The beleaguered N2 Gateway housing project in Cape Town has been dealt a further financial blow by the discovery that 705 units comprising the project’s first phase have been built on a 50-year flood plain.
The city has had to fork out a further R10-million to build a culvert to divert possible flood waters, Democratic Alliance (DA) councillor, Niel Ross, chairperson of the city’s housing committee, confirmed this week.
”It was brought to my attention two weeks ago,” he said, adding that construction on the culvert has already begun.
The floodplain setback was part of a triple whammy for the R1,2-billion project this week, also including:
The discovery that only 11 families of a sample of 200 waiting for houses in the city could afford rentals in phase one.
The implication is that bloated costs have put the recently completed development in Langa out of reach of most poor residents who stood to benefit from the scheme. There are more than 200 000 people in the city’s housing queue.
The disclosure in a council debate this week that the development had incurred a R35-million overrun in building costs. There were also calls for the project’s capital budget to be cut from R317-million to R86-million, with the city saying that it could not carry the costs on its own.
While the project was transferred to the province shortly before the local government election in February, Cape Town is still responsible for bulk capital expenditure.
The project, part of the Minister of Housing Lindiwe Sisulu’s national vision to eradicate shacks by 2014, has been mired in controversy since it was hurriedly launched in May last year.
The 705 units form the first phase of the 22 000-unit N2 Gateway, the most ambitious intergovernmental housing delivery venture the city has seen. But the single, double and three-bedroomed units in the high-density development — built on land that was cleared after two fires raged through the Joe Slovo informal settlement adjacent to the N2 highway — still stand vacant.
The cost per unit of the rental stock at the start of the project was R80 000, but this has ballooned to over R160 000, putting the monthly rentals of between R300 and R500 beyond the means of most of those on waiting lists. Cape Town has not built new rental stock since 1979.
Officials were this week trying to resolve the issue of the allocation of the units, 70% of which have been promised to shack dwellers and 30% to backyard tenants.
But housing researchers and policy organisations are not surprised that so few people can afford the rentals. In a city with high rates of unemployment and poverty, they say that most informal settlers earn less than R1 000 a month and form part of what the government terms the ”hardcore poor”.
Warren Smit, a researcher with Development Action Group, said the biggest mistake was to drive the Gateway project from the top down. There had been no study of the communities who stood to benefit before the development started and no assessment of income or ability to pay rent, said Smit.
The current problem showed what happened when you elevate speed over everything else. Smit added that high-density development did not allow for individual ownership, in contrast with stand-alone Reconstruction and Development houses.
Reacting to the affordability crisis, Cape Town mayor Helen Zille lashed out in a letter this week to Sisulu. ”The Joe Slovo 1 project has been undertaken without proper policy framework and often without signed contracts. It went several times over budget and is now entirely unaffordable to the intended beneficiaries,” Zille wrote.
She added that because ”the city had been required to implement this unfunded mandate at the directive of your administration [it] now faces huge claims from various companies involved in the undertaking. This we cannot accept. Cape Town supported the project’s intent, but only if it is implemented within the framework of existing national policies, including the housing policy, the municipal infrastructure grant and the city’s integrated development plan.”
Sisulu replied that she understood that Zille was new, but that she should have familiarised herself with government protocol. She referred Zille to the Western Cape housing minister, Richard Dyanti. Dyanti said he would address Zille’s concerns after meeting with all three spheres of government involved in the project. Earlier he was quoted as saying that he acknowledged that the process is ”not as fast as we want it to be”.
The provincial government has handed the project to a Section 21 company, Thubelisha Homes, which will oversee the allocation of the completed units as well as project manage phase two, which will allow for individual ownership.