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Contents Urbani izziv, volume 25, supplement, July 2014 ADDRESSING SOUTH AFRICA’S URBAN CHALLENGES Guest Editors Jayne M. ROGERSON, University of Johannesburg, South Africa Nico KOTZE, University of Johannesburg, South Africa Christian M. ROGERSON, University of Johannesburg, South Africa Editorial Jayne M. ROGERSON, Nico KOTZE, Christian M. ROGERSON: Addressing South Africa’s urban challenges Articles Ralph REX, Maléne CAMPBELL, Gustav VISSER: The on-going desegregation of residential property ownership in South Africa: The case of Bloemfontein Etienne L. NEL, Christian M. ROGERSON: Re-Spatializing development: Reflections from South Africa’s recent re-engagement with planning for Special Economic Zones Sophie OLDFIELD: Intertwining lives and logics: Household and informal economies in Cape Town Mukovhe MASUTHA, Christian M. ROGERSON: Small business incubators: An emerging phenomenon in South Africa’s SMME economy Sanette FERREIRA, Rozitta de VILLIERS: The Victoria and Alfred Waterfront as playground for Capetonians Jayne M. ROGERSON: Changing hotel location patterns in Ekurhuleni, South Africa’s industrial workshop Ashley GUNTER: Renting shacks: Landlords and tenants in the informal housing sector in Johannesburg South Africa Paul Tsietsi MONARE, Nico KOTZE, Tracey Morton MCKAY: A second wave of gentrification: The case of Parkhurst, Johannesburg, South Africa Desire A. GREENBERG, Jayne M. ROGERSON: The greening of industrial property developments in South Africa Clinton AIGBAVBOA, Wellington THWALA: Structural equation modelling of building quality constructs as a predictor of satisfaction in subsidised low-income housing Lochner MARAIS, John NTEMA, Jan CLOETE, Anita VENTER: From informality to formality to informality: Extralegal land transfers in an upgraded informal settlement of South Africa Wayde R. PANDY, Christian M. ROGERSON: The evolution and consolidation of the timeshare industry in a developing economy: The South African experience Ronnie DONALDSON, Julian BENN, Malene CAMPBELL, Annelie de JAGER: Reshaping urban space through studentification in two South African urban centres Christian M. ROGERSON, Jayne M. ROGERSON: Urban tourism destinations in South Africa: Divergent trajectories 2001–2012

Urbani izziv, volume 25, supplement, 2014 (special issue)

S2 DOI: 10.5379/urbani-izziv-en-2012-23-supplement-000

Addressing South Africa’s urban challenges Jayne M. Rogerson Nico Kotze Christian M. Rogerson Jayne M. Rogerson, University of Johannesburg, Faculty of Science, School of Geography, Environmental Management & Energy Studies, South Africa ([email protected]) Nico Kotze, University of Johannesburg, Faculty of Science, School of Geography, Environmental Management & Energy Studies, South Africa ([email protected]) Christian M. Rogerson, University of Johannesburg, Faculty of Management, School of Tourism & Hospitality, South Africa ([email protected])

Abstract South Africa is among the most urbanized countries in Africa and has an urban population that is growing rapidly. The country’s urban challenges sometimes are considered as distinctive and separate to those of rest of Africa because of the apartheid legacy of a fragmented and racially splintered urban landscape. Nevertheless, 20 years after democratic transition the issues that confront its cities increasingly exhibit a set of sustainability challenges that typify those problems of many other fast-growing African urban areas. This introduction locates the collection of articles as a contribution to the expanding corpus of scholarship on urban South Africa. Keywords: urban challenges, urban development, South Africa

Introduction One recent United Nations report offers the prediction that by 2034 50 percent of Africa’s population is expected to be living as ‘urban’ dwellers (United Nations, 2012). Arguably, for at least the past 50 years Africa has experienced the world’s most rapid rate of urban population growth and is likely to continue to do so for the next century (Turok, 2012a; United Nations, 2010). As has been pointed out by several urban scholars, the scale and velocity of contemporary urbanization in Africa is markedly different to the historical urbanization experience of the global North (Beall et al., 2010; Parnell & Pieterse, 2014; Grant, 2015). The rapid expansion which is occurring in African cities is a component of what is termed the ‘second urban transition’. This transition is producing a situation that most of the world’s urban population is now no longer resident in rich countries but instead is found in low and middle income economies, including sub-Saharan Africa. The urbanisation processes taking place in the global South differ in many respects from the first urbanisation wave as experienced in now advanced economies (Grant, 2015). Most importantly, the first wave of urbanisation was accompanied by and aligned to industrialization processes and the growth of what would be described as formal work opportunities. The second urbanisation wave is markedly different and thus poses an array of complex issues around sustainable socio-economic development. It is distinguished firstly by its scale and rapidity of growth of urban populations. Another difference is that the urbanisation trends impacting upon urban Africa are occurring and reflecting a state of crisis which is manifest in the growth of informality in urban life (Parnell & Pieterse, 2014). As Grant (2015: 135) reflects, the mass of urban dwellers in Africa “work outside of the formal economy, live in informal housing, and conduct business without using banks”.


S3 It is calculated that Africa needs to generate productive employment opportunities and livelihoods for the 7-10 million young people who are entering the labour force each year, a disproportionate amount of whom will live in cities as a consequence of the youthful nature of migration streams (Turok, 2012a, 2012b). For the majority of inhabitants of urban Africa the informal city – as mirrored in informal settlements and the primacy of informal sector employment – is the real African city (Grant, 2015). The limited growth of industrial employment in sub-Saharan Africa starkly demonstrates the sharp contrasts that must be drawn between Africa’s contemporary urban transition and that of the first urban transition as was experienced in the global North. The management and sustainability challenges of this new urban expansion are not simply to be felt in ‘mega-cities’ but are reflected increasingly also in the challenges facing secondary cities and small towns. The critical agenda of sustainability challenges for African researchers must incorporate questions around building resilient cities, local economic development, service delivery, food security, informal livelihoods and environmental change (Beall et al., 2010; Rogerson & Rogerson, 2010; Simon, 2010; South African Cities Network (SACN), 2011; Parnell & Pieterse, 2014; Grant, 2015). Moreover, Taylor & Peter (2014: 2) alert us that “as climate change becomes increasingly acknowledged as a key driver of global, regional and local scale impacts that exacerbate the vulnerability of human systems, the question of how to conduct ‘climate compatible development’ within urban systems has become more pressing”, not least in urban Africa. Overall, therefore, the transition from rural to urban lives has multiple implications in economic, social and political spheres and in particular underscores a critical need for undertaking applied urban research in order to strengthen capacities for urban management and planning (Parnell, Pieterse & Watson, 2009). South African Issues South Africa’s urban challenges sometimes are considered as distinctive and separate to those of the rest of the continent because of the apartheid legacy of a fragmented and racially splintered urban landscape. Twenty years after democratic transition many of the urban challenges facing South Africa still are tainted by the apartheid past. Nevertheless, the issues that face its cities increasingly exhibit a set of sustainability challenges that typify those problems of many other fast-growing African cities. South Africa is already among the most urbanized countries in Africa and has an urban population that is growing rapidly. Current estimates are that the proportion of the national population living in cities is 62 percent but expected to reach 71 percent by 2020 (Turok, 2013). By 2050 the urban population is expected to increase by an additional 13.8 million residents (National Treasury, 2011). South Africa’s cities are drivers of national economic development as well as major hubs for enterprise development (Turok, 2012b; Rogerson, 2013; CDE, 2014). Indeed, economic activity is disproportionately concentrated in the country’s large urban areas and in particular its metropolitan areas where 59 percent of country’s economic output is generated by just 37 percent of the population. As argued by the Centre for Development and Enterprise (CDE 2014: 2) South Africa’s “relationship with urbanisation is complicated and ambiguous, if not outright hostile”. For Turok (2013: 170), however, the underlying approach of government to the space economy remains broadly neutral with no explicit national urban policy currently but with rural development the stated priority of the ruling African National Congress. Place-based initiatives for promoting economic development in large urban areas as well as secondary cities and small towns have been one of the most distinctive aspects of the South African development over the past 15 years (Rogerson & Rogerson, 2010; Rogerson, 2014). Unleashing the full economic potential of the country’s cities is a challenge faced by local policy makers in common with cities across Africa (UN-Habitat, 2013). It is argued that the


S4 country’s cities “are not performing to their potential or reaping the benefits of agglomeration because of shortages of energy and water infrastructure, transport congestion and shortfalls in education and skills” (Turok, 2012b: 1). Widespread agreement exists that modest rates of economic growth are not translating into improved livelihoods for all urban residents in South Africa. Accordingly, as the pace of urban population expansion is outstripping rates of economic growth South Africa’s cities “are increasingly becoming home to expanding poor populations” (National Treasury, 2011). Core challenges exist for expanding job creation and especially for generating new opportunities and livelihoods for the country’s youth (CDE, 2014). In common with the rest of the continent therefore South Africa’s cities are confronting the multiple challenges of managing the urbanization of poverty (Turok, 2012a, 2013). Apartheid patterns of segregation exacerbate the management challenges of transforming the inefficient and inequitable layout of the country’s cities. Exclusionary spatial patterns from the past continue to be reproduced as evidenced by the rapid expansion of urban informal settlements in peripheral and marginal zones and often subject to environmental hazards such as flooding. One frank assessment recently offered from national government is that “South Africa has yet to find an appropriate model for effectively harnessing the potential of its cities to drive economic growth and redress the spatial patterns that continue to marginalise poor people” (National Treasury, 2011). Urban Scholarship Over the past 20 years urban scholarship in South Africa has made considerable strides with the appearance “of a rich body of scholarship” (Visser, 2013: 75). In examining trends in this body of urban studies several important points are raised (Visser, 2013; Visser & Rogerson, 2014). First, the most well-developed sets of writings have focused upon issues of local economic development, housing, urban tourism and leisure, citizenship and city planning. Second, there is a heavy emphasis upon various dimensions of aspects of urban poverty, the needs of the urban poor and planning that might inform alternative and improved futures for the urban poor. Three, marked geographical imbalances in research focus are observed with the city of Cape Town the best documented. By contrast, other large cities, and most secondary centre and small towns, have received much less attention. Four, many knowledge gaps remain as several critical urban issues are so far sparsely investigated including most importantly, urban economic and environmental challenges. In addition, Visser (2013) calls for investigations that go beyond the urban poor and highlights our oversight of the “not so poor” and of the realities of wealthy urban dwellers. It is against this backdrop that this special issue of Urbani Izziv was prepared. The issue offers a set of new applied urban research work from scholars who have contributed original papers on both well-established themes as well as newer research foci concerning urban South Africa. Among issues under investigation in this collection are spatial planning, informality, desegregation, housing and land, tourism and leisure, gentrification, small business development and the green economy. These themes are explored from various perspectives and methodological approaches. Taken together the articles in the issue address a range of concerns about the challenges of contemporary urban policy and practice as well as interrogating little documented aspects of the South African urban fabric. Acknowledgements Boštjan Kerbler is thanked for encouraging the production of this special theme issue. Special acknowledgements are extended to several referees on the papers in this collection for their contributions. Usual disclaimers apply.


S5 References Beall, J., Guha-Khasnobis, B., & Kanbur, R. (2010) Introduction: African development in an urban world: beyond the tipping point. Urban Forum, 21 (3), pp. 187-204. CDE (2014) Cities of Hope: Young People and Opportunity in South Africa’s Cities, CDE, Johannesburg Grant, R. (2015) Africa: Geographies of Change, Oxford University Press, New York. National Treasury (2011) The 2011 Local Governments Budgets and Expenditure Review, National Treasury, Pretoria. Parnell, S., Pieterse, E., & Watson, V. (2009) Planning for cities in the global South: An African research agenda for sustainable human settlements. Progress in Planning, 72, pp. 233-241. Parnell, S. & Pieterse, E. eds., (2014) Africa’s Urban Revolutions. Zed, London. Rogerson, C.M. (2013) Improving market access opportunities for urban small, medium and micro-enterprises in South Africa. Urbani izziv, 24 (2), pp. 133-143. Rogerson, C.M. (2014) Reframing place-based development in South Africa: The example of local economic development. Bulletin of Geography: Socio-Economic Series, 24, pp.203218. Rogerson, C.M. & Rogerson, J.M. (2010) Local economic development in Africa: Global context and research directions. Development Southern Africa, 27, pp. 465-480. SACN, (2011) Towards Resilient Cities: A Reflection of the First Decade of a Democratic and Transformed Local Government 2001-2011, SACN, Johannesburg Simon, D. (2010) The challenges of global environmental change for urban Africa. Urban Forum, 21 (3), 235-248. Taylor, A. & Peter, C. (2014) Strengthening Climate Resilience in African Cities: A Framework for Working with Informality, African Centre for Cities, University of Cape Town, Cape Town. Turok, I (2012a) Unleashing the economic potential for African cities. Report prepared for the UN Habitat Workshop, Cape Town, South Africa 23-24 February. Turok, I. (2012b) Urbanisation and Development in South Africa: Economic Imperatives, Spatial Distortions and Strategic Responses. International Institute for Environment and Development, United Nations Population Fund Urbanization and Emerging Population Issues Working Paper No. 8, London. Turok, I. (2013) Transforming South Africa’s divided cities: Can devolution help? International Planning Studies, 18, pp. 168-187. UN-Habitat (2013) Unleashing the Economic Potential of Agglomeration in African Cities, UN-Habitat, Nairobi. United Nations (2010). The State of African Cities 2010: Governance, Inequality and Urban Land Markets. United Nations Human Settlements Programme, Nairobi. United Nations (2012) World Urbanization Prospects: The 2011 Revision. United Nations Department of Economic and Social Affairs/Population Division. United Nations, New York. Visser, G. (2013). Looking beyond the urban poor in South Africa: The new terra incognita for urban geography? Canadian Journal of African Studies, 47 (1), pp. 75-93. Visser, G. & Rogerson, C.M. (2014) Reflections on 25 years of Urban Forum. Urban Forum, 25, pp. 1-12.



The on-going desegregation of residential property ownership in South Africa: The case of Bloemfontein Ralph Rex Maléne Campbell Gustav Visser Ralph Rex, University of the Free State, Department of Town and Regional Planning, Bloemfontein, South Africa ([email protected]) Maléne Campbell, University of the Free State, Department of Town and Regional Planning, Bloemfontein, South Africa ([email protected]) Gustav Visser, University of the Free State, Department of Geography, Bloemfontein, South Africa ([email protected])

Abstract The investigation responds to the low ebb in racial property ownership desegregation discourse in South Africa. The paper provides a review of recent desegregation studies in South Africa and its empirical reflection in the secondary city of Bloemfontein. The investigation supports current discourses focused on desegregation of residential property ownership in urban South Africa. Drawing on the Bloemfontein experience, it is demonstrated that significant progress has been made in this type of desegregation. Keywords: South Africa, residential desegregation, home ownership, Bloemfontein

Introduction The legal segregation of different races, in terms of residential life and property ownership, was a defining feature of twentieth century South Africa (Robinson, 1996). This was the result of a range of interventions although the Group Areas Act of 1950 was the main legislative framework that underpinned the near-absolute segregation of different racial groups spatially. After this Act was repealed in 1991, all racial groups could choose where to live and own property (Christopher, 2005). Owing to the Apartheid-induced scarcity of appropriate economic opportunities, however, Black South Africans have, until recently, been severely restricted in options available for exercising these newly acquired spatial mobility rights, including the choice of where to reside (Christopher, 2001a). However, this has changed over the past two decades: the Black, Coloured, and “Indian” middle class is now larger than the entire White population (Donaldson et al., 2013; Statistics South Africa, 2013). Consequently, it has mainly been this nouveau riche cohort who have left previously designated townships and moved to less crowded, safer, and better serviced former White suburbs (Crankshaw, 2008; Horn & Ngcobo, 2003). The limited scholarship on urban desegregation has followed different methodologies. Most relevant investigations have been dominated by the work of Christopher (2001a, 2001b, 2001c, 2005), Crankshaw (2005, 2008, 2012) and Horn (2000, 2002a, b, 2005) in detailed analyses of South Africa’s census records. Through comparison of the census data of the late Apartheid and early post-Apartheid eras, scholars argue that the high levels of White segregation that prevailed under the previous dispensation have changed slowly during the 1990s and 2000s. However, recent work by Crankshaw (2008, 2012) demonstrates that this trend is gaining pace in certain places, though


S7 still linked to class position. In a concurrent, but methodologically different debate, similar conclusions have been drawn. In those investigations, residential property ownership, as opposed to residential occupation measured in the census data, also indicates such trends (Donaldson & Kotze, 2006; Rex & Visser, 2009). This investigation draws upon the latter methodology and chronicles current desegregation in Bloemfontein. The paper revisits investigations by Kotze and Donaldson (1998), and Rex and Visser (2009) in a city that was among the first to legislate residential segregation (as early as 1893). This study’s objective is to determine the extent of subsequent desegregation. This aim is addressed in five sections of discursive analysis. The first furnishes an overview of trends in residential desegregation scholarship. The second explores the broad residential segregation trends in Bloemfontein, while the third outlines the methodology employed. The fourth provides a detailed analysis of Bloemfontein’s desegregating residential property market, and in the final section, some key conclusions are highlighted. A Brief Overview of Residential Segregation and Desegregation in South African Cities Residential segregation is a worldwide phenomenon, chronicled and theorised extensively (Mustert & Ostendorf, 2000; Donaldson & Kotze, 2006). Segregation is typically based on personal attributes (race, class, ethnicity, religion) and/or other identity markers (such as sexual identity, or migration status) (Acharya & Barragán Codina, 2012; Donaldson & Kotze, 2006; Donaldson & van der Merwe, 1999a; Márquez, 2011). Pacione (2005) has summarised these types of segregation, discerning three types of residential segregation: (1) segregation by social status; (2) segregation by family status and lifestyle; and (3) ethnic segregation. The (un)desirability of segregation is generally gauged on whether different types of residential segregation are voluntary or forced. Typical examples of voluntary segregation relate to migrant communities in cities such as London, or gay and lesbian communities in Los Angeles and San Francisco, where minorities cluster for defence, mutual support, and cultural preservation. These “enclaves”, based on a range of possible identity markers, can, however, be malignant if they are the result of a specific group’s entrapment – its members unable to move out into a broader urban society owing to hostility and a resultant lack of opportunities (both outside and within the enclave). Such locations are often referred to as ghettos, the subject of a large body of literature, particularly in North American urban studies. Residential segregation can, however, be forced. Donaldson and Kotze (2006: 568) suggest that there are two situational types of this form of segregation. One is the result of social pressure through racial discrimination, often recorded in accounts of the experiences of African-American communities in the USA. These show that in a range of investigations, a number of different role players, including bankers, estate agents, and government agencies, have contributed to racial discrimination, residential segregation, and, ultimately, a number of different forms of exclusion. As a result, certain communities are excluded from the social, cultural, political and economic networks of the cities they inhabit. A second form of exclusion arises from legislation, as in the case of Apartheid South Africa, where such exclusion was forcefully implemented through overt racial discrimination: race as an identity marker was elevated to a level where it overrode all other forms of actual or potential association (Donaldson & Kotze, 2006). The exclusion of Black South Africans from mainstream society can be traced back to the early nineteenth century when the first African locations were developed by various institutions –with mixed motives – in the eastern parts of the Cape Colony. However, this exclusion was confined to a small part of the urban system and was not legislated. Over the next hundred years, the segregation of different racial groups, in different parts of the country and in different ways would ensue, finally “standardised” and enforced across South Africa


S8 through the Native (Urban Areas) Acts of 1923 and 1937. By the late 1940s, the increased impracticality of these pieces of legislation and their inability to stem Black urbanisation and White fears of “swamping” ushered in Apartheid policy from 1948 (Posel, 1991). Separation was effected at the micro-scale in terms of amenities and transport while at the macro-scale through Bantustans or “homelands” for African ethnic groups. It was the meso-scale of towns and cities, however, which was most crucial to the Apartheid regime. Indeed, the first National Party prime minister described the urban scale of Apartheid as the essence of that societal system, and this urban scale was later regarded by President P.W. Botha as his “bottom line” (Lemon & Clifford, 2005). The Apartheid city’s development and demise has seen extensive commentary but it is not the purpose of this paper to review that literature here (see Christopher 2001a, 2001b; Giliomee, 2003, Morris, 2012; Posel 1991, Robinson, 1996; Saff, 1994). Considering the effort devoted to investigating and recording residential segregation in South Africa during Apartheid, only a handful of geographers have investigated subsequent residential desegregation. Donaldson and Kotze (2006) note that the available academic scholarship is dominated by a small number of researchers, despite the scrapping of Apartheid legislation opening up a fertile field of research. Their studies have focused mainly on secondary and metropolitan cities (Crankshaw, 2008, 2012; Donaldson & Van der Merwe 1999a, b; Kotze & Donaldson 1998; Horn & Ngcobo, 2003; Lemanski 2005; Oldfield, 2004; Wood, 2000), while scant attention has been paid to smaller towns (Lemon & Clifford 2005). Donaldson and Kotze (2006: 569–70) argue that desegregation studies in South Africa mainly endorse five viewpoints. The first is that not much desegregation has occurred and slowly at first (cf. Christopher, 2001a). The most recent national accounts of desegregation show that changes have been place specific, with the Free State Province being the most segregated, for example, while KwaZulu-Natal continues to be the most desegregated and group-specific, with the Black-White index of dissimilarity having remained high, although there has been some evidence of a decline (Christopher, 2005). Additionally, certain neighbourhoods are prone to become re-segregated (Horn & Ngcobo, 2003; Lemon & Clifford, 2005). Inner-city neighbourhoods generally have the highest desegregation percentage, except for Cape Town, which has remained largely White. Secondly, most of the desegregation that has occurred has involved the movement of Black people into historically White areas, such as in Johannesburg (Crankshaw, 2008). In Pretoria, desegregation levels are highest in formerly White low- and middle-income residential areas (Horn & Ngcobo, 2003; Prinsloo & Cloete, 2002) concomitant with an influx of higher income Blacks into newly developed middle-class and middle- to high-income areas. A third observation is that although forced racial segregation has been removed from the political landscape, it has been replaced by class-based segregation (Crankshaw, 2008; 2012). The clustering of higher income groups in gated communities, where certain neighbourhoods and new estate developments are spatially closed off from other areas, has been driven primarily by class. Fourthly, Crankshaw notes that interracial mixing does not correlate with desegregation, however, the formation of new identities is evident in certain shared spaces (Crankshaw, 2008). Lastly, because Black people have not been active in the secondary housing market for very long, they are vulnerable under tough economic conditions. The exceptionally high interest rate during 1998–1999, the introduction of more stringent credit control, and the 2007 economic meltdown caused many to have their houses repossessed (Donaldson & Kotze, 2006). In the analysis that follows, it is our contention that to varying degrees, these trends can also be observed in Bloemfontein – the South African city that implemented residential segregation legislation first, and which is located in the country’s most segregated region, the Free State Province (Christopher, 2005).


