The City of Cape Town and developers will need to work hand in hand, post-lockdown, to resurrect the property industry.
The task is daunting but it is vital not only to assist economic recovery, but to avoid massive job losses.
For years, developers have complained one of their biggest challenges is handling the timeline for city planning approval. There is concern that after lockdown, this might worsen.
Planning approval and rezoning “can take years”, which David Sedgwick, managing director of Horizon Capital, laments is “unacceptable for a developing country being crippled by economic under-performance”.
“The government should be doing everything to speed up timelines on capital projects - these create the jobs required.”
While no one is certain exactly what impact Covid-19 and the lockdown will have, he says there is little doubt “it will be devastating on a level we’ve never before seen, with millions of jobs lost throughout South Africa”. Cape Town, therefore, needs to be bold and proactive in facilitating growth.
“It must work with, and alongside, developers and construction companies to protect citizens’ livelihoods and ensure an employment bloodbath is avoided.”
However, Sedgwick did acknowledge the city has reached out to developers for ideas on how it could assist in boosting post-lockdown impetus. The city also told the Cape Times development planning departments have remained open during lockdown to ensure service delivery, providing a platform for the industry to leave the blocks as soon as the economy is back on stream.
The City of Cape Town insists it is prepared.
“We urge development professionals, developers and investors to continue submitting applications via our online e-services portal. We will process submissions as rapidly as possible,” says Marian Nieuwoudt, mayoral committee member for special planning and environment.
She says her department has reduced the processing timeframe for land-use applications by 50% against the national benchmark laid down in the Spatial Planning and Land Use Management Act.
“We meet the quarterly target of 85%, as set by the City of Cape Town.”
The Western Cape Property Development Forum’s biggest concern, other than the state of the economy, is the “expected and ongoing ‘business as usual’” response on land use and building plan applications with the city and other municipalities”, says chairman Deon van Zyl.
“We have for some time now pointed out the incredible delays and red tape hindering investment - a situation pushing the industry to the edge of collapse - even before Covid-19 struck.
“It is now critical these be resolved, once and for all.”
Van Zyl says the three spheres of government need to “become serious” about facilitating investment in fixed capital projects, such as infrastructure and building.
Timelines aside, Colin Anderson, chief operating officer at the Rabie Property Group, says a major challenge the property development industry will face after lockdown is pressure on income.
This relates to rents payable by tenants and the sale of development stock, plus the construction industry needing to get back on its feet.
“Prior to lockdown, developers had already felt the sting of the slowdown of development investment because of lethargic economic conditions. Now, with the world in turmoil, South Africa, as a developing nation, is particularly susceptible.”
When lockdown is lifted, the completion of developments will be behind schedule. Brad Morgan of Rawson Developers says making up for lost time will be a serious challenge.
“We will need buy-in from suppliers, contractors, labour and factories to work through the builders’ holidays in December to try to make up lost time.”
He says working hours need to be considered, with companies possibly facing day and nightshift options on construction sites. Labour unions and bargaining councils would also need to be on board to ensure such initiatives were streamlined.