How Cape Town is addressing the housing crisis with new planning regulations
Image: Supplied
The City of Cape Town has shed more light on its recent changes to the Municipal Planning By-law (MPBL), aimed at unlocking affordable rental accommodation through small-scale, incremental housing developments.
On 26 June 2025, Council approved an additional land use right for properties in designated areas, allowing for the development of up to eight small-scale rental units in addition to a main dwelling, or up to 12 rental units if no main dwelling is present.
According to City spokesperson Luthando Tyhalibongo, 'The additional right must be exercised in lieu of the existing right to a second and third dwelling and the property owner will need to make a choice between the new and the existing right.'
Tyhalibongo explained that this move forms part of the City's broader approach to managing rapid urbanisation and providing more affordable housing opportunities through legal and safe connections to existing infrastructure. 'This additional right is subject to the payment of a development charge and will not drastically change capacity demands on existing services,' he said.
He added, 'It still requires beneficiaries to contribute toward long-term infrastructure upgrades.'
To assist micro-developers with these costs, the City launched a Development Charges Fund in March 2024. 'This Fund has enabled the City to subsidise 90% of the development charges typically required of small-scale rental unit developments in low-income areas,' Tyhalibongo said. The fund started with R20 million in capital and is already being used to unlock developments across Cape Town.
'This is helping to unlock small-scale rental unit developments on formal properties in historically disadvantaged areas,' he said. 'In some instances, landowners are developing between six and 12 units on a property.'
He noted that the City's policies already promote densification and support incremental housing development. 'We are enabling lower-income households to supplement their incomes, while also helping to meet the demand for affordable housing for those who do not qualify for state-subsidised housing or social housing.'
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Tyhalibongo stressed that all land use and building plan applications are evaluated individually. 'They are circulated to internal engineering departments for comment, and development contributions are calculated pro-rata depending on the scale of the proposed development,' he said.
'Where existing infrastructure cannot support additional development, further services or road upgrades are required to enable the development.'
To support micro-developers further, the City is investing in new tools and reforms to make the process easier and faster. These include local planning support offices, standardised building plan templates, alternative building materials, and work with financial institutions to make microbuilding more accessible.
'The private sector—small-scale developers in particular—are critical to solving our housing crisis. Only the private sector has the capacity to build at the speed and scale required. Government will never have enough money to meet the housing demand alone,' said Tyhalibongo.
He added, 'The real problem with unaffordable housing is not greedy landlords. It's that there's not enough housing. The way to make housing more affordable is to build more of it. To do this we need higher densities, more mixed uses, and development in existing nodes and corridors where people are close to jobs and public transport.'
He said the City is actively working to enable this shift: 'We are optimising our scarce land, electricity and water capacity to achieve long-term sustainability and access for all residents.'
He also pointed to the City's ten-year infrastructure pipeline, valued at R120 billion, which includes major upgrades to wastewater treatment plants, sustainable water supply, energy diversification, and waste management systems.
As part of this investment, Tyhalibongo highlighted the R5.4 billion roll-out of Phase 2 of the MyCiTi bus service from Mitchells Plain and Khayelitsha to Wynberg and Claremont. 'This project will bring affordable, scheduled public transport to over 35 communities and catalyse job creation and mixed-use investment in the metro-south east.'
He added, 'The City is also pushing for the devolution of passenger rail services and is preparing a detailed business plan to be submitted to national government.
'We are making it easier, safer and more cost-effective for more people to legally develop affordable housing and support backyard rentals.'
tracy-lynn.ruiters@inl.co.za
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Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ The dtic and the Department of International Relations and Cooperation (Dirco) said the 20% increase on top of the basic 10% tariff may shave off 0.2% of South Africa's economic growth, with the reduction in growth depending on SA's ability to find alternative markets. 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