Applicability Of Incentive Zoning Within Built Up Areas In South African Context: [Essay Example], 2272 words GradesFixer
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Applicability of Incentive Zoning Within Built Up Areas in South African Context

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Introduction

Land Value Capture (LVC) consists of a number of different instruments which can be implemented by state to increase the land value market around a certain urban area. Some of these instruments which is associated with LVC includes strategies such as incentive zonings, development levies, land swaps, transit development impact fees, etc. Land value capture investment is also a source of generating public funds to allocate to future development in other areas. So in theory, these instruments should include a set of principles which is used to monetize land values increase that occur in areas where public infrastructure services have been implemented, for example: MyCiti BRT system. The focus of this report will be on Incentive zoning as a LVC instrument.

Incentive zoning can be defined as “a development in land use regulation that encourage the creation of certain amenities and land use designs that a community and/or municipal authority wish to promote”. So incentive zoning strategies relax zonings or offer developers certain benefits which will “boost” their project’s value and the rewards of this will eventually reflect on a the public sectors income generated and investment return which will enable the local government to continually invest in other urban development strategies to ensure positive growth. Other measures of incentive zoning can also demand private developers to “give back” to the public by demanding the developer to make provision for open spaces, low cost housing, etc. The state don’t always have the finances to provide these services to the public but can do so by giving leeway to developers in exchange of these initiatives. The history and characteristics of incentive zoning strategies and the characteristics involved in such implementations will be determined and investigated in this report to eventually lead up to a local analysis to see where this is present and how successful it has proven to be in the South African context.

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History and Usage of Incentive Zoning

To understand the origin of incentive zoning, it is first important to know exactly where zoning regulations and enforcement from the local government have originated from. Land Use Zoning and the regulation thereof has been a concept enforced since way back in the Roman times. Although land use regulations were not officially stated in the form of guidelines or principles, the idea of making use of zones and dedicated spaces for specific uses was general knowledge in some sense. In South Africa, land use and development regulations originated around the early 1920s in which applications for subdivisions were regulated. Severe overcrowding, urban unpleasantness, pollution, etc. played a major part in making planners realize that some sort of functional separation system is required. This system should aim to separate uses that can be of harm or contradict each other, for example: residential and industrial neighbourhoods can’t be within close proximity as it is a threat to an individual’s health. The first zonings were introduced in France, Germany and Britain to ensure that pollution is kept at a minimum in residential areas and later on, Germany introduced an office modern zoning system in the late 1900’s.

In the Western Cape, the first attempt to regulate land uses based on a solid foundation or framework was implemented in 1985 as the Land Use Planning Ordinance (LUPO). LUPO consisted of a number of unique ideas, based on the current state of the city, and included spatial plans, land use rights and the concept that unutilized zonings which was allocated should lapse, if not used for the allowed purpose. Before LUPO, zoning was also similarly used for spatial planning, but were not site specific or considered with much detailed on a local scale, but rather a broad overview of where future residential, business or industrial areas will be developed.

Incentive zoning as a tool originated in the United States solely as a housing problem solution. During the mid- to late-20th century, new suburbs grew and expanded around American cities as middle-class house buyers, supported by federal loan programs such as Veterans Administration housing loan guarantees, left established neighbourhoods and communities. These newly populated places were generally more economically homogeneous than the cities they encircled. Many suburban communities enacted local ordinances, often in zoning codes, to preserve the character of their municipality. Communities have remained accessible to wealthier citizens because of these ordinances, effectively shutting the low-income families out of desirable communities. Such zoning ordinances have not always been enacted with conscious intent to exclude lower income households, but it has been the unintended result of such policies. Incentive zoning was not just a way of council gaining housing for low income groups but also includes other public benefits such as parks and recreation, sustainable energy efficiency, sidewalks, water and storm system improvements, parking, etc.

Characteristics of Incentive Zoning

Incentive zoning can be greatly beneficial to all spheres of government based on its own unique merits. What incentive zoning can generate for the public is usually framed under the issues and challenges which the authority is facing in its current state. Incentive zoning and development is calculated based on this and consists of specific characteristics which can accompany demands from the local authority. The main characteristics will be discussed in the following section. The outcome and benefits of each development project will be different seeing that each local or national authority have different spatial and social issues which it is facing and the context in which the background on which the proposed land development will occur will require care consideration. The merit should be calculated based on the size of the development and the location’s potential to be of significant value to the city.

The rewards received by the local authority in a case where incentive zoning was actioned is called “zoning bonus”. Since the developer gets allowed to exceed the allowable development restrictions on condition, the zoning bonus is calculated to equal or slightly to exceed in the value the developer obtain. Zoning bonus, in other words, is a density bonus calculated by the floor area ration and the further the developer deviate therefrom, the higher the public benefit should be. Incentive zoning is directly interrelated to inclusionary zoning. Inclusionary zoning focus more on “forcing” the private stakeholders in developments to not only provide housing opportunities to the mid-high-income class but also the low-income class. The local government is not in the position to develop housing opportunities to the negatively affected due to lack of resources, but they do have the power to regulate and guide other development in this direction. Some of the potential benefits of Inclusionary and incentive zoning can include:

  • Less fortunate and struggling families will have the opportunity to have access to a wider range of potential employment possibilities, located closer to better educational facilities, increased safety and ease of access to public transport routes.
  • It could take some pressure off local authorities who needs to supply the inadequate supply of affordable housing.
  • It will also avoid economic or racial segregation, which will in actual fact reduce crime rates and improve social wellness in the community.
  • Very little public subsidies will be required to implement incentives zones as a market-based tool. Potential limitations
  • Developers will spend less capital on constructing the “incentive” structure which will lead to poor building quality and sustainability.
  • Unstable production of affordable housing that highly affected by local housing-market conditions. In some cases, the servicing and maintenance of the provided benefits by the developer will be the responsibility of the developer itself, or the duties will be allocated to the city to upkeep.

