CITY OF CAPE TOWN ECONOMIC AND HUMAN DEVELOPMENT STRATEGY

1
CITY OF CAPE TOWNECONOMIC AND HUMAN
DEVELOPMENT STRATEGY

• By Zolile Siswana
• September 2005

2
Contents

1. Approach
2. Socio-Economic Indicators
3. Meeting the Challenges
4. Way Forward Sakha Ikapa

3
(No Transcript)
4
City Budget

• R3.8 billion for capital spending and R14 billion
  for operating expenditure.
• Huge increase in capital spending boosted by
  transfers from national and provincial government
  in support of the N2 Gateway project.

5
Key Drives
Vision Sustainable Economic Development
Benefiting All Overall framework combines

• Global Competitiveness
• Invest in people
• World class infrastructure
• World class local government services
• Cluster / sector development
• World class marketing

• Poverty
• Social safety net
• Basic infrastructure
• Spatial integration and environmental quality
• Job creation and economic empowerment
• Supporting community and social development

6
Key Drivers Economic Growth, Job Creation,
Poverty and Inequality Reduction

• Growth in foreign demand and ability to globally
  compete to meet this demand for exports, tourism,
  film, business process outsourcing, and linked
  services (and resulting domestic investments to
  meet this demand)
• Growth in domestic demand and investment in human
  capital (esp. of the poor) and infrastructure
• Government resources partnerships for combined
  reductions in levels of various inequalities
  (income, asset ownership, access to
  opportunities, and capabilities) and growth
  (productivity improvements through technology,
  globally competitive skills and infrastructure
  etc.)
• Entrepreneurship, business ownership, small-big
  integration, broad-based empowerment

7
Demography
8
KEY SOCIO-ECONOMIC INDICATORS FOR CAPE
TOWNNegative trends (1)
9
Negative Trends (2)
10
Negative trends (3)
11
Negative trends (4)
12
Negative trends (5)

• Significant shifts in public expenditure to
  poorer areas of Cape Town but private investment
  has largely remained focused on the established
  areas of the city
• Very little private investment in poorer
  South-East of the city
• This pattern is reinforcing spatial inequalities
  in the city

13
Constraints
14
EconomicSectorPerformance
15
Past Economic Development Trends

• Unemployment trend is just starting to bend
  slowly (dropped by 5,000 to 275,000 or by 0.4 to
  23.4) but requires economic growth of 6 to
  sustain reduction in number of unemployed due to
  40,000 annual new migrants
• The unemployed are young and recent entrants to
  the labour market (69 under the age or 35) and
  predominantly black and coloured (98)

16
Past Economic Development Trends

• The poverty trend is also bending slowly (drop in
  households earning less than R1068 per month
  from 29 to 13), although inequalities show
  little change and over 500,000 people live in
  extreme poverty (no income) although huge
  inequalities exist (average income poorest 20 is
  R15K p.a. vs R315K of richest 20).
• Economic growth trend is strengthening from 2-4
  since 2000 and dependant on ongoing strengthening
  of global linkages and reduction in skills
  mismatches
• - Exported manufactured goods increased from
  10 in 1996 to 33
• in 2003
• - Attracted over 1 million foreign and
  international tourists
• - Attracted at least R1 billion of Foreign
  Direct Investment in 2004 which
• created 3500 direct new jobs

17
Urban Renewal Areas
Focus of urban renewal in the poorest South-East
parts of the City
18
MEETING THE CHALLENGESMayors Listening
CampaignPMG note Graphics not included
Issue No. Of comments
Provision of housing/land for housing 333
Job Creation and Skills Development 138
Address high crime rate/more policing 108
Support community-based projects 57
Provision and maintenance of sport/recreational facilities/swimming pools 50
Social Welfare (poverty related) 48
Cleaning of public places controlling littering 47
Better provision/management of Community Halls 42
Improved Health Service 42
Maintenance of council housing 36
Youth Development 35
19
Cape Town CBD experiencing development boom

• Investment R9.1bn (cumulative since 2000)
• Capital value of current leases, new
  developments, investment purchases, upgrades and
  renewals
• Increasing average AB-grade office space rentals
• A grade 1994 R25/m sq 1999 R43/m sq 2005
  R75/m sq
• B grade 1995 R22/m sq 1999 R31/m sq 2005
  R60/m sq
• Increasing average prime retail rentals
• 1999 R70/m sq 2005 R250/m sq
• Decreasing commercial vacancies (Dec 2004)
• At 9.92, lowest since 2000 (by comparison,
  Durban 16,6 JHB 19,9)
• Anticipated further decrease to between 4-6
  once residential conversions are stripped out
• Decreasing retail vacancies
• 200 shops still used for non-retail purposes
  targeted for conversion by 2006
• 300 shops now black-owned
• New retail planned Chancery Square (40 000m/sq
  mixed use), Broadway Boulevard

