been to pour money into top-down housing ‘vanity projects' which seek to integrate cities. But it hasn't worked - indeed no amount of state-led intervention will resolve this crisis. What is needed is legislative deregulation and the empowerment of individuals through monthly rental housing vouchers.
Fortunately, housing law is a concurrent function of government. It is therefore possible, in theory, for non-ANC provincial governments to implement reforms which conflict with and prevail over PIE and the RHA, thereby allowing choice, competition and private sector investment to spread opportunity as widely as possible. If the DA wins Gauteng in 2014 it should make enacting a comprehensive package of housing reforms one of its most urgent priorities.
This article first appeared on the http://policyxchange.wordpress.com website.
Click here to sign up to receive our free daily headline email newsletter
