At the end of February 2018, the City of Johannesburg Metropolitan Municipality (COJ) published a new draft policy on inclusionary housing for public comment.

According to Cliffe Dekker Hofmeyr’s Joloudi Badenhorst, the draft policy defines ‘inclusionary housing’ as a housing programme that requires private developers to let a certain percentage of new housing developments to low income and low-middle income households at an affordable cost.

“Inclusionary housing is to be mandatory for any development in the City of Johannesburg which consists of 10 or more dwelling units,” Badenhorst said.

“It requires that a minimum of 20% of the dwelling units developed must constitute inclusionary housing units.

“The requirement for inclusionary housing will be embodied as a condition for the approval of the relevant development by COJ and will find application in perpetuity or until removed by COJ by resolution,” she said.

Badenhorst added that the COJ may take action against developers who do not comply with the conditions for inclusionary housing outlined in the development approvals.

What they have to look like

According to the policy, inclusionary housing units must be located on the same site or within the same township as the remainder of the residential units being developed.

They must include:

A private bathroom;

At least 7 square metres of habitable space per person (and measure no less than 15 square metres);

Have the same outward appearance as the other residential units; and

Share common spaces and facilities as well as access thereto.

“The COJ seeks to promote two types of management structures in respect of inclusionary housing, being social housing managed by an accredited Social Housing Company or the private ownership and rental of the inclusionary housing units,” Badenhorst explained.

“In regard to the latter, and particularly in respect of sectional title developments, the draft policy provides that the inclusionary housing units must be owned, managed and rented out by the body corporate and that rentals, including levies but excluding utility bills, cannot exceed R2,100 per month (for 2018).

“However, it must be noted that the body corporate of a sectional title scheme comprises all of the owners of the various units situated within the relevant scheme (Section Owners),” she said.

“Accordingly, the inclusionary housing units will, in essence, be owned by the Section Owners. This may pose practical difficulties and give rise to potential disputes between section owners,” she said.

Incentives

The draft policy provides for certain incentives for developers to which this requirement of inclusionary housing applies.

However, these incentives will:

Only apply to a maximum of 50% of the total dwelling units in a development;

Apply proportionally to the percentage of inclusionary housing units developed; and

Will not be capable of being applied retrospectively to land use/development applications approved prior to the adoption of the policy.

“The above incentives will include, inter alia, decreased parking requirements, density bonuses, and relaxed street building lines,” said Badenhorst.

“Furthermore, the inclusionary housing units will be liable for lower parks contributions as well as lower engineering service contributions.

“Finally, COJ intends to provide for a rates rebate in respect of inclusionary housing units, which rebates will, however, first have to be applied for and approved by COJ,” she said.

The Draft Policy is accessible here and the deadline for submission for public comments is 30 April 2018.

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