Latest news with #R2.5-billion
Daily Maverick
17-07-2025
- Politics
- Daily Maverick
What inclusionary zoning in Stellenbosch means for post-apartheid cities
Stellenbosch municipal manager Geraldine Mettler says she wanted to go public with the admittedly excellent Inclusionary Zoning Policy in 2023, but with highly contestable local elections on the cards in 2026, it's easy to see why the Cape leadership held it for 2025. Anton Bredell, Western Cape MEC for local government, environmental affairs and development planning, wants South Africa to radically rethink what it means to live a 'dignified life.' Specifically, he believes the constitutional standard for basic services (currently 50kWh of free electricity and six kilolitres of water per household per month) is too low. 'We need to double that basket,' Bredell said to the room overlooking a picturesque vista of the Stellenbosch Berg and the exclusive De Zalze golf estate – it's 10 years and one month since Henry van Breda handed himself in to the local police following the January 2015 axe murder of his family which got locals calling the estate 'van der byl park,' but I digress. The occasion on this day is the Stellenbosch Municipality's Inclusionary Zoning Policy workshop. Stellenbosch is only the second municipality in the land to adopt the founding ideas of reconstructing the social fabric and undoing apartheid spatial planning that was codified in the Mandela years (read: RDP). It may come as a surprise, but the Cape Winelands region actually gave the City of Johannesburg its flowers for being the first municipality to introduce inclusionary housing by adopting a policy and amending its planning by-law to guide decision makers, all the way back in 2019. Trading rights for positive choices How would Bredell's radical ideas be funded? 'I can tell you now, if we can get the 100,000 children that's on the street into schools, we get R2.5-billion. There's the money.' Of course, his scheme for releasing this assistance to households in need is based on an incentive: 'If I offer 100 units of electricity on proof that your child is in school, won't that help us? Must we not start to change?' He believes that this approach, getting children into schools, would lead to 'less unemployment, less inequality and less poverty in the future because we won't have to spend that money [on] safety because our children end up in gangs, etcetera…' Bredell's expanded dignity basket ideas were developed in partnership with Stellenbosch University and peg a realistic standard of dignity at 115kWh and 10.5kl of water per household monthly, far above the current minimum guaranteed by policy. What's the cost of dignity? But lofty ideals come with heavy costs. A quick analysis estimates that such a doubling of services would cost R28.7-billion annually – R17-billion for water and R11.7-billion for electricity. This comes at a time when South Africa's water and electricity infrastructure already face a combined funding shortfall of more than R1.6-trillion over the next decade. With 65% of the country's 257 municipalities in financial distress, Bredell's model may work in Stellenbosch – but it's unlikely to survive contact with the national balance sheet. The Stellenbosch Inclusionary Zoning Policy, formally adopted in June 2023, is part of the National Land Value Capture Programme and makes the municipality the first in the Western Cape to adopt such a strategy. At its core, inclusionary zoning is a land-use planning tool that requires or incentivises developers to include a certain proportion of affordable housing units in new developments. Jeremy Fasser, executive mayor of Stellenbosch, framed the policy not as a housing intervention alone, but as an attempt to remake the city's spatial geography. 'It's about bringing working families closer to opportunities,' he said. 'It's about redressing historical spaces of injustice.' The policy has already yielded more than 900 approved inclusionary housing units, which is a significant early success. But Stellenbosch's financial health is a critical part of the story. 'We're in a good financial position as a municipality,' Fasser tells Daily Maverick. 'We can afford to give 100kWh when the national standard is 50kWh because we have the revenue, the political stability and the planning capability.' Pioneers in disarray Minenhle Maphumulo, assistant director of metro planning at the City of Johannesburg, offered a frank assessment of why the country's first inclusionary zoning policy fell short. 'Johannesburg left affordability to the market,' she explained. 'We limited the size of units rather than setting price thresholds.' The result? Developments included units ranging from R700,000 for 20m² to R2-million for 140m², hardly affordable for the intended market. In contrast, Stellenbosch defined affordability more rigorously and anchored the policy in land value capture principles. 'Stellenbosch presents opportunities for us to leverage strategic use of land,' Maphumulo continued. 'It's the first policy presented as land value capital – unlike Johannesburg.' Still, she stressed that inclusionary housing wasn't meant to replace social housing. 'It's one tool in a broader set of responses. We need more responses, not fewer.' Wait, what's inclusionary zoning? Inclusionary zoning sounds technical, but it could change where you live, work and send your kids to school. Stellenbosch is testing a policy that forces private developers to include affordable housing in new builds. If it works, it could undo decades of apartheid spatial planning – not just in wine country, but nationwide. What this means for you If you're a nurse, a teacher or a security guard commuting two hours to work, inclusionary zoning could mean living closer to your job, your children's school, and public transport – without paying elite prices. If Stellenbosch's model proves financially sustainable and socially transformative, other cities may follow. That means more mixed-income neighbourhoods, less congestion, better school access – and more pressure on developers to prioritise people over profit. But here's the catch: only two municipalities (Joburg and Stellenbosch) have adopted inclusionary zoning in 30 years. If Stellenbosch fails, it may take another 30 before anyone tries again. Samantha Naidu, from the National Treasury's Cities Support Programme, declined to respond directly to Daily Maverick's questions, but did offer more general insights. 