The developer was allowed to take the building higher than usual but had to include childcare services, open spaces within the precinct and protection of the surrounding heritage landmark. The real estate industry determined that inclusionary and incentive zoning have generated an indirect tax and extra responsibility on developers, which discouraged them to focus development on areas in which local authorities will seek to provide services from which there are a shortage from. The real estate market also discovered that some developers which include this incentive based on council’s requirements, especially low income housing, usually gets resold by the owners for a profit short after receipt of this. This have led to elimination of the potential and the benefits which this actually should have. Inclusionary zoning aims to reduce residential economic segregation by mandating that a mix of incomes be represented in a single development. How this applies to the South African context and attempt to address the shortcomings of the current planning system will now be assessed in the next section.

Relevance and adaptability to local context

Incentive zoning can be very effective in the South African context, especially considering the exceptionally high rate of property development which major South African cities like Cape Town and Johannesburg have experienced over the last few years. Also, affordable housing on its own is a big issue in modern day South Africa. There have been struggles to provide affordable housing for previously disadvantaged and the demand and focus group is so large that government can’t solve this issue by itself. Land demands and potential locations within close proximity of other social opportunities is also a related issue and to “redevelop” areas with the city boundaries to ensure the social well-being of the beneficial parties can be relieved by implementing incentive zoning to developers which only focus on expanding and developing land with excellent social, environmental, economic qualities. Incentive zoning can be used as a market based tool to also help with the principle of inclusionary housing. As discussed before, there is a major shortage of inclusionary housing in the country. Radical change is required in the country to provide this and all private and public stakeholders should have a joined initiative and view on this. The objective of inclusionary housing is to guide the development process to integrate equal opportunities, whether it refers to housing, social or economic opportunities, as far as possible. Incentive zoning regulations measures can contribute towards provision of this.

Shortcomings and failures of incentive zoningIncentive zoning reached a stage where developers started to reject the principle because the incentive offered by local authorities were not worthwhile. Developers would make more money by abiding by the development parameters than deviate therefrom.

Ossing, New York Case Study

An international case study which have proven this initiative to show success was in Ossining, New York. The municipality required in this case that all developments of a residential nature, exceed a maximum of 6 units should include or provide affordable housing in their development precinct. Based on the amount of affordable housing developed, developers received a 10% allowable density bonus if the provided low income housing is affordable to approximately 80 percent of the average income of the population residing in the neighbourhood. In Ossining, and additional density was approved by council to construct 8 dwellings per acre instead of 6. This was about a 33% bonus the developer received. Additional demands in this area based on the incentive zoning principle stated that 10% of the units are made affordable, that the heritage significant structures in the area be rehabilitated and maintained free of use and that there will be pathways and walkways included in the development which will link with public open spaces and existing pedestrian transport routes. One of the contributing factors that led to the success of this particular incentive program was the high demand in housing and real estate in the area based on its popularity. As mentioned before, incentive programmes are site specific and in other areas which not necessarily have the same real estate potential, the incentive program probably wouldn’t have been so successful.

In South Africa, three factors mainly contribute to the success of an incentive zoning implementation or program. The first factor is the demand and the strength of the demand in a certain market (Ex: Low-income housing) and also the location. Secondly, planners will discuss the limitations and requirements they would best see is suitable in a proposed project and then lastly, the needs of the people and the effects it will have on the market. The market will be shaped based upon its surroundings so it’s not a question of how to create a market, but rather alternate and meet the developer and council’s needs somewhere in the middle.

Conclusion

Incentive and inclusionary zoning can be a great opportunity for local governments to promote future developments and include certain public goods council can’t provide form their side or is in the position to fund this. While incentive zoning regulations is widely recognized, most city officials are not in the position or have the resources and time to evaluate this tool in every given situation or to look into the kinds and scales of incentives that would result in the most efficient solution. More research and evaluation of this tool is required especially in the modern day South African with focus on today’s challenges such as environmental issues, social instabilities (effects of apartheid planning) and economic issues.

Some sort of framework or guideline also have to be included in the official planning by-laws to ensure that developers will have an accurate idea or forecast of what will be expected from them and what council’s requirements will be. The tool in its current state is still sort of a concept “in the dark” and continuous research is required to see how and what the optimal benefits can be in future planning issues which may exist. In South Africa especially, planners should start to implement this tool in more areas since development is growing at an exponential rate.

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Applicability Of Incentive Zoning Within Built Up Areas In South African Context. (2020, July 14). GradesFixer. Retrieved May 11, 2021, from https://gradesfixer.com/free-essay-examples/applicability-of-incentive-zoning-within-built-up-areas-in-south-african-context/
“Applicability Of Incentive Zoning Within Built Up Areas In South African Context.” GradesFixer, 14 Jul. 2020, gradesfixer.com/free-essay-examples/applicability-of-incentive-zoning-within-built-up-areas-in-south-african-context/
Applicability Of Incentive Zoning Within Built Up Areas In South African Context. [online]. Available at: <https://gradesfixer.com/free-essay-examples/applicability-of-incentive-zoning-within-built-up-areas-in-south-african-context/> [Accessed 11 May 2021].
Applicability Of Incentive Zoning Within Built Up Areas In South African Context [Internet]. GradesFixer. 2020 Jul 14 [cited 2021 May 11]. Available from: https://gradesfixer.com/free-essay-examples/applicability-of-incentive-zoning-within-built-up-areas-in-south-african-context/
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