Last month in Cape Town saw the convening of Urban and Housing Development, a three-day global conference of urban professionals and practitioners to address the issues of sustainable housing and infrastructure. The conference was promoted as a 'one-stop platform that will encapsulate cutting-edge issues, strategic solutions and pertinent case studies'. Overall, the agenda looked set to deliver, with speakers ranging from government officials to private consultants, and delegates from across Africa and the Middle East. Most notably, a group from South Sudan represented the entry of the urban interest into one of the world's newest geopolitical spaces.
Social housing, one of the main areas of focus, brought in the most delegates out of the entire session and showed the amount of far-reaching interest in the issue. One of the most encouraging presentations highlighted housing microfinance companies as a privately-created solution to the massive challenges of housing: By providing a series of smaller loans, Select Africa, a housing microfinance company based out of Mauritius, has made it possible for people in seven African countries to build their homes in stages, and out of location-specific materials. Despite higher interest rates, the structure of repayment periods and the length of loans, on average less than 4,500 US dollars each, mean that borrowers pay less over time and per month for more financial gain.
Just when it seemed that the solution to urban housing had come about, however, the speaker revealed that sadly the model doesn't seem to work in urban areas.
Just when it seemed that the solution to urban housing had come about, however, the speaker revealed that sadly the model doesn't seem to work in urban areas. In fact, 99 per cent of the company's operations are based in rural zones. The deciding factor is the price of urban land: without the partnership of governments and parastatals, developers find great difficulty in making privately funded and socially inclusive housing affordable within urban environments.
Making these houses affordable to the end user continues to be one of the greatest challenges to developers and banks alike, and one of the greatest barriers to urban inclusivity. Contemporary financial regulations and hefty down-payment requirements by traditional banks typically exclude most of Africa's urban population from formal housing market access. This exclusion exacerbates inequalities in housing provision and continues a divide between the formal and informal, both structurally and financially.
To change this, two speakers from The Banking Association of South Africa and Chartwell Housing underscored the need for state-supported alternative 'non-traditional' financial solutions that enabled residents to integrate into the housing market. Speakers suggested options like enhanced urban-based micro-lending, expanded rent-to-buy schemes, and the introduction of real estate investment trusts as platforms to offer custom-tailored solutions for urban residents. Essential in the proposed new finance mechanisms is the belief that a house should remain an asset for its residents, whether financed through traditional banks or newly-designed financial instruments.
Targeting the GAP market, or those who earn too much to qualify for social housing grants but too little to qualify for traditional mortgages, represents one of the most promising areas of intervention — enabling these potential home owners to realise a greater level of financial investment would help to expand the 'housing ladder' and offer up a greater level of flexibility, movement, and options within the lower-income housing field.
Transportation: one system or two?
Some presentations merely demonstrated just how dichotomous urban development can be. Barbara Jansen of the Gautrain Management Agency put forward Johannesburg's much-lauded Gautrain — which connects the airport with the business districts in the north — as an example of a successful public-private partnership. Yet beyond highlighting how high-speed rail can carry passengers across a large expanse of urban land, this also showed just how much public money — 22 billion South African Rand or 1.85 billion British Pounds — went into a project that benefits only a select percentage of the population.
The trains are impressive and certainly reduce the amount of drivers on Johannesburg's overburdened highways, but the steep price of tickets means that the majority of the city's residents can't use the trains on a regular basis. Jansen admitted that the Gautrain wasn't the solution to Johannesburg's transportation problem, but 'just one solution aimed at a specific market'. Indeed, money is being ploughed into Johannesburg's more accessible MetroRail system as well, but it begs the question why a separate high-speed line was needed at all. Why not channel all public spending into one project that meets everyone's needs simultaneously? Surely one integrated train system is more sustainable than two separate ones, both for future maintenance costs and social cohesion?
Why not channel all public spending into one project that meets everyone's needs simultaneously? Surely one integrated train system is more sustainable than two separate ones, both for future maintenance costs and social cohesion?
A strategy is not always a solution
One of the most important take-aways from the conference stands to be that sustainable urban development must always be inclusive urban development. Partial solutions — housing that works in peripheral areas but not city centres, rail lines that integrate only one side of the city — will continue to limit the way we can promote inclusivity within our urban environments. By thinking about solutions in silos and boxes, we miss out on the larger goals that hold up the idea of urban sustainability — inclusivity and equality.
Urban development solutions must offer something for all: development strategies should seek to tie urban networks together, not drive them further apart. Public-private partnerships designed to promote urban development should be founded on the recognition that while certain strategies may work for some, strategies really aren't solutions unless they promote a bettter urban standard for all.