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| Is Local Government Stifling Development? |
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While there is clearly a need for responsible local authority control of property development, there is also a real danger of disruption of the market
That, in turn, suggests the need for mutually drawn up and regularly reviewed municipal development guidelines, says Gerhard Kotzé, CEO of the ERA South Africa property group.
"Nobody would argue with the need for municipalities' to police compliance with building standards and safety regulations. Also, there is now widespread acceptance by developers of the need to pay for their own infrastructure and provision of services in terms of roads, water and electricity.
"However, leaving aside the impact of such self-provision on the selling prices of property for the moment, and accepting the fact that municipal resources need to be re-allocated to redress historic imbalances, developers should nonetheless not have to deal with uncertainties in terms of municipal regulations and policies."
Kotzé acknowledges that there are plenty of examples of positive interventions by local authorities. "Approval for a golf estate in George was reportedly put on hold by the municipality recently due to environmental concerns. Similarly a security estate in Dullstroom has been downsized, due partly to ratepayers' concerns about water supply.
"However, it is important to note that interventions can easily lapse into petty interference or worse still, indifference, and that it should be left to developers to work out whether they can viably undertake a given project and still bring a property product to the market place.
"And there is no doubt that many developers are faced with costly approval delays that put the viability of projects in doubt simply because of capacity problems in municipal town planning departments."
The most serious consequence of this, he notes is that it restricts developers' ability — and their desire — to provide housing for a growing population, and especially affordable housing.
"This may not seem like such a problem right now, but it is a time-bomb in the making if the economy continues to grow as predicted, because there will be rising demand for housing that developers are unable to meet with affordable stock."
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