Cape Town agrees to transfer R114.3m Salt River site for 10% of its value for housing

Activists have been campaigning for affordable housing in the City Bowl and Sea Point for low-income families. (Mary-Anne Gontsana, GroundUp)
Activists have been campaigning for affordable housing in the City Bowl and Sea Point for low-income families. (Mary-Anne Gontsana, GroundUp)

The City of Cape Town has agreed, "in principle", to sell the Salt River Market site to a "social housing institution (SHI)" for 10% of its market value for an 820 unit mixed-use development, it announced on Thursday.

"I'm elated by Council's decision to agree, in principle, to transfer this City-owned land," said councillor Malusi Booi, member of the mayoral committee (MMC) for human settlements.

He said the market site was valued at R114.3m, but the council would let it go, with strings attached, to an SHI for R11.4m.

Booi told News24 that it could be non-profit Communicare, which owns and manages rental units, that the land is transferred to.

The site consists of 13 erven and 1.4 hectares in total about 5km from the CBD and, if a development plan is approved by council, the social housing institution is expected to produce a mixture of rental units for varying incomes, as well as retail space.

Booi said this would be a break with apartheid's past when poor, mostly black families, were put on the outskirts of the City.

City backtracks

"Thus, by giving such a huge discount to the SHI which will develop the site, we had to ensure we will get the maximum benefit," he said.

On November 1, former MMC for urban development Brett Herron resigned during a flurry of political activity following Patricia de Lille's exit as mayor. 

At the time he said the last straw was when the DA caucus refused to support the disposal of the Salt River Market site, letting down communities he had been working with for affordable housing. 

Booi said that in October the possible transfer was referred back to the relevant City departments for further clarification and analysis and to check whether the City would get maximum value for the land. 

Booi said the latest feasibility study confirmed that it was possible to increase the number of affordable units from the mandatory 30% to 43%, up from what was originally presented in the report to council on October 25. 

The outcome of the pre-feasibility study on the Salt River Market site is as follows:

  • 14 607m² in extent of which 12 907m² is able to be developed;
  • Achievable bulk amounts to 38 235 m², of which 2 000 m² can be used as parking, retail and community space;
  • Over 820 affordable housing units could be provided as part of a mixed-use, mixed-income development, consisting of 216 "social housing units. These are rental units for families with a combined monthly income of between R1 500 and R15 000;
  • 100 gap units for families with a combined income of R22 000 per month; and
  • 507 residential units where the monthly rent is capped at R13 000;

The site currently houses the Salt River Market, a municipal hall, old stables; and is next to the busy Voortrekker and Bromwell roads and a railway line. 

DA 'shamed' into handing site over

Booi stressed that this was an approval "in principle" only and that there was still a long way to go in finalising agreements on terms and conditions, and getting it accepted by the council. 

If council agrees with the terms and conditions, the site will be formally transferred to the SHI that will develop it.

Earlier on Thursday Mayor Dan Plato told the council that it was not good enough that the City only provided 3 500 housing units in the last financial year, and said this needed to change.

Herron issued a statement in his private capacity on Thursday to say that the DA was "shamed" into handing the site over. 

"Public and activist pressure has led the DA into reversing its October decision to block the disposal of the Salt River Market site to Communicare," he said. 

He resigned in November because he felt that the City was anti-transformation and blocking developments in sites on well-located areas. 

He also resigned from the DA. 

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