Activists concerned that Cape Town’s “affordable” housing will not be affordable

Housing activists celebrate the Constitutional Court ruling on the Tafelberg site in July. Archive photo: Matthew Hirsch

• Following a ruling by the Constitutional Court, the City of Cape Town and the Western Cape provincial government have filed reports to the high court on plans for affordable housing.
• But activists say the plan by the City for “affordable” housing, cross-subsidised by private developers, could leave out lower-income families.
• They want the national Minister of Human Settlements and the Social Housing Regulatory Authority (SHRA) to report to the high court, citing a “serious breakdown” between the three spheres of government.
• Neither the City nor the Province has an affordable housing policy, and no social or affordable housing has been completed in the inner city since the case began in 2017.

Housing activists are concerned that the “affordable” housing planned by the City of Cape Town will not be affordable to those who need it most.

In July, the Constitutional Court ruled in the landmark Tafelberg case that the City of Cape Town and the Western Cape government have a constitutional duty to redress apartheid spatial planning by providing well-located affordable housing.

This followed a decade-long campaign by Reclaim the City and Ndifuna Ukwazi for affordable housing in the inner city.

On 2 October, in line with the apex court’s ruling, the City and Province filed reports to the High Court on their plans to provide affordable housing.

To date, just under 6,700 affordable housing units have been built across the metro. None are in the inner city. But the City plans about 28,400 affordable homes on City-owned land that has been, or still has to be, sold to developers. GroundUp detailed the plans. Every site is mapped in GroundUp’s affordable housing tracker.

On Friday, the applicants in the court case filed their responses to the government’s reports.

Who is “affordable” housing for?

State-subsidised social housing is targeted at households earning between R1,850 and R22,000 a month, with rentals capped at R7,326 a month. But the vast majority of the City’s planned homes are non-subsidised “affordable” housing, targeted at households earning below R34,800 a month.

Non-subsidised affordable housing will be built on state land, which is sold to private developers at a steep discount on the condition that the developments include affordable housing, cross-subsidised by market-rate flats and shops.

The City says it has had to “pivot” from state-subsidised social housing because the Social Housing Regulatory Authority has not funded its projects: none on City-released land has been paid to developments since 2021.

In an affidavit, Zamuxolo Gulwa, an attorney at the Ndifuna Ukwazi Law Centre, warns that the R34,800 income ceiling could prioritise housing for families “on the higher end of this range, dramatically limiting social and economic integration of the CBD”.

While social housing units must be allocated across the full income range of between R1,850 and R22,000 and rentals must stay affordable for the life of the project, Gulwa says it is unclear whether the same would apply to non-subsidised projects.

Gulwa asks the City and Province to say whether they will set income bands for units and rentals, or only use the R34,800 ceiling. If there are bands, the applicants want to know what they will be in the planned projects, and how the City and Province will make developers stick to them – not only when tenants first move in, but for years afterwards.

“Affordable housing delivered by private developers on state land is not a simple substitute for social housing. There is a real danger that the multiple objectives of social housing get diluted when social housing projects are switched to affordable housing,” says Gulwa.

The applicants also want more information from both the Province and the City on their planned housing, including the contracts with developers; any incentives, capital or operational, for developers; how the rental units will be managed; and what systems will monitor and act on non-compliance.

They ask the City to disclose its Council minutes and its agreements with developers, and to say whether its “pivot” to affordable housing will include permanent discounts on rates and service charges.

Gulwa says unless restrictions are written into the deals, the homes could end up on the private property market, “inaccessible in the future for the original targeted group”. Developers given incentives have also tended to build small units, which excludes larger households and “has a detrimental effect on families and children”.

Gulwa also points to the value of social housing in mixed-income projects: the SHRA grant is paid up front, which helps developers’ cash flow, while waiting for rent to come in could make a project unviable.

The applicants say the City needs a system, and the resources, to monitor developers and act on breaches for years to come, before it signs any deals.

For full screen view of the Affordable Housing Tracker, and for more details, click here.

Nothing built in the inner city

“The stark reality revealed by the reports is that, since the inception of this matter in 2017, there are still no completed social or affordable housing projects in the CBD, (which includes Sea Point), nor are there any where construction by the developer is even underway,” says Gulwa in his affidavit.

The City has blamed national government for the delays across its pipeline. In his affidavit, Mayor Geordin Hill-Lewis says five of the six inner-city land parcels released by the City for social housing “have had no funding awarded at all”. SHRA has not approved funding for a social housing project on City-released land since 2021.

But Gulwa says the Mayor has not specified which five sites these are, or when each application was made to the SHRA. Gulwa points out:

• At Salt River Market, funding was awarded, but the grant agreement has not been signed.
• The developments at sites in Pine Road and Dillon Lane, sold together to social housing institution SOHCO, are being cancelled. According to the City, SHRA declined to fund Pine Road, finding it non-viable. “Grant funding unavailability” was among the City’s reasons for cancelling both.
• The application to the SHRA for the development on New Market Street was made only in 2026.
• No application has yet been made for Pickwick Street.

The City has said Salt River Market is finally under construction. Gulwa disputes this. Earthworks and demolitions have started on the site, but construction of the building itself has not yet begun.

The Salt River Market site will include both social housing and affordable housing as defined by the City, to be developed by social housing institution Communicare. The SHRA has awarded funding for 376 social housing units, but has not signed the grant agreement.

The Province’s court report says Communicare was told in January 2026 that the SHRA had put the signing on hold, so the social housing component is “in abeyance”.

Gulwa says it is unclear what this means for the rest of the project, including whether construction is still due to start in January 2027.

The case began with the Province’s sale of the old Tafelberg School site in Sea Point to a private school, which the Constitutional Court found unlawful in July. The Province now plans 220 social housing units and 220 market units on the site. It has heritage approval and has applied to the City for land-use approval.

But the applicants are concerned about “non-transparent changes” to the design. The previous preferred option had an 11-storey building. The current one has an 8-storey building with market housing and ground-floor retail, and 4-storey social housing “walk ups”.

They fear this may make the development less viable and reduce how much social housing the market units can cross-subsidise. They also say neither government has set out any steps it has taken since the judgment to co-ordinate with the other, or with national government and the SHRA, on Tafelberg.

Intergovernmental breakdown

The applicants say neither the City nor the Province has shown the court any evidence that, since the judgment, they have co-ordinated with each other or with national government and the SHRA on the current projects or the Tafelberg site.

“There is also no indication that the Provincial Steering Committee which advises Province on matters affecting social housing has met for purposes of reporting to this Court,” says Gulwa.

The committee includes representatives of the national Department of Human Settlements, the SHRA and the City.

“It does not appear to be an effective forum for meaningful and effective co-operation with the national sphere of government and the SHRA in respect of social housing projects in the CBD,” says Gulwa.

After the Constitutional Court ruling, the applicants wrote to the national Minister of Human Settlements on 7 August. They invited her to take part voluntarily in the supervisory process. On 20 August, Director-General Dr Alec Moemi replied that the Minister was “of the view that it is neither necessary nor appropriate for the national executive to be joined as a party to the supervisory proceedings”. He said the court’s order was directed at the Province and the City.

On 13 October, the applicants’ attorneys wrote again to Minister Thembisile Simelane, the Director-General and SHRA head Sandile Luthuli. They asked for help to “unlock apparent funding deadlocks” at Salt River Market and at New Market Street, where the SHRA has not yet approved funding for 375 social housing units.

The SHRA was cited as the ninth respondent in the original High Court case but did not oppose it.

The Mayor’s affidavit accuses national government of a lack of good faith. The applicants say this “reflects a serious breakdown in inter-governmental co-operation”.

“Given the serious concerns raised by Province and the City in respect of funding for social housing, and the evident on-going lack of any meaningful and effective co-operation between all three levels of government,” the applicants intend to ask the court to join the Minister and the SHRA to the case, and to order them to respond to the Province’s and City’s reports.

Housing activists packed the Sea Point Methodist Church on Saturday to be briefed on Ndifuna Ukwazi’s responses to the City and Province’s court reports. Photo: Matthew Hirsch

No policies for affordable housing

The court’s order also requires the City and Province to report on their “affordable” housing policies. The activists point out that neither has a formal policy. The City is still developing an affordable housing policy, the concept note for which was first tabled in July 2023. The Province has given no indication that it intends to adopt one, says Gulwa.

“Social housing has an express legislative and regulatory regime. Affordable housing does not,” says Gulwa.

Without adopted policies, Gulwa says, affordable housing projects “will take place in an ad-hoc manner and policy vacuum, depending on the Cabinet (Province) and Municipal Council (City) decisions, terms of bid processes, and contractual provisions”.

“In the absence of affordable housing policies, there is no clear policy direction for purposes of implementing social and affordable housing projects in the CBD, now and into the future,” says Gulwa.

The applicants want the City to set a date for adopting its policy. If that will take time, they suggest the City consider “an urgent interim affordable housing policy” covering only social and affordable housing for the current projects. They also ask the Province whether it will adopt a policy at all.

In its report to the court, the City had said the policy has not yet been finalised for public comment. It is still investigating whether inclusionary housing would work, saying any proposal “needs to be evidence-based to avoid perverse effects” and to make sure projects would be financially feasible.

The City said its proposed affordable housing policy would set out how it will enable and encourage private developers to build affordable housing, “recognising that, in the context of declining grant funding, the City alone cannot deliver the number of affordable housing units required to address the growing needs of its residents”.

The policy would cover social housing, affordable rental, land release for micro-developers and inclusionary housing, which requires developers to set aside some units in exchange for extra building rights.

The Province’s report, in an affidavit by Premier Alan Winde, said housing policy is set by national government through the National Housing Code. Provinces may develop their own programmes, but these must be consistent with national policy, and the “primary duty of provincial governments” is to implement the code.

What the applicants want

The City and Province now have two weeks to reply. The applicants have also invited them to file supplementary replies by the end of January 2027, “because there are a number of current social and affordable housing projects which have significant milestone dates in the period between November 2026 and January 2027”.

The applicants will set out how they want the court to take the matter further once the replies are in, and once the Minister and the SHRA have also responded, if the court orders them to. They want to ensure there are effective plans for “tangible delivery” of social and affordable housing in the CBD, focused on the current projects.

They say this may require ongoing supervision by the court, through progress reports, or the right of the parties to return to court for specific orders. They suggest the order could state that failing to comply with the plans would not automatically amount to contempt of court.

Any of the parties may ask the court to set the matter down for a hearing.

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