20
Urban Development Zones PMG note Graphics not
included

• National govt has introduced tax incentive to
  encourage investment in specified urban
  development zones
• Two UDZs declared in Cape Town
• Bellville CBD in vicinity of Voortreker Road
• Parts of Cape Town CBD

21
SAKHA IKAPA Integrated Human SettlementsN2
Gateway Project PMG note Graphics not included

• 22 000 houses will be delivered as part the N2
  Gateway project
• Part of broader Integrated Human Settlement
  programme that also includes Urban Renewal
  initiatives in Mitchells Plain and Khayelitsha
• Housing projects underway or on budget in many
  other parts of the city

22
SAKHA IKAPA Integrated Human SettlementN2
Implementation Guidelines

• The directorate for Economic and Human
  Development has developed a set of guidelines to
  inform the planning, development and
  institutional Phases of any project.
• I Planning Phase
• Market driven
• Flexible
• Low technology structures
• Dedicated economic spaces
• Connectivity
• Governance

23
Implementation guidelinesCont ..

• II Development Phase
• In the development phase, in this case
  construction, again a number of guidelines ensure
  there are synergies not conflicts with the EHD
  5-star strategy
• Efficient administration
• Compliance
• Maximising local employment
• Maximising training
• Local procurement
• Maximise energy and water savings

24
Implementation guidelinesCont ..

• III Institutional Phase
• Good Governance
• Integrated Planning
• Monitoring and Evaluation
• Research and Development
• Capacity
• Legal and Regulatory Framework

25
SAKHA IKAPA An Economic Human Development
Strategy
Enhance global competitiveness Targeted poverty reduction Enhance global competitiveness Targeted poverty reduction Enhance global competitiveness Targeted poverty reduction Enhance global competitiveness Targeted poverty reduction Enhance global competitiveness Targeted poverty reduction
1 Developed economy 2 Economies of the poor 3 Economic bridges 4 Social package 5 Social Capital
To increase the no. of economic opportunities by growing the economy To increase the no. of economic opportunities of the poor and broaden economic participation. To strengthen linkages between the first and second economies. To facilitate universal access to basic needs and social services. To build the human and social capital of the poor.
Sector support Skills development and training Procurement Bulk and business infrastructure subsidies Early Childhood Development services.
Destination brand management and marketing. Informal trade support. Use of state owned assets Capital subsidies and grants for assets for the poor. Community development esp. vulnerable groups
Accelerate Investment) Low skilled job creation (e.g. EPWP) Transport and telecommunications infrastructure. Social services infrastructure Adult basic education and training
Area targeting and management. SMME and cooperative business support. Enabling business environment Subsidised access to basic services (indigent policy). Tolerance and inclusion.
Business and consumer security. Business and consumer security. Research and information Welfare grants. Individual and community safety nets.
26
Background (1)

• From a spatial perspective, Cape Town is
  inequitable and not integrated because its
  citizens do not have equitable access to the
  opportunities offered by the City.
• This is unsustainable in the long term there is
  a prevalence of apartheid inequalities while new
  needs constantly confront the city.
• Some areas are very well off, rich in both nature
  and urban opportunities, and continue to benefit
  from sustained investment.
• Simultaneously, the gap in opportunity that
  exists between wealthier areas and poorer ones
  continues to widen.

27
Background (2)

• An equitable city from a spatial perspective
  will be one where all people have relatively easy
  access to a similar range of nature and urban
  opportunities public facilities, special
  places, events etc
• Up to now little success has been achieved in
  creating a significantly new pattern of
  opportunities characterised by greater and
  growing levels of spatial equality.
• As the City has grown outwards, it has become
  increasingly inaccessible, inequitable and
  inconvenient for the majority of people.
• For Cape Town to strategically position itself
  nationally and internationally, and meet the
  needs of all its citizens, it needs to address
  its spatial challenges in a coherent way.
• A visionary and bold approach which supports
  economic growth and job creation, assists the
  development of strong communities, increases
  access and contributes to the development of
  full, integrated settlements, is required to
  transform Cape Town into an equitable,
  world-class and sustainable city.

28
Approach

• 20 Year Integrated Human Settlement Framework,
  strongly informed by
• Integrated Settlement Growth
• Economic Integration
• Investment in Strategic Growth and Movement
  Infrastructure
• Environmental Cultural Resources
• Strategic shifts in the approach to leveraging
  maximum and sustainable positive impact in
  relation to
• The Governance Agenda
• Developmental Impact
• The Urban Form
• The Employment Base
• Social and Human Capital
• Urban Technology
• Geographical Positioning

29
Key informants

• CITY I.D.P
• Creating Integrated Settlements
• Economic Growth
• Building Strong Communities
• Access and Mobility
• Equitable and Effective Service Delivery
• Spatial Frameworks
• NATIONAL SPATIAL DEVELOPMENT PERSPECTIVE
• Economic growth is a prerequisite
• Fixed capital investment spending in areas of
  growth / potential
• Basic service provision in areas of low growth /
  potential
• Addressing social inequalities through people,
  not places
• Settlement and economic opportunities focusing on
  activity corridors within, or adjacent to, main
  growth centres
• PROVINCIAL SPATIAL DEVELOPMENT STRATEGY
• Integration of residential communities
• Reinforcement of high potential / exposed
  economic space
• Protection of agricultural land, biodiversity and
  scenically sensitive areas through development
  control

