4.1.1. Bulk infrastructure The availability of bulk infrastructure for new developments and redevelopments has been of considerable concern to property developers to date. Not being able to access sufficient bulk infrastructure, or having to wait a substantial period of time for bulk infrastructure, can be costly to businesses. In response to these concerns, the City is directly investing in bulk infrastructure in areas of significance in the Corridors to facilitate increased densities. The City’s Land Use Management Department is responsible for the bulk infrastructure incentive that is being offered as part of Johannesburg’s TOD programme. According to the Director of Land Use Management Linah Dube, the City is putting in infrastructure in the Corridors and part of the cost of the infrastructure will be recouped through bulk contributions. She stresses that the City is working on a city-wide policy on development contributions, but that it is not currently available for review (interview, 29 August 2016). Although the policy on amended development contributions is not available, David Savage from National Treasury’s City Support Programme argues that restructuring development contributions can be problematic in the following ways: • Transferring benefits to private developers through permitting them to maximise their profits at the cost of ratepayers; • Failing to tap into a ready source of infrastructure finance, drawn from the property finance industry and home-owner creditworthiness rather than their own balance sheet • Implicitly reallocating resources away from other priorities such as pro-poor expenditures particularly over time as they will inevitably be forced to expand infrastructure networks at a later date to deal with congestion • Imposing a cost on the economy, in terms of both forcing an inappropriate allocation of capital away from the property sector in their areas where they do not provide infrastructure and through imposing economic costs associated with network congestion until they actually do invest (Savage 2009: 2).
Transit corridors & the private sector
The City is aware of these concerns and doing detailed work in order to ensure that this process is optimally managed.
4.1.2. Faster development application process The bulk infrastructure work is being done at the same time as the SDZ initiative is being undertaken to kick start the development process. As custodians of the regulatory framework, the department is leading the revisions in the development applications process, and consider themselves in a good position to innovate when necessary. Three SDZs have been selected in two of the corridors (Empire-Perth and Louis Botha), with the understanding that not all incentives and mechanisms will work the same way in each Corridor. The SDZs selected as pilot projects thus far are: • Brixton Precinct • Knowledge Precinct • Orange Grove Precinct The objective of the SDZ is to establish best practice for facilitating faster turnaround times for development applications in the Corridors. The Land Use Management Department is leading a process of generating development-ready sites, which are sites with all zoning and development rights pre-approved. The City has taken on a number of functions that would normally fall to the developer, including technical studies required for a normal rezoning process. These include: outline scheme reports, Environmental Impact Assessment (EIA) studies, and heritage studies. These actions are premised upon the understanding that development is more likely in the Corridors if developers know the rights they can get, how much it will cost them, and what timeframes to expect. The City will remove the risk and uncertainty associated with the planning process. Further, the City will run the community participation exercises and deal with objections in the rezoning processes (interview with Linah Dube, 21 July 2016). The intention of this incentive is to cut the cost of development by ensuring development times are shortened. By eliminating the time taken to conduct the studies, as well as the 60 day commenting time, developers will cut costs associated with holding the property and financing until the development is approved.
Transit corridors & the private sector
Published on Aug 2, 2017
Part of the Spatial Transformation through Transit-Oriented Development in Johannesburg research series. Published by the South African Rese...