S9 Bloemfontein, founded in 1846, was formerly the capital and administrative headquarters of the Boer Republic of the Orange Free State (as from 1854; Krige, 1991). It became the judicial capital of the Union of South Africa in 1910 (Krige 1991) and later of the Republic of South Africa (1961). The development of Bloemfontein along highly segregated residential property ownership during the 19th and 20th centuries has been outlined in detail by Rex and Visser (2008). Suffice it to say that similar to cities such as Johannesburg’s two-part, northsouth split (Crankshaw, 2008), Bloemfontein was physically divided into a western “White” region and an eastern “Black” region by the Cape Town-Johannesburg railway line. The railway line serving as a buffer zone between White and African residents was further reinforced by the industrial areas, the premises of the transport services, the shooting range, and two cemeteries (Krige, 1991; see Fig. 1 for an illustration of the current suburbs of Bloemfontein). The first systematic post-Apartheid investigation into the desegregation of residential property ownership in Bloemfontein was undertaken to investigate the property data roll of the municipality, confirming extreme levels of segregation. In December 1995, the percentage of Black homeowners identified in the former White suburbs of Bloemfontein amounted to 2.3% (Kotze & Donaldson, 1998; Fig. 1). In most suburbs, less than 1% of homeowners were Black, except in the case of four areas: Fauna/Uitsig (1.0%), Pellissier (1.7%), Ehrlichpark (8.8%) and Lourierpark (25.9%; Kotze & Donaldson 1998; Table 1). These four suburbs are all situated to the south and south-west of the CBD and are either adjacent to or in close proximity to the respective Black and Coloured townships of Mangaung and Heidedal (Kotze & Donaldson, 1998; Fig. 2). Kotze and Donaldson (1998) argued that one reason for Black homeowners settling in these suburbs was that these neighbourhoods had the lowest property prices in the former White suburbs of Bloemfontein. Thus people with a lower income could more easily afford residential properties in these areas. The Bloemfontein CBD was not part of Kotze and Donaldson’s (1998) investigation, as it did not contain many residential properties. Nevertheless, the CBD witnessed a shift in the racial composition of residential property owners, from exclusively White ownership in 1991 to desegregation of almost 50% by 2001 (Jürgens et al., 2003) and 77% by 2004 (Hoogendoorn & Marais, 2008). Jürgens et al. (2003) concluded that economically mobile “non-Whites” only reside in the CBD for an interim period, aiming to leave the CBD, after a brief sojourn, to settle in former White residential areas. In comparison to other South African cities (except Cape Town), it was found that the Bloemfontein inner-city desegregation is taking place at a slower rate and on a smaller scale. This can be attributed to the compactness of Bloemfontein and the relatively close proximity of its Black townships, such as Mangaung, to the CBD, eliminating the need to move to former White areas in order to save on transport costs and travelling time (Jürgens et al. 2003). Study Methodology This quantitative investigation demonstrates the potential of using a property database to assess the extent of racial change in Black residential property ownership in the former White suburbs since the abolition of the Group Areas Act (1991). In contrast to most desegregation studies conducted in South African cities, the measurement of residential desegregation in this investigation is not based on census data, but rather comprises an analysis of the Mangaung (Bloemfontein) municipal Property Data Roll for the year 2012 (hereafter referred to as the ‘data source’). This route was chosen for a number of reasons. Firstly, this investigation seeks to determine the extent to which further residential desegregation has taken place in Bloemfontein since the 2007 study of Rex and Visser (2009). Secondly, although the last South African Census was conducted in 2011, the results thereof were not available whilst this study was being conducted. Apropos to which, desegregation


S10 studies can only meaningfully be conducted every time a census is undertaken (once every decade). Moreover, this investigation is concerned with desegregation in terms of property ownership, not occupation. Lastly, the method of using different databases to infer racial classification has been successfully employed by Kotze and Donaldson (1998), Donaldson and van der Merwe (1999a, 1999b), Wood (2000), Lemon and Clifford (2005), as well as Rex and Visser (2009). The data source, inter alia, contains information regarding the property description of each erf, the suburb in which a specific erf is located, the ownership of each individual erf, as well as the street address, the land-use zoning, and the size and valuation of each erf. The information provided in the ownership field of the data source made it possible to distinguish between the following types of ownership: Private (i.e. White, Black or ‘Asian’), Trusts or Companies, Municipal, Provincial or Government, Organisations (i.e. churches and institutions) and Sectional Titles. As the data source does not make direct reference to the racial classification of each private owner, and whilst this study investigates the extent of racial change of Black residential property ownership in former White suburbs of Bloemfontein, it was necessary to go through each record of the data source (approximately 45,000 records) and to decide in each case whether a private owner’s surname indicated a Black or White owner. Surnames that could not be immediately identified as being either Black or White, were later identified by distinguishing the owners’ full names as being either Black or White, by utilising the Deeds Office Property Search Website. Here lies a challenge for the analysis as we had to use interpretation in deciding whether a certain private owner’s surname and full names are either Black or White. The Coloured population was excluded from the Black category as it is difficult to utilise surnames to distinguish whether an owner is Coloured or not. Often, Coloured surnames are the same as those of White English or Afrikaans speakers. For the purpose of this investigation the Coloured population is therefore included in the White category. The 2012 data source also indicated the zoning of each erf, making it possible to ignore all the erven not zoned as ‘Residential’. Consequently, the desegregation results only indicate the residential component of Bloemfontein. For this investigation, the Bloemfontein CBD (cf. Figures 1 – 3) was also excluded from the desegregation analysis, owing to the low residential component of this area. To indicate the extent as well as the location of the residential desegregation in the suburbs of Bloemfontein spatially, the data source’s property description fields (‘Erf’ and ‘Portion’) were manipulated to form a unique 21-digit code that could be linked to the Surveyor-General’s Geographical Information System (GIS) map of Bloemfontein, by using Arc View 9.3. It would have been possible, therefore, to indicate the location of each Black residential property owner within each suburb. Finally, it was possible to determine to what extent Black-owned residential property desegregation (hereafter referred to as ‘desegregation’) has taken place in the former White suburbs of Bloemfontein since 1994, by comparing the 2012 data source with the 1995 data source of Kotze and Donaldson (1998) and the 2007 data source of Rex and Visser (2009). Current Desegregation Patterns in Bloemfontein The analysis of the 2012 data source sought to indicate to what extent desegregation in terms of ownership has taken place within the former White suburbs of Bloemfontein since the 2007 investigation (Rex & Visser, 2009). It was possible to determine the type of ownership of each residential property in the suburbs and the results are tabulated in Table 1. The field ‘Black-owned Erven’ refers to the African and Indian segments of the South African population, the field ‘Asian Owned Erven’ to the Asian segments, whilst the field ‘Whiteowned Erven’ refers to rest of the South African population. The field ‘Trusts and Companies’ refers to all the erven that are owned by Trusts, Closed Corporations and


S11 Companies, whilst the ‘Sectional Titles’ field includes all the erven where townhouses have been developed and also includes residential dwelling units that are situated in blocks of apartments. The field ‘Other’ includes all the erven that are owned by the national and provincial government departments, the Mangaung Metropolitan Municipality, churches, and welfare organisations. Table 1: Bloemfontein: Ownership percentages by suburb in 2012 (Number of Erven per suburb in parentheses) Suburb

Black‘Asian’ White Trusts and Sectional owned Owned Owned Companies Titles Other Erven Erven Erven Vista Park 92.6 (679) 0.0 (0) 4.9 (36) 1.8 (13) 0.7 (5) 0.0 (0) Lourier Park 62.3 (663) 0.0 (0) 6.6 (70) 1.9 (20) 0.5 (5) 28.8 (306) Ehrlich Park 48.9 (231) 0.0 (0) 33.7 (159) 1.5 (7) 1.5 (7) 14.4 (68) Fauna 37.7 (390) 0.1 (1) 55.0 (569) 1.1 (11) 3.3 (34) 2.9 (30) Hilton 35.8 (152) 0.2 (1) 38.6 (164) 5.9 (25) 8.9 (38) 10.6 (45) Helicon Hoogte 20.0 (24) 5.8 (7) 60.8 (73) 5.0 (6) 6.7 (8) 1.7 (2) Brandwag 15.8 (89) 1.8 (10) 56.2 (316) 16.0 (90) 3.9 (22) 6.2 (35) Pellissier 15.0 (216) 0.1 (1) 65.4 (943) 3.0 (43) 8.7 (126) 7.8 (112) Woodlands 15.0 (99) 1.8 (12) 56.6 (374) 22.7 (150) 3.9 (26) 0.0 (0) Uitsig 14.4 (156) 0.2 (2) 74.0 (804) 1.4 (15) 7.0 (76) 3.1 (34) Fleurdal 12.0 (41) 1.2 (4) 77.3 (265) 1.7 (6) 4.1 (14) 3.8 (13) Pentagon Park 10.9 (33) 1.0 (3) 37.8 (115) 10.5 (32) 36.8 (112) 3.0 (9) Oranjesig 10.0 (30) 0.0 (0) 42.8 (128) 25.4 (76) 2.3 (7) 19.4 (58) Heuwelsig 9.0 (52) 3.5 (20) 63.0 (364) 8.8 (51) 12.5 (72) 3.3 (19) Generaal De Wet 8.8 (62) 0.1 (1) 82.5 (578) 1.6 (11) 1.6 (11) 5.4 (38) Bayswater 8.8 (103) 2.2 (26) 70.7 (826) 7.9 (92) 6.2 (72) 4.3 (50) Noordhoek 7.9 (46) 0.9 (5) 80.3 (470) 5.6 (33) 0.7 (4) 4.6 (27) Fichardtpark 7.2 (159) 0.3 (6) 82.3 (1824) 3.6 (79) 2.7 (60) 3.9 (87) Hillsboro 6.5 (6) 1.1 (1) 66.7 (62) 5.4 (5) 15.1 (14) 5.4 (5) Navalsig 6.3 (17) 1.1 (3) 36.8 (99) 17.5 (47) 27.1 (73) 11.2 (30) Bays Valley 4.8 (3) 0.0 (0) 36.5 (23) 12.7 (8) 44.4 (28) 1.6 (1) Universitas 4.6 (99) 0.5 (10) 72.7 (1558) 9.1 (196) 8.5 (183) 4.6 (98) Langenhovenpark 4.6 (74) 0.1 (2) 65.6 (1058) 9.4 (152) 17.2 (277) 3.2 (51) Wilgehof 4.5 (42) 0.1 (1) 78.5 (728) 3.6 (33) 9.3 (86) 4.0 (37) Hospitaalpark 4.2 (29) 0.3 (2) 83.5 (582) 3.0 (21) 3.4 (24) 5.6 (39) Gardenia Park 3.6 (18) 0.2 (1) 85.3 (430) 2.8 (14) 2.6 (13) 5.6 (28) Dan Pienaar 3.0 (46) 0.7 (10) 76.0 (1159) 9.9 (151) 5.8 (89) 4.6 (70) Waverley 2.0 (12) 0.3 (2) 65.0 (396) 14.8 (90) 9.9 (60) 8.0 (49) Willows 1.2 (3) 0.4 (1) 18.3 (44) 17.8 (43) 38.6 (93) 23.7 (57) Westdene 0.6 (3) 0.0 (0) 49.0 (264) 23.9 (129) 19.1 (103) 7.4 (40) Park West 0.4 (1) 1.8 (5) 63.8 (173) 16.6 (45) 5.5 (15) 11.8 (32) Arboretum 0.0 (0) 0.0 (0) 15.0 (6) 25.0 () 27.5 (11) 32.5 (13) Totals 15.3 (3578) 0.6 (137) 62.8 (14660) 7.3 (1704) 7.6 (1768) 6.4 (1483) Source: Calculated by the author from the 2012 Property Data Roll of the Mangaung Local Municipality.

The ‘Suburb’ column in Table 1 is sorted according to the desegregation levels of each suburb, from the suburbs displaying the highest desegregation levels in the top row of the table, to the suburbs with the lowest desegregation levels at the bottom of the table. An analysis of the data indicates that by 2012, 15.3% of the erven located in the former White suburbs of Bloemfontein were Black-owned, as compared to 11.4% in 2007 (Rex & Visser, 2009) and 2.3% in 1995 (Kotze & Donaldson, 1998). Almost 34.2% has been achieved in the desegregation levels of Black-owned erven within the suburbs of Bloemfontein since 2007. In their study of the 1995 data source, Kotze and Donaldson (1998) Urbani izziv, volume 25, supplement, 2014 (special issue)

Total

100 (733) 100 (1064) 100 (472) 100 (1035) 100 (425) 100 (120) 100 (562) 100 (1441) 100 (661) 100 (1087) 100 (343) 100 (304) 100 (299) 100 (578) 100 (701) 100 (1169) 100 (585) 100 (2215) 100 (93) 100 (269) 100 (63) 100 (2144) 100 (1614) 100 (927) 100 (697) 100 (504) 100 (1525) 100 (609) 100 (241) 100 (539) 100 (271) 100 (40) 100 (23330)

S12 combined the various suburbs of Bloemfontein, categorising them into 17 suburbs, whilst the study of the 2007 data source by Rex and Visser (2009) was more fine-grained, categorising Bloemfontein into 30 suburbs. Since the 2007 study (Rex & Visser, 2009), the former White suburbs of Bloemfontein have expanded further, principally in a north-westerly direction. The suburbs of Woodlands and Arboretum are therefore now included in this study, categorising Bloemfontein into 32 suburbs. Whilst there was only one suburb (Lourier Park) with a desegregation level of more than 10% in 1995 (Kotze & Donaldson, 1998) and eight suburbs with a 10% or higher desegregation levels in 2007 (Rex & Visser, 2009), the 2012 data source has indicated that 13 suburbs achieved a desegregation level of more than 10%. The five suburbs that obtained the highest percentage desegregation levels out of the 2007 data source are again the top five desegregated suburbs out of the 2012 data source. A significant observation concerns the fact that out of the four suburbs that displayed the highest percentage of desegregation levels in terms of the 1995 data source, three of these suburbs (Lourier Park, Ehrlich Park, and Fauna/Uitsig) are amongst the top five desegregated suburbs in 2012, whilst the third most desegregated suburb (Pellissier) in terms of the 1995 data source is amongst the top eight desegregated suburbs in 2012. This points towards a continuation of the desegregation patterns of the former White residential suburbs located close to former township areas. The suburb of Vista Park, situated adjacent to Ehrlich Park, is the suburb in Bloemfontein that has achieved the highest levels of desegregation out of the analysis of the 2012 data source, namely 92.6%, as well as the lowest levels of White occupancy, (4.9%, Table 1 and Figure 2 for a spatial illustration thereof). Vista Park, having been established during 2005, is one of the newest suburbs of Bloemfontein and is currently in the process of being developed with middle class residences for the Black first-time buyer in mind. Similarly, high desegregation levels have been registered for similar types of developments elsewhere in South Africa (Donaldson & Kotze, 2006). Vista Park and Ehrlich Park are also situated en route from the southern parts of the township of Mangaung towards the CBD of Bloemfontein and confirm a trend observed in other South African cities (Prinsloo & Cloete, 2002). Furthermore, the erven within Vista Park and Ehrlich Park have the smallest average size, as well as the lowest average Municipal erf valuations of all the suburbs that were not formerly Black Group Areas, making them the most affordable suburbs to reside in. In our view, these factors contribute to the high levels of Black homeownership in these suburbs. By contrast, the lowest levels of desegregation were recorded in the northern and western suburbs of Bloemfontein, situated the furthest away from the former Black and Coloured suburbs on the city’s southern outskirts. The highest percentage increase in desegregation levels since 2007 has been recorded in the suburb of Brandwag (119.4%), from 7.2% in 2007 to 15.8% in 2012. It should, however, be noted that this increase is distorted, as amongst others the Mangaung Metropolitan Municipality, as part of its Social Housing Project within the suburb of Brandwag, consolidated 126 erven into three erven during 2010. The suburbs in Bloemfontein that are known for their high number of Black residents (comprising students and single residents) are Westdene, Willows, and Navalsig. The low desegregation levels of the suburbs of Westdene (0.6%), Willows (1.2%), and Navalsig (6.3%) obtained in this study, however, contradict this knowledge. It must, however, be stressed that this study only focused on the desegregation of Black-owned residential erven and that these suburbs have large numbers of flats, townhouses, and business premises within them, predominantly owned by Trusts and Companies.


S13

Figure 1: Percentage desegregation levels per Bloemfontein suburb in 2007 (Source: Rex & Visser, 2009)


S14

Figure 2: Percentage desegregation levels per Bloemfontein suburb in 2012 (Source: Calculated by the authors from the 2012 Property Data Roll of the Mangaung Metropolitan Municipality) Table 2: Bloemfontein: Percentage Black erf owners per suburb – comparison between the 1995, 2007, and 2012 data sources. Suburb

2012 Data Source

Vista Park

92.6

% increase(+)/decrease(-) in desegregation levels between 2007 and 2012 6.3

2007 Data Source

1995 Data Source

87.1

-


S15 Lourier Park Ehrlich Park Fauna Hilton Helicon Hoogte Brandwag Pellissier Woodlands Uitsig Fleurdal Pentagon Park Oranjesig Heuwelsig Generaal De Wet

62.3 48.9

2.5 -8.3

37.7 35.8

21.6 5.0

20.0 15.8 15.0 15.0

19.0 119.4 11.9 -

14.4 12.0

20.0 44.6

10.9 10.0 9.0

17.2 23.5 8.4

60.8 53.3 31.0

25.9 8.8 1.0 (Fauna/Uitsig)

34.1 16.8

0.6 0.8 (Bayswater)

7.2 13.4 12.0

0.5 1.7 1.0 (Fauna/Uitsig)

8.3 9.3

1.0 (Fauna/Uitsig) 0.8 (Bayswater)

8.1 8.3 5.3

0.4 (Central South) 0.9 1.0 (Fauna/Uitsig)

8.8 66.0 Bayswater 8.8 17.3 7.5 Noordhoek 7.5 7.9 5.3 Fichardtpark 6.0 7.2 20.0 Hillsboro 4.3 6.5 51.2 Navalsig 3.8 6.3 65.8 Bays Valley 4.8 -2.0 4.9 Universitas 3.6 4.6 27.8 Langenhovenpark 2.9 4.6 58.6 Wilgehof 3.2 4.5 40.6 Hospitaalpark 3.7 4.2 13.5 Gardenia Park 2.4 3.6 50.0 Dan Pienaar 2.3 3.0 30.4 Waverley 2.8 2.0 -28.6 Willows 1.9 1.2 -36.8 Westdene 0.5 0.6 20.0 Park West 0.4 0.4 0.0 Arboretum 0.0 Totals 15.3 34.2 11.4 Note: The 1995 data source indicates the combined suburbs in parentheses as categorised by Donaldson (1998).

0.8 0.5 0.2 0.9 (Heuwelsig) 0.6 (Hilton) 0.8 (Bayswater) 0.2 0.8 0.3 0.2 (Fichardtpark) 0.3 (Wilgehof) 0.4 0.3 0.0 2.3 Kotze and

To explain this pattern of desegregation, similarities and dissimilarities between the different types of erven were sought, beginning with an investigation of possible relationships that exist between erf size and value in relation to the suburban levels of desegregation. Table 3: Bloemfontein: Average erf area per suburb in 2012 Suburb

Black Owned Erven (%)

Vista Park Lourier Park Ehrlich Park Fauna Hilton Helicon Hoogte Brandwag Pellissier Woodlands Uitsig Fleurdal Pentagon Park

92.6 62.3 48.9 37.7 35.8 20.0 15.8 15.0 15.0 14.4 12.0 10.9

White Owned Erven (%) 4.9 6.6 33.7 55.0 38.6 60.8 56.2 65.4 56.6 74.0 77.3 37.8

Average Area (m²) 400 840 670 940 840 1430 960 1290 1230 860 1120 1210

Erf

Rank

32 29 31 24 28 7 23 11 14 27 18 15


S16 Oranjesig 10.0 42.8 690 30 Heuwelsig 9.0 63.0 1600 3 Generaal De Wet 8.8 82.5 1030 21 Bayswater 8.8 70.7 1480 5 Noordhoek 7.9 80.3 1160 17 Fichardtpark 7.2 82.3 1190 16 Hillsboro 6.5 66.7 1530 4 Navalsig 6.3 36.8 1360 10 Bays Valley 4.8 36.5 1280 12 Universitas 4.6 72.7 1440 6 Langenhovenpark 4.6 65.6 1390 9 Wilgehof 4.5 78.5 950 25 Hospitaalpark 4.2 83.5 930 26 Gardenia Park 3.6 85.3 1020 22 Dan Pienaar 3.0 76.0 1400 8 Waverley 2.0 65.0 1840 1 Willows 1.2 18.3 1080 20 Westdene 0.6 49.0 1100 19 Park West 0.4 63.8 1250 13 Arboretum 0.0 15.0 1780 2 Source: Calculated by the authors from the 2012 Mangaung Metropolitan Municipality Property Data Roll

The average erf size per former White suburb of Bloemfontein was calculated from the 2012 data source and a ranking was allocated from largest average erf size to smallest, ranging from 1–32 respectively. Table 3 shows the suburbs arranged hierarchically from highest desegregation levels (in terms of residential property ownership) to lowest, with each suburb’s percentage of White ownership also indicated. Quite noticeable is that, on the whole, the suburbs with the highest number of Black-owned erven (with desegregation levels of 30% and higher) correspond with the suburbs having the smallest average size erven. The average Municipal erf valuation, per former White suburb was calculated from the 2012 data source and a ranking was allocated from high to low according to average Municipal erf valuation, ranging from 1–32. Table 4 arranges the suburbs hierarchically from those with the highest to those with the lowest desegregation levels, with each suburb’s percentage of White ownership also indicated. Once again, it is significant that the suburbs with the highest number of Black-owned erven (with desegregation levels of 30% and higher) correspond with the suburbs having the smallest average Municipal erf valuation. Table 4: Bloemfontein: Average Municipal erf valuation per suburb in 2012 Suburb

Vista Park Lourier Park Ehrlich Park Fauna Hilton Helicon Hoogte Brandwag Pellissier Woodlands Uitsig Fleurdal Pentagon Park Oranjesig Heuwelsig Generaal De Wet

Black Owned (%) 92.6 62.3 48.9 37.7 35.8 20.0 15.8 15.0 15.0 14.4 12.0 10.9 10.0 9.0 8.8

Erven

White Owned Erven (%) 4.9 6.6 33.7 55.0 38.6 60.8 56.2 65.4 56.6 74.0 77.3 37.8 42.8 63.0 82.5

Average Municipal Valuation (Rand) 255,000 205,000 318,000 550,000 237,000 910,000 748,000 725,000 1,247,000 591,000 643,000 1,271,000 342,000 1,245,000 603,000

Rank Erf

30 32 29 24 31 8 15 18 4 23 19 3 28 5 21


S17 Bayswater 8.8 70.7 726,000 17 Noordhoek 7.9 80.3 515,000 25 Fichardtpark 7.2 82.3 763,000 14 Hillsboro 6.5 66.7 1,037,000 6 Navalsig 6.3 36.8 472,000 27 Bays Valley 4.8 36.5 903,500 9 Universitas 4.6 72.7 848,000 11 Langenhovenpark 4.6 65.6 818,000 12 Wilgehof 4.5 78.5 506,000 26 Hospitaalpark 4.2 83.5 603,000 22 Gardenia Park 3.6 85.3 618,000 20 Dan Pienaar 3.0 76.0 937,000 7 Waverley 2.0 65.0 1,284,000 2 Willows 1.2 18.3 808,000 13 Westdene 0.6 49.0 877,000 10 Park West 0.4 63.8 734,000 16 Arboretum 0.0 15.0 1,785,000 1 Source: Calculated by the authors from the 2012 Mangaung Metropolitan Municipality Property Data Roll.

