Abstract
Background: Cities continue to grapple with a rising demand for housing, which affects affordability and the well-being of its citizens. This growth continues to put pressure on the delivery of adequate, affordable housing in well-located areas while the availability of infrastructure and proximity to economic nodes remains a challenge. This has led to increasing infill development of medium-density to high-density affordable housing in greenfield areas located adjacent to higher-income neighbourhoods.Aim: This study investigates how a new affordable housing development influences the locational and structural values of the adjacent, existing housing market.Setting: Transactional data of residential sales for two areas in South Africa are used to measure the value change. Both areas are located within an urban setting next to an open, greenfield area that was redeveloped for affordable housing.Methods: Two case studies are used and analysed with hedonic pricing modelling to identify and measure the value change for the locational and structural characteristics before and after the development of affordable housing.Results: The results reveal a changing housing market as the locational and structural characteristics change in value, further highlighting the importance of careful planning that preserves the existing market and also supplies affordable housing.Conclusion: The value of several structural characteristics of properties will change, revealing just how consumer preference responds when affordable housing is introduced in an existing housing market. Distance to an affordable housing project continues to influence the house market value and careful consideration should be made when planning to integrate an affordable housing development in an existing neighbourhood.
Highlights
The urban settlement patterns in South Africa have transformed from the post-apartheid era; cities continue to grapple with increasing demand for housing within its boundaries
With the increasing demand for land to develop affordable housing development, coupled with the pressure to use infill, greenfield development to limit urban sprawl and utilise existing infrastructure, the results from this study provide important insights to local and regional councils that need to deliberate on relevant planning aspects
This is in response to limited available land on the periphery of the urban edge, as well as supplying affordable housing in areas located closer to economic nodes that provide reasonable employment opportunities
Summary
The urban settlement patterns in South Africa have transformed from the post-apartheid era; cities continue to grapple with increasing demand for housing within its boundaries. Since 1994, various approaches were undertaken by the government to support the increasing demand for housing and since property was available and more reasonably priced at the edge of urban areas, most affordable housing developments took place at the periphery (Schoonraad 2000:224) This trend has changed recently with an increasing number of affordable housing initiatives being developed in greenfield areas, used as open space and local parks in cities and often located adjacent to existing neighbourhoods (Leshage n.d.; Van der Westhuizen 2020). In 2004, the National Department of Housing (NDoH) introduced the Breaking New Ground (BNG) policy in an effort to provide sustainable human settlements and increase the delivery of appropriate housing in the urban core of South African cities This was done to address the frequent mismatch of housing supply and demand at well-located and in-demand areas. Special emphasis will be given to social housing and FLISP initiatives which are referred to as affordable housing
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