30
Integrated settlement growth

• Improving settlement planning - necessary to
  ensure that quality living environments are the
  output of the settlement development process.
• Well-located land for affordable housing.
• Considerable developable land with urban edge (18
  000 ha 72 000 soccer fields!), but release is a
  major obstacle (NIMBY!)
• Redefining the urban core in relation to where
  people are located and the social and economic
  amenities associated with quality of life not
  just the Cape Town CBD, which in itself is
  inaccessible to many, especially the poor!
• Improving the design and management of
  residential areas is also central to the
  development of quality human settlements that
  promote social development. e.g. Improving the
  housing form for low income communities, to
  increase options available and identifying forms
  and locations for medium to high-density housing
  projects, including resource efficient design and
  greening aspects in the planning phase.
• Eliminating procedural and policy blockages as
  obstacles to the efficient rollout of new
  settlements e.g. removing blockages that cause
  delays - rezoning applications and EIAs.

31
Sustainable Regional Development

• The Citys future is tied to the immediate and
  broader region Western Cape, southern African
  region and further afield. This requires
  consideration and consultation with settlements
  in this region.
• The Citys lateral growth is eating into
  valuable agricultural land and destroying key
  natural resources.
• In turn, surrounding towns growing towards Cape
  Town which is seen as the centre of opportunity
  in the region.
• A strategy is needed that defines how the City of
  Cape Town and surrounding towns should relate to
  each other, or how each should be managed in the
  interests of the Western Cape as a whole. This
  should be closely tied to the Provincial Spatial
  Development Framework.

32
Economic Integration

• Extending the economic core of the city to
  include economically displaced and disadvantaged
  communities
• Generating employment above the rate required
  through the spatial and structural nature of
  economic activity from 3-4 to 6-7 in
  accordance with national growth targets
• Reducing the spatial and settlement dimensions
  that increase the cost of doing business,
  especially for disadvantaged communities and
  SMMEs
• Spatially integrating the 1st and 2nd
  economies through mutually beneficial linkages
• Equitable and effective provision of basic
  services across spatial lines to support business
  development, particularly LED
• Extending the economic opportunities of
  developing competitive advantage in key growth
  sectors to disadvantaged communities
• Key sectors Tourism Oil and Gas supplies Boat
  building Call centres Business Process
  Outsourcing Film ICT and Clothing.

33
Investment in Strategic Growth Movement
Infrastructure

• Conceptualising a spatial approach to
  infrastructure led growth consistent with the
  national intent.
• Mega movement, strategic economic infrastructure
• R2, 8 billion Port of Cape Town expansion over
  next 3 years
• Airport terminal expansion nearing completion.
  Further expansion (estimated _at_ R10bn in 2001)
  required
• Future of Port of Saldanha and its relation to
  displaced socially and economic depressed
  West-Coast communities e.g. Atlantis?
• Improving generally poor public transport
• Poor response to increasing travel demand
  complexity
• No public transport between 8pm and 5am
• High private motor vehicle reliance
• Increasing road congestion / bottlenecks
  vehicle ownership up from 45 (1990 2000)

34
Environmental Cultural Resources (1)

• Various dimensions of Cape Towns natural and
  cultural environment underline its importance for
  the City as a whole. This includes the ecological
  dimension of the natural environment, which
  provide the basic resources within which human
  life is sustained.
• It therefore has important economic, social and
  recreational dimensions
• Due to the geography of the city and historic
  settlement patterns, there is very inequitable
  access to natural and cultural assets. Assets of
  nature need to be enhanced and made more
  accessible to all citizens, particularly those on
  the Cape Flats who do not enjoy ready access to
  the Citys magnificent environmental assets.
• Access by the poor to public space amenities
  such as beaches and mountains constrained
• The beauty and natural setting of Cape Town is
  its greatest single economic asset. It is
  important to enhance this asset further.
  Therefore existing open space elements need to be
  protected and maintained, and new special places
  created.
• Scenic assets threatened by development pressure
  erosion of important heritage stock e.g Kalk
  Bay, Bo-Kaap etc.
• Biggest city-region with tourism assets and
  biodiversity of global significance of
  city-region biodiversity - 71 plant species
  endemic to Cape Flats lowlands.

35
Demonstration Athlone Power Station Site (1)
LEGEND
Rail
High density housing
HOUSING POTENTIAL Phase 1 (Power Station) 25
hectares 120 units per ha 3 000 units Phase 2
(Treatment Works) 25 hectares 120 units per
ha 3 000 units
Possible station
Public facility corridor
Routes connecting to Langa
N2
Major park-and-ride facility/ interchange
Existing buildings converted for commercial and
cultural uses
Future high density housing
Possible re-use of part of towers