With a view to investigating the desegregation patterns further, the suburbs of Bloemfontein were divided into three regions, namely the south-western, western and northern suburbs. Owing to the high percentage of non-residential land use, the suburbs on the periphery of the CBD of Bloemfontein – Westdene, Oranjesig, Navalsig, and Hilton – were excluded from this exercise. The rankings obtained for the average erf area and Municipal erf valuation per suburb, shown in Tables 3 and 4, were used to determine the averages per region. The results are tabulated in Tables 5, 6, and 7. The average percentage of desegregation per region was also obtained. The results that were obtained for the three regions during the 2007 study are also indicated at the bottom of Tables 5, 6, and 7 for comparison purposes. Table 5: South-Western suburbs of Bloemfontein: average erven area ranking, average erven valuation ranking and average percentage desegregation Suburb

Average Erven Area Average Erven Ranking Valuation Ranking Hospitaalpark 26 22 Generaal De Wet 21 21 Ehrlich Park 31 29 Vista Park 32 30 Fleurdal 18 19 Uitsig 27 23 Fauna 24 24 Lourier Park 29 32 Pellissier 11 18 Fichardtpark 16 14 Totals 23.5 23.2 Totals for 2007 21.7 20.2 Source: Derived from Tables 3 and 4; Totals for 2007 by Rex & Visser (2009)

Average Percentage Desegregation 4.2 8.8 48.9 92.6 12.0 14.4 37.7 62.3 15.0 7.2 30.3 28.1

Further accentuating the desegregation patterns in 2007, the 2012 data source strongly corroborates the trend that the suburbs of Ehrlich Park, Vista Park, Uitsig, Fauna and Lourier Park, situated in the south-western portion of Bloemfontein, and the closest to the former Black township of Mangaung, achieved the highest levels of desegregation of all the former White suburbs. Furthermore, the suburbs to the south-west of the CBD have obtained the highest levels of desegregation of all the suburbs of Bloemfontein with an average of 30.3%, with rather high average ranking points of 23.5/32 for the average erf area and 23.2/32 for the average Municipal erf valuation. Urbani izziv, volume 25, supplement, 2014 (special issue)

S18 These average ranking points further indicate that the smallest and most cost efficient erven are found in this part of Bloemfontein, confirming the earlier suggestion that these suburbs comprise attractive options for first time Black homeowners within the former White residential areas. A further attractive feature for homeowners lies in the fact that five major shopping centres, three secondary schools and five primary schools are located in these suburbs. Although, owing to method, the case of Bloemfontein and Mangaung cannot be directly compared with the other studies, this echoes a trend also identified in Johannesburg’s formerly White residential suburbs in close proximity to Soweto and en route to the Johannesburg and Pretoria CBDs (Horn & Ngcobo, 2003; Prinsloo & Cloete, 2002). Table 6: Western suburbs of Bloemfontein: Average erven area ranking, average erven valuation ranking and average percentage desegregation Suburb

Average Ranking 9 23

Erven

Area

Average Erven Valuation Ranking 12 15

Langenhovenpark Brandwag (See Appendix A) Universitas 6 11 Gardenia Park 22 20 Wilgehof 25 26 Park West 13 16 Totals 16.3 16.7 Totals for 2007 14.7 15.8 Source: Derived from Tables 5 and 6; Totals for 2007 by Rex & Visser (2009)

Average Percentage Desegregation 4.6 15.8 4.6 3.6 4.5 0.4 5.6 3.3

The suburbs to the west of the CBD have obtained the lowest levels of desegregation of all the suburbs with an average of 5.6%, although having favourable average ranking points of 16.3 for the average erf area and 16.7 for the average Municipal erf valuation (Table 6). One of the possible reasons for the low desegregation levels is that these suburbs are located directly on the opposite side of the CBD in relation to the townships of Mangaung and Heidedal. Another factor for their low desegregation levels is the lack of amenities such as schools and shopping centres that are more readily found in other parts of Bloemfontein. In addition, it would appear that prospective Black homeowners perceive these western suburbs as being politically conservative areas. Indeed, looking at the political representation of electoral wards for the western suburbs of Bloemfontein, it is found that generally ‘White middle class’ political parties enjoy strong support. Table 7: Northern suburbs of Bloemfontein: Average erven area ranking, average erven valuation ranking and average percentage desegregation Suburb

Average Erven Area Average Erven Ranking Valuation Ranking Helicon Heights 7 8 Pentagon Park 15 3 Bays Valley 12 9 Bayswater 5 17 Noordhoek 17 25 Hillsboro 4 6 Waverley 1 2 Dan Pienaar 8 7 Heuwelsig 3 5 Woodlands 14 4 Totals 8.6 8.6 Totals for 2007 6.9 7.1 Source: Derived from Tables 3 and 4; Totals for 2007 by Rex & Visser (2009)

Average Percentage Desegregation 20.0 10.9 4.8 8.8 7.9 6.5 2.0 3.0 9.0 15.0 8.8 7.1


S19

If one considers that the lowest average ranking points of 8.6 for the average erf area and 8.6 for the average Municipal erf valuation (Table 7), suburbs north of the CBD have obtained respectable levels of desegregation, averaging 8.8%, These average ranking points highlight the fact that the erven with the largest average areas, as well as the highest Municipal erf valuation are found in these suburbs. A possible reason for these levels of desegregation is that these areas are where the wealthiest people of Bloemfontein reside. Generally, the Black elite, comprising company directors and high-ranking government officials, are willing and able to pay the high price of erven in these suburbs for investment purposes and the status linked to residing there. Further corroborating this contention, the new, gated suburb of Woodlands has obtained a desegregation level of 15.0% although it obtained a ranking of 4 for the Municipal erf valuation (i.e. the fourth most expensive erven are found in the suburb of Woodlands). Another contributing factor for the desegregation found in these suburbs could be the presence of good English primary and secondary schools, typically patronised by South African Black elites. The data also contained information regarding the ownership of sectional titles. The analysis indicated that 7.6% of all properties (5.8% in 2007) contain sectional title developments (Tables 1 and 8). The results, indicating the number of sectional title developments – and units –per suburb are presented in Table 8. The suburbs column in Table 8 is sorted according to the suburbs with the highest desegregation levels in Sectional Title unit ownership in the top row of the table to the suburbs with the lowest desegregation levels in Sectional Title unit ownership at the bottom of the table. The numbers of sectional title developments per suburb are illustrated in Figure 3. The suburbs achieving the highest sectional title unit desegregation levels are Vista Park, Hilton, Ehrlich Park, Lourier Park, and Navalsig. The high sectional title unit desegregation levels obtained for the suburbs of Hilton and Navalsig could indicate that less mobile Black homeowners reside in and around the city in order to be in close proximity to either their workplace or places of education. The average Black ownership of 8.7% for sectional title units being lower than the average percentage Black erf ownership of 15.3% – together with the fact that the suburbs of Vista Park, Lourier Park, Ehrlich Park, Fauna, Hilton, Helicon Heights, Brandwag, Pellissier, Woodlands, and Uitsig are known for areas of ‘Single Residential’ erven with the highest desegregation levels – indicates that the mobile Black homeowners are inclined to purchase ‘Single Residential’ erven in the former White suburbs of Bloemfontein rather than units in sectional title developments. Table 8: Bloemfontein: Sectional Title ownership percentages by suburb in 2012 Suburb

Vista Park Hilton Ehrlich Park Lourier Park Navalsig Fauna Willows Uitsig Bayswater Oranjesig

% Sectional Title Developments per suburb (Number of erven in parentheses) 0.7 (5) 8.9 (38) 1.5 (7) 0.5 (5) 27.1 (73) 3.3 (34) 38.6 (93) 7.0 (76) 6.2 (72) 2.3 (7)

% Sectional Title Units Ownership (Number of units in parentheses) Black‘Asian’ White-owned owned owned units Units units

87.5 (7) 76.9 (60) 51.9 (28) 40.0 (4) 33.7 (397) 24.8 (57) 16.9 (323) 15.2 (73) 14.7 (81) 10.0 (8)

0.0 (0) 0.0 (0) 0.0 (0) 0.0 (0) 3.6 (42) 0.0 (0) 0.1 (2) 0.0 (0) 0.5 (3) 1.3 (1)

12.5 (1) 9.0 (7) 14.8 (8) 40.0 (4) 50.6 (596) 65.2 (150) 61.1 (1169) 76.7 (368) 48.2 (265) 86.3 (69)

Trusts and Companies

Other

Total

0.0 (0) 14.1 (11) 33.3 (18) 20.0 (2) 12.1 (143) 10.0 (23) 21.6 (413) 8.1 (39) 36.2 (199) 0.0 (0)

0.0 (0) 0.0 (0) 0.0 (0) 0.0 (0) 0.0 (0) 0.0 (0) 0.3 (6) 0.0 (0) 0.4 (2) 2.5 (2)

100 (8) 100 (78) 100 (54) 100 (10) 100 (1178) 100 (230) 100 (1913) 100 (480) 100 (550) 100 (80)


S20 Westdene 19.1 (103) 9.9 (99) 3.7 (37) 59.5 (595) 26.9 (269) 0.0 (0) Pellissier 8.7 (126) 7.0 (69) 0.6 (6) 80.1 (792) 12.3 (122) 0.0 (0) Brandwag 3.9 (22) 6.7 (13) 0.0 (0) 55.2 (107) 36.6 (71) 1.5 (3) Waverley 9.9 (60) 6.6 (12) 1.7 (3) 64.6 (117) 27.1 (49) 0.0 (0) Helicon Hoogte 6.7 (8) 6.0 (4) 0.0 (0) 76.1 (51) 17.9 (12) 0.0 (0) Bays Valley 44.4 (28) 4.9 (9) 0.5 (1) 70.7 (130) 23.9 (44) 0.0 (0) Park West 5.5 (15) 4.4 (7) 0.0 (0) 57.9 (92) 35.2 (56) 2.5 (4) Pentagon Park 36.8 (112) 3.8 (22) 1.6 (9) 66.3 (379) 28.3 (162) 0.0 (0) Langenhovenpark 17.2 (277) 2.8 (99) 0.5 (16) 79.1 (2795) 17.6 (621) 0.0 (1) Fleurdal 4.1 (14) 2.8 (12) 0.0 (0) 80.7 (352) 16.5 (72) 0.0 (0) Woodlands 3.9 (26) 2.7 (14) 0.8 (4) 56.5 (288) 40.0 (204) 0.0 (0) Hillsboro 15.1 (14) 2.7 (1) 0.0 (0) 91.9 (34) 5.4 (2) 0.0 (0) Arboretum 27.5 (11) 2.6 (3) 0.9 (1) 78.1 (89) 18.4 (21) 0.0 (0) Heuwelsig 12.5 (72) 2.5 (14) 1.4 (8) 82.2 (465) 13.8 (78) 0.2 (1) Hospitaalpark 3.4 (24) 2.4 (8) 0.0 (0) 71.9 (243) 11.2 (38) 14.5 (49) Wilgehof 9.3 (86) 2.3 (20) 0.0 (0) 72.5 (630) 9.8 (85) 15.4 (134) Fichardtpark 2.7 (60) 2.3 (9) 0.0 (0) 84.5 (333) 13.2 (52) 0.0 (0) Universitas 8.5 (183) 1.9 (23) 0.2 (3) 74.6 (909) 23.2 (283) 0.0 (0) Dan Pienaar 5.8 (89) 1.5 (15) 0.2 (2) 78.6 (784) 19.4 (194) 0.3 (3) Gardenia Park 2.6 (13) 0.9 (1) 0.0 (0) 93.1 (108) 6.0 (7) 0.0 (0) Generaal De Wet 1.6 (11) 0.0 (0) 0.0 (0) 100.0 (24) 0.0 (0) 0.0 (0) Noordhoek 0.7 (4) 0.0 (0) 11.1 (1) 77.8 (7) 11.1 (1) 0.0 (0) Totals 7.6 (1768) 8.7 (1492) 0.8 (139) 70.0 (11961) 19.3 (3291) 1.2 (205) Source: Calculated by the author from the 2012 Mangaung Metropolitan Municipality Property Data Roll

100 (1000) 100 (989) 100 (194) 100 (181) 100 (67) 100 (184) 100 (159) 100 (572) 100 (3532) 100 (436) 100 (510) 100 (37) 100 (114) 100 (566) 100 (338) 100 (869) 100 (394) 100 (1218) 100 (998) 100 (116) 100 (24) 100 (9) 100 (17008)


S21

Figure 3: Percentage Sectional Titles per Bloemfontein suburb in 2012 (Source: Calculated by authors from the 2012 data source) Conclusion The analysis of the 2012 Property Data Roll of the Mangaung Metropolitan Municipality has indicated a 15.3% desegregation level in residential property ownership in Bloemfontein. If we compare this to the 11.4% desegregation level in 2007 (Rex & Visser, 2009), it is clear that even though the world economy has slowed down since late 2007 (with a concomitant impact on the South African economy), significant desegregation has taken place in Bloemfontein over the past five years (an increase of almost 35%), particularly as Christopher (2005) has calculated a Dissimilarity Index value of 96 from the 2001 Census data. Even more significant is the fact that the current study did not investigate rental housing and it could be argued that the desegregation value of 15.3% obtained is a conservatively low value.


S22 The top five desegregated Bloemfontein suburbs in 2007 remain for 2012. Furthermore, the top five desegregated suburbs in 2012 are situated closest to the townships of Mangaung and Heidedal. Additionally, six of the ten most desegregated suburbs are situated within the southern and south-western portions of Bloemfontein. This clearly indicates that the same spatial desegregation trends, highlighted by Rex and Visser (2009) and first suggested by Kotze and Donaldson (1998, 475) have continued since 2007 and will probably continue in future. The suburbs with the highest percentage levels of Sectional Title Schemes within them (cf. Table 8 and Figure 3) are also among the suburbs with the lowest levels of desegregation. Table 1 indicates that mobile Black property owners are more likely to purchase more affordable ‘Single Residential’ erven, than units in Sectional Title schemes. A further telling statistic enhancing this observation is that in 2012 only 8.7% of all available Sectional Title Units (1492/17008) are Black-owned, compared to 7.2% (1022/14144) in 2007. On the whole, existing trends in the desegregation discourse of urban South Africa are corroborated in this investigation. However, some new avenues for future investigation also come to the fore. • An observation that can be highlighted is that some suburbs are demonstrating trends towards re-segregation from nigh totally White to Black. • Desegregation trends are relatively low in wealthier suburbs and at levels that do not come anywhere close to reflecting the provincial racial demographic which is overwhelmingly Black. • Desegregation has taken place mainly at the lower end of the residential property market or near the top. Sectional title ownership has not desegregated to any large extent. • In this respect, it would also be insightful to come to an understanding of why prospective Black property owners do not invest in these types of residential developments when in cities such as Bloemfontein they tend to be ideal investment vehicles for those aiming to get a foothold in the property market. References Abbey, S.K. (2007). Modelling socio-economic dynamics in a working class desegregation area in post-industrial, post-Apartheid South Africa – The case of Danville-Elandspoort, Pretoria. Unpublished MA Thesis. University of Pretoria. Acharya, A & Barragán Codina. (2012). Social segregation of indigenous migrants in Mexico: An overview of Monterrey. Urbani Izziv 23(1), pp 140-149. Christopher, A.J. (1991). Before group areas: Urban segregation in South Africa in 1951. SA Geographer 18(1/2),pp. 85–96. Christopher, A.J. (2001a). First steps in the desegregation of South African towns and cities, 1991–6. Development Southern Africa 18(4), pp. 457–469. Christopher, A.J. (2001b). Monitoring segregation levels in South African cities 1911–1996. South African Geographical Journal 83(3), pp.249–257. Christopher, A.J. (2001c). Urban segregation in post-Apartheid South Africa. Urban Studies 38, pp. 449–466. Christopher, A.J. (2002). Trends in political geography. South African Geographical Journal 84(1), pp. 48–57. Christopher, A.J. (2005). The slow pace of Desegregation in South African Cities, 1996– 2001. Urban Studies 42(12), pp. 2305–2320. Crankshaw, O. (2005). Class, race and residence in Black Johannesburg, 1923–1970. Journal of Historical Sociology 18, pp. 353–392.


S23 Crankshaw, O. (2008). Race, Space and the Post-Fordist Spatial Order of Johannesburg. Urban Studies 45(8), pp. 1692–1711. Crankshaw, O. (2012). Deindustrialization, Professionalisation and Racial Inequality in Cape Town. Urban Affairs Review 48(6), pp.839–865. Donaldson, R., & Kotze, N. (2006). Residential desegregation dynamics in the South African city of Polokwane (Pietersburg). Tijdschrift voor Economische en Sociale Geografie 97(5), pp. 567–582. Donaldson, R., Mehlomakulu, T., Darkey, D., Dyssel, M., & Siyongwana, P. (2013). Relocation: To be or not to be a Black diamond in a South African township? Habitat International 39, pp. 114–118. Donaldson, S.E., &d Van der Merwe, I.J. (1999a). Urban transformation and social change in Pietersburg during transition. Society in Transition, 30(1), pp. 69–83. Donaldson, S.E., & Van der Merwe, I.J. (1999b). Residential desegregation and the property market in Pietersburg 1992–1997. Urban Forum 10(2), pp. 235–257. Hoogendoorn, G., & Marais, L. (2008). Inner-city residential change in Bloemfontein after Apartheid: a perspective on those who did not flee desegregation. In L. Marais & G. Visser (Eds), Spatialities of urban change: Selected themes from Bloemfontein at the beginning of the 21st century, pp. 61–84. Stellenbosch: African Sun Media. Horn, A., & Ngcobo, J.R.B. (2003). The suburban challenge: (De)Segregation, opportunity, and community in Akasia, City of Tshwane. Urban Forum 14(4), pp. 320–346. Horn, A. (2000) Segregation and desegregation in South Africa with emphasis on Pretoria. In Iano, I., Pumain, D. & Racine, J. (eds.), Integrated Urban Systems and Sustainability of Urban Life, pp. 275-288. Bucharest: Editura Technic. Horn, A (2002a) Update: Segregation and Desegregation in Pretoria, South Africa. In Kim, I., Nam, Y. & Choi (eds.), Diversity of Urban Development and Urban Life, pp. 309-323. Seoul: Seoul National University Press. Horn, A (2002b) New perspective on Urban Segregation and Desegregation in Postresolution South Africa. In Schnell, I. & Ostendorf, W. (eds.), Studies in Segregation and Desegregation, pp.247-284. Aldershot: Ashgate. Horn, A. (2005). Measuring Multi-Ethnical spatial segregation in South African Cities. South African Geographical Journal 87(1), pp. 58–72. Jürgens, U., Marais, L., Barker, C., & Lombaard, M. (2003). Socio-demographic transformation in the Bloemfontein inner-city area. Acta Academica Supplementum 2003(1), pp. 34–54. Kotze, N.J., & Donaldson, S.E. (1998). Residential desegregation in two South African cities: A comparative study of Bloemfontein and Pietersburg. Urban Studies 35, pp. 467–477. Krige, D.S. (1991). Bloemfontein. In A. Lemon (Ed.), Homes Apart: South Africa’s Segregated Cities, pp. 104–119. London: Paul Chapmen Publishing. Lemanski, C. (2005). The impact of residential desegregation on social integration: Evidence from a South African neighbourhood. Geoforum 37, pp. 417–435. Lemon, A. (1998). Separate space and shared space in post-Apartheid South Africa. Geography Research Forum 18, pp. 1–21. Lemon, A., & Clifford, D. (2005). Post-Apartheid Transition in a Small South African Town: Interracial Property Transfer in Margate, KwaZulu-Natal. Urban Studies 42, pp. 7–30. Márquez, F. (2011). Santiago: Modernisation, segregation and urban identities in the twentyfirtst century. Urbani Izziv 22(2), pp.86-97. Mokoena, M., & Marais, L. (2008). An evaluation of post-Apartheid housing delivery in Mangaung. A view from local government. In L. Marais, & G. Visser (Eds), Spatialities of urban change: Selected themes from Bloemfontein at the beginning of the 21st century, pp. 109–129. Stellenbosch: African Sun Media.


S24 Morris, M. (2012) The History of Apartheid: Race versus Reason. Cape Town, Sunbird. Mustert, S., & Ostendorf, W. (Eds). (2000). Urban Segregation and the Welfare State: Inequalities and Exclusion in Western Cities. Oxford: Routledge. Oldfield, S. (2004). Urban networks, community organising and race: an analysis of racial integration in a desegregated South African neighbourhood. Geoforum 35, pp. 189–201. Pacione, M. (2005). Living in the city: Residential differentiation and communities in the city. In M. Pacione (Ed.). Urban Geography, A Global Perspective, 378–397. Abingdon: Routledge. Posel, D. (1991). Curbing African urbanization in the 1950s and 1960s. In Swilling, M., Humphries, R., and Shubane, K. (Eds), Apartheid city in transition, pp. 19–32. Oxford: Oxford United Press. Prinsloo, D., & Cloete, C.E. (2002). Post-Apartheid residential mobility patterns in two South African cities. Property Management 20, pp. 264–277. Rex, R.S.R., & Visser, G. (2009). Residential Desegregation Dynamics in the South African City of Bloemfontein. Urban Forum 20, pp. 335–361. Robinson, J. (1996). The Power of Apartheid. Oxford: Heinemann-Butterworth. Saff, G. (1994). The changing face of the South African City: From urban Apartheid to the deracialization of space. International Journal of Urban and Regional research 18, pp. 377–391. Wood, L. (2000). Residential real estate transfers in Pietermaritzburg – Msunduzi, South Africa. Tijdschrift voor Economische en Sociale Geografie 91, pp. 263–277.



Re-Spatializing development: Reflections from South Africa’s recent re-engagement with planning for Special Economic Zones Etienne L. Nel Christian M. Rogerson Etienne L. Nel, University of Otago, Department of Geography, Humanities Division, New Zealand and University of Johannesburg, Faculty of Management, School of Tourism & Hospitality, South Africa ([email protected]) Christian M. Rogerson, University of Johannesburg, Faculty of Management, School of Tourism & Hospitality, South Africa ([email protected])

Abstract In 2014 the South African government formally sanctioned the establishment of Special Economic Zones (SEZs) in that country. The importance attached to SEZs reflects a clear return to spatially-based economic interventions following the recognition of the persistence of deep-rooted structural and spatial inequalities in the country. This paper discusses South Africa’s past and present involvement in processes of spatial economic development and how the SEZ concept has emerged. The potential of SEZs is assessed relative to local experience with the lacklustre performance of what were termed Industrial Development Zones (IDZs) since 2001. While re-engagement with issues of how to address ‘uneven geographical development’ is clearly significant, it would be difficult to argue that SEZs will achieve guaranteed success. Keywords: Special Economic Zone, Industrial Development Zone, South Africa, spatial planning, regional development

Introduction In many parts of the world there is a defined move to re-spatialise development planning and associated economic interventions. The passage of the Localism Act in the UK, the work of the Cities Alliance, continued effort put into the European Regional Development Fund, the considerable interest in Chinese spatial interventions and the theoretical outputs on New Regionalism and New Localism serve as testimony to this re-emerging international interest (Markey, 2011; Evans et al., 2013). This focus is driven by the perceived need to promote economic development, particularly in ‘lagging regions’, post the 2008 global economic crisis, and the fundamental recognition that geographical space is economically ‘uneven’ (Harvey, 2006) requiring spatially focussed but locally unique interventions. As PallaresBarbera et al. (2012: S8) argue “spatially uneven development in a globalizing world is an important phenomenon driven by its fast dynamics and its manifestation across a wide range of economic agendas and its regional challenges”. In response, as the New Regionalism approach argues, the failure to achieve regional convergence within countries and limitations on the capacity and success of nationally driven development, are encouraging an emphasis on localised solutions and spatial planning interventions uniquely targeted to address local development needs and challenges (Markey, 2011; Rogerson, 2009). It is argued that such interventions “offer opportunities to address the complexities of territorial planning and mobilize the strategic competitive advantages of place-based assets within a globalized economy” (Markey, 2011: 2). One intervention which is being looked at with renewed


S26 interest is that of Special Economic Zones (SEZs), which though having a mixed track record internationally are often regarded as a vehicle to potentially help catalyse development, particularly in lagging regions (Farole, 2011) especially if tailored to meet local needs and utilise local resources and capacity. SEZs have become a key feature on the development agenda in sub-Saharan Africa in recent years, not least because of the support which China is providing to such zones which it is currently establishing in the continent (Brautigam, 2011). In South Africa, spatial development planning is experiencing something of a revival after over two decades in which its potential was largely downplayed (Robbins, 2008; Oranje, 2010; Rogerson, 2014). As apartheid was based on the principle of spatial separation of people on racial grounds and associated differentiated spatial support, particularly for the various nominated black racial reserves, the post-apartheid government, understandably, was reluctant to continue a policy of spatial and regional development interventions which, de facto, may have been seen as supporting ‘separate development’ on racial grounds (Robbins, 2008). Economic intervention was, as a result, largely spatially neutrally after 1994, occasionally seeking to support market based development in the most economically advantaged areas, such as through the National Spatial Development Plan (The Presidency, 2006). The most significant spatial intervention was the support provided for a series of Industrial Development Zones (IDZs), only four of which were operational by 2014 and which, according to recent assessments, including those of the government, have not lived up to expectations. In recent years however, there has been a marked revival of interest in the persistent nature of spatial inequalities in the country (Nel & Rogerson, 2009), as a result of the recognition that, “spatial inequalities have proven to be the most stubborn legacy of Apartheid, both reflecting and reinforcing wider social inequities. When people are kept apart, the scope for social integration is reduced” (Turok, 2010: 267). Key responses in this regard include the identification of the need to address the legacy of apartheid spatial planning and promote rural development in particular, in order to achieve the government’s target of 5 million jobs in terms of the New Growth Path (Department of Economic Development, 2011). In addition the National Development Plan has indicated the need to develop a vision to respond to spatial distortions, and to promote spatial resilience and equality (National Planning Commission, 2011). In direct response a range of spatial economic interventions are currently being experimented with, one of the most prominent are current efforts to introduce Spatial Economic Zones (SEZs) (Nel & Rogerson, 2013). In May 2014, the South African government passed a Special Economic Zone (SEZ) Act (RSA, 2014) which potentially heralds a new era of spatial planning and intervention in the economy. Given the mixed experience of SEZs globally (Farole, 2011; McCallum, 2011; Anwar, 2014) the apparent faith being accorded to SEZs in South Africa is interesting to observe and important to reflect on with respect to their potential for contributing to the potential future wellbeing of South Africa’s lagging regions. Arguably, in line with the revival of spatial planning, the introduction of SEZs is an attempt to help address the country’s challenge of persistent ‘uneven’ economic development and to revive the established, but lacklustre Industrial Development Zones (IDZs) which have been in existence for over a decade. This article reflects on the nature and persistence of spatial inequality in South Africa, before moving on to look at past and present endeavours to address these challenges, placing particular emphasis on current government approaches, and the thinking behind SEZs. The paper concludes with an assessment of their potential and of international evidence and local considerations which may impact on their future application and success. Spatial Inequality in South Africa While differences in the economic performance of different regions and localities in any national space economy are inevitable, in the case of South Africa, a legacy of generations of


S27 conscious marginalization and under-development of those regions historically zoned for the exclusive residence by black people, overlays the inevitable structural disadvantage experienced in such primarily rural areas. Despite the post-1994 government’s endeavours to create broad-based development, growth, beyond welfare provision, has clearly not occurred in the impoverished rural areas and former racial reserves – the Homelands. Deep-rooted urban-rural inequalities persist in South Africa. In 2008, even though 42% of the national population lived in rural areas, those areas only generated 16% of the national GVA, compared with the 6 primary metropolitan cores which housed 38% of the population and generated 70% of the GVA (DTI, 2012a).

