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Building properties, especially upmarket ones, in townships has been an unattractive proposition for developers for many years. This is because crime, poverty and lack of affordability among potential homeowners has always been a concern in these areas.
But the perception that townships are a ‘no-go’ when it comes to developing properties is changing, thanks to a few financial services companies, individuals and companies willing to make a go of it.
Here we show how some past and current actions are inspiring more action in places that developers have feared to tread in the past.
Young developer builds beautiful apartments
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Last year in March website briefly.co.za highlighted a tweet that went viral. It shared the Twitter handle @oupapilane who tweeted an appreciation post about a young man who was gentrifying local townships by ‘building one beautiful building apartment at a time’.
Oupa Pilane, who is the mental wellness chairperson at Kruger Lowveld Tourism and Co-Chairperson at SATSA National, tweeted: “This young man has been developing upmarket apartments in the township, I pray that many more could watch and learn on how to create wealth at a younger age. At my age he is my inspiration.’
Pilane revealed in the comments box that the young man’s name is Theo Mabuza. Since the article and Tweet was made there appear to be no subsequent news items about Mabuza’s efforts. However, back in 2021, the post got retweeted over 460 times and garnered close to 2,800 likes as people applauded Mabuza’s efforts.
The future for development is in townships
Fast forward to this year and Tim Akinnusi, chief executive of MortgageMarket.co.za, was moved to pen a column in the Sowetan about how new residential developments, particularly in townships, are key to growth of the SA housing market.
Akinnusi highlights that more than 65% of people in SA live in rural, informal township housing and this trend hasn’t changed materially in the last 25 years of democracy. He adds in his column: “This is an important observation to consider because it effectively means that townships provide the economy with the largest opportunity for infrastructure development and a countrywide housing construction programme.”
Township sizes vary, of course. Akinnusi points out that they vary in size from smaller ones where around 37,000 live to bigger ones with population sizes of around 1.2million people. The potential for development and catering to people living in the township is huge.
Urban Dev
Akinnusi points to recent works by developers such as Urban Dev who he describes as having changed the narrative ‘by producing affordable housing products that are more reflective of lifestyle developments found in traditionally established cities’.
It’s easy to see why. Urban Dev specialise in student accommodation, affordable housing as well as integrated mixed-use developments. They’re currently spearheading a new property project in Soweto which was launched in June this year and involves converting the surrounding area of Orlando Dam and Orlando Towers with a ‘one of a kind’ cluster of lifestyle estates.
Appropriately named the Orlando Towers Estates will offer more than 2,800 two- and three-bedroom apartments in four secure estates and will be built over the next five years. Lifestyle facilities include security features like biometric access, a football pitch, kids’ play areas, braai pods and a clubhouse to name but a few. Prices are reported to start at R670, 575.
Developments that have tried to cater to townships in the past have been criticised for not being close enough to key amenities like schooling and hospitals. But Orlando Towers Estates is unlikely to garner such criticism as this challenge has been taken care of. The estates are conveniently located close to Moponya Mall and Barra Mall, Chris Hani Baragwanath Hospital and the University of Johannesburg.
Executive directors Derek Steyn and Deon Steyn told iol.co.za that the aim of the development is to empower the community through ‘attaining property assets that will appreciate in value due to the prime location’.
They added: “Furthermore it will serve as a stimulus for the local community and represent a mor investment into middle-income bonded housing for the area.”
Affordable housing financial products
In the past, developers may have been reluctant to build new, affordable housing in townships as there weren’t many financial products to support this type of build. But that has changed in recent years as well.
Established lenders like Standard Bank and Nedbank now offer home loan applicants the choice of an affordable housing loan product. Standard Bank, for instance, offers individuals earning between R3,500 and R27,200 a home loan with benefits like 100% finance with no deposit required.
With this increased and renewed focus on uplifting townships, developers could do worse than to ignore the potential of creating and investing in new developments in townships where homes with fully functional facilities that are close to major amenities for new and low-income home loan applicants is still sorely needed.
