When property developer Anver Essop bought land in Cape Town’s gang-ridden Cape Flats area, people laughed at him for considering it an investment.
Now, 12 years later, the Watergate Estate is a sought-after refuge that will soon be donned with solar panels funded through an online leasing platform, making it, Essop hopes, a “blueprint” for green, safe and cheap homes across South Africa.
The marketplace, Sun Exchange, allows people to buy individual solar cells with cash or bitcoin and then lease them to power solar projects in emerging economies, resulting in lower electricity costs for residents.
“We thought, why don’t we give people the same product we build in wealthier areas and uplift them to improve their own lives,” said Essop.
Essop, who founded development company New Age Properties, said the Watergate estate seeks to solve two pressing issues in the country: the need for safe, affordable housing and reliable, clean energy.
Nearly three decades since the end of white minority rule under the apartheid regime, South Africa is battling high levels of inequality, crime and unemployment and a housing crisis linked to booming urbanisation.
The government has subsidised about 14% of South African homes since 1994 – or 2.3 million properties – according to official statistics, but housing rights groups say there is a major backlog in the roll-out.
There are more than 300 000 people registered and waiting for government-funded housing in Cape Town, said Malusi Booi, a member of the city’s Mayoral Committee for Human Settlements
Rights advocates noted that almost all of those waiting are black or mixed-race.
“While this spatial inequality has its historical origin in the colonial and apartheid eras, a key contemporary driver is Cape Town’s acute housing affordability crisis,” said Michael Clark, the head of advocacy at local housing rights group Ndifuna Ukwazi.
Cape Town is expected to have the highest year-on-year rise in property prices in the world this year, equal only to that of Shanghai, according to global property consultancy Knight Frank.
Booi said the city is currently ramping up its supply of affordable housing in and near urban centres across the metro.
Watergate is the first privately-funded, low-cost housing development in the Western Cape province, according to Essop, with more than 200 apartments, 24-hour security, electric fencing and a children’s play park.
Gated communities are popular across cities in South Africa, which had the world’s fifth highest murder rate in 2019, according to United Nations data.
But academics and rights groups have criticised protected complexes for further segregating already divided spaces, leaving people who cannot afford to live in them exposed to violent crime.
CROWDSOURCED SOLAR PANELS
Having grown up in the Cape Flats surrounded by gangs, gun violence and drug dealers, Watergate resident Samantha Wilson said she now feels secure enough to sometimes leave her door unlocked.
But keeping the lights on is a challenge.
South Africa has been dealing with scheduled electricity blackouts, where the state utility Eskom cuts power to protect the national grid from collapse as coal-fired plants struggle to meet demand.
“Loadshedding is a nightmare everywhere. It impacts my performance when I am working remotely,” said Wilson.
Watergate is due to receive its first solar panels in the coming weeks through Sun Exchange.
Cells can be bought with cash or bitcoin for R90 and owners lease the electricity generated to Watergate at a pre-agreed price, saving them nearly 40% in electricity costs over 20 years.
After 20 years, the project will be decommissioned or Watergate will have the option to purchase the solar-power system outright, explained Sun Exchange founder Abe Cambridge.
“By combining cryptocurrency and energy, you end up with someone sitting in London getting an income from selling green energy where it is needed and offsetting their carbon footprint,” he said.
About 470 people across the world bought solar cells for Watergate, and of the 39 Sun Exchange projects launched so far, it is the first being used to power affordable housing, said Cambridge.
Watergate’s solar electricity system will save about 3.3 million kg of carbon dioxide over its lifetime, he added - equivalent to a year of emissions from 718 cars.
Although the energy produced by the cells will initially be linked to the national grid, Cambridge hopes to add a battery that can store solar power to protect residents from blackouts.
“If the (Covid-19) pandemic has shown us anything, it is the need to build resilient finance and energy systems. We need foundations that can withstand shocks,” he said.
Some like Ryan Fester, a project officer with housing and land non-profit Development Action Group (DAG), say gated communities are short-term solutions that create an “illusion” of safety.
“Crime can still take place inside gated communities, we need to tackle long-term issues like unemployment, trauma, abuse, lack of education ... building high walls won’t create vibrant communities,” said Fester, who also lives in the Cape Flats area.
But Wilson said that “Watergate is affordable, it is not exclusionary,” adding that she is part of a community watch group that patrols both within and outside the estate.
Essop said that his company is in the process of building another 100 units in Watergate and negotiating an additional 45 hectares (110 acres) of land in the area for more affordable housing projects.
Sun Exchange also plans to expand into other parts of southern Africa through a partnership announced last year with one of Zimbabwe’s biggest fruit and tobacco producers, Nhimbe Fresh.
“Long-term we want Sun Exchange to be a global platform in Latin America and southeast Asia, where there are similar energy challenges that can benefit from our model,” said Cambridge.
At the Watergate Estate, Wilson said that, for her, the biggest benefit is finally being able to sleep soundly at night.
“I feel proud to live here. I sleep through the night knowing my family is safe and I think people in other countries should feel like this, too,” she said. – Thomson Reuters Foundation, the charitable arm of Thomson Reuters