Building Better Cities: A New Approach to Housing and Urban Development

Since South Africa became a democracy, desperate people unable to find suitable and affordable housing have constituted a calamitous reality that keeps recurring. Like many pre Covid-19 challenges, the outbreak of the pandemic has increased attention devoted to land and housing issues in urban areas, while also intensifying the seriousness of the situation. South Africa has a growing urban population and is a rapidly urbanising country. The existing urban population is expanding and that creates a growing need for housing. In addition, people are moving away from rural areas, where poverty and unemployment are extremely high, towards urban areas, where the majority of economic opportunities are concentrated. When they get there, they usually settle on the outskirts of sprawling urban areas like Johannesburg, where land is cheap. The real opportunities, however, lie elsewhere, closer to the more concentrated centres of the city. In contrast to providing sprawling housing developments for the poor far from jobs and opportunities, this approach helps to move South African cities away from segregation and exclusion. Many small housing projects, driven by small to medium sized private developers, achieve market-driven urban densification within existing residential suburbs, close to economic opportunities. This report sets out the core elements of the ‘massive small’ approach and offers examples of where this kind of delivery is already making a significant difference in creating more compact and efficient South African cities. We explain why the ‘massive small’ phenomenon has great potential to raise growth and reduce unemployment in South Africa, and detail the factors that are preventing it from expanding at a much faster rate. A crucial aspect of this challenge is the regulatory environment that makes it too costly for many smaller providers to operate. This result, in many instances, in entrepreneurs and developers operating completely outside the legal context, which is extremely undesirable. Operating outside the legal framework places significant constraints on entrepreneurs seeking to build and finance new accommodation. Reforming the regulatory environment and strengthening the ability of Metro authorities to manages these developments is the way to respond to this challenge. The paper concludes by spelling out the reforms and interventions required for this approach to go to scale and deliver optimal results.