'Inclusionary zoning is not the silver bullet when it comes to spatial transformation,' Naidu said. 'It is one of the tools in the arsenal of instruments that a municipality has at its disposal.' But tools need hands to wield them, and political will to use them effectively. 'Leadership is required at both technical and political levels. We need consistency, governance, and accountability. And we need to start implementing, not just planning.' No handouts from national coffers Naidu cautioned municipalities against always turning to the Treasury for funding: 'There are tools you already control. We should not always be looking for solutions elsewhere, like more money from the national government.' While acknowledging the pioneering role of Stellenbosch, she reminded the audience that 'despite discussions for the last 30 years, only two municipalities have adopted inclusionary zoning policies. So something is wrong somewhere'. She praised Stellenbosch's use of the Adam Tas Corridor as a site for testing land value capture and deeper affordability mechanisms, but reiterated that without meaningful integration into broader housing, transport and economic policy frameworks, isolated experiments wouldn't change the systemic failures that continued to marginalise the urban poor. Good ideas and the best intentions For Bredell, the argument isn't just about water and power. He says it's about changing how society values its people, even offering a metaphor: 'If you're in a hospital, do you want a nurse who took four taxis to get to work and doesn't know if her children are safe, or one who walked from a nearby home after dropping her kids off at a good school?' It's a powerful image. But good metaphors don't fill dams or rebuild substations. He may be right that South Africa's problem isn't a lack of resources, but a crisis of leadership and coordination. But as long as policy ambitions outpace fiscal reality, the Constitution's promise of a dignified life, even at its current standard, remains just a promise. DM
Daily Maverick
16-07-2025
- Business
- Daily Maverick
The Road Accident Fund is due for a robust clean-up
The recent suspension of Road Accident Fund (RAF) CEO, Collins Letsoalo, followed by Minister Barbara Creecy's decision to dissolve the RAF board this week, is a welcome move and a long overdue signal that serious intervention is finally under way at this embattled institution. While the RAF's rot certainly worsened under Letsoalo's leadership since 2019, its dysfunction long predates his tenure. The decline began as far back as 2008/09, not coincidentally, the same period when State Capture began to take root under former President Jacob Zuma. The RAF has since become a textbook case of how cadre deployment, poor governance and weak financial oversight give rise to the collapse of a state institution, which in turn leads to widespread failure to deliver on its mandate to the people and massive increases in costs to society. Consider this: in 2005/06, the RAF received just more than R5.5-billion in fuel levy income (then 37 cents a litre), ran a manageable claims book and even produced a surplus of R1.4-billion – thanks in part to a once-off Treasury grant of R2.5-billion. It was, at the time, still largely functional and able to fulfil its mandate, and a 5c increase in the RAF levy would have negated the Treasury bailout. However, within three years, by 2008/09, the RAF's operating expenses had ballooned more than 350% to R24-billion. To cover this growing shortfall, the fuel levy was pushed up to 47c per litre, which was a 27% increase in just three years that significantly outpaced inflation. The rot had taken hold, and opportunistic law firms and other specialist advisory services began feasting on the RAF's inability to manage claims effectively, many settling on courthouse steps at enormous cost to the fund. From 2009 onwards, this chaos spiralled. By 2020, operating expenses had doubled again to nearly R49-billion. However, this figure masked a growing backlog of unpaid claims, with the RAF simply stalling many settlements. Its actuarial liabilities had exploded to an estimated R322-billion, as referenced in its 2020 annual report. Fuel levy hikes In a deeply troubling move, Letsoalo and the RAF Board attempted in 2021 to manipulate the fund's finances by rewriting its accounting policies to reduce liabilities by R306-billion, effectively hiding the problem rather than fixing it. Thankfully, the Auditor-General rejected this cunning plan, and the matter was taken to court. During these loss-of-control years, the public paid a heavy price. Between 2009 and 2022, the RAF levy on the fuel price shot up 360%, from 47c to R2.18 per litre. These hikes inflated the cost of transport, food, and consumer goods for every South African. Instead of fixing the RAF's broken systems, the government simply passed the costs on to the public through excessive, above-inflation levy increases. Had the RAF levy increased only at the rate of inflation, it would have reached just 94c by 2022 – not R2.18. In real terms, the RAF received around R200-billion more than it would have under inflation-linked increases, which is essentially a hidden tax caused by incompetence, maladministration and poor political will. Minister Creecy's intervention must now be the start of a serious turnaround. The next step is critical: appointing a capable, independent and professional board with the skill and courage to fix this institution. That board must recruit qualified executives and people with experience in managing risk, claims, and fraud prevention. South Africa has many capable, retired insurance industry professionals with a deep understanding of complex claims environments and the controls needed to stop internal and external abuse. These are the people the RAF desperately needs. I would also urge the minister to send a strong and unambiguous message to the ANC's cadre deployment machinery – hands off the RAF. It's time to rebuild this institution based on merit, integrity and competence. Not politics. The pain inflicted on accident victims, the public purse, and our economy by a broken RAF is incalculable. Fixing it will take courage and resolve, but it must be done. The window for action is now open. Minister Creecy must not waste it. DM
