GEORGE NEWS - The Western Cape Government (WCG) 'sold' land earmarked for the Village Ridge affordable housing development to the developer Power Construction for R1. The provincial department of human settlements responded as follows to a few questions from the George Herald regarding the project:
Q: Will the prices charged for the housing units exclude a land price, and therefore consist of only the cost of infrastructure and the building cost (including a reasonable builder's profit)?
A: One of the strategic goals of the WCG via its department of human settlement is to create affordable housing opportunities to middle and lower-middle income earners. For this reason, the WCG looked at how best its vacant well-located land holdings can be used to create such opportunities, within the existing urban context, whilst having minimal impact on the surrounding neighbourhood.
The WCG indeed made the two land portions available via tender to Power Development (developer) for an affordable housing development, as the land, which is currently zoned for group housing, is ideally situated towards an affordable-housing development.
Although the land is technically sold to the developer at R1, it is not the full picture, as the developer is only the vehicle through which the end purchaser of a unit will benefit extensively from not paying any land costs.
This is to make the units as affordable as possible for the specific target market.
The rezoning application was submitted to the George Municipality in 2018, which advertised the proposal for comment.
A response to the comments and objections are currently being prepared and will shortly be submitted to the municipality, after which the municipality needs to make a decision on the rezoning application.
Q: Is the relevant tender document available that sets out the estimated cost of the units?
A: The tender only set out the goals of the department in terms of selling prices, and it was up to the developers to propose feasible development and unit costs.
Q: Will the sales be handled by the developer or will WCG or George Municipality be involved too?
A: The sales will be handled by the developer.
Q: Will financing be available to prospective buyers?
A: Prospective buyers will have to apply and qualify for a mortgage bond. Those families earning less than R22 000 per month may qualify for a Finance Linked Individual Subsidy Programme (Flisp) subsidy that will effectively reduce their loan amount.
Q: What will be the prerequisites to buy at Village Ridge?
A: A number of units will specifically be set aside for first-time home-owners in Flisp income category. The standard conditions applicable to a Flisp subsidy will thus apply.
Q: Is this a pilot project of the WCG?
A: No. The department has several projects where its land has been geared to create opportunities to address the affordable housing market.
Read a related article: Proposed affordable housing
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