Unlocking Township real estate potential: Critical role of collaboration in overcoming Town Planning and land-use challenges

• Densification and Mixed-Use Opportunities: Township sprawl offers significant potential for densification and mixed-use developments, driving economic growth and revitalising local economies.
• Navigating Town Planning Challenges: Property entrepreneurs must navigate town planning and land-use regulations, securing the “rights to build” to avoid roadblocks in development.
• Collaboration for Streamlined Development: Collaboration between developers, financiers, and municipalities is vital to reduce delays and costs, ensuring sustainable township growth and infrastructure development.

When I consider the vast sprawl and low densities in most townships across South Africa, the first thing that becomes apparent is that there are abundant opportunities. Notably, there are significant opportunities for densification and to integrate mixed-use developments within these areas. This I believe will invigorate township economies, which is an exciting source of future economic growth for the country. 

However, realising these opportunities needs to be done the right way, as the journey of building new, inclusive and affordable housing in townships is a multifaceted one. 

Property entrepreneurs need to understand how to secure financing from the likes of uMaStandi, and they need to find the right project team, vet tenants and ensure compliance with municipal regulations, to name a few. Equally as crucial and not as frequently discussed is the importance of ensuring one has the “rights to build” in terms of the applicable town planning and land-use regulations; and this is usually where most roadblocks are met by property entrepreneurs.

At its heart, town planning is the management of how land is developed and it ensures that development happens in an orderly fashion. Historically, there were reasons why most of our high-rise buildings were in the CBDs and low-density residential properties in suburbs and townships. But times have changed, and regulations need to consider systematically allowing medium-density developments in townships because building activity happens daily and mostly without formal approvals. These uncontrolled densities are putting strain on the already burdened bulk infrastructure and municipalities need to proactively manage this to avoid total infrastructure collapse. 

Property entrepreneurs need to be cognisant that town planning takes place at the very beginning of the development process. At this stage, they must obtain all the required permissions from the relevant municipality to ensure the necessary services, such as water, electricity and sewage are taken into account for their developments.

Secondly, property entrepreneurs must factor in the length of time applications can take to be approved. This can take from between six months, to a year, depending on the municipality. Rezoning approvals can take between eight months to two years in some municipalities and this has serious cost implications for developers. This is where collaboration between property entrepreneurs, financiers such as uMaStandi and municipalities is needed. Costs and time associated with these processes need to be reviewed and necessary changes to streamline these processes must be considered, otherwise, we run the risk of continued uncontrolled densities and potentially disinvestment by capital providers who are currently committed to the economic development of townships. The simple truth is that capital will move elsewhere where it is easier to do business, leaving townships entrepreneurs with no long-term and competitive financing options for their projects. 

Property entrepreneurs and those in need of quality affordable housing in townships cannot afford to have providers of capital moving out; and municipalities need the increased rate base to invest in the maintenance of existing and to build new infrastructure. Intentional collaboration between all stakeholders is the only way forward.

Lusanda Netshitenzhe is CEO of TUHF21

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