City and Bank Housing Agreement Proves to be Successful in Elsies River

"Leo Mews, an aesthetically pleasing and environmentally friendly housing development in Leonsdale, Elsies River, is a tangible symbol of the City of Cape Town's commitment to make "gap housing market" housing a reality for households earning between R7500 - R10 000 per month", says Executive Mayor, Alderman Dan Plato.

Welcoming Premier Helen Zille, Cllr Shehaam Sims, Mayoral Committee Member for Housing, Cllr Neil Ross, Chairperson of the City's Housing Portfolio Committee, Mr. Aubrey Manganye, Director: Integrated Residential Development Division of Standard Bank, Mr David Williams, Marketing Manager for the developer, Bitol Development and other guests, Mayor Plato said the success of the project was based on the City's willingness to provide suitable tracts of land within already developed suburbs at an affordable rate to keep the selling price of the houses as low as possible.

"A vital factor was the innovative and pioneering co-operation agreement signed three years ago between the City of Cape Town and two major banks - Standard Bank and Nedbank. Through the bonds they provide, potential home owners earning between R7500 - R10 000 per month qualify for mortgage finance and are given security of tenure".

"The City of Cape Town/Banks Co-operation Agreement was concluded on 16 May 2006. This was the first operational and tangible partnership between a local authority and the major national banks. The rationale underpinning the agreement is that the City allocates appropriate land to the banks to facilitate the development of affordable housing and the banks provide the finance and development expertise," Plato said.

"We realised that there were many people in Cape Town, including backyarders, who do not qualify for subsidised housing but earn too little to afford to enter the conventional housing market. They earn less than R10 000 a month and neither the developers nor the banks cater for this market. We believed that the problem could be solved if a synergy could be created between affordable land being provided by the municipality and buy-in from banks and developers. Leo Mews proves that the concept is viable," Plato said.

Standard Bank's involvement was strategic and went beyond simply providing housing finance. The bank is committed to do whatever is necessary to deliver housing opportunities to address the housing shortage.

To this end Standard Bank has even "entered the value chain" where required to do so. This had involved the Integrated Residential Development team becoming involved from the conceptualisation of projects like these through to fruition.

"Strong partnerships between government at national, provincial and local level, banks as providers of development and mortgage finance, and developers is required if national goals are to be achieved," says Aubrey Manganye, Director of Standard Bank's Integrated Residential Developments Division (IRDev).

"Our mandate is to not only address immediate housing challenges, but to build a future customer base and facilitate a sustainable environment for all South Africans to prosper. The partnership with the City of Cape Town is an example of the many partnerships that we hope to foster throughout the country in the future," he said.

There are 125 units in 11th Avenue (primary target market: R7500 - R10 000 per month household income) and 75 units in 22nd Avenue.

"Anybody purchasing a home aspires to a place they feel safe, comfortable and proud of, regardless of their income," says David Williams, Marketing Manager of Bitol Development.

"Leo Mews has multiple energy and water saving interventions, an architectural and urban design that provides density without compromising dignity and mechanisms already in place for its long term sustainability. A development with all these attributes would not be out of place in any affluent suburb of Cape Town and it is with this philosophy that Bitol Development has delivered this project in Elsies River. The project has been well received by the Elsies River community. We have gone further in that we have utilised our resources to upgrade neighbouring homes and small business where home owners aspire to have houses of Leo Mews standard, but lack the necessary funds. We re-painted several homes, cleaned roofs and gutters, completed perimeter walls and removed illegally dumped refuse that had collected over years. The Leo Mews project has made it possible for us to not only deliver dignified homes, but play a role in uplifting a community," he said.

The development is a high density apartment complex that complies with all land use and zoning regulations while making optimal use of the land available. The units are energy efficient, aesthetically pleasing and provide safe and secure family accommodation in a historically deprived locality while contributing to economic and social upliftment.

The design and construction of the complex minimise its environmental footprint by including water and energy conservation systems. All units are fitted with solar hot water systems to save electricity, and water recovery, recycling and re-use systems conserve water and save money. These and other energy saving interventions are standard features of the development.

These apartments are specifically aimed at households which do not qualify for subsidised housing, but which, at the same time, do not earn enough to meet the commercial banks' criteria for mortgage funding.

The units cost between R237 000 and R254 000. They are fitted with carpets and tiles, have secure parking bays and there is a five-year maintenance plan. The complex has a CCTV monitoring system and access control.

Potential buyers will need to earn R7 500 or more per month to qualify for a bank loan.

"The Leo Mews partnership model between the City of Cape Town, Standard Bank of South Africa and Bitol Development is sustainable and could be replicated anywhere in the country provided a local authority is willing to make land available at a price that makes development viable. This is one of several successful projects where the City has made such land available," Plato concluded.

The City and Standard Bank have entered Leo Mews in the annual "Housing Project of the Year' competition organised by the Southern African Housing Foundation. It will compete in the category for units costing more than R80 000 and for the overall prize. The objective of the competition is to: "identify, encourage and promote good practice in housing design development and management. The evaluation will be based on the innovative use and management of human resources, financing options and technologies as well as the contribution to community development, management and the sustainability of the development."

It will be one of the projects visited by local and international delegates attending the Foundation's annual conference which will be held in Cape Town from 11-14 October.

---

Issued by:
Communication Department
City of Cape Town