Figure 1: South Africa’s Priority District Municipalities. The persistence of spatial inequality has become politically contentious as indicated in the emphasis placed on promoting rural development in the New Growth Path (NGP) and in the formation of two new government ministries, those of Rural Development and Economic Development which are mandated to address issues of rural underdevelopment and economic inequality (Rogerson, 2014). In pursuance of these plans and through parallel endeavours to invest in infrastructure through the National Infrastructure Plan, a series of 23 priority District Municipalities have been identified as requiring focussed assistance and support (see Figure 1). It is important to observe that these district municipalities contain the majority of the former Homelands and their designation is a reflection of the failure to date of state interventions to address uneven regional development and the political desire to address what is such an evident spatial and economic backlog. While interventions are generally still being formalised, with SEZs being the first intervention of what may be a suite of new strategies, it is important to first reflect on South Africa’s history of regional development, and the later experimentation with IDZs before moving on to consider SEZs, which are clearly one of the


S28 most significant of the spatial interventions which the state is now about to roll out in South Africa, some of which, as will be discussed below are likely to be sited in the priority district municipalities. Spatial Economic Planning and Development in South Africa Spatial economic planning in South Africa has had a strong presence in the country since World War Two, albeit that its motivations and achievements have often been questionable. Commencing in the 1950s and then expended over subsequent decades, what was then known as the Regional Industrial Development Programme witnessed the establishment of some 80 ‘growth points’ across the country in which investing manufacturing firms benefitted from available infrastructure and a generous range of incentives (Tomlinson & Addelson, 1987). The overlap between the siting of most of the growth points in or near the former Homelands reflected the reality that the policy was based on a racialised conceptualization of space, leading to investment in areas which had little chance of experiencing catalytic growth. The programme was suspended in 1991 and evaluations undertaken at the time indicated that there had been only very few tangible benefits derived from the programme. Amongst the reasons cited were the politically driven nature of the programme, the poor linkage development with the host economy, the failure to create permanent economic nodes and the costly nature of the intervention (Nel, 1999). In the immediate post-apartheid era, Export Processing Zones (EPZs) were briefly considered as an alternate form of development interventions which was regarded as having the potential to both boost export-led growth and develop the host economy. Concerns, particularly over labour abuses in other countries, meant that there was strong union opposition to the plan, and nothing materialised. In the late 1990s two explicit spatial development interventions were introduced, Spatial Development Initiatives (SDIs) which were based on a “corridor” development approach and Industrial Development Zones (IDZs) which, like EPZs are sited near an international transport node and are specialised zones for export orientated manufacturing (Jourdan, 1998; Rogerson, 1999, 2002). SDIs enjoyed mixed success, with the most well-known, the Maputo Corridor helping to improve transport links to the port city of Maputo in Mozambique (Rogerson, 2001). IDZs in the meantime have not all been developed, the largest, Coega has yet to reach its envisaged potential, while smaller ones, such as East London seem to have attracted in some degree of investment (CDE, 2012). Given that IDZs share many similarities with the SEZ concept, it is pertinent to pay some attention to the possible reasons for their limited success to date, which will be undertaken in a subsequent section. A more recent, and critical stance to spatial planning came in 2002 when the government released its National Spatial Development Programme which identified the ‘growth potential’ of different parts of the country and argued that core investment should be focussed only in the areas of greatest growth potential. An updated version of the document was released four years later (The Presidency, 2006). Naturally this aroused political concerns about the fate of the less favoured regions and the plan which had come from President Mbeki’s office was effectively shelved (Oranje & Merrifield, 2010). A key concern for the post-apartheid government is how best to try and attain election promises of both mass job creation and international economic integration. In 1996 the Growth Employment and Reconstruction (GEAR) policy indicated the government’s commitment to the pursuit of economic orthodoxy and export-led growth (Marais, 2001). Despite a long-term commitment to amongst other activities, support for IDZs, cluster development and export focussed growth, the economy has remained relatively sluggish and has not created the envisaged number of employment opportunities. In 2011 the Department of Trade and Industry (DTI, 2011a) expressed concern about the underperformance of the


S29 South African economy relative to the global and emerging economies. In its Medium Term Strategic Plan the DTI (2011b) identified both falling levels of employment and manufacturing value adding as key concerns, particularly given that the manufacturing sector is regarded as one that can absorb low skilled labour. It is within this context that SEZs are being implemented, namely as a potential way to help to create more jobs and improve the value of manufacturing and exports in particular. The emerging debate about SEZs follows on from the complex history of spatial intervention in the country which has been marked by political interference and mediocre success (Nel & Rogerson, 2009). If SEZs are to be implemented and to succeed it can be argued that South African planners and the business community need to take cognizance of the international experience which SEZs have enjoyed (Farole, 2011, CDE, 2012). The failure rate seems to be high, and there are clear factors which seem to account for their mixed level of success. In addition, the degree to which an SEZ does not remain an isolated enclave, but is incorporated into the host economy is clearly of critical importance. Formalizing SEZs in South Africa In pursuance of its goal of establishing SEZs, the Department of Trade and Industry (DTI) produced an SEZ Bill in 2011, which was approved by cabinet in 2012 (RSA, 2011; DTI, 2012b). The DTI defined an SEZ as a “geographical designated area of the country set aside for specifically targeted economic activities which are then supported through special arrangements and support systems which are different from those which apply to the rest of the country” (DTI, 2012b: 1). The DTI argued that they are tools to promote long-term economic and industrial development, to attract in local and foreign investment, to encourage infrastructure creation and to support targeted industries. In addition the DTI claims that they have learnt from international experience and from the modest performance of IDZs in the country which were poorly funded and planned and hence, by implication, DTI now believes they have developed a better product. Efforts to establish SEZs are closely linked to South Africa’s re-industralization goal and also link with the current (fifth) Industrial Policy Action Plan (IPAP 5) which seeks to promote the beneficiation of minerals and natural resources (DTI, 2014). It is argued that “such zones would bring mainstream economic activity to poor and isolated parts of South Africa by leveraging the commercial potential of a particular region. This will include industry clustering and targeted development” (Buthelezi, 2013: 17). The association between regional development i.e. spatial interventions and industrialization is clear in government documentation, with the Department of Trade and Industry (2014) stating that “SEZs … (are) key contributors to economic development. They are growth engines towards government's strategic objectives of industrialisation, regional development and employment creation”. In May 2014, the South African parliament passed Act No. 16 of 2014 – The Special Economic Zones Act, both formalizing and legalizing the strategy (RSA, 2014). The Act argues for a focus on “new sources of competitiveness that lie in innovation and productivity, with an entrenched base in skills, infrastructure and efficient, responsive state action” (RSA, 2014: 2). Within this context SEZs are seen as key drivers of industrial and economic growth, which through specific support mechanism, special infrastructure and incentives will encourage foreign direct investment, extend export promotion, encourage labour absorbing employment and promote industrial growth. The Act defines SEZs as “an economic development tool to promote national economic growth and exports by using support measures in order to attract targeted foreign and domestic investments and technology” (RSA, 2014: 8). Importantly, while the government has separately identified a series of potential SEZs, the Act also allows government agencies, municipalities and public-private partnerships acting alone or independently to apply to the government to designate an SEZ.


S30 The Act provides for different categories of SEZs to be established, these include: free ports, free trade zones, industrial development zones and sector development zones. Interestingly the Act specifies that that the pre-existing but poorly achieving IDZs will be designated as SEZs (RSA, 2014).

Figure 2: Proposed Special Economic Zones Prior to the passage of the Act and the actual designation of zones, but in anticipation of its approval the government allocated R 2.3 billion (approx. US $ 240 million) to support SEZs in the 2012 budget (CDE, 2012). In addition, during 2013 the National Treasury proposed a reduction in the corporate tax for firms setting up in designated SEZs to 15% (Buthelezi, 2013). In 2013 a total of 10 SEZs were designated (Buthelezi, 2013). Unlike the IDZs which were all set up as major port facilities adjacent to international ports, there has clearly been an attempt to scatter the points more evenly across the country in both areas of higher gross value added and in some of the more impoverished parts of the country (Figure 2). A particular sectoral focus for each zone is identified which seeks to build on regional economic strengths and to give focus to proposed development, no doubt in sympathy with the concept of the clustering of like activities. The designated zones are as follows: Tubatse (platinum mining), Musina (petro-chemicals, agro-processing and logistics), Nkomati (agroprocessing), Rustenburg (platinum mining), Atlantis (renewable energy), Upington (solar power), Wild Coast (agro-processing), Dube trade port, Durban (agro-processing), Harrismith (agro-processing and logistics) and Nasrec in Johannesburg (industrial). It is significant to observe the overlap between half of these 10 zones and the priority districts as indicated in Figure 1 (i.e the former Homelands). This indicates the importance attached to developing the impoverished parts of the country, compared with the IDZ focus on points of international connectivity. This reality raises the question of what will need to be


S31 undertaken to ensure the success of such zones in areas which suffer from structural disadvantages such as a low skills base, poor infrastructure, poor economic linkages and potential. In addition, a range of additional challenges can be identified: 1) The extent to which the zones be internationally competitive as compared with other zones globally. Arguably, the 15% corporate tax reduction will scarcely allow for competition with better incentivized zones in Asia (Farole, 2011). 2) The policy documents do not demonstrate how South African zones will differ from those in other parts of the world in terms of identifying their clear comparative and competitive edge. Assessing the Potential of SEZs in South Africa: Lessons from South Africa’s IDZs and Internationally The Industrial Development Zones (IDZs), which have been in existence over a decade, starting with Coega near Port Elizabeth in 2001 (Tang, 2008) and which share apparent similarities with the SEZ concept can be used as a point of comparison with the proposed SEZs to help assess the potential for SEZs to succeed. Despite initial enthusiasm regarding the role which IDZs might play in the South African space economy – only three were established, all at major port facilities – Coega (near Port Elizabeth), East London and Richards Bay, while a fourth, Saldanha Bay, also sited at a port was launched in 2013. Despite the relatively long track record of the first two IDZs, it is evident that their performance can be regarded, at best, as modest (Zarenda, 2012; Nel & Rogerson, 2013). Recent independent and government evaluations of IDZs have indicated the nature and causes of their limited success (McCallum 2011; CDE, 2012). According to a Department of Trade and Industry review by 2007 only 40 investors had set up in the three IDZs operational at that stage, investing some R11.8bn, whilst government investment had come to R5.5bn (CDE, 2012). In addition, whilst the Coega IDZ had received R3bn of investment in infrastructure, there were only 21 investors and only 2800 jobs (although some 27 000 short term/construction jobs had been generated) had been created (CDE, 2012). The East London zone had precipitated the creation of 1400 jobs (in addition to approximately 4000 short term/construction jobs), and the investment of R 1,5bn with 90% of firms being linked to the city’s automobile factory, many having relocated there from elsewhere in the country. The Richard’s Bay IDZ had only one investor who had created 300 jobs and invested R 650 mn. An overall assessment must be that the performance of South Africa’s IDZ programme is modest and falls short of the expectations of all stakeholders (Nel & Rogerson, 2013). During February 2014 the Minister of Trade and Industry argued that IDZs had underperformed because of their weak governance, poor incentives, poor stakeholder engagement and a spatial bias in terms of their location on the coast (South Africa Info, 2014). Additional reasons cited for the poor performance of IDZs include: • The absence of special incentives for zone investors, making them unattractive to investors • The absence of a comprehensive policy framework and strategic planning and guidance • Weak governance arrangements, and poor coordination of government agencies • Exclusive government ownership and management – with no private sector involvement which differs from international practice (South Africa Info, 2014). According to McCallum (2011) while the IDZs do offer tax holidays and VAT exemption, the fact that they are not exempt from social regulation was a concern for potential investors. He argued that ‘the strategy has failed to produce notable gains to attract sufficient investors’ and that IDZs face an identity crisis being “caught between market-driven and Keynesian


S32 redistributive logistics” (McCallum, 2011: 15). Given the apparent similarities between IDZs and SEZs it is debatable whether a new ‘title’ will ensure success. IDZs and SEZs Compared While the government and analysts have been critical of the success of the IDZ programme, which generated a total of only 42 investments in three zones (southafrica.info, 2014), it is important to establish if the proposed SEZs will differ significantly from the IDZs, especially given that IDZs have now, de facto, become a sub-category of SEZs, and, by implication, to try and gauge if they might enjoy better prospects for success. According to the government an IDZ is “a purpose built industrial estate linked to an international air or sea port, which might contain one or multiple Customs Controlled Areas (CCA) tailored for manufacturing and storage of goods to boost beneficiation, investment, economic growth and, most importantly, the development of skills and employment in these regions” (SARS, 2014). As highlighted above an SEZ is defined in South Africa as a “geographical designated area of the country set aside for specifically targeted economic activities which are then supported through special arrangements and support systems which are different from those which apply to the rest of the country” (DTI, 2012b: 1). Key differences appear to be two. First, that IDZs focus on an international port versus the more open locations of an SEZ, as indicated in the list of currently designated sites. Second, that the IDZs primarily exhibit an industrial focus as compared with the more general focus on SEZs (though this may be slightly at odds with the suggested link between SEZs and DTI latest Industrial Policy Action Plan, see DTI, 2014). In terms of incentives, IDZ incentives have included exemption from VAT and import duties, access to Customs Controlled Areas, depreciation allowances, and a limited tax holiday (Tang, 2008; SARS, 2014). Proposed SEZ incentives include a 15% corporate tax rate (Buthelezi, 2013), the scope to design support measures as deemed appropriate for any zone (RSA, 2014), a building allowances (still to be specified), an employment incentive (still be specified), access to Customs Controlled Areas and a tax allowance (still to be specified) (DTI, 2014). Overall, although the SEZ incentives seemingly have yet to be fully spelled out, the lowering of the applicable tax rate, the employment incentive and the scope to design additional support, suggest that SEZ firms will be better assisted and that employment generation is a more explicit focus. While there is, in theory, scope to now establish zones away from the port cities, it is not clear how customs exemptions will be managed in locations distant from a ‘port of entry’. Several issues raised as concerns above, including by the Minister, do not seem to be addressed as yet in the SEZ documentation. Most notably these include how to ensure better governance and stakeholder involvement, how to ensure that national government does not dominate the process, and how to ensure better coordination of activities. In addition it would be difficult to argue that a comprehensive policy framework, of which SEZs are a part, has been formulated. Positive aspects of the process of designating the first round of SEZs include the scope to operate away from the core or coastal nodes, the identified sectoral foci of many of the proposed SEZs (such as on platinum related activities), which has scope, in theory, to encourage the clustering of economic activity and the apparent focus on both local and foreign investment and employment creation. What is not dealt with is how establishing zones would not lead to the relocation of existing South African firms to benefit from the incentives, such as took place under the previous administration, prior to 1994, leading to a ‘zero-sum game’ (Nel, 1999) and has been noted in the case of the current IDZs. Additional concerns regarding the more isolated sites include: how are the structural disadvantages of operating in remote, under-resourced, low skilled and isolated locations to be overcome such as the Wild Coast. The experience of the earlier SDIs which had similar sectoral foci is reminiscent of this


S33 challenge (Bek et al., 2004). In addition, down-streaming and clustering of activity while a noble ideal, is often difficult to attain as indicated by the limited clustering which has occurred around the Richard’s Bay aluminium plants and the stainless steel mill at Middleburg, raising questions about the viability of some of the mineral related nodes (Nel et al., 2007). International Evidence The reality that there are over 3500 economic zones globally (including SEZs) and the fact that they have now been operating for over three decades in China provides a valuable international yardstick against which the potential success of South African zones can be compared and evaluated. This is an important consideration both academically and in policy terms given the reality that there are marked differences in the performance and ‘success’ of SEZs globally (Jain, 2008), with those in Africa being regarded as underperforming (Jauch, 2002; Farole, 2011). Positive aspects associated with SEZs include their potential to leverage in FDI, to assist economies to globalize, facilitation of technology imports and job creation and improvements in infrastructure (Aggarawal, 2007; Yeung et al., 2009; Wang, 2010; Brautigam, 2011). Negative aspects include, concerns over what are frequently poor working and labour conditions, limited spill-over effects and linkages outside of the zones, their promotion of uneven development, the cost of the incentives to the host country and unequal level of integration into the global economy which they are based on (Brun et al., 2002; Aggarawal, 2007; Jain, 2008; Palit, 2009; Anwar, 2014). China’s adoption of SEZs is often regarded as one of the key mechanisms which facilitated rapid economic growth and global market entry (Farole, 2011). However, one must not ignore the reality that policy has evolved in the country as has the location of zones, in response to global integration, shifting developmental and policy needs and broader level reform (Yeung et al., 2009; Zarenda, 2012). This clearly indicates the need to have an open and flexible approach in the planning, operation and evolution of SEZs and to relate SEZs directly to broader processes and policies of economic reform and change and not to treat them as stand-alone entities. Conclusion This analysis represents a modest contribution to debates around spatially uneven development, a phenomenon which “has always captured the interest of economic geographers” (Pallares-Barbera et al., 2012: S2). Currently, the South African government is clearly concerned about how it can address deep-seated geographical unevenness in the country. In this regard it is both realistic and important to observe the conscious effort on the part of government to come to terms with spatial inequalities and to try and find appropriate spatial interventions which can both address developmental backlogs and promote economic growth (Department of Economic Development, 2011; RSA, 2014). Within this context SEZs have become the most recent spatial tool which the government is placing its faith in. While it is apparent that policy makers have sought to address the short-comings of the IDZs and to put in place an intervention which is more attractive to investors, has an employment creation focus and seeks to focus growth in both growing and lagging regions, it is apparent that success cannot be assured.As the preceding analysis demonstrates, many of the fundamental challenges which IDZs experienced have not yet been addressed through the SEZ policy. In addition, there is little indication that SEZs are part of a clearly defined national economic strategy and process of change and reform as was the case in China (Zarenda, 2012). Unless a comprehensive, multi-faceted spatial strategy is conceptualised which allows for a range of interventions and targeted support it is difficult to envisage that the SEZs will make a more


S34 substantive differences in the most impoverished areas than pre-1994 spatial interventions did. International evidence reveals that many SEZs underperform and fail to generate the envisaged returns. Indeed, Jauch (2002) commented with respect to SEZs in Africa that they held little prospect of solving the socio-economic problems of the region. While one does not want to prejudge the potential of SEZs in South Africa, if the experience of the notionally better-sited IDZs is to be improved upon, one would hope to see a significant shift from a policy focus to strategic planning since as Farole (2011, 263) cautions “SEZs can be expensive and risky projects, the margin for error is small, and successful zones take time to develop”. Further monitoring of the unfolding SEZ programme in South Africa is an important research challenge for the country’s urban and regional scholars. Acknowledgements Wendy Job of University of Johannesburg is thanked for preparing the accompanying maps. Financial support from University of Johannesburg is acknowledged. The research for this paper was undertaken during 2014 when Etienne Nel was a Visiting Professor at University of Johannesburg. References Aggarawal, A. (2007) Impact of Special Economic Zones on Employment, Poverty and Human Development. New Delhi, Indian Council for Research on International Economic Relations. Anwar, M. A. (2014) New modes of industrial manufacturing: India’s experience with special economic zones. Bulletin of Geography: Socio-Economic Series, 24, pp. 7-25. Bek, D., Binns, J.A. & Nel, E.L. (2004) ‘Catching the development train’; Perspectives on ‘top-down’ and ‘bottom-up’ development in post-apartheid South Africa. Progress in Development Studies, 4 (1), pp. 22-46. Brautigam, D. (2011) African Shenzhen: China’s special economic zones in Africa. Journal of Modern African Studies, 49(1), pp. 27-54. Brun, J.F., Combers, J.L. & Renard, M.K. (2002) Are there spillover effects between coastal and non-coastal regions in China. China Economic Review, 13 (2-3), pp. 161-169. Buthelezi, N. (2013) Industrial Hubs. Engineering News, 21 June, pp.16-17. CDE (2012) Roundtable Special Economic Zones: Lessons for South Africa from International Evidence and Local Experience, CDE Roundtable No. 19, CDE, Johannesburg Department of Economic Development (2011) New Growth Path. Pretoria, Department of Economic Development. Department of Trade and Industry (DTI) (2011a) Industrial Policy Action Plan: 2011/122013/14. Pretoria, DTI. DTI (2011b) Medium-Term Strategic Plan: 2011-2014. Pretoria, DTI. DTI (2012a) Draft Regional Industrial Development Programme. Pretoria: DTI. DTI (2012b) Special Economic Zones Policy and Bill. Pretoria, DTI. DTI (2014) Industrial Development Financial Assistance (Incentives). Available at: https://www.thedti.gov.za/financial_assistance/financial_incentive.jsp?id=59&subthemeid =25 (Accessed 20 July 2014). Evans, M., Marsh, D. & Stoker, G. (2013) Understanding localism, Policy Studies, 34 (4), pp. 401-407. Farole, T. (2011) Special Economic Zones in Africa: Comparing Performance and Learning from the Global Experience. Washington, The World Bank. Harvey, D. (2006) Spaces of Global Capitalism. London, Verso.


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Intertwining lives and logics: Household and informal economies in Cape Town Sophie Oldfield Sophie Oldfield, University of Cape Town, Department of Environmental and Geographical Science, South Africa ([email protected]) Abstract Enabling households to make ends meet, the practices of small, informal businesses are not simple, but bound up in the struggles of households and the social and economic relationships that weave local economies together. This paper draws on stories of local businesses in an impoverished Cape Town township to situate these diverse logics and strategies, the histories and aspirations that shape small business success and struggle. Drawing on interviews and mapping every informal sector business in the neighbourhood, I reflect on the specific difficulties of running a business in the context of poverty, including unreliable and inadequate incomes, difficulties of credit, as well as the challenges of operating business on a small scale. This material demonstrates the community-based, as well as livelihood, logics that motivate local business owners as well as sustain their livelihoods. The paper concludes with an argument that the neighbourhood economy, instead of a vehicle driven primarily to maximize profit, forms an intimate part of peoples’ lives. This more multifaceted and embedded analysis stretches overly narrow notions of the informal economy, its limits and logics. Keywords: Informal economy, popular economy, livelihoods, survivalist, community, competition

Introduction “We can’t stay any longer’ Fearing for their lives, Somali businessmen have fled Valhalla Park, where roaming mobs have firebombed and looted their shops” (Cape Argus, 11 July 2012: 1) One of many xenophobic attacks in recent city history, in mid-July 2012 four Somali-run shops were burnt to the ground in Valhalla Park, an impoverished neighbourhood on the Cape Flats of Cape Town. The shops were looted after ‘locals’ threw petrol ‘bombs,’ burning out their premises. Following this violent episode, Somali-run shops were shut down, their owners and employees fleeing the neighbourhood. There are mixed feelings about this event and diverging interpretations of what led to this violent outburst. One resident describes the burnt-out remnants of stores, the empty spaces where they were, as initially ‘surreal.’ She suggests the first attack was related to a local gang fight, the shopkeeper a target because his connection to the neighbourhood was forged through a rival drug-dealer (personal communication, 19 July 2012). A community leader stresses that some local business owners have stoked the existing discontent with ‘foreigners’, exploiting both the longer-term rumours about foreigners and their business dominance, as well as the increasing tension between gangs in the neighbourhood (personal communication, 22 July 2012). Not geared primarily toward maximizing profit, neighborhood businesses face significant threats from foreign-owned and formal businesses running off more entrepreneurial business models (see Charman et al., 2012; Gastrow & Amit, 2013). The challenging realities that shape and sustain small businesses in this neighbourhood and across poorer parts of Cape Town (and every other South African city) lie below the surface of this violence (Charman & Piper, 2012). Enabling households to make ends meet over the short and long-term, the practices of small (informal) businesses are not simple, but bound up in the struggles of households and the social and economic relationships that weave the neighbourhood together.


