Sithembele Sidzumo and his team from Kaya Properties have officially broken ground on the Ubuntu Terrace 1 project in Delft, Cape Town.

The development is the first TUHF-funded project to receive affordable rental flats (ARF) approval in the Western Cape capital, where the city has been engaging with micro-developers and property owners to work together to meet the demand for affordable rental housing.

TUHF is a commercial property financier that provides specialised financial services and solutions to clients in the urban and suburban areas of South Africa’s large metropolitans.

The group believes the Ubuntu Terrace 1 project represents a watershed moment in township development.

A myriad of municipal by-laws, zoning requirements and complex, slow processes historically made it challenging for property entrepreneurs to receive construction approval, however, the City of Cape Town last year amended its by-laws to change this.

“This journey started in 2020,” says THUF Cape region client coverage consultant Nomfundo Molemohi.

“We wanted the City of Cape Town to recognise and support township landlords who were already driving a quiet rental revolution.

“After years of back-and-forth discussions, expert input, and relentless advocating throughout the process, we are proud of the role [we] played to find solutions and promote affordable housing developments that comply with city regulations.”

The approval process for Ubuntu Terrace 1 was boosted by working through the City of Cape Town’s newly established Local Planning Support (LPS) office.

Formed to assist developers with navigating the approval process for ARFs, the LPS is staffed by professionals such as architects and quantity surveyors.

“The lesson is that it is important to liaise with the LPS team to ensure the process is correctly followed,” notes Molemohi.

“Working with the LPS also ensures the revised by-laws are correctly interpreted by both the professional team and the property entrepreneur.”

Molemohi believes that it is now simpler to comply with city by-laws and quicker to achieve plan approvals, which means that more entrepreneurs are likely to come forward to invest in township property developments.

TUHF has already approved funding for two additional phases of Ubuntu Terrace.

The three developments aim to create a combined, safe, well-maintained precinct in Delft that provides decent affordable rental housing.

This will aid families in building generational wealth from properties that could otherwise be considered dead equity.

“Building legal, safe, and affordable accommodation benefits all of us,” notes Cape Town Deputy Mayor and Spatial Planning and Environment MMC Eddie Andrews.

“Firstly, the landowner benefits as they can earn an income from renting out safe and legal units, and they can also borrow money against these assets.

“Secondly, the tenant benefits because they have access to a unit that is safe and complies with health and safety regulations, and one that is legally connected to water, electricity and sanitation.

“Thirdly, the broader neighbourhood benefits because it does not have overflowing sewers and blocked stormwater outlets and the risk of fire because of illegal connections.”

The city also benefits, adds Andrews, as the private sector – be it the landowner or a small-scale developer – can build affordable rental flats at a pace the city is unable to match.

The revised planning by-law approved last year makes it possible for landowners and micro-developers to build affordable rental flats in selected residential areas across Cape Town.

These are areas where one will generally find State-funded housing developments, backyarder dwellings, and less formal structures, and where the city has identified a surging demand for affordable rental accommodation.

In terms of the amended municipal planning by-law, the conditions for the development of affordable rental flats as an additional use right are applicable to properties that fall within 194 identified areas.

The units may also only be developed on a property where there is only one existing house.

The number of affordable rental units or flats on a single property may not exceed eight units, plus a dwelling house, or a floor area of 160 m².

The number of affordable rental units or flats on a single property may not exceed 12 units, if no dwelling house exists on the land, or a floor area of 240 m².

The height of the affordable rental unit or flat may not exceed eight metres or two storeys.

The construction of the affordable rental flat is subject to the payment of a development charge.

The 194 target areas include, among others: Bellville, Beacon Valley, Belhar, Bishop Lavis, Brown’s Farms, Bloekombos, Crossroads, Delft, Dunoon, Enkanini, Fisantekraal, Grassy Park, Gugulethu, Heideveld, Joe Slovo Park, Kraaifontein, Khayelitsha, Kuyasa, Langa, Lavender Hill, Lentegeur, Lwandle, Mamre, Nomzamo, Nyanga, Ocean View, Parow Valley, Pelican Park, Philippi, Phoenix, Retreat, Westlake, Muizenberg, Hout Bay, Sea Winds, Sir Lowry’s Pass, Strand, Strandfontein, Steenberg, Scottsdene, Saxonsea, Sun City, The Hague, Valhalla Park, Vrygrond, Wallacedene, Wetton, Witsand and Westridge in Mitchells Plain.