What is urban densification and how does it affect you?
The Council has a policy of encouraging more and more people to live and occupy the existing areas within the city of Johannesburg.
The practical effect is to allow developers to erect more and more smaller and more compact apartments in the city.
The City of Johannesburg Metropolitan Municipality has been embarking on a program of encouraging densification in certain areas for some years now. The program is known as the Spatial Development Framework or SDF.
The aim of the SDF is to encourage higher density housing in specific areas, with emphasis on areas where the population will have easier access to transport, employment and retail centres. To do this, specific regulations and targets are set to facilitate higher intensity development in appropriate areas.
The emphasis has moved away from concentrating this program along arterial routes, and rather towards specific areas close to public transport infrastructures, economic opportunities and social infrastructure. Higher densities will be allowed within defined walking distances of mixed use and economic nodes and public transit stations such as the Gautrain.
Areas such as to the south of Sandton Drive, along Rivonia Road and William Nicol close to Sandton Drive, and Rosebank, have been earmarked in the SDF as future high density nodes. So we can expect high rise apartment blocks starting to appear in these regions. Obviously the selling price of the land in these nodes will dictate that these dwellings will be well appointed and expensive.
Whereas in the past the properties in these regions may have been between 4 000 and 6 000 square meters, with one dwelling and outbuildings, the SDF may now encourage subdivided properties as small as 500 square meters and/or a dwelling unit per hectare ratio of as many as 50 to 70 per hectare.
The SDF provides that as one moves further away from these nodes, the densification will reduce so there will be fewer dwelling units per hectare as one moves into the suburb. Whereas there may be a new 15 story apartment block built along Sandton Drive with many one and two bedroom units, 500 meters further into the suburb, one may find a 3 story apartment block with mainly 3 bedroom family units, and another 500 meters further into the suburb one may find standalone cluster double story dwelling units.
What is very important is that one needs to know, before one purchases a new property, what developments are planned or will be permitted around the property. If one intends purchasing a 4 000 square meter property to raise a large family on, one would prefer to be further away from a high rise apartment block.
But then a developer may be most keen to purchase land right in the densifying node as the SDF will permit him to build many dwelling units in a smaller area, providing more profit.
If one is considering purchasing a property with a view to subdividing and selling it off in bits, or building a new Sectional Title development on it, one should consider the SDF and the relative ease of securing the rezoning of the property by the municipality in the right nodes.
Each property will need to be rezoned individually, to allow for the higher density of dwelling units. A rezoning typically may take 12 to 15 months for municipal approval and the townplanning costs may be anything from R75 000.00 to R120 000.00. In addition to this one needs to factor into the equation the municipal bulk service charge which typically ranges from R65 000.00 to R85 000.00 per new property, or about R50 000.00 per new dwelling unit in a sectional title development. The attorneys conveyancing charges (fees and disbursements) may be about R5 000.00 per new dwelling.
Andrew Smith has 26 years of conveyancing experience, including subdivisions, township developments, sectional title developments, servitudes, usufruct transfers, general transfers, mortgage bonds, and uses his tax background to structure complicated transactions in the most tax efficient manner.