S38 This paper draws on stories of local businesses in this neighbourhood to situate these diverse logics and strategies, as well as the histories and aspirations that shape small business success and struggle in this context. Though not focused on a comparative analysis of foreign-owned business practices and models, nor a direct attempt to explain past or present xenophobic violence, these narratives help elaborate the logics of local livelihoods, and their intimate and durable connections to household and community context. The narratives demonstrate the ways in which small businesses constitute the neighborhood economy – the ‘informal sector,’ highlighting their intimate embedding in the social and economic logics that shape households as well as community relationships and networks. These dynamics are what many in this neighbourhood understand as ‘under threat from’ newer businesses run by ‘foreigners.’ The paper draws from research completed as part of a community-based partnership with the Valhalla Park United Front Civic, a process that included interviewing and mapping every informal sector business in the neighbourhood from January to March 2012. The first section of the paper considers the specific difficulties of running a business in the context of poverty, including unreliable and inadequate incomes, difficulties of credit as well as the challenges of operating business on a small scale. The second section reflects on the community-based, as well as livelihood logics that motivate local business owners as well as sustain their livelihoods. The paper concludes with an argument that the neighbourhood economy, instead of a vehicle driven primarily to maximize profit, forms an intimate part of peoples’ lives. This more multifaceted and embedded analysis stretches often narrow notions of the informal economy, its limits and logics. Informal economies, household livelihoods and poverty There is broad policy acknowledgement that informality is a significant part of the South African economy (Rogerson, 2013). The informal sector moreover particularly sustains family and community economies in townships across South African and southern cities. Many analyses, however, frame issues of the informal economy as local, with limited connections to the formal economy, and thus as organised around subsistence, practices that are understood as broadly uncompetitive. In the South African context, for instance, Davies and Thurlow (2009) estimate up to two thirds of the South African population are involved in the informal economy, be it through informal employment, employed by an informal business or a self-owned enterprise. Despite issues around availability and reliability of data (Devey et al., 2006), researchers can confidently argue that the informal sector has exploded – drawing in or providing livelihoods for from 965,000 (1997) to 2.3 million people in 2005 (Devey et al., 2006) and absorbing between 10–18% of the labour force (Valodia, 2006). A range of figures estimate the contribution of the informal economy to GDP, ranging from a conservative 7–11% to approximations at a Cape Town city-scale that suggest the informal economy contributes 18–20% of GDP (City of Cape Town, 2003 in Battersby, 2012). Recognized by Hart (1973) nearly forty years ago, informal economies remain critical areas of southern urban economies. Yet, nonetheless, complex practices of economic informality are frequently the least acknowledged, a silence that marginalizes this type of work and the people making a living in this type of economic activity. Valodia (2006) stresses the need for empirical research that moves beyond macroanalyses, in the grounded, everyday lived experiences that people engaged in informal economies navigate and experience. This sort of material helps fuel an extensive debate that questions how we define what is informal (Chen et al., 2004), challenging simplistic notions that it encapsulates simply ‘local’ businesses and activities that are illegal or on the margins of our cities, essentially unimportant for the broader national economy. This rich literature emphasizes instead the heterogeneity and complex relationalities that connect formal and informal across South African cities. Here I draw from this foundation and the set of


S39 assumptions it brings to thinking about city economies. More particularly, I build from a debate that considers neighbourhood economic practices as ‘popular economies’ (Hull & James 2012), drawing our attention away from the binaries of informal-formal, state-regulated-unregulated, or illegality-legality, that too simplistically divide the debate into technocratic or instrumentalist notions of the economy. They suggest instead that, in contrast, the term ‘popular economies’ stresses “the embeddedness of economic practices and institutions in broader cultural milieux; their reliance on ideas about luck, fortune, fate and the like; and the way they speak to dreams of wealth, equality, and the future.” (Hull & James, 2012: 9) In making this analytical shift, I explore as Neves and du Toit (2012: 131) propose: “the imperatives and networks that underpin practices of generating, accumulating and managing wealth at the margins of the economy”. Through a detailed qualitative empirical study, the paper contributes to their broader problematic that: “The [informal] sector tends to be viewed in homogeneous and undifferentiated terms, misrecognized and misunderstood because of normative notions of economic ‘rationality’, or found wanting when measured with the yardstick of ‘entrepreneurism’ predicated on rational, self-interested, utility – maximising individuals. Informal sector workers are prone to not keeping written business records, eliding enterprise and domestic accounts, and extracting seemingly unsustainably high levels of resources from their enterprises. They are motivated not by business plans but by various social and redistributional logics.” (2012: 131–132) It is these latter social and redistributional logics, and their relationship to household realities and community mores and needs, that shape the discussion in this paper. This research highlights two relational logics: first, small informal businesses reflected household (business owners and customers) constraints, the precarious temporal and purchasing contexts that shape everyday economies and family life. Across a background of economic marginalization, both customer and owner often struggled to get by, a context fundamentally shaping the operations of neighbourhood businesses. At the same time, and the second part of the argument here, the logic of business was shaped in the interplay between community-neighbourhood relationships and the role of informal businesses. Over and over again, business owners referred to the community and their respective role in it as an important concern that shaped business. The informal economy in this context then is not only shaped by the necessity to source an income to survive and the desire to improve family and household circumstances. In all their varied ambitions, and stories of perseverance, many local businesses are triggered, driven, and sustained as well, by a desire to give back to the community. Selflessness and small-scale philanthropy play a critical role in the creation, sustenance, and sustainability of many small businesses in neighbourhood context. The stories, explored below, help ground the logics that sustain and build the informal economy, as well as the tensions that they generate – be-it in competition with foreign-owned enterprise, the point of the departure the paper begins with, or the vagaries of informal economies at neighborhood scale. The remainder of the paper draws on narratives that explore the nature of business, the varied linkages and logics built in relationships and aspirations for community, turning lastly to household dynamics and their often-constrained interplay. From Tuck Shops to Pool Houses: Everyday business More than anything, businesses are an intimate part of peoples’ lives, extensions of owners’ values, as well as connections to community and identity. From Rabia’s Mobile, to Yusaf’s Tuck shop, to Boy’s Fruit and Veg, the area is inundated with shops that seemed, on first glance, to have been created simply as a method for economic survival. In almost every instance, however, this preconception was proved wrong. Kadeer’s Tuck Shop, for example, appeared initially to be a typical small informal business. No signage, very little


S40 advertisement, though boasting 1-2 conspicuous back rooms swollen and distended with knick-knacks and daily necessities. Kadeer opened his shop 8 years ago, when he “needed to make more money but wanted to give back to the community at the same time” (personal communication, 2/16/12). The shop sells little necessities, such as cigarettes, sweets, and batteries, and he purchases these from nearby wholesalers, similar to many of the tuck shops in the area. He explained that the shop stays open for only six months each year, since he uses the other six months to travel. A worldly man, it was unclear how he found the money to travel so extensively, since he insisted that his tuck shop provided only for food and necessities, often on credit, for his community (2/09/12). Uncle Gesant, a short gentleman probably in his sixties with a kindly presence and warm smile, is the owner of Dulsie’s Spices- selling spices, vegetables and blank CDs and DVDs. Gesant said that many years ago he used to have a big shop with shelves all around his lounge but now he ran his small business just to keep himself busy and support him and his wife. When asked whether he wanted to expand his shop, he replied with a look of anguish on his face: “You expand your shop, then the people ... yoh! No man!” He was content to keep his business running on a small scale; the thought of running a “whole shop” seemed to stress him out. Mr. Paulse explained that he ran his shop “instead of sitting. Because when you sit, you get older quicker ... It’s just to keep me busy you know.” When we met him, he had been running his shop for about two years; he opened it shortly after retiring. He explained that his business doesn’t make much money on most of the products he sells, because he tries to keep his prices low; in other words, he is largely just making back what he spends. He said that cool drinks were the only products that he made a decent profit on and they were good products to stock because of their long shelf lives. According to Mr. Paulse, cigarettes were a “big draw card” in the home shop business. But despite the potential benefits of selling cigarettes, he chose to not sell them for religious reasons and because he knows they are bad for people. He loses customers who smoke because people are likely to shop elsewhere where they can buy everything they want from the same shop. But that did not seem to bother him, as long as he was not losing money and the shop was keeping him busy. In sum, Mr. Paulse was satisfied with his tuck shop. The figurative godmother of the Community Pool Club, for instance, Kathleen precariously balanced her grandson on her left knee, reaching simultaneously for another grandchild, chastising them both for torturing the family’s new puppy. From the moment we met, it was clear: this woman could multitask. And this is perhaps because Kathleen has been filling her home, her thoughts, and her heart with the neighbourhood youth for almost ten years now. Her survival depends on her ability to juggle constantly the needs of her community with her own and those of her household. Kathleen worked at a hospital in the center of Cape Town until 2009, after which she retired with a pension. She now lives in her home, adjacent to the pool club, with her two daughters and six of her grandchildren. The scene at her house is rich, full of activity, laughter and curiosity in our interview. The pool club is spacious and bright, the walls plastered with framed photographs of members and their respective successes. The outside boasts a garden, tended by the neighborhood’s Rasta community. The gaming machines seem to tower over young players, who eagerly grasp the joysticks with miniature hands. This space serves as a sanctuary for neighbourhood youth, a haven that keeps many off the streets and out of the troubles that afflict many in the community today. Children pay 50c to play a game and R1 to partake in a round of pool, a small fee for the camaraderie and stability that draw youth to the establishment everyday from 2:30-8:00pm. The stories of these businesses suggest that the informal economy exists in peoples’ lives not only as a source of employment or livelihood alone. Businesses form part of peoples’


S41 everyday lives, linking them into the neighbourhood. Neighbourhood niches: Individual and communal motivations The motivation to give back to the community proved a powerful trigger for the creation of many businesses. A number of business owners explained that their main reasons for operating within the informal economy were to assist and improve their own community. Achmat Josephs, for example, runs his madrasah, teaching Arabic full time for a small fee per student. Although not initially obviously a business, this service sustains him and acts as a means to educate the youth and ensure they grow into community members who can be responsible and accountable in their environment. Similarly, Mrs Arendse began her home business as a way to keep children in the community fed on the weekends when they are not receiving free meals at school. Today, the revenue is measly, and most of it goes to her feeding scheme business. She is clearly not running the business for herself. The idea to create a business in order to give back to the community comes from varied and unconventional sources. Kadeer explained, “The biggest reason I run this business is to give back to the community. When I sell things for cheaper than anywhere else, it helps to keep money within the community rather than flowing out of it. This idea came to me from God” (2/09/12). Proudly, Kathleen explained her deepest passion: “What I care most about is youth development and working with children. I love running the pool club because I feel as if I’m giving back to the community while providing a way for my family to live.” She chuckled when asked about the profitability of the pool club. “Money is not the main reason for this place. We hardly make any, but we started it so that the kids would have a place to go” (2/16/12). Gail Peterson, principal and pioneer of Valhalla Park Educare Centre, re-told a remarkable story of how her crèche came to be where it is now. She emphasizes: “I think this is a special thing that happened in my life. I was a factory worker; I had no education. I saw the factories closing. What did I do? I went to high school, I did standard eight over two years, I did some other trainings ...” After the various training courses Gail started the crèche in her back yard with eight children twenty years ago. Shortly after opening, some social workers recognized the good work she was doing and organized for her to use the hall at which they were still operating when interviewed. Since then she said she has been going “from strength to strength.” Now she has a trained staff of twelve that cares for 130 children at the Centre. She explained the challenges she may face from operating in a context where many adults are unemployed. She said that she “must” care for certain children for free because their families can’t afford the fees. These include children looked after by their grandparents who do not work and children who have no one to look after them at home. If a child’s parents are unemployed, she cares for the child for free so that the parents can go and look for work during the day and she is passionate about the services that she is able to provide to the community. Aziza at Gammie’s Fish, a home shop best known for providing fish at affordable prices, spoke explicitly about how important the community is to the way they (her and her husband) run the business. She said: “Our business is here to serve the poor, it’s the poor serving the poor …. Here in Valhalla Park we look after each other. If someone comes with R2 or R3, I’ll see to them. I’ll help you because you need it. In business we must see to each other’s needs.” Aziza’s conception of business didn’t exist outside of “community.” Their fish business forms a much bigger part of her and her husband’s lives than a form of income, it is their connection to the community and at the same time it defines their place in the community. At


S42 the time when interviewed, she said that they were struggling to source fish cheaply because the fishing boats from which they normally bought had made very small catches and the fish were very expensive. The values embodied in the Gammie’s Fish business are displayed in her reflection on how she feels when there’s no fish available. She explains: “It is a terrible thing for the people because they are poor. They buy fish heads to make food, if there is no fish, there is no fish heads.” The distinctive expressions and meanings of business in this neighbourhood reflect owners and their business models built in and from a deeply local and personal economy. This is not a one-way street or relationship, however; linkages to the community also are what sustain businesses, the relationships through which they continue to exist. Community as a Sustainer: Helping Businesses to Thrive and Prosper While a desire to support and give back to the community was evidently a main reason for business creation, the reciprocity between community and business also sustains many small household businesses. Many of the interviewees explained ardently that their businesses would have never succeeded without the charitable help of neighbors, religious institutions, or community organizations. As Ross suggests, economic position is not just defined by how much money one has. “Other [indicators] include one’s social networks and the ways that one may be able to activate these to access resources, including money, food, care, and access to institutions (May, 2000); one’s capabilities’ and capacities to mobilize these; and one’s inclusion or exclusion from these systems” (2010: 107). Social networks and their meaningfulness manifest further in this neighbourhood informal economy, serving as the backbone that enables businesses in the area to thrive and prosper. Philanthropic actions between community members are often what keep businesses afloat in hard times. Many business owners spoke of instances when they looked towards governing social bodies such as mosques, churches, or the Civic, for aid when business began to default or they feared they would be forced to shut down. Salyeyah, who owns her own home sewing business, explained, “I could not have began or continued this business without the help of the Muslim community. The mosque gave me sewing machines when I lost my job. Today, they help me with groceries when times at the business are hard” (2/09/12). Similarly, when one of the soup kitchen operations are threatened, friends and neighbors sometimes help by donating vegetables whilst the butcher often provides free bones to flavor the broth. At the Pool Club, all of the games and pool tables were donated from individuals and organizations within the community. Altruism and care acts as sustenance not just in terms of physical donations, but in the form of counsel and guidance as well. For instance, when interviewing Samaya about her tuck shop, we learnt that she is currently at risk of being evicted; an event that would be disastrous for her family and business. The Civic member interviewing with us almost bellowed in response, “They can’t close your shop down.” In her posture, in the agency of her hands, in the eloquence and sharpness of her voice, “the Lion,” as our partner was known, willingly offered her time and these services for free, although she had not previously known Samaya well at all (personal communication, 2/23/12). Our interview and visit proved an opportunity for consultation and advice to avoid the eviction. Most business owners explained that the lack of economic stability within the informal economy makes running their operation difficult. “Two weeks are up, two weeks are down” (Ferusse, 2/23/12); “Everyday is fish day, but not everyday is catch day” (Salyeyah, 2/09/12). Informal economic activities must cope with fluctuating businesses. Often, from the first to the fifteenth of the month, business booms, then becomes totally stagnant until the very end of the month when individuals receive a monthly paycheck (Reynolds, Mila, 2/16/2012). But this is only a rough approximation of the cycle. With no way to ensure sustenance or revenue day to day, business owners’ ability to rely on outside actors within the community to help


S43 sustain their operations is crucial. This custom ensures the livelihood of the informal economy in Valhalla Park. It’s a fundamental characteristic of the order of operations within this tight knit community; as a Civic member expressed passionately, “An injury to one is an injury to all” (2/23/12). Due to the lack of stability so intrinsic to business within the informal economy, the shelf life of many economic operations can be short lived and temporary, despite the attention and drudgery which goes into getting them off the ground and running. Oftentimes, however, the need for a business or service in a community battles the inherent temporality it would otherwise face as a part of the informal economy. When asked about the future of their small business, many individuals acknowledged a need for the service within the community as the main driver of its sustainability. If it is of altruistic nature, often the future of a business does not depend on its weekly revenue or the challenging price fluctuations of the formal market, but instead on an intrinsic need in the community for the provided service. This reality allows many small business owners in Valhalla Park to be confident that the time, exertion, and effort they enact to keep their business afloat today, will continue to pay off in coming years, on the medium term. When asked what she saw for the future of her business, Kathleen responded, for instance: ‘As long as there are children in this community, there will be a place for our business and for the Pool Club. Its survival is not based on me and the money I need but on what it gives back to the community and how it fixes a big problem in [the neighbhourhood]” (Kathleen, 2/16/12). Mr. Daniels felt similarly when confronted with the potential temporality of his business. He explained: “I run my business so that the youth can have an opportunity to see what an honest living looks like. There are not enough jobs for the young in our community, and by running my business, I am doing what little I can to fix that problem. The business will stay running because I will do this service for my son, and he in turn will do it for his son. It is this need in the community that will make sure our barber business does not close down.” (2/16/12) Through a multi-faceted understanding of the connection between business operations and the networks and relationships they sustain in the neighborhood, we are better able to grasp how the informal economy works to serve and simultaneously profit from the community in substantial, non-economic ways. Household economies and scales of business A tuck shop owner, Mr Paulse is a warm, retired man. Soft spoken and relaxed, he welcomed us into his home on two occasions to sit and chat about his business. His lounge decorated with family photos, two fish tanks and one or two pieces of art with bible verses reflecting his commitment to the Christian faith, we sat and discussed many of the challenges he faces running his shop. The first thing noticeable about his shop before he told us anything about it was the scale of it; the shop room couldn’t be bigger than three-by-four meters. On the one side of the room was a window behind security bars through which he could interact with his customers; opposite this window he placed a fridge, with access to a wall of shelves. Mr Paulse’s product base was small; at the time he was selling chips, sweets, cool drinks, bread, bompies [ice sticks] and a few other food products. This small scale of operation seemed, in itself, to be the root of most of the challenges that he, himself identified. Another issue surfaced in not knowing which products people wanted. He explained: “Its very difficult because you don’t know what people want, what the children want. Everyone differs ... so I’m trying to get a bit of each. So I buy one of these (multi-packs of chips), one of these, one of these, then I see which one sells fast, then maybe next time I buy two of that one and none if its selling slow.”


S44

This issue was exacerbated by the perishable nature of food products. He explained that he was reluctant to buy products that wouldn’t sell well because if he didn’t sell them fast enough they would expire. Bread was considered a particularly difficult product in this regard because of its short shelf life if he doesn’t sell it in one or two days he generates a loss. Although big multi-packs of chips only cost R20 to R30 [US$2 to 3] and bread loaves about R7.50 [~75 US cents], these mark potentially big losses if these products do not sell. Another challenging aspect related to the economic context in which businesses operate was the reality that people buy very small amounts of foodstuffs, often buying for only one meal at a time. He elaborated: “People around here, they are poor people you know, people can’t buy a whole packet of sugar, they buy R1 [~10 US cents] of sugar.” He then explained that, to meet the demands of the market, he buys a big packet of sugar, coffee or mealie meal and he divides those big packets into smaller packets that he then sells individually for R1 each. This practice enables him to make back the money he spends on the big packets and a little bit of profit. But, because people buy such small quantities, it takes a while to sell a whole packet and see any of the profit. Yvonne and her husband, located less than five minutes walk from Mr. Paulse’s tuck shop, own and run “NIKS VINIET” (Nothing for free), a home shop on the corner of a road located directly opposite a church. Yvonne highlighted many of the same challenges that Mr. Paulse spoke about, of particular interest here, is the nature of consumer behaviour in this area. She said: “People buy little, very little.” Minutes before she told us this we had seen an elderly lady come into the shop and go away with a single small tin of tomato paste. She said that this practice of buying such small quantities is the norm and was a significant challenge to the well being of her shop. In addition to buying such small volumes, Yvonne complained that the inconsistency in purchasing patterns made it tricky to run a small shop. NIKS VINIET used to stock bread but she faced the same difficulty as Mr. Paulse, often left with bread close to reaching its expiry date. When this happened she said she would have to give the bread away, thereby making a loss. She has chosen to discontinue stocking bread because it was too difficult to sell to people with such inconsistent, unreliable purchasing habits. Many people, Yvonne’s husband included, are only able to access work opportunities on a casual basis. When people’s livelihoods depend so heavily on forms of income that is both inadequate and unreliable, their eating habits tend to reflect the inconsistency of their income. Adorning the walls of the covered outside area that leads to Yvonne’s shop window are a number of signs or notices, the signs are cut out of bright luminous cardboard- green, pink, orange and yellow, with text written in blue or lack permanent marker pen. One sign read “Halal liver spread,” another “DVDs and CDs.” But the sign that jumped out most read: “NO CREDIT. Bad paid got KILLED.” The violence of the language on the bright yellow sign and our welcome from Yvonne clashed. She explained that she had lost a lot of money from selling things on credit to people and never being paid back. “You get a lot of stories from people:” they will pay at the end of the month or when they received their [state welfare] grants but she was often left carrying the cost of those products herself. As a result of these losses, Yvonne now has a strict policy on credit: no credit. Customers who had not settled their credit accounts had “killed” the opportunity for anyone to buy goods on credit. For a business operating on a modest scale any default on credit payment could be the difference between breaking even and failing in tough months, central difficulties in a context where both customer and business owner are poor. Moreover, competition in this stretched and impoverished context presents a challenge. All of the shop owners interviewed, at some point, expressed the difficulty they faced from competition from shops in the area owned by people who were foreign. Because local business strategies are often informed by principles other than profit- maximizing market logic, different, more ‘entrepreneurial’ business models


S45 tend to make the former appear inefficient and flawed. Anti-foreigner sentiment slipped easily and worryingly into the climate surrounding the xenophobic attacks of 2008 that swept the country (Gumede, 2008). Mr Paulse emphasized, for instance: “The Nigerians and the Somalians- they took over. They can sell cheaper... I believe they have one owner. I see one bakkie going around distributing goods and sets up many shops... they buy in bulk.” Graham, another home shop owner, lives five houses down from his brother who also runs a shop selling meat during the weekends. He explained how difficult foreign competition made running his business, but was reluctant to explore collective strategies with his brother or other ‘local’ shop owners. Gesant echoed this reluctance to upscale to a more market-oriented business model even in the face of competition. Responses of local, neighbourhood shop owners at one level are contradictory. On one hand, there is a marked hostility toward foreign competition; on the other hand a reluctance to change business models to be more competitive and proactively stake a claim in the home shop neighbourhood industry. These patterns resonate with research completed by the Sustainable Livelihoods Foundation (Charman et al., 2012) and the African Centre for Migration and Society (Gastrow & Amit, 2013) on the phenomenon of foreign shops and their impact on neighbourhood economies. In Somalinomics, Gastrow and Amit discuss the mix of ‘competitive and cooperative’ practices that Somali traders draw on, sharing transport and information on wholesalers prices, while buying stock individually, and sometimes jointly investing in setting up shops (2013: 23-25). Charman et al. (2012), similarly, highlight the approach to running spaza shops based on entrepreneurial business models introduced by ‘foreign’ owners to Delft, another Cape Town township. They argue persuasively that in light of these practices, ‘local’ small shops characterized by a ‘survivalist’ approach often have been forced out of business. Present practices stand in stark contrast to the way the spaza shop market operated when price competition was considered unethical and unfair (Charman et al., 2012). Certainly in the context where this research was completed, foreign competition and a more market-based approach to running neighbourhood businesses stands in contrast to the intimate embeddedness of small businesses in people’s lives, the logic that this paper explores and that binds together the informal or popular economy in this context. Conclusion In contexts of informality and subsistence, neighbourhood economies weave together an entanglement of people, their desires, values, relationships, histories, and experiences. These expressions are bound up in everyday lives and practices. Small business owners are reluctant to change business models because their lives and identities are informed by and invested in their businesses. Changing that would mean altering the ways in which they relate to the community, and imagine themselves within it. Instead of a focus on maximizing profit and running businesses based on market logic, businesses are extensions of owners, embodying values, aspirations and relationships. These practices ground owners’ identities in neighbourhood and household relations, a means and a site through which connections to the community are defined and maintained. These are the threads that weave together local logics and livelihoods; a socio-economic fabric that sits in often-precarious relation with ‘foreign’ and ‘formal’ market practices that many perceive as a threat. Acknowledgements Thank you to the many business owners who agreed to be interviewed and to share their experiences. This research was designed and completed in partnership with the United Front Civic Organisation. Thank you to the Civic participants, especially Mrs. Gerty Square, their coordinator. Thank you too to students from University of Cape Town and Stanford University who participated in the research project and to Stanford University’s Bing Cape


