Cape Town council approves social housing at “Fruit and Veg” site

An artist rendering of the proposed social housing development at the “Fruit and Veg” site between Kent and Bloemhof Streets. Image: City of Cape Town

The Cape Town City Council has approved the sale of the “Fruit and Veg” site in the city centre for social housing.

This comes eight years after municipal land, between Kent and Bloemhof Streets on the border of District Six, was first earmarked for affordable housing. The city council gave in-principle approval for the land to be released for social housing in 2023.

YG Group is the successful bidder to develop the site. Council on Thursday voted in favour of selling the site to the company for just over R10-million.

The mixed-use development will include retail space and 375 residential units, of which 237 will be social housing.

Social housing units are rental-only, partly funded by once-off state subsidies from the national government. The Social Housing Regulatory Authority ensures they are rented to households earning under R22,000 a month, at rental amounts below R7,326. Open-market homes and retail space are often added to cross-subsidise costs.

The City of Cape Town plans to build about 12,000 affordable housing units on 21 City-owned land parcels. See an interactive version of this map here.

The “Fruit and Veg” site is among 21 City-owned land parcels where affordable housing is planned. Ten of these are within a 10km radius of the city centre. The City has about 12,000 affordable housing units in its pipeline.

The draft sale agreement between the City and YG Group includes a clause to ensure that should the company not complete the development, including its social housing component, within seven years of the sale date, the contract will default and the YG Group will have to compensate the City.

The social housing development will depend on whether subsidies are received from SHRA, via the national government.

Other developments where City-owned land has been released for social housing have been delayed. At Pine Road and Dillon Lane in Woodstock, land was released for two developments in 2019, but construction has not yet started. At the Salt River Market, land was released in 2022, but SHRA funding has not yet been approved.

Addressing the council on Thursday, mayco member for human settlements Carl Pophaim, called on the national government “to come to the party when it matters – in their actual budgets – as opposed to in the promises made during State of the Nation Addresses.”

In response to the challenges with social housing subsidies, the City plans to build affordable housing units at other sites without any direct state subsidies.

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