Siphokazi Vuso|Published
The City of Cape Town and the national Department of Human Settlements are locked in a dispute over affordable-housing funding, with the City accusing national government of failing to provide subsidies for its projects since 2021.
The department has rejected the claims, accusing the City of misrepresenting the facts and perpetuating spatial segregation by failing to prioritise affordable housing.
The dispute comes amid growing pressure to deliver affordable homes in well-located parts of Cape Town, where low-income residents face barriers to living close to jobs and public transport.
City says five years without affordable-housing subsidies
The City’s Mayco member for Human Settlements, Carl Pophaim, said the municipality had submitted six qualifying bids for national grant funding but had received no funding for its affordable-housing projects since 2021.
He said progress over the past two years had largely been driven by the City’s own policies, including the release of municipal land for development.
“No national grant funding for affordable housing has been received for five years – since 2021 for the now-completed Maitland Mews development – despite six qualifying bid submissions,” he said.
“The city has many more ready or near-ready developments that would greatly benefit from national funding.”
Department spokesperson Tsekiso Machike cited approvals for three projects as evidence of national support: Regent Villas Extension 2 in 2023, Somerset West in 2024, and the Salt River Market development, which is expected to deliver 970 homes.
"A few weeks ago, the mayor of the city launched an affordable housing project to deliver 970 homes, and this was through the approved national funds. We therefore wish to dismiss this perpetuated narrative as falsehoods,” Machike said.
He added: “We view this as nothing but the inability of the sphere of government concerned to take responsibility for its deliberate action to perpetuate spatial segregation by not prioritising affordable housing in the city.”
Dispute over Salt River Market funding
Pophaim, however, said Regent Villas Extension 2 and the Somerset West project were not City projects, while funding for Salt River Market remained outstanding despite work having commenced.
"The city can confirm it has not received any subsidies for its affordable housing projects since 2021. Funds have not been received for Salt River Market Social Housing despite work having commenced on site since notice of approval was granted. The initiation of the Salt River Market development has been through the city’s discounted release of land and advancement of the developer’s equity,” he said.
"The allocation of the Social Housing Regulatory Authority (SHRA) subsidy remains outstanding with no certainty on when the agreement will be concluded with the SHRA."
Pophaim called on national government to increase affordable-housing funding and allocate it directly to capable metros rather than through what he described as the "red-tape-laden" SHRA.
“National government should not be proud of the record they cite, which is one of failure and inadequacy. Instead, they must urgently increase affordable housing funding and allocate this directly to capable metros,” he said.
SHRA was asked to comment, but no response was forthcoming by the time of going to print.
Housing advocates criticise delivery and funding priorities
The funding dispute comes amid a wider debate over spatial inequality in Cape Town.
Social housing advocacy organisation Reclaim the City leader Bevil Lucas criticised the City’s handling of housing funds.
Lucas said the municipality had become the face of the entire housing plan, which presented a challenge.
"On more than one occasion, the city has returned money to National Government because it failed to spend it. Yet the City’s own figures show so many people on the waiting list for formal housing. With a need that great, how do you return money that could have made a difference in people’s lives?
“Local and provincial government have a duty to address this. We have proposed a number of solutions, but we have not received the response we need from the authorities. That is part of the challenge,” Lucas said.
GOOD mayoral candidate Brett Herron said well-located affordable housing needed to be fast-tracked to enable residents to live closer to employment opportunities.
“We need to change the spatial pattern of our city, which has dormitory suburbs, where people go home to live and sleep but which are far removed from where the economic activity is,” Herron said.
EFF Western Cape campaign manager Nazier Paulsen also criticised the City’s housing priorities.
“You have people living side-by-side with sewage and rubbish. That has ultimately been the result of a DA-led City of Cape Town that focused almost exclusively on development in affluent areas,” he said.
Pophaim said access to well-located housing across the metro was a socio-economic issue, worsened by South Africa's income crisis and a weak, stagnant national economy.
"A weak national economy and lack of national grant funding remain a challenge. Nevertheless, Cape Town is the leading city working to unstitch the legacy of the past through major infrastructure investment and innovative programmes."