Entrepreneurs & Local Government: Planning Policies In South Africa’s Major Metros

Will we see a change to urban planning, making it easier for acquire land and develop, especially in formerly marginalized communities? By far the biggest economic lever cities have on policy is their complete authority over urban planning, which includes physical land developments and all the rules, such as zoning laws, that go with it.

With new governments in major cities that are DA-led, what happened in Cape Town over the past few years on urban planning may be revealing when looking at what is in store for cities like Johannesburg and Tshwane. And the debates that may unfold.


A Case in Point: What is the Urban Edge?

The urban edge is an artificial line drawn in the city council by planners which delineates the borders within the city, beyond which development application cannot be considered as development is prohibited. Urban edges can be prescribed in law or policy. In the City of Cape Town it is prescribed in neither, despite many assuming it to be a policy. Rather it is a policy tool, a mechanism by which one can achieve actual policy objectives depending on the context.

The Cape Town Situation

The Urban Edge has taken on the status of policy in the minds of many of its defenders in the City of Cape Town, attracting sharp criticism when the edge is moved to the Council to consider development applications outside the edge. Many believe it should be a policy of the City.

Proponents of urban edges maintain it keeps infrastructure costs down, allows for effective public transport planning due to the resultant urban densities, and lowers carbon footprints as people move within the confined space of the City. It is also promotes the poor being closer to economic opportunities, whereas it is said urban sprawl –its opposite – entrenches the apartheid spatial planning legacy.

Opponents say it is a top-down tool, which provides planners too much power. It is argued individuals should have the choice of where they want to live.

Urban edges, in this argument, also keep land and thus housing prices artificially high by limiting the developable land and thus the choice of consumers and entrepreneurs looking to acquire eland or rent.

Affordable housing, through the market, becomes far more difficult, if not impossible, to achieve. Furthermore, new development can have densities and economic opportunity through mixed uses (residential and commercial) within any new development (city councils still hold the power to impose such conditions on new developments beyond the urban edge as they do within it).

Many cities today have not one but multiple economic nodes and this should be enabled. It is a reflection of free choice in a competitive market and since cities are constantly evolving in a world that is rapidly urbanizing, this should be permitted.

Urban planning rules can have a major effect on the environment for establishing businesses when it comes to getting rezoning, renting and buying. The availability of land has an impact on costs.

In the City of Cape Town Wescape and the Philippi Horticultural Area have become two matters with vocal public opinion expressed. Much of it relates to the urban edge.

Wescape is a proposed new city to the north of Cape Town.  The Wescape development, proposed by urban development company communiTgrow, is 3,100 hectares (31 square kilometres) and on completion will reportedly include 200,000 houses, 400 education facilities (schools, crèches and colleges), 370 public service facilities (such as libraries and clinics) and 15 sports complexes.

Opponents say it will lock the poor closer to the outskirts of the city, much like Atlantis. Proponents say it will provide choice of more affordable housing opportunities and economic options within a mixed development, being the first post-apartheid mini-city to be developed following decades of racial segregationist urban planning. Atlantis was an apartheid creation based on the strong arm of the state, whereas as Wescape is privately funded and successful or not based on individual choices of residents who choose to live there.

Infrastructure costs are an issue raised by the skeptics, and rightly so. New infrastructure is expensive. However, development contributions and infrastructure provision by the private sector is not without precedent and for developments at scale proponents argue the private sector, not the taxpayer can (some say “must”) cover the infrastructure costs such as roads, water and sanitation services.

The Philippi Horticulture Area (PHA) has been another news news item in Cape Town.  Some supporters of urban agriculture say this district of Phillipi should be preserved for farmland. Some farmers however do not wish to farm any longer and have asked for a rezoning, saying the government cannot force private landowners to farm or engage in any commercial activity they do not wish to undertake. In one instance, the City approved a redevelopment of land on condition that it includes several thousand low cost houses for those currently unable to afford housing. The market (in this case the “developer”) agreed.

Nonetheless the differences of opinion are clear. Opponents say farmers who don’t wish to farm should sell to those who do wish to do so. They have added that urban food systems require locally grown food to lower transport costs (and emissions). In response others have pointed out that new technology mean urban food agriculture can exist without specific top-down enforcement through zoning, and that a) existing farmland by farmers who wish to farm can deliver well-priced local food and that b) some of this food is produced in areas not specifically zones for farming – underscoring that zoning is not always the only mechanism by which to direct economic activity (assuming it should be directed at all). They say other incentives, besides top-down approaches, can encourage specific industries without undermining the market working to respond to consumer demand notably (through access to land development rights, especially in poorer areas).

Entrepreneurs should keep a close watch on the cities in which they live. While the political changes are deeply interesting, the policies that follow in municipalities can have a major effect – positive or negative – on the ease with which entrepreneurs can start businesses, gain the right zoning and access affordable land for rent and purchase to run businesses.

Ineng is an acronym for the Independent Entrepreneurship Group. A a non-profit association based in Cape Town created to promote public policies that enable entrepreneurship. Read more here.