Changes in the way cities plan for growth, densification and mixed-use integration are driving structural changes to South Africa’s affordable housing sector.
According to TUHF Client Coverage Executive Velda Delox, inclusive development starts with how local governments rethink spatial planning and economic activity within urban nodes.
“Inclusive development is how cities intentionally structure urban growth. It’s about rethinking economic activity, transportation systems, zoning, and densification in ways that begin to redress historical spatial inequalities,” DeRocks says.
Urban planning scheme and zoning framework under consideration
Across major cities, municipalities are reviewing their urban planning plans and zoning frameworks. Delocks points to the City of Cape Town as a proactive example, particularly the use of incentive overlay zones and the Town Planning Bylaw Amendment (2025) to shorten lengthy zoning processes, and cross-sectoral coordination to verify infrastructure capacity before allowing for higher densities.
“You can’t talk about densification without making sure your utilities and services can handle the load. Inclusive, large-scale growth is possible when municipalities work together internally and align their budgets and plans,” she says.
Densification beyond misunderstanding
There is a common understanding that densification is correlated with overcrowding. This is beside the point.
“Densification is not a fancy word for overcrowding. It’s about making the most of available space legally and compliantly, in a way that supports and doesn’t compromise sustainability, and using design as a social stabilizer rather than an afterthought,” she explains.
Densification is not synonymous with high-rise development.
“High-rise is just one typology and often does not mean adding 10 floors to a building, as it is not the best fit for South Africa’s metros. The most effective densification is cost-effective, supports walkability, fits into the existing neighborhood structure, and does not mean adding 10 floors to a building. Occurring in the 3-6 storey range suitable for high-income and social housing, this means redesigning oversized units so that space is used more efficiently, increasing yields for landlords and affordability for tenants.”
Carefully planned densification will also improve service delivery.
“More people living within structured nodes makes it easier to maintain infrastructure, roads, security and utilities. This encourages planning authorities to rethink capacity and upgrade services rather than allowing them to deteriorate. The real burden comes from sprawl, not density.”
Mixed-use integration and public-private partnerships
One of the clearest examples of inclusive densification is the Conradie Park precinct in Cape Town, developed through a collaboration between the Western Cape Government, the Department of Human Settlements, the City of Cape Town, and private sector partners.
“This shows what mixed-use urban inclusivity looks like. There will be social housing and open market units on the same site, and schools and other retail and commercial facilities will also be developed on the same site. Different income groups will live in one integrated node.”
These developments demonstrate that fiscal sustainability and social inclusion can coexist when public and private stakeholders work together around long-term outcomes.
Demand dynamics and policy
Demand for affordable housing remains strong wherever there is economic activity.
“In Cape Town, demand is affected by immigration and displacement pressures. In Johannesburg, young professionals are attracted by economic opportunities and relatively low costs of living,” says DeLox.
National policy signals also influence demand for property rights. Currently, residential properties valued at up to R1.21 million are exempt from transfer tax, reducing transaction costs for entry-level buyers and sectional title buyers. According to SARS, properties below this threshold will be subject to zero transfer tax based on the 2025/26 table.
Although TUHF is best known for primarily funding rental entrepreneurs, Delocks points out that its lending products also include funding developers who create greenfield developments for sale on the open market, an initiative that stimulates demand for affordable ownership and contributes to shaping housing supply patterns.
Another new dynamic is the displacement effect caused by student accommodation in major cities.
“Student accommodation often has a high return per unit, which can crowd out traditional family rental properties in certain areas. TUHF currently limits its student accommodation offering to 25% of loan balances and remains below that threshold to manage concentration risk.”
Beyond major metropolitan areas, growth nodes are emerging in smaller municipalities adjacent to large economic centers, with affordability pressures in core cities pushing demand outward.
Commercial discipline and long-term implications
For TUHF, inclusive development cannot be separated from commercial sustainability.
“We are a profit-driven business, and our commercial interests allow us to further increase our impact. We will continue to invest in affordable housing provision as long as landlords remain viable and profitable,” Mr Delocks says.
TUHF’s expertise in retrofitting, sustainable home building design and access to green financing structures strengthens that balance.
“Affordability for tenants and viability for landlords have to coexist,” says DeRocks. “Utility costs continue to rise, and efficiency and smart design are essential to making homes more accessible.”
“Success over the next three to five years will mean strengthening commercial performance while increasing measurable social impact. If we can continue to scale up localized interventions responsibly, we will meaningfully contribute to South Africa’s sustainable and prosperous urban future,” says Delocks.
Last month, the Chartered City Institute (CCI) partnered with Waterfall City Management Company (WCMC) to host the 2026 edition of the Global New Cities Summit at Waterfall City, Johannesburg this December.
This summit will solidify its position as the leading global platform for advancing the future of urban development.
We convene governments, technology executives, private investors, urban developers, entrepreneurs, infrastructure providers, philanthropists, academics, professional services firms and more to address challenges and seize opportunities to build thriving new cities around the world. The New Cities Summit is said to be the essential gathering for people dedicated to rethinking urban life at scale and taking action to turn their ideas into reality.
The 2026 New Cities Summit will be held at Waterfall City, Africa’s largest mixed-use development.
Willie Bos, CEO of Waterfall City Management Company, said that although the company’s 2,200-hectare smart city is only half completed, he believes it already reflects the pioneering urban design and human-centered principles that underpin the project.
“We are proud to showcase how innovative planning, long-term vision and dedicated property management can deliver smart, safe and sustainable environments where people can truly live, work, play and thrive.
“At the same time, we look forward to interacting with global thought leaders and gaining valuable insights during the summit as we continue to build cities that raise the bar for urban development.”
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