S46 Town Centre for providing the funding for the student participation in the project, as well as the South African National Research Foundation, for funding the research as part of a Community Engagement Grant (No. 774408). References Amin, A & Thrift, N. (2007) Cultural-economy and cities. Progress in Human Geography, 31(2), pp. 143-161. Ballard, R., Habib, A., Valodia, I. & Zuern, E. (2005) Globalization, marginalization and contemporary social movements in South Africa. African Affairs,104 (417), pp. 615-634. Battersby, J. (2011) Urban food insecurity in Cape Town, South Africa: An alternative approach to food access. Development Southern Africa, 28(4), pp. 545-561. Charman, A., Petersen, L. & Piper, L. (2012) From local survivalism to foreign entrepreneurship: the transformation of the spaza sector in Delft, Cape Town. Transformation 78, pp. 47-53. Charman, A. & Piper, L. (2012) Xenophobia, Criminality and Violent Entrepreneurship: Violence against Somali Shopkeepers in Delft South, Cape Town, South Africa. South African Review of Sociology 43(3), pp. 81-105. Chen, M.A., Vanek, J. & Carr, M. (2004) Mainstreaming informal employment and gender in poverty reduction: A handbook for policy-makers and other stakeholders, Ottawa: International Development Research Centre. Davie, K. & McDermott, S. (2011) South Africa’s hidden economy. Mail &Guardian Online, http://mg.co.za/article/2011-08-19-the-hidden-economy (accessed 19 August 2011). Davies, R. & Thurlow, J. (2010) Formal and Informal Economy Linkages and Employment in South Africa. South African Journal of Economics 78(4), pp. 437-459. Devey, R., Skinner, C. & Valodia I. (2006) Definitions, data and the informal economy in South Africa: a critical analysis, in Padayachee, V (ed.), The development decade: Economic and social change in South Africa 1994-2004, Human Sciences Research Council Press: Pretoria, pp. 302-326. Gastrow, V. & Amit, R. (2013) Somalinomics: A Case Study on the Economics of Somali Informal Trade in the Western Cape. Johannesburg: African Centre for Migration and Society, University of Witwatersrand, pp. 1-37. Gray, M. (2006) The progress of social development in South Africa. International Journal of Social Welfare, 15(1), pp. 53-64. Gumede, W. (2008) Failing its people: The government of South Africa is neglecting its own poorest communities, with deadly results for immigrants from other African nations. Guardian UK www.guardian.co.uk/commentisfree/2008/may/20/failingitspeople (accessed 20 May 2008). Hart, K. (1973) Informal Income Opportunities and Urban Employment in Ghana. Journal of Modern African Studies, 11(1), pp. 61-89. Hull, E. & James. D. (2012) Introduction: Popular economies in South Africa. Africa, 82(1), pp. 1-19. Neves, D. & Du Toit, A. (2012) Money and Sociality in South Africa’s Informal Economy. Africa 82(1), pp. 131-149. Robins, S, Cornwall, A, & Von Lieres, B. (2008) Rethinking citizenship in the postcolony. Third World Quarterly, 29(6), pp. 1069-1086. Rogerson, C.M. (2013) Improving market access opportunities for urban small, medium and micro-enterprises in South Africa. Urbani izziv 24(2), pp. 133-143. Ross, F. (2010) Raw Life, New Hope: Decency, Housing and Everyday Life in a PostApartheid Community. Cape Town: University of Cape Town Press. Sharp, L. (2011) Trickery in employment figures. Mail & Guardian Online.


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Small business incubators: An emerging phenomenon in South Africa’s SMME economy Mukovhe Masutha Christian M. Rogerson Mukovhe Masutha, University of Johannesburg, Faculty of Science, School of Geography, Environmental Management & Energy Studies, South Africa ([email protected]) Christian M. Rogerson, University of Johannesburg, Faculty of Management, School of Tourism & Hospitality, South Africa ([email protected])

Abstract In South Africa much policy attention is focused on the potential of the small, medium and micro-enterprise (SMME) economy for job creation. Nevertheless, despite government support for the SMME economy, high mortality rates are experienced by start-up enterprises. In common with international experience South Africa has adopted business incubation as a strategic tool for assisting the survival as well as building the competitiveness of SMMEs. This article analyses the state of business incubation in South Africa drawing attention to marked differences between the groups of public sector business incubators as opposed to those business incubators which have been initiated by the private sector. Keywords: small business development, SMMEs, South Africa, business incubators

Introduction Two decades after the democratic transition South Africa remains one of the most unequal societies in the world (Ndungu & Frye, 2008). Some observers argue that poverty, unemployment and inequality levels have reached a state of crisis and threaten the social and economic stability of one of Africa’s youngest democracies (Fakir, 2009). In a response to the triple challenge of poverty, unemployment and inequality the South African government has made substantial commitments to supporting Small, Medium and Micro Enterprises (SMMEs) as a critical policy vehicle for achieving sustainable economic growth, creating employment opportunities and alleviating poverty (Department of Trade and Industry [DTI], 1995, 2006; Rogerson, 2013). It is significant that the national government’s New Growth Path (NGP) and the National Development Plan (NDP), South Africa’s blueprint for future development, both identify the SMME sector as central to the realization of South Africa’s Vision 2030. The National Development Plan Vision 2030 sets out a target of creating 11 million jobs by 2030, of which 90 percent is expected to come from SMMEs (Department of Economic Development, 2011; National Planning Commission, 2011). In addition, the promotion and growth of SMMEs is one of the cornerstones for the successful attainment of local economic development programming in South Africa (Rogerson, 2006, 2007, 2008a, 2010, 2011, 2012, 2014; Rogerson & Rogerson, 2010a, 2012). The establishment of a network of business incubators is an essential step for improving the local business environment and enhancing prospects for local development particularly in South Africa’s urban areas (Rogerson & Rogerson, 2010b, 2011, 2012). Overall, the importance attached by national government to the role of small businesses is underlined by the establishment during 2014 of a separate dedicated Ministry of Small Businesses (Greve, 2014).


S49 Despite the long-standing government commitment and increased support for the sector South African SMMEs have not reached their intended impact, anticipated or desired by policymakers (Rogerson, 2004, 2008b; Timm, 2012). Rather, the South African SMME economy continues to experience high mortality rates with SMMEs failing to grow sufficiently to create the expected employment opportunities (Herrington et al., 2008, 2009, 2010, 2011). The 2011 report produced by the Global Entrepreneurial Monitor (GEM) rated South Africa’s total early-stage entrepreneurial activity at 9.1 percent. Arguably, this rating of South Africa’s early-stage entrepreneurial activity remains far lower than that of comparable emerging economies such as Brazil, Chile or Malaysia (Herrington et al., 2011; Timm, 2012). The GEM report (2011) further notes that South Africa has one of the world’s lowest SMME survival rates. Indeed, in 2012, the country’s Small Enterprise Development Agency (SEDA) estimated that 80 percent of South Africa’s SMMEs are failed businesses in their first year of existence (SEDA, 2012). Across both developed and developing countries small business incubators have been identified as strategic tools for helping to grow a country’s entrepreneurial base while reducing the high mortality of SMMEs. Although the detailed definition of small business incubator is contested there is a general consensus among scholars that a business incubator provides various targeted business support and technical support services aimed at growing emerging and small start-up business enterprises into financially and operationally independent enterprises (Akcomak, 2009; InfoDev, 2010a). Business incubation has been adopted and supported for varying reasons in several countries (Akcomak, 2009; Monkman, 2010; Barbero et al., 2012). Governments across both developed and developing countries have adopted and supported business incubation within various developmental contexts and in response to different developmental challenges (InfoDev, 2010a; Monkman, 2010). Although the reasons behind the establishment of business incubators appear similar, often each nation has specific priorities which respond to locally-specific challenges (InfoDev, 2010a). This said, the most common motives for governments to give support for business incubator programmes relate to issues of employment creation, poverty alleviation, technology transfer, acceleration of business growth, reduction of the mortality rate of SMMEs, empowerment of specific groups of entrepreneurs, creating value for various stakeholders, urban/rural regeneration, and the revitalization of local economies (Colombo & Delmastro, 2002; Monkman, 2010). For Akcomak (2009: 1) incubators provide an attractive framework for government policymakers and “can be considered as a remedy for the disadvantages that small and new firms encounter by providing numerous business support services and they are useful in fostering technological innovation and industrial renewal”. Notwithstanding growing international interest for the application of small business incubators, research concerning business incubation is limited and remains in its infancy. In common with the international experience South Africa, through the Department of Trade and Industry (DTI), has identified business incubation as a viable tool to help SMMEs grow and become successful and globally competitive enterprises with the potential to create jobs, alleviate poverty, empower previously marginalized groups and contribute to the growth of local economies (InfoDev, 2010b; SEDA, 2010; Timm, 2012, DTI, 2013). The lead agency for galvanizing business incubation is the government’s Small Enterprise Development Agency or SEDA. In South Africa only a small number of investigations have been undertaken on the role of business incubators as one of the ways in which the country might seek to energize its entrepreneurial base for developmental purposes (Wyeth, 2007; Buys & Mbewana, 2007; Ndabeni, 2008; InfoDev, 2010b; Sandheep & Thomas, 2011). Accordingly, there is a significant knowledge gap concerning business incubation in the country and in particular, little is known about the organization and operations of different kinds of business incubators (Masutha, 2014). The aim in this paper is to address this knowledge deficit about


S50 the growing phenomenon of small business incubators in South Africa. More specifically, the discussion undertakes an analysis of the contemporary state of business incubators, their sectoral and institutional base, and character of entrepreneurs. The conclusion seeks to draw comparisons and differences between the groups of public and private incubators in South Africa. The analysis is based upon a national audit that was undertaken of business incubator operations in South Africa during 2013. In addition, it draws upon findings from a national survey of business incubators, documentary sources in the form of SEDA Annual Reports and material gathered from semi-structured interviews conducted with the SEDA Technology Programme Executive Manager, former SEDA Technology Programme Executive Managers, SEDA Regional Manager (Gauteng) and telephonic interviews with incubator managers of both public and private sector business incubators. In total, responses were received from thirty-eight of the forty-two public incubators implying a response level of 90 percent. Information concerning the remaining four public sector incubators was received during an interview with the SEDA Regional manager responsible for incubation. In the private sector, responses were received from seven of the nine private sector business incubators in the country which is a 78 percent response rate. National State of Business Incubators In terms of numbers of incubators by 2013 the audit of national incubators reveals a total of 51 functioning incubators. This figure represents a marked growth in the numbers of South African business incubators from a total of only four in 2004, to 37 by 2011 to 51 by 2013. The majority of the 51 business incubators have been established by the public sector. Of the national total of incubators 42 or 82 percent are public sector driven through the activities of SEDA, South Africa’s national small enterprise development agency. The remaining nine incubators or 18 percent are private sector operations. Overall, it was disclosed in interviews that the primary objective of public sector incubators is to broaden economic participation in South Africa by creating employment opportunities and the transference of skills, most importantly for disadvantaged communities. By contrast most private sector incubators focus upon growing small businesses into assets of value with specific emphasis on maximizing the profitability and annual turnover of the small business. In terms of the incubators’ institutional environment, all public incubators report to the Department of Trade and Industry’s Small Enterprise Development Agency, while private incubators are accountable to their parent companies. Within the international landscape of business incubators it is apparent that the public sector has been particularly strong in driving the growth trajectory of the business incubator movement in South Africa (SEDA, 2010, 2011a, 2011b; 2012). Indeed, it is only in recent years that a set of parallel private sector incubators have made their appearance. Table 1: Number of Incubators by Sector Sectoral Focus Number of Incubators Manufacturing 13 Mixed Use 8 Agriculture/Agro-Processing 7 Construction 5 ICT 5 Chemicals 4 Jewellery 4 Small-scale Mining 2 Bio and Life Science 1


S51 Renewable Energy Automotive (Source: Authors)

1 1

Table 1 shows the sectoral focus of business incubators in South Africa. A number of points can be observed. First, 84 percent of business incubators (43 in total) are sectorally specific and only 8 incubators can be described as mixed in terms of the business category of incubatees. Second, in terms of sectoral focus, currently the largest number of functioning incubators are linked to manufacturing with the largest individual sectors being those of furniture, agro-processing and chemicals. Other manufacturing activities in which sector specific incubators have been established include the production of jewellery, aluminum fabrication, and stainless steel. Three, beyond manufacturing-linked incubators there are several incubators which are dedicated to support other sectors such as ICT, construction and small-scale mining. Finally, in agriculture there are incubators which support enterprise development for both floriculture and the production of essential oils. Table 2: Number of Incubators in Each Sector: Public vs Private Sector Driven Sectoral Focus Public Sector Private Sector Manufacturing 13 0 Mixed Use 2 6 Agriculture/Agro-Processing 7 0 Construction 5 0 ICT 3 2 Chemicals 3 1 Jewellery 4 0 Small-scale Mining 2 0 Bio and Life Science 1 0 Renewable Energy 1 0 Automotive 1 0 (Source: Authors) Table 2 reveals the sectoral distribution or focus of respectively the groups of public sector versus private sector incubators. It is evident that significant differences between the focus of public sector as opposed to private sector operated business incubators in South Africa. Three points are of note. First, 95 percent of public sector incubators are sectorspecific with only two of the 42 incubators functioning as mixed incubators. Second, by contrast, two-thirds of the private sector incubators are mixed and only three sector-dedicated incubators have been initiated by the private sector. Third, of the large group of public sector incubators initiated by SEDA, the majority are linked to manufacturing activities or agroprocessing. Table 3: Number of Incubators by Province Province Number of Incubators Gauteng 17 KwaZulu-Natal 12 Eastern Cape 7 Western Cape 5 Mpumalanga 5 Limpopo 2 Free State 1


S52 North West 1 Northern Cape 1 (Source: Authors) Finally, in terms of their geographical distribution across South Africa, a number of points can be observed. As is demonstrated on Table 3 at least one business incubator has been established in each of South Africa’s nine provinces. However, the largest clusters of business incubators are currently located in the provinces of Gauteng and KwaZulu-Natal followed by Eastern Cape, Western Cape and Mpumalanga. Together these five provinces account for 90.2 percent of all business incubators. The provinces that are relatively underserved in terms of business incubators are Limpopo, North West, Free State and Northern Cape. Table 4: Geographic Distribution of Business Incubators by Settlement Type Number of Business % Share Incubators Urban Areas – 41 80 Cities/Small Towns/Cities Townships 5 10 Rural Areas 5 10 (Source: Authors) Table 4 provides a more refined picture of the location of business incubators in terms of different types of settlement. This reveals that South African business incubators are unevenly distributed between urban and rural areas. Over half of the existing business incubators are located in South Africa’s leading metropolitan centres with Johannesburg having the greatest individual number of incubators. It is observed that all the private sector business incubators are situated in metropolitan areas and that the private sector driven incubators are absent from secondary cities or small towns. The geography of public sector incubators reveals, however, an outreach into secondary cities and small towns. Importantly, however, there are few business incubators located in the underdeveloped rural areas or urban townships, the most disadvantaged areas of the South African space economy. Survey Findings The national survey of public and private incubators collected information on a number of different aspects of their operations. In particular, information was obtained on the evolution and size of incubators, nature of SMMEs, number of jobs created, and issues of recruitment and graduation of incubatees. Table 5: Number of Public Sector Business Incubators by years of establishment Year of Number of Incubators establishment Established 2001 3 2002 2 2003 1 2004 5 2005 4 2006 4 2007 2008 3 2009 6


S53 2010 2 2011 1 2012 11 Total 42 (Source: Authors) Table 6: Number of Private Sector Business Incubators by years of establishment Year of Number of Incubators establishment Established 2000 2 2001 1 2002 2003 2004 1 2005 1 2006 2007 2008 1 2009 1 2010 1 2011 1 2012 (Source: Authors) Tables 5 and 6 provide a profile of the evolution of business incubators in South Africa, both private and public, by year of establishment. It is evident that South Africa’s business incubation movement has evolved rapidly particularly over the past decade. In 2001 there existed only 3 public incubators in South Africa. Between 2001 and 2007 this number increased to 20 public incubators. During the past 5 years South Africa has expanded the number of public incubators from 20 in 2007 to reach a total of 42 by 2012. In 2012 SEDA established 11 public sector incubators. Tables 5 and 6 indicate that the category of public sector incubators has evolved more rapidly than private sector incubators in terms of number of incubators established each year. Table 7: Number of SMMEs Currently Supported by Public Sector Incubators Name of Public Business Incubator Number of SMMEs Currently Supported Chemin (3 Incubation Centers) 50 Downstream Aluminium Centre for Technology 76 (DACT) EgoliBio 13 Ekurhuleni Jewellery Incubator New Furntech (7 Incubation Centers) 93 Global Jewellery Academy 6 Innovation Technology Business Incubator (Invo 33 Tech) Lepharo 6 Mapfura Makhura Incubator (MMI) 166 Mpumalanga Agri-skills Development & Training 131

Incubation Model Physical Physical Physical Physical Mixed Physical Physical Physical Virtual Virtual


S54 (MASDT), Nelspruit Mpumalanga Stainless Steel Initiative (MSI) Seda Agricultural & Mining Tooling Incubator (SAMTI) Seda Alfred Nzo Agro Manufacturing Incubator (SANAMI) Seda Atlantis Renewable Business Incubator (SEREBI) Seda Automotive Technology Centre (SATEC) Seda Construction Incubator (SCI) Seda Essential Oils Business Incubator (SEOBI) (2 Incubation Centers) Seda Limpopo Jewellery Incubator (SLJI) Seda Nelson Mandela Bay ICT Incubator (SNMBICTI) Seda Northern Cape Diamond and Jewellery Incubator Seda Platinum Incubator (SPI) Seda Sugar Cane Incubator SESUCI) Seed Container Park (Secopa) SmartExchange SoftstartBTI (SBTI) Soshanguve Manufacturing Technology Demonstration Centre (SMTDC) Timbali Zenzele Technology Demonstration Centre Total (Source: Authors)

34 24

Physical Physical

New

Physical

New

Physical

45 215 68

Physical Virtual Physical

80 30

Physical Physical

New

Physical

33 105 7 47 44 60

Physical Virtual Physical Physical Mixed Physical

118 30 1514

Virtual Physical

Table 8: Number of SMMEs Currently Supported by Private Sector Incubators Name of Private Business Incubator Number of SMMEs Incubation Model Currently Supported (2012) Raizcorp Business Incubator 300 Virtual Aurik Business Incubator 200 Virtual Bandwidth Barn ICT Incubator 70 Physical Shanduka Black Umbrellas (JHB) 29 Mixed Shanduka Black Umbrellas (CT) 17 Mixed Shanduka Black Umbrellas (PTA) 18 Mixed Shanduka Black Umbrellas (DBN) 24 Mixed Sasol Chemcity Business Incubator 179 Virtual Total 837 (Source: Authors) Tables 7 and 8 reveal the numbers of SMMEs currently supported in respectively public incubators and private incubators. It is evident that there are considerable variations in the size of various incubators as measured by the number of SMMEs currently supported. In the case of public sector incubators, excluding newly established incubators (that currently have no occupants), the range in size is from six to 215 in total. The largest cluster of public sector Urbani izziv, volume 25, supplement, 2014 (special issue)

S55 incubators is, however, in the range of 40 to 80 SMMEs. In examining Table 5 it is evident that the size of private incubators is considerably larger than public sector incubators. The survey revealed a range of sizes from 17 SMMEs in an incubator with the lowest number of SMMEs to 300 in the case of Raizcorp. Currently, the average incubator size for public incubators is calculated as 44 SMMEs, whereas the average size for private incubators is 97 SMMEs per incubator. With the growing demand of business incubation services, both groups of public and private sector incubators are progressively introducing programmes of virtual incubation as opposed to a physical incubator. The group of private sector incubators is already predominantly virtual in their operational model. A major advantage of virtual business incubation is that it increases incubators’ capacity to accommodate more SMMEs. It is evident that marked size differences exist between the groups of physical as opposed to virtual incubators. Nationally, the largest physical incubator had 64 SMMEs. The largest incubator is a virtual rather than physical incubator (Raizcorp Business Incubator) with 300 SMMEs. Table 9: Percentage of Women-Owned SMMEs by Business Incubator Name of Business Incubator % Women Owned Chemin (3 Incubation Centers) 100 Downstream Aluminium Centre for Technology (DACT) 45 EgoliBio 58 Ekurhuleni Jewellery Incubator 0 Furntech (7 Incubation Centers) 39 Global Jewellery Academy New Innovation Technology Business Incubator (Invo Tech) 3 Lepharo 38 Mapfura Makhura Incubator (MMI) 22 Mpumalanga Agri-skills Development & Training (MASDT), 36 Nelspruit Mpumalanga Stainless Steel Initiative (MSI) 17 Seda Agricultural & Mining Tooling Incubator (SAMTI) 4 Seda Alfred Nzo Agro Manufacturing Incubator (SANAMI) New Seda Atlantis Renewable Business Incubator (SEREBI) New Seda Automotive Technology Centre (SATEC) 7 Seda Construction Incubator (SCI), 43 Seda DUT Technology Incubator (SDTI) New Seda Essential Oils Business Incubator (SEOBI) (2 Incubation 44 Centers) Seda Limpopo Jewellery Incubator (SLJI) 57 Seda Nelson Mandela Bay ICT Incubator (SNMBICTI) New Seda Northern Cape Diamond and Jewellery Incubator New Seda Platinum Incubator (SPI) 37 Seda Sugar Cane Incubator SESUCI) 33 Seed Container Park (Secopa) 75 SmartExchange 23 SoftstartBTI (SBTI) 16 Soshanguve Manufacturing Technology Demonstration Centre 33 (SMTDC) Timbali 100


S56 Zenzele Technology Demonstration Centre Total (Source: Authors)

24 40

Table 10: Percentage of Black-Owned SMMEs by Business Incubator Name of Business Incubator Chemin (3 Incubation Centers) Downstream Aluminium Centre for Technology (DACT) EgoliBio Ekurhuleni Jewellery Incubator Furntech (7 Incubation Centers) Global Jewellery Academy Innovation Technology Business Incubator (Invo Tech) Lepharo Mapfura Makhura Incubator (MMI) Mpumalanga Agri-skills Development & Training (MASDT), Nelspruit Mpumalanga Stainless Steel Initiative (MSI) Seda Agricultural & Mining Tooling Incubator (SAMTI) Seda Alfred Nzo Agro Manufacturing Incubator (SANAMI) Seda Atlantis Renewable Business Incubator (SEREBI) Seda Automotive Technology Centre (SATEC) Seda Construction Incubator (SCI), Seda DUT Technology Incubator (SDTI) Seda Essential Oils Business Incubator (SEOBI) (2 Incubation Centers) Seda Limpopo Jewellery Incubator (SLJI) Seda Nelson Mandela Bay ICT Incubator (SNMBICTI) Seda Northern Cape Diamond and Jewellery Incubator Seda Platinum Incubator (SPI) Seda Sugar Cane Incubator SESUCI) Seed Container Park (Secopa) SmartExchange SoftstartBTI (SBTI) Soshanguve Manufacturing Technology Demonstration Centre (SMTDC) Timbali Zenzele Technology Demonstration Centre Total (Source: Authors)

% Black-Owned 100 36 67 New 91 100 95 100 100 100 48 88 New New 100 100 New 100 100 89 New 92 100 100 100 34 100 100 100 83

Tables 9 and 10 index the proportion of women owned SMMEs by business incubators and black owned SMMEs by incubators. The analyses relate only to public sector incubators, as private sector incubators could not provide this information. In terms of the proportion of women owned SMMEs, considerable variations exist. Table 9 reveals that on average women owned SMMEs represent 40 percent of the public sector incubatees. This said, in some cases the proportion is less than 10 percent and in other instances it reaches 100 percent as in the case of Timbali Floriculture business incubator and Chemin business incubator. Table 10 discloses that the vast majority of public sector incubators are supporting only black owned SMMEs. This is in line with the objectives of the business incubator programme as laid out


S57 by the Department of Trade and Industry to give preference to disadvantaged groups. The emphasis upon black owned and women owned enterprises within the group of public incubators reflects the recruitment strategies for these incubators. The survey revealed that common recruitment strategies by the public sector include the hosting of networking events such as incubation days, advertisements including radio, television and lampposts, the hosting of roadshows, use of websites, social networks (Facebook), walk-ins and referrals. Overall, a key finding from the survey was that each incubator developed its own individual recruitment strategy to attract a particular group of aspiring entrepreneurs. It is significant to observe that incubators have aligned their SMME recruitment strategies to their respective incubation models and objectives. For example, the private sector Shanduka Black Umbrellas Business Incubator (SBU) recruitment strategy targets enterprises that are 100 percent black owned. This is in line with the incubator’s strategic objective to broaden economic participation in South Africa by empowering emerging black entrepreneurs and their SMMEs. The survey also reveals that most incubators have aligned their SMME recruitment strategies with specific sectors of the economy. For example, Softstart Business Technology incubator only recruits entrepreneurs in the Information and Communications (ICT) sector. Table 11: Number of Jobs Created by Public Business Incubators (2012) Name of Business Incubator Number Created Chemin (3 Incubation Centers) 68 Downstream Aluminium Centre for Technology (DACT) 52 EgoliBio 45 Ekurhuleni Jewellery Incubator New Furntech (7 Incubation Centers) 80 Global Jewellery Academy 0 Innovation Technology Business Incubator (Invo Tech) 57 Lepharo 42 Mapfura Makhura Incubator (MMI) 68 Mpumalanga Agri-skills Development & Training (MASDT), 80 Nelspruit Mpumalanga Stainless Steel Initiative (MSI) 11 Seda Agricultural & Mining Tooling Incubator (SAMTI) 20 Seda Alfred Nzo Agro Manufacturing Incubator (SANAMI) New Seda Atlantis Renewable Business Incubator (SEREBI) New Seda Automotive Technology Centre (SATEC) 12 Seda Construction Incubator (SCI) 1050 Seda Essential Oils Business Incubator (SEOBI) (2 Incubation 154 Centers) Seda Limpopo Jewellery Incubator (SLJI) 17 Seda Nelson Mandela Bay ICT Incubator (SNMBICTI) 35 Seda Northern Cape Diamond and Jewellery Incubator New Seda Platinum Incubator (SPI) 23 Seda Sugar Cane Incubator SESUCI) 59 Seed Container Park (Secopa) 47 SmartExchange 55 SoftstartBTI (SBTI) 29

of

Jobs


S58 Soshanguve Manufacturing Technology Demonstration Centre 25 (SMTDC) Timbali 90 Zenzele Technology Demonstration Centre 182 Total 2301 (Source:Authors) Table 12: Number of Jobs Created by Private Business Incubators Name of Private Business Incubator Number of Jobs Created Raizcorp Business Incubator No Records Aurik Business Incubator No Records Shanduka Black Umbrellas (Johannesburg) 50 Shanduka Black Umbrellas (Cape Town) 30 Shanduka Black Umbrellas (Pretoria) 46 Shanduka Black Umbrellas (Durban) 40 Sasol Chemcity Incubator 3099 Total Not available (Source: Authors) Tables 11 and 12 present data provided on the number of jobs which were created by each of the incubators respectively for the public sector incubators (Table 11) and the private sector incubators (Table 12). It should be noted that information for the private sector business incubators could not be obtained from two of the seven surveyed incubators. A key finding is the much greater impact for job creation of the group of private sector incubators. It is evident that the number of jobs created by several of the private sector incubators is in excess of all the jobs created in total by the group of public sector incubators. By the end of the 2012 financial year, in total the number of jobs created by public sector incubators stood at 2031 jobs, whereas the group of four private incubators from which information is available together created at least 3099 jobs. This finding points to the markedly different job creating impact of private sector business incubators as opposed to the group of public sector incubators. Table 13: Number of Graduates from Public Sector Business Incubators Name of Public Founding Number of Graduation Business Incubator Year Graduates Since Period Inception Chemin (3 Incubation Centers) 2002 30 3 Years Downstream Aluminium Centre for 2002 20 3 Years Technology (DACT) EgoliBio 2001 No Records 3 Years Ekurhuleni Jewellery Incubator 2009 No Records 3 Years Furntech (7 Incubation Centers) 2001 85 3 Years Global Jewellery Academy 2009 No Records 3 Years Innovation Technology Business 2009 5 3 Years Incubator (Invo Tech) Lepharo 2009 No Records 3 Years Mapfura Makhura Incubator (MMI) 2006 50 3 Years Mpumalanga Agri-skills Development & 2005 51 3 Years Training (MASDT), Nelspruit


S59 Mpumalanga Stainless Steel Initiative (MSI) Seda Agricultural & Mining Tooling Incubator (SAMTI) Seda Alfred Nzo Agro Manufacturing Incubator (SANAMI) Seda Atlantis Renewable Business Incubator (SEREBI) Seda Automotive Technology Centre (SATEC) Seda Construction Incubator (SCI) (5 Incubation centers) Seda DUT Technology Incubator (SDTI) Seda Essential Oils Business Incubator (SEOBI) (2 Incubation Centers) Seda Limpopo Jewellery Incubator (SLJI) Seda Nelson Mandela Bay ICT Incubator (SNMBICTI) Seda Northern Cape Diamond and Jewellery Incubator Seda Platinum Incubator (SPI) Seda Sugar Cane Incubator SESUCI) Seed Container Park (Secopa) Smart Exchange SoftstartBTI (SBTI) Soshanguve Manufacturing Technology Demonstration Centre (SMTDC) Timbali Zenzele Technology Demonstration Centre Total (Source: Author)

2001

12

3 Years

2010

New

3 Years

2012

New

3 Years

2012

New

3 Years

2011

New

3 Years

2006

56

3 Years

2009 2006

No Records No Records

3 Years 3 Years

2009

2

3 Years

2008

5

3 Years

2012

New

3 Years

2006 2004 2010 2009 2006 2010

10 62 New No Records No Records New

3 Years 3 Years 3 Years 3 Years 3 Years 3 Years

2004 2003

140 4

3 Years 3 Years

528

Table 14: Number of Graduates from Private Sector Business Incubators Name of Private Founding Number of Business Incubator Year Graduates since Inception to 2012 Raizcorp Business Incubator 2000 900 Aurik Business Incubator 2001 800 Shanduka Black Umbrellas (JHB) 2009 3 Shanduka Black Umbrellas (CT) 2008 4 Shanduka Black Umbrellas (PTA) 2010 New Shanduka Black Umbrellas (DBN) 2011 New Sasol Chemcity Incubator 2004 652 Bandwidth Barn Incubator 2000 No Records Maxum Business Incubator 2005 No Records Total (Source: Author)

Graduation Period 3 years 1 to 3 Years 3 years 3 years 3 years 3 years 3 years 3 years 3 years

2359


S60

Tables 13 and 14 provide valuable information on the graduation performances of SMMEs from incubators. It is evident by comparing the two tables that the performance of private sector incubators is much more impressive as compared to the group of public sector incubators. For the group of public sector incubators from which information could be obtained, in total the number of graduates was 528 by the end of the 2012 financial year, with the largest numbers generated from the Timbali Floriculture incubator, Furntech and SEDA sugar cane incubators. By contrast, the seven surveyed private sector incubators have graduated a total of 2359 SMMEs. This means that in terms of the business incubation movement in South Africa, the small group of private sector incubators records a much greater impact than their public counterparts as indexed by graduation of SMMEs. In explaining this different performance, it should be noted, however, that private sector incubators tend to target for recruitment the group of high growth and high impact enterprises while public incubators predominately focus on small and micro enterprises. For example, SEDA incubators target SMMEs with an annual turnover around R250 000 (In 2013 $1 = R10 South African Rand approximately). By contrast, the group of private incubators target the recruitment of enterprises with a much higher annual turnover often from R5 million and above. Graduation is mandatory in all South African incubators. However, in most cases this rule is not strictly applied. The majority of incubators emphasize that they will only graduate an SMME once the product or service being rendered is ready for the market. Both public and private incubators stipulate three years as a generally accepted incubation period. In some cases it is possible for an SMME to exit the incubator earlier or later than the agreed three years incubation period depending on the readiness of the product or the service being rendered. The graduation of incubatees into the mainstream business environment is one of the major key performance indicators used by incubators to measure and evaluate their performance and economic impact globally (Ravjee, 2010). Nevertheless, with a few exceptions, Table 14 reveals that several public sector incubators surveyed do not maintain accurate records of the state of SMMEs that have graduated from their incubators since inception. Furntech is one of the few exceptions, having graduated 85 SMMEs since 2001. More alarming is the admission by SEDA Technology Programme (STP), the entity responsible for managing all public sector incubators in South Africa, that they do not have records about SMME graduation from their incubators. The STP is a division of SEDA which is responsible for, amongst other things, monitoring and evaluation of the performance of all public incubators. By contrast, all private business incubators kept accurate records of their graduates since inception. Conclusion For promoting small business development there is a growing international interest in the use of business incubation as one strategy to tackle the high mortality rates which are prevalent amongst start-up enterprises. With the critical role identified for SMMEs in South Africa for creating new employment opportunities, particularly over the next two decades, the promotion of business incubation is an issue of mounting policy concern. The expanding network of business incubators can contribute to support the SMME economy and thus be part of place-based local economic development programming (Rogerson & Rogerson, 2010a, 2010b, 2011; Rogerson, 2014). This paper addresses the knowledge gap about business incubators in South Africa. It highlights the burst of new incubator expansion in the past decade which has been driven mainly by the activities of the country’s small enterprise development agency. In addition, in common with the international experience, there has been


S61 a growth in South Africa of private sector involvement in the development of business incubators. The national survey undertaken in this study reveals that in terms of the incubators, important variations exist in the landscape of private as opposed to public sector funded business incubators. It is observed that the private sector incubators are mainly mixed in focus and spatially highly concentrated in the major metropolitan centres and market areas of the country. By contrast, the pattern of public sector incubators is that mainly they are sectorally focused and geographically less concentrated in major metropolitan areas as there has been a deliberate attempt by government to locate public sector incubators in poorer provinces and secondary cities or small towns. However, the results from the survey interviews point to critical differences in the operations and impacts of the groups of public and private sector incubators as indexed by the size of incubators, recruitment strategies, graduation performance and jobs created. Overall, given their rising policy significance, further investigations are merited into the unfolding landscape and performance of small business incubators in South Africa. Acknowledgements Thanks are due to research funding support from the National Research Foundation, Pretoria and the University of Johannesburg. A preliminary version of this paper was presented at the Society for South African Geographers Conference, Cape Town, July 2012. The comments of referees were extremely helpful in the revision of this paper. References Akcomak, I.S. (2009). Incubators as Tools for Entrepreneurship Promotion in Developing Countries. Helsinki, UNU-WIDER Working Papers 2009/52. Barbero, J.L., Casillas, J.C., Ramos, A. & Guitar, S. (2012). Revisiting incubation performance: How incubator typology affects results, Technological Forecasting & Social Change, 79, pp. 888-902. Buys, A.J. & Mbewana, P.N. (2007). Key success factors for business incubation in South Africa: The Godisa case study, South African Journal of Science, 103 (9-10), pp. 356-358. Colombo, M. & Delmastro, M. (2002). How effective are technology incubators? Evidence from Italy, Research Policy, 31 (7), pp. 1103–1122. Department of Economic Development (2010) The New Growth Path Framework, Pretoria, Department of Economic Development. DTI (1995). White Paper on National Strategy for the Development and Promotion of Small Business in South Africa, Cape Town, DTI. DTI (2006) Integrated Small-Enterprise Development Strategy: Unlocking the Potential of South African Entrepreneurs, Pretoria, DTI. DTI (2013). DTI launches Incubation Support Programme. Pretoria, DTI. Fakir, E. (2009). Politics, State and Society in South Africa: Between Leadership, Trust and technocrats, Midrand, Development Bank of Southern Africa Development Planning Division Working Paper Series No.1. Greve, N. (2014) New cabinet: thinking small. Engineering News, 6-12 June, p. 11. Herrington, M., Kew, J., & Kew, P. (2008). Global Entrepreneurship Monitor 2008 South African Report, Cape Town, Graduate School of Business, University of Cape Town. Herrington, M., Kew, J., & Kew, P. (2009). Tracking Entrepreneurship in South Africa: A GEM perspective,. London, Global Entrepreneurship Research Association. Herrington, M., Kew, J., & Kew, P. (2010). Global Entrepreneurship Monitor 2010 South African Report, Cape Town, University of Cape Town Graduate School of Business.


S62 Herrington, M., Kew, J., & Kew, P. (2011). Global Entrepreneurship Monitor 2011 South African Report, Cape Town, University of Cape Town Graduate School of Business. InfoDev (2010a). Global Practice in Incubation: Policy development and Implementation. Washington DC, The World Bank. InfoDev (2010b). Global Practice in Incubation: Policy development and Implementation: South African Country Study,. Washington DC, The World Bank. Masutha, M. (2014) Small business incubators in South Africa: Emergence, geography and local impacts, Unpublished MSc dissertation, University of Johannesburg. Monkman, D. (2010). Business Incubators and Their Role in Job Creation, Ohio, NBIA National Planning Commission. (2011). National Development Plan: Vision for 2030. Pretoria, National Planning Commission. Ndabeni, L. (2008). The contribution of business incubators and technology stations to small enterprise development in South Africa. Development Southern Africa, 25, pp. 259-268. Ndungu S.K. & Frye I. (2008). Poverty, Inequality and Creating Decent Work, Johannesburg, National Labour and Economic Development Institute. Ravjee, J. (2010). Critical success factors for incubators. Unpublished paper presented at the African Incubator Network, Durban. Rogerson, C.M. (2004) The impact of the South African government’s SMME programmes: a ten year review, Development Southern Africa, 21, pp. 765-784. Rogerson, C.M. (2006) The market development approach to SMME development: Implications for local government in South Africa, Urban Forum, 17, pp. 54-78. Rogerson, C.M. (2007) Small enterprise development in South Africa’s lagging regions: the case of Mpumalanga province, Urban Forum, 18, pp. 60-93. Rogerson, C.M. (2008a) Consolidating local economic development in South Africa, Urban Forum, 19, pp. 307-328. Rogerson, C.M. (2008b) Tracking SMME development in South Africa: Issues of finance, training and the regulatory environment. Urban Forum, 19, pp. 61-81. Rogerson, C.M. (2010) Local economic development in South Africa: Key strategic challenges, Development Southern Africa, 27, pp. 481-495. Rogerson, C.M. (2011) Tracking local economic development policy and practice in South Africa, 1994-2009. Urban Forum, 22, pp. 149-168. Rogerson, C.M. (2012) Supplier diversity: A new phenomenon in private sector procurement in South Africa. Urban Forum, 23, pp. 279-297. Rogerson, C.M. (2013) Improving market access opportunities for urban small, medium and micro-enterprises in South Africa. Urbani izziv, 24 (2), pp. 133-143. Rogerson, C.M. (2014) Reframing place-based economic development in South Africa: The example of local economic development. Bulletin in Geography: Socio-Economic Series, 24, pp. 203-218. Rogerson, C.M. & Rogerson, J.M. (2010a) Local economic development in Africa: Global context and research directions, Development Southern Africa, 27, pp. 465-480. Rogerson, C.M. & Rogerson, J.M. (2010b) Improving the business environment of Johannesburg, Development Southern Africa, 27, pp. 577-593. Rogerson, C.M. & Rogerson, J.M. (2011) Improving the business environment for local economic development in South Africa, Journal of Public Administration, 46, pp. 994-1009. Rogerson, C.M. & Rogerson, J.M. (2012) Business development and local economic development in South Africa: Addressing the disconnect. Acta Academica, 44 (2), pp. 41-69. Sandheep, R. & Thomas, W. (2011) How are South Africa’s Government-subsidized small business incubators doing at nurturing start-up enterprises? Raising Businesses: Agenda, 2, pp. 18-21.


S63 SEDA (2010) Seda Technology Programme Incubators Fast Track SMME Success. Pretoria, SEDA. SEDA (2011a) Incubator Support Promised for SMEs. Pretoria, SEDA. SEDA (2011b) Annual Report 2010/11. Pretoria, Seda. SEDA (2012) Annual Report 2011/12. Pretoria, Seda. Timm, S. (2011) How South Africa Can Boost Support to Small Businesses: Lessons from Brazil and India, Pretoria, Trade and Industrial Policy Secretariat. Wyeth, C. (2007) Government’s Role in Supporting Innovation and Entrepreneurship in South Africa. Paper presented at the African Incubator Network Conference, Maputo, 9 July.



The Victoria and Alfred Waterfront as playground for Capetonians Sanette Ferreira Rozitta de Villiers Sanette Ferreira, Stellenbosch University, Department of Geography and Environmental Studies ([email protected]) Rozitta de Villiers, Masters’ student in the Department of Geography and Environmental Studies at Stellenbosch University

Abstract The paper contributes to the exploration and understanding of the social geographies of public space in the Victoria & Alfred Waterfront (V&AW) in Cape Town. The aim is to understand Capetonians’ (visitors and employees) perceptions of the V&AW as public, leisure, shopping and working spaces. The appropriate literature on waterfront developments in providing public, working and leisure space is reviewed. Two questionnaire surveys (visitors and employees) as well as eight unstructured interviews with important role players in the tourism industry of Cape Town were conducted. Findings revealed the most important reasons for Capetonians to visit or use certain spaces in the V&AW, the public open spaces they liked and how they perceived the V&AW as an inclusive space. The research also sought the respondents’ views on how the certain public spaces can be improved; what new activities and retail shops can be introduced; their opinions about the affordability of restaurants and parking; and how the V&AW can improve to cater for the needs of the Waterfront’s employees. Recommendations are made for making the V&AW more functional and accessible to Capetonians. Keywords: Cape Town, waterfronts, leisure, tourism, shopping space and public space

Introduction The past four decades have witnessed many waterfront transformations from places where shipping and heavy industry dominated into spaces for residential, commercial and leisure activities (Gospondini, 2006; O’Callaghan & Linehan, 2007; Casellas, Dot & PallaresBarbera, 2012). The challenge to port cities undertaking waterfront redevelopments is to reclaim the port areas and transform them into areas of economic growth, spaces where public health and the environment are protected and to create a sense of place that attracts the local community to use the public open spaces the developments offer (Quinn, 2012).The Victoria and Alfred Waterfront (V&AW) in Cape Town had been transformed from a brownfields shipping wasteland to a mixed-use development boasting public spaces of distinction. The V&AW now includes tourism attractions, retail space (shopping space), office space, restaurants, accommodation establishments, entertainment facilities, commercial property and a variety of residential properties (V&A Waterfront, 2011). This redevelopment and ongoing development (eighth phase – also called silo-development) has received the attention of international (Breen & Rigby, 1996; Lemanski, 2007; Houssay-Holzchuch & Teppo, 2009; Eidelman 2013 ) and local scholars (Kilian & Dodson, 1996; Van Zyl, 2006; Ferreira & Visser 2007; Pirie, 2007; Rogerson & Visser, 2007). The V&AW is the most visited tourism and leisure space in South Africa. It received over 24 million visitors in 2013 (White, 2014) and the visitor profile in 2011 revealed a local, national and international mix with approximately 55% of the visitors being Capetonians,


S65 29% foreign and 16% South African visitors from beyond the boundaries of the Cape Town metropolitan area (Cole, 2014). The V&AW is not only a key destination for domestic visitors to Cape Town as it is also a popular site for the leisure activities of Capetonians (Rogerson & Visser, 2007). The original purpose of the development was to transform the former harbour area into a safe public space that would be commercially viable and would reconnect the harbour with the city centre (Birkby, 1998). Other objectives of the redevelopment were to generate employment and to develop the public spaces in the V&AW in a way that locals would feel welcome to visit these leisure spaces. Access has often been a key concern of critics of waterfront developments (Lehrer & Laidley, 2008). In the first years of the V&AW’s redevelopment, it was predominately “a white man’s playground” but the V&AW has since expanded its appeal to include at least lower-middle-class cohorts and, on occasion, even the poor (Ferreira & Visser, 2007). However, “whatever the critics might say, anyone with Levi’s jeans, T-shirt, and good sneakers is welcome at the V&AW” (Ferreira & Visser, 2007: 241). Access to (and some aspects of the consumption of) the redeveloped space (as opposed to full participation) is not nearly as exclusionary as critics would lead one to believe about waterfronts, if not generally, then certainly the V&AW (Ferreira & Visser, 2007). The V&AW employs a wide variety of staff in various business categories and with different skills levels, who work there daily and often spend their lunch hours shopping or at leisure in a variety of public open spaces. From a spatial perspective, it is false to argue that the V&AW is inaccessible regarding its physical location as the V&AW is one of the most accessible locations in Cape Town and well serviced by both private and public transport. However, some local visitors perceive the V&AW to be a tourist trap aimed at high-income earners and international visitors. Although many local visitors have an emotional connection with the property, they do not necessarily make it their shopping destination of choice (HoussayHolzchuch & Teppo, 2009). The V&AW consists of a variety of public spaces but Capetonians do not find all to be functional and some have no reason to visit the V&AW. The V&AW regeneration was primarily investment led and while a part of the old commercial port was converted into an upmarket mixed-use development, some Capetonians perceived it as a playground for high- income earners. Against these criticisms of the exclusiveness and expensiveness of the V&AW, the overarching aim of the research reported here was to investigate, understand and evaluate the perceptions Capetonians have on the leisure, recreation, shopping and working spaces of the V&AW. First, we review the appropriate theory on waterfront developments in port cities regarding their role as public, work and leisure spaces. Second, we explain the mixed-method research approach which includes a spatial analysis of land use in the V&AW; two questionnaire surveys (Capetonians who visit the V&AW and employees in different business sectors at the V&AW) to determine the perceptions of these groups of individuals about certain spaces at the V&AW; and unstructured interviews with important role players in the tourism industry of Cape Town, to detect their views on these spaces. Third, findings are presented and interpreted. Last, the main findings are discussed and synthesised and conclusions are drawn. Public space in waterfront cities Public spaces are a fundamental feature of cities and are generally owned and managed by public agencies. Areas to which the public has access (such as roads, streets, lanes, parks, squares and bridges) make up the ‘public realm’. This includes the publicly accessible space between buildings, along with the spaces and the buildings or other structures that enclose them (Dublin City Council, 2011). Public spaces are often viewed as empty or residual spaces – areas between buildings and open to all forms of public use. Public spaces are “breathing zones built into the heart of the city” (Nikitini, 2011, p.21). Today, a variety of semi-public


S66 spaces are managed by private-public partnerships – this questions the concept of public spaces – as spaces accessible to the public (Tonnelat, 2010). The use of public spaces varies with the community which they serve. In some societies public spaces are used for leisure activities (drinking coffee or wine at a street cafe) and in developing countries, some of the citizens live in informal settlements and use these open spaces for socialising or informal markets (Nikitin, 2011). Ideally, public spaces are open spaces shared by the whole community, spaces that are open to all without discrimination (Nikitin 2011). Moreover, they are spaces that can be shared by all, spaces for informal socialising or meetings, places where people can come and go freely (Cattel et al., 2008). Public spaces contribute to continuity of urban environments as they are often a link between buildings and neighbourhoods. They are a fundamental factor in encouraging social cohesion among communities. They are spaces where people meet; human interaction takes place; and they form a constructive part of the image of cities. Public spaces are often designed to showcase the historical and cultural landscapes as well as the natural surroundings of cities. Main public spaces usually act as gateways to cities by attracting investors and tourists and they are used to project a positive image of a city (Madanipour, 2004). Unfortunately, because of declining central areas of some cities, the lives of users of these spaces are at risk and in some cases users of these spaces can be ‘othered’ (Young 1995). Amin (2006) posits a positive view of these spaces in urban areas by considering them as sites of association and as “sites of civic promise” (Amin, 2006: 1020).Typically, waterfront developments are regarded as shared space about which different groups often hold highly contrasting views (Hoyle, 1995, 2002). Different users of public spaces attain a sense of well-being for different reasons. Social interaction in spaces can provide relief from daily routines, give sustenance for people’s sense of community, offer opportunities for sustaining bonding ties or making bridges, positively influence tolerance and raise people’s spirits. These spaces represent sites for socialising and face-to-face interaction, and at the same time their quality is commonly perceived to be a measure of the quality of urban life (Cattel et al., 2008). Cattel et al. (2008, p. 544) see public spaces as: “Places of escape; social interaction; vibrant social arenas; inter-ethnic interaction and understanding.” Local-community perspectives on waterfront developments are often rather different from those of developers, politicians, planners, port authorities and environmentalists. In the case study reported here the perceptions of local Capetonians of the V&AW are analysed. V&AW in Cape Town: A place for work, shopping and leisure Study area The re-establishment of physical links between Cape Town and its waterfront has created a quality environment: a desirable place to work, live and play as well as giving Capetonians pride. “It has exceeded all expectations, and it has earned its place as South Africa’s most visited destination” (Van Zyl 2006, p. 2). The V&AW is located on the edge of Cape Town's harbour and in relative proximity to the iconic Table Mountain, Robben Island, Cape Town Stadium and the Cape Town International Convention Centre (CTICC) (Figure 1). The V&AW borders the central business district (CBD), Greenpoint, Duncan Dock, the Atlantic Ocean and Granger Bay. For the purposes of this study, the marine residential apartments situated in the Marina Basin are excluded. The surface area of the V&AW is 604, 000m² which includes 46, 000m² of retail, 130, 000m² office, 7, 000m² entertainment, 13, 000m² museums, 250, 000m² residential and 98, 000m² fishing industry space as well as public space (V&AW, 2013). The latter public space includes a variety of ‘precincts’ of which ten are used for outside events and exhibitions areas, another six are used as promotional courts and are situated inside the Victoria Wharf Shopping Centre. The study concentrates on eight ‘open air’ public spaces and their uses (Table 1). Other public areas at the V&AW include the newly established boardwalk – built along the Granger Bay beach area with viewing points and


S67 benches, and two jogging routes (2.5 and 5km). In the Clock Tower precinct (Silo Square) a cruise liner terminal and jetty are planned to be completed in 2016. In 2012 the V&AW had 649 tenants employing 16, 764 people directly (permanent and temporary staff) (Standish et al, 2013).

Figure 1: The V&AW in its urban context. Table 1: Open-air public spaces at the V&AW. Amphitheatre The amphitheatre consists of 123 m² of covered stage surrounded by concrete seating. The area has capacity for 2,000 seated spectators and 5,000 standing. The area is used to host a variety of live performances, media events and interactive promotions. The amphitheatre also hosts a 5.36m-wide x 2.88m-high LED daylight screen with a 160-degree view used to display specific messages aimed at visitors. Pier-head This is a 25m² area is situated on the historical harbour which was part of the first development of the V&AW.


S68 The area includes a small amphitheatre and is used to host small public events and as a viewing point for marine activities on Quay 5 and Jetty 1 (e.g. Volvo Ocean Yacht Race, Red bull Flugtag, etc.). North Wharf This 1,123m² quayside area is situated in the Marina Basin. It is a multipurpose space for hosting a wide variety of events given its proximity to the Marina Basin. Previous events include the Blessing of the Portuguese fishing fleet, dragon-boat races, Cape Town Boat Show, a Summer Concert series and Aqua Opera (the event consisted of a stage floating the Marina Basin and supported by a 2,000-seater pavilion on North Wharf. Croquet Lawn Situated at Portswood on top of the Ulundi Parking Garage. The area consists of 800m² of lawn and is used for private and public events with great consideration for the well-being of the lawn. Public events include croquet. During the coming festive season (2014/15) the area is earmarked to host an open-air theatre for showing movies to general public under the stars. Historic Tunnel Situated at Portswood Ridge and only used for small private functions. The area was originally an open tunnel cut through the ridge to transport rock in cocopans from the current Marina Basin area to the Breakwater, during the latter’s construction in 1860. The tunnel was later covered for use as an air-raid shelter during World War II but luckily never used for this purpose. The area was later used as a small winery, Flagstone Wines, and then for additional brewing space for Ferryman's Brewery. Breakwater Boulevard Site The area consists of lawn situated between the Breakwater Parking Garage and Granger Bay beach area. The area is 1,000m² in size and used for private events and functions. An international company recently used the site to host a recruitment drive. Clocktower Square Situated in the Clock Tower precinct, the square is used to host a variety of private and public events and functions. Previous uses of this area include a viewing area for the 2010 FIFA Soccer World Cup, vehicle launches, charity events and children's entertainment. The space is currently divided in two. One site is occupied by Moyo Restaurant and its semi-permanent informal food market called a "souk". The other half is used to host a variety of events, such as the Chelsea Flower Show exhibition in September 2013. Market Square Situated in the heart of the V&AW, adjacent to the amphitheatre and children's play area. The area is currently the semi-permanent home to the Cape Wheel but it use to host a variety of public and private events, e.g. Volvo Yacht Race exhibition, beach volleyball, children's events, Wine Festival, Khoi Fish Festival and even a haunted house. The central location of this area makes it very accessible to the public and therefore popular with event organisers. Nobel Square Named after the four South African Nobel Peace prize winners, Albert Luthuli, Desmond Tutu, FW de Klerk and Nelson Mandela. The small square situated between the Market on the Wharf and the V&A Hotel have spectacular views of Table Mountain and the Alfred Basin. The square is usually used for small cultural events related to the Nobel Laureates. Amsterdam Site The remains of the Amsterdam Battery have been found on this site and date from the same period as the Chavonnes Battery. V&A management decided to cover the remains to protect the area until they have the resources to do proper excavations. The concrete slate adjacent to the Battery is used for a variety of public and private events, e.g. 2010 FIFA Soccer World Cup viewing area, extreme skateboarding events, and parking for large busses, film crews and overflow parking for the Cape Town International Convention Centre (Moolman, 2013). Note: The location of each of these public spaces is shown in Figure 2.

The richness and variety of public open spaces at the V&AW provides a real world stage for local Capetonians to interact, leisure and enjoy some ‘breathing space’ between the ocean and the city. In the next section the mixed method research approach is explained. Research methods The first step was to review the appropriate literature on waterfront developments and public open spaces as well as the transformation of the V&AW from ‘port to playground’ – a redevelopment of redundant dockyards to a world-class waterfront development providing


S69 public, working and leisure spaces. The second step was the administering of two questionnaire surveys, one of local Capetonian visitors to the V&AW and the second among employees working for companies located in the V&AW in different sectors on three employment levels. The visitor questionnaire included three sections on V&AW-specific information (14 questions), geographical information (six questions) and biographical information (three questions). The fourteen questions in the first section enquired about primary reasons for visiting the V&AW; types of business and leisure activities; duration of stay; sleepovers at hotels in the V&AW; favourite parts of the V&AW; favourite public spaces; uses of public spaces; special memories of certain spaces; with whom they spent time at the V&AW; and suggestions for improving the V&AW. The six questions in the second section elicited information about where the respondents live, where they are employed, where they do their monthly and daily convenience shopping, the name of their favourite shopping centre and where they engage in leisure activities. The last section asked questions on gender, age and whether the respondents had children. The employee questionnaire asked the same questions posed to visitors but added a section on employment information enquiring about sector of employment, employment level, number of years worked in the V&AW, time away from office during working hours (spent in other activities at V&AW) and time spent at V&AW outside working hours (before work, during lunch break, after hours).

Figure 2: Land uses and public open spaces in the V&AW. Within the constraints of time and funds, a convenience sampling approach with a target quota of at least 150 completed questionnaires for each subgroup was followed. The two questionnaires were distributed differently. The employee questionnaire survey used a stratified approach. All employees at the V&AW were divided into business sectors and according to the relative proportion (percentage) of the total employment population (e.g. if


S70 retail jobs represented 41% of total employment at the V&AW, then 41% of the total respondents in this sub group has to come from the retail sector). Employee respondents were further stratified into three groups: senior managers (or business owners), middle management and frontline staff. Distribution of questionnaires took place by contacting every company individually by e-mail and those willing to take part in the project were given questionnaires and their human resource managers asked to distribute them to employees in a specific category. Completed questionnaires were collected later. Over 600 questionnaires were distributed to this group before the quota of 150 completed questionnaires was reached. For the visitor respondents email addresses were distilled from the V&AW Company’s database of visitors. To ensure that respondents were included from high-, middle- and lowincome suburbs, the selection process purposely included respondents from a wide geographical spread. The visitor questionnaires were distributed in three ways: online by inviting people through social media (Facebook); direct email correspondence; and hard copies per hand. This was done over a period of three months with continuous follow-ups, reposting of the link to the questionnaire and repeated requests for invitees to respond. Visitors to the V&AW who were personally known to the researchers were not asked to participate. A total of 150 completed questionnaires were received. The third step in data collection process was the conducting of unstructured interviews with eight important role players in the tourism industry of Cape Town. Profiles of respondent groups (visitors and employees) The gender profile of the visitor respondents is 66% female and 34% male whereas the employee profile shows a greater male (39%) representation than that of visitors (Figure 3a). The majority of respondents (41%) are between the ages of 25 and 35 years old, with another 38% between the ages of 36 and 45 years and the rest of the respondents were older than 45 (Figure 3b). The employees represent different business sectors (Figure 4) of which most are in the commercial (including financial, fishing and marina businesses) and retail sectors.

Figure 3a: Gender of respondents.


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Figure 3b: Age of respondents.

Figure 4: Employee respondents per business sector. The V&AW as a place to visit, work, relax and do shopping Many port cities have, over the past three decades, reclaimed their waterfronts and transformed them into areas that contribute to economic growth, provide leisure space for their local communities to mingle with other citizens so contributing to the quality of urban life of these citizens (Robinson, 2012; Quinn, 2012). Following its transformation and redevelopment, the V&AW was assessed to be very exclusive and a “white man’s playground” (Lemanski, 2005) and although Ferreira and Visser (2007: 241) counter claimed that the V&AW had expanded its appeal to include “at least lower-middle-class cohorts and, on occasion, even the poor”, there are still those who perceive the V&AW as a tourist trap (Dave, 2011). In the following paragraphs the results of two questionnaire surveys are


S72 examined to uncover how the Capetonian respondents (visitors and employees) think about, view and experience the V&AW. Visitor and employee views on the V&AW The V&AW provides locals with a vast array of options for eating out at restaurants, shopping and enjoying entertainment. The visitor respondents indicated that the most important reasons for visiting the V&A are to eat at a restaurant, do shopping or to participate in a leisure activity (Figure 5a). For employees working at the V&AW, shopping, doing business and eating at a restaurant are the most important reasons for visiting the V&AW during their free time (Figure 5b). Both respondent groups were asked how often they visited the V&AW and for how long. Overall, both groups indicated that they visited the V&AW at least once per month to do shopping, or to visit a restaurant or a coffee shop. Those who visited the V&AW daily stayed for less than an hour and to up to two hours a time, while those who visited the V&AW less frequently stayed longer, e.g. three to four hours or even longer. It appears that those who visit the V&AW for shorter periods may do so for convenience shopping or to have a quick meal, while those visiting for longer most probably do so for leisure purposes. Visitors indicated that they only purchase take away meals at the V&AW once a month, while employees did so once per week. Visitors liked to relax and enjoy the view, whereas employees never did so. The main reason for employee not visiting the V&AW over weekends was that parking is too expensive. To assess how Capetonians perceive certain areas in the V&AW, respondents were asked to indicate their liking of nine areas (working harbour, shopping mall, craft markets, free entertainment areas, restaurants, hotels, public spaces, coffee shops and scenic views from benches on the quayside). Local visitors responded that they like the shopping mall, followed by the restaurants and free entertainment areas. A very small percentage of the local visitors did not like the craft markets, the working harbour and free entertainment areas. Employees responded that they like scenic views from benches on the quayside, the shopping malls and restaurants. The craft markets, working harbour and free public spaces were not liked by a very small group of employees. It is noteworthy that employees indicated that they do not spend time enjoying the scenic beauty but when asked if the like this feature of V&AW they responded that they liked it most. Members of this group quite likely do not have the time to enjoy the scenic views, yet they find it appealing. The local visitors and employees were also asked about their liking of seven public spaces in the V&AW, how they interact with each and to suggest how use of public spaces can be improved. Figures 6a and 6b indicate how many of each respondent group respectively liked or did not like the seven public spaces (Amphitheatre, Market Square, Clock Tower Square, Nobel Square, Food Court, Pier Head and North Wharf).


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Note: A respondent could select more than one option

Figure 5a: Reasons why Capetonians visit the V&AW.

Figure 5b: Reasons why V&AW employees visit the Waterfront during their free time.


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43 40

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0

The Market Square Clock Tower Nobel Square amphitheatre Square

I like it

Neutral

Food Court

Pierhead

North Wharf

I don't like it

Figure 6b: Employees – Public space preferences in the V&AW


S75 Local visitors and employees responded differently. Most of the local visitors like the Pier Head, Amphitheatre and Clock Tower Square, whereas most employees like the Food Court, Market Square and Amphitheatre. Both groups felt neutral about North Warf and Nobel Square. A small number of local visitor respondents did not like the Food Court, Amphitheatre and Clock Tower Square. A small number of employee respondents did not like North Wharf, Clock Tower Square and the Food Court. Figures 6a and 6b indicate large numbers of ‘neutral’ responses and the researchers wondered if this was an indication of mixed feelings or an inability to decide.

Figure 6c: Reasons for visiting public spaces at the V&AW. The public spaces close to the Victoria Wharf Shopping Centre, Amphitheatre and Food Court appear to be the most popular and have the highest footfall and use. Areas farther away from the central development are experienced to be quiet, not user-friendly and offer little attraction for visiting (V&AW 2014). Respondents were asked about their reasons for visiting the public spaces (Figure 6c). The three main reasons given by local visitors were to meet friends, to relax for a while and allow for children to run freely. The employees visit the public spaces to take time away from the office, meet friends and relax. Overall the respondent’s use the public areas at the V&A Waterfront for relaxation and as meeting places. Respondents were also asked what changes could be made to public areas to encourage more use. Both groups suggested the addition of benches, availability of free Wi-Fi and improved landscaping (Figure 6d). It is noteworthy that a stronger and more visible security presence did not rate highly.


S76

Figure 6d: Ways to encourage users to frequent the public spaces in the V&AW more. The V&AW has often been reported by the media as a tourist trap and not accessible to local visitors. Houssay-Holzchuch and Teppo (2009) have branded the V&AW as a colonial development aimed at a white audience. The V&AW Marketing Department has been making concerted efforts to change such adverse perceptions (Cole 2014). Consequently, respondents were asked how inclusive and affordable they perceive the V&AW to be, whether they are proud to be associated with the V&AW and if they are willing to take their friends and family with them to spend time at the V&AW by indicating their agreement or not with a set of nine statements. Figures 7a and 7b detail the results. The local visitors strongly agree that all population groups were welcome at the V&AW. Affordability is, however, a concern as local visitors hold that shopping options and leisure activities are not affordable. Answers to the open-ended questions reveal that parking and shops are too expensive, the shops are too ‘touristy’and the steap hotel tariffs deter locals from sleeping over in the V&AW. Some respondents observed that there are too many homeless people in and around the V&AW’s public spaces and that their presence has an adverse effect on the sense of place of these areas. Local visitors agree that the Food Court and Craft Markets offer affordable options. They also feel very strongly about their association with the V&AW as a place that provides positive memories and with which they are proud to be associated. Employees have similar views with the exception that they deem the leisure activities to be affordable. Even though Capetonian visitors are critical they are loyal supporters and are proud to be associated with the V&AW. The respondents were further asked to comment about the types of shops in the waterfront to make proposals for expanding the variety to encourage them to visit and shop there more often. Table 2 records the responses.


S77

120 97


100

89

94

87

80

71

71

65 58

60

93

85

61

59

55

54

51

50

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40

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14

11

8 2

4

2

1

0 All people All The V&AW The V&AW The stalls at The V&AW The V&AW The V&AW I bring my leisure is an (including population shopping food court the V&AW is a place friends and the 'poor') groups are areas offer outlets offer craft market activities attraction about which family to the are welcome affordable affordable offer are that you are you have V&AW welcome options to options to affordable affordable proud to be positive Capetonian Capetonian options to to associated memories visitors visitors Capetonian Capetonian with visitors visitors

agree

strongly agree

disagree

Figure 7a: Visitors’ perceptions of the V&AW. 100

94

91

90 79


80 68

70

70

67

65

60 60

55 54

56

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48

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2 0 All people All (including population the 'poor') groups are are welcome welcome

The V&AW shopping areas offer affordable options to Capetonian visitors

The V&AW The stalls at The V&AW food court the V&AW leisure outlets offer craft market activities affordable offer are options to affordable affordable Capetonian options to to visitors Capetonian Capetonian visitors visitors

Strongly agree

Agree

The V&AW The V&AW I bring my is an is a place friends and attraction about which family to the that you are you have V&AW proud to be positive associated memories with

Disagree

Figure 7b: Employee perception of the V&AW


S78

Table 2: Remarks about the existing shops and suggestions for types of shops to be added to the V&AW Not sure about the kind of shops, but definitely more cost-effective shops (specifically for the locals) Affordable ones and a 'real' produce market would have been nice...the current one is way too formal and is more like open-plan shops ... you need a “real” Fish Monger/Fish Market on the scale of those in Asia. Local designers Big Blue Proudly South African shops with local products Current offering is good and diverse; don't feel like there are too many additional shops that would make me visit more often. More affordable ones...only catering for the overseas tourists as far as pricing is concerned Spar More affordable lifestyle shops The designer shops only cater for tourists - locals cannot buy there. In terms of home ware: I think they should consider adding Mr Price Home Fashion boutiques Jewellery As for shops, more farmers market-type areas No additional shops/stores are needed. The V&A W has a unique mixture of brands/stores/shops including food stores - catering for local visitors and tourists alike Labels like Cotton On would definitely attract me to the V&AW to shop more often Mid-range international brands like H&M or Shoe brands There is an excellent mix of shops and shopping at the V&A. It does seem quite curio driven but that is just perception. From a personal perspective, I'd like to see a good pet shop, a good home ware and furniture store and more medical services such as doctors consulting rooms (I know that there is a dental practice on site). Also, I trek out to Kalk Bay and Hout Bay for their fish markets... Cape Town Fish Market is too expensive; a real fish market would add some awesome authenticity as would a flower market More affordable service providers Golf shops If the waterfront could have a Dis-chem, a Sportsman's Warehouse and a Mr Price I would never need to go anywhere else None. The traffic is more of a problem and keeping me away from the centre More affordable, the V&A is losing its authenticity with all the International brands – support more local chains The shops there are pretty cool, a lot of the clothing shops are very expensive branded shops but if I had the money to shop there I would I personally wouldn't shop there on a regular basis because it is too far from where I live. I like the shops that are there now and occasionally when necessary for me to acquire something specific I will go there. Generally I find that mall geared more for tourists and the upper-middle- class type people. That is part of its charm I rarely shop here, only in extreme cases if the shop isn't at other malls, or if this is the only mall I can find a particular item. I find it to be more expensive for a product than for the same item at another mall Local restaurants selling traditional Unique but affordable homeware, fashion, decor Bicycle shop None. The waterfront is not my closest 'store', so for everyday shopping, I would not choose to go to the V&A specifically Something like a Food Lover's Market More child-friendly restaurants and safe controlled playing areas Wimpy

Respondents were asked to suggest leisure activities that should be added to the V&AW’s product portfolio to encourage visits. The range of proposals included areas (indoor and outdoor) for children; walking tours linked to the heritage aspects of the Waterfront; water sports or water-based events (e.g. boat shows, powerboat racing); controlled picnic or beach braai spots; a theme park with rides; fashion parades; more local music like the ‘Kaapse Klopse’; tours on working boats; music shows; supervised area for children; petting zoo; a gymnasium; drive-in cinema; jazz festival; live evening entertainment; more food markets; transport to and from parking garages for people with small children and for older people; and art exhibitions of any sort. The long and varied list of suggestions indicate that a popular


S79 leisure space like the V&AW can always improve and that local visitors indicated certain gaps in the current supply of leisure opportunities that can be filled in future. Finally, respondents were asked to name their favourite shopping centres in Cape Town. Their two most popular shopping centres are Canal Walk (75%) and the V&AW (25%). Conclusions and recommendations The V&AW is the most visited tourist destination in South Africa, with over 24 million visitors in 2013, of whom more than half originate from the greater Cape Town metropolitan area. Over 16, 000 people work in the V&AW daily. These large numbers of visitors and employees rank the V&AW as an important leisure and working space for Capetonians and a keystone of the economy of the city and the region. Visitors and employees enjoy the products (leisure and retail), services and experiences that this mixed-use development offers as well as the pleasant memories the V&AW inspires. Some Capetonians still perceive it as a playground for high income earners. Realities concerning the unaffordability (of certain highend shops, hotels and restaurants) persist and these are widely criticised, yet serve as a reminder that Cape Town is a World-class city competing to attract affluent local and international tourists to the best ‘shoppertainment’ experience an Africa city can offer. Capetonions perceive the V&AW and its public spaces as welcoming and open to all. The public open spaces are perceived by Capetonians as welcoming and open to all with some preferred over others. Capetonians are proud to be associated with this destination and are willing to showcase the property to their visiting friends and family. Given the rapid diminishing of available public open spaces the V&AW in Cape Town is a backyard for local visitors and employees that is functional for the community it serves and retains the special link between the ocean and the city where locals feels welcome and take ownership of the available public spaces. The V&AW management is striving to dispel the perception of the venue as a tourist trap where Capetonians feel alienated. They have recognised the need to cater for both the local and tourist markets (domestic and international) in their belief that visitors will seek out the places favoured and frequented by locals (Van Zyl 2006). Acknowledgments The authors want to thank Mr Jascha Muller of the Centre for Geographical Analysis at the Department of Geography and Environmental Studies for preparing the final maps and graphs for this article. References Amin, A. (2006) The good city. Urban Studies, 43 (5/6), pp.1009–1023 Birkby, R. (1998) The making of the Victoria & Alfred Waterfront: The inside story of its planning, design and creation. Cape Town: V&A Waterfront. Breen, A. & Rigby, D. (1996) The waterfront: A worldwide urban success story. London; Thames and Hudson. Casellas, A., Dot, E., Pallares-Barbera, M. (2012) “Artists, cultural gentrification and public policy”. Urbani Izziv. 23 (1) pp. 104-114. Cattel, V. Dines, N. Geslerc, W. & Curtis, S. (2008) Mingling, observing, and lingering: Everyday public spaces and their implications for well-being and social relations. Health & Place, 14, pp. 544–56. Cole, C. (2014) Chantal Cole, Marketing manager at the V&AW. Personal communication, 3 March 2014. Dublin City Council, (2011) Your city your space: Dublin City Public Realm Strategy. Dublin.


S80 Eidelman, G.E. (2013) Landlocked: Politics, property, and the Toronto waterfront, 19602000. Phd thesis. Toronto: University of Toronto. Ferreira, S.L.A. & Visser, G. (2007) Creating an African Riviera: Revisiting the Impact of the Victoria and Alfred Waterfront Development in Cape Town. Urban Forum, 18, pp. 227246. Galvin & Sales (1994). Cape Town Historical Walk-Waterfront: 13. Gospondini, A. (2006). Portraying, classifying and understanding the emerging landscapes of the post-industrial city. Cities, 23(5), 311–330. Hoyle, B.S. (1995) A shared space: Contrasted perspectives on urban waterfront developments in Canada, Town Planning Review, 66, pp.345–369. Hoyle, B.S. (2002) Urban waterfront revitalization in developing countries: The example of Zanzibar’s Stone town. The Geographical Journal, 168 (2), pp. 141–162. Houssay-Holzschuch, M. & Teppo A. (2009) A mall for all? Race and public space in postapartheid Cape Town. Cultural Geographies, 16 (3), pp.351-379. Hoyt, L. (2005) Planning through compulsory commercial clubs: Business improvement districts. Economic Affairs, 25(4), pp. 24–27. Kent, F. (2014) Personal communication between R de Villiers and with Fred Kent from Project Public Spaces (PPS) on the V&AW and its Public Open Spaces, February 9, 2014. Kilian, D. & Dodson, B. (1996) Between the devil and the deep blue sea: Functional conflicts in Cape Town’s Victoria and Alfred Waterfront. Geoforum, 27, pp. 495–507. Kilian, D. Goudie, S. Dodson, B. (1995) Postmodern f(r)ictions: History, text and identity at the Victoria and Alfred Waterfront. Architecture SA, May–June, pp. 26–31. Lehrer, U & Laidley, J (2008) Old mega-projects newly ackaged? Waterfront redevelopment in Toronto. International Journal of Urban and Regional Research, 32 (4), pp.786–803. Lemanski, C. (2005) Proving a mixed-