Old Mutual drags its heels on Khayelitsha housing development

Vacant land in Thembokwezi, Khayelitsha remains undeveloped because of a dispute between Old Mutual and the Khayelitsha Development Forum.

Mary-Anne Gontsana

28 April 2015

Old Mutual has not kept a promise to build more than 500 low cost houses and a shopping centre in Khayelitsha, though this was a condition of a 2008 deal with the City of Cape Town.

In 2008, Old Mutual bought property in the city centre with a condition that it developed a section of land in Thembokwezi, Khayelitsha. According to a report in Die Burger at the time, the city centre land was purchased for R89 million.

City Mayoral Committee Member for Finance Ian Neilson confirmed that a mixed-use development - commercial and residential - on the Thembokwezi site owned by Old Mutual in Khayelitsha was part of the 2008 deal.

The development, he said, had been “imposed in the sale agreement” whereby Old Mutual bought a portion of land from the City. The land had been consolidated with Old Mutual’s land, on which the Portside development in the city centre had been built, he said.

Portside is now the tallest building in Cape Town. The Die Burger article reported that it was a R1.2 billion development.

The Portside building is now the tallest in Cape Town. Photo by Brent Meersman.

But the development of housing on the Khayelitsha site is being held up by a disagreement between Old Mutual and the Khayelitsha Development Forum. The only building on the site is “a pilot project” currently occupied by the offices of Equal Education, according to an Old Mutual representative who did not wish to be named.

Initially, the Thembokwezi site was to be used for the Thembokwezi Lifestyle Estate, which was to include a shopping centre, affordable housing, and public open space.

Neilson said in 2011 Old Mutual had notified the City that because of the development of shops near the site and changing market conditions in Khayelitsha, the proposed shopping centre would not be viable.

“They requested the City to authorise the redesign of the Thembokwezi site development plan to rather accommodate 500 housing units. This proposal was accepted and approved by Council on 29 February 2012. Old Mutual initiated a rezoning application to amend the land-use on the properties in accordance with Council’s approval.”

But the Khayelitsha Development Forum (KDF) did not want to allow Old Mutual to proceed with the development unless a retail centre was also constructed on the site, he said.

“The KDF… objected to the rezoning application submitted by Old Mutual … The KDF lodged a formal objection to the rezoning application. Despite their objection having been overruled by the City of Cape Town, they are still very much opposed to the development of residential units,” said Neilson.

“During the rezoning process, it became apparent that sections of the local community did not support the development of housing and objected to the rezoning,” said the Old Mutual representative. “Sections of the community have continued to object and to lobby both ourselves and the City of Cape Town for the site to be used for purposes other than housing.”

KDF’s Ndithini Tyhido said the forum did not object to anything; all they wanted was that the initial plan be used: the Thembokwezi Lifestyle Estate.

“Former president Thabo Mbeki was there when the Thembokwezi Lifestyle site was launched and he said it would be for mixed use development. Now all of a sudden, they only want to build 500 houses. We are not objecting to anything, but we see no development. You cannot just build houses without any infrastructure that will benefit the community, like shops or a community centre.

“Housing development is the easy way out. It is the easiest thing that the City of Cape Town can do, but why are they ducking and diving? What about the houses that are already in the area? What will happen to the people who are paying bonds on those houses? Will the value of these houses appreciate once the low cost houses are built? That is the question.”

“We are against land invasion and we condemn it strongly, but when situations like these happen, then land invasions happen,” Tyhido said.

“We are prepared to walk the walk with Old Mutual but what we are finding difficult is this housing development.”

“We are available any time to meet with the parties involved and to discuss alternatives,” he said.

Asked whether Old Mutual was concerned that the vacant land might be occupied, the representative said steps had been taken to protect the site. “We have liaised with the City of Cape Town’s anti-land invasion unit. We have alerted the local police and the site is constantly being monitored. Members of the surrounding community are also assisting us in monitoring the site.”

Neilson said the City would meet Old Mutual soon to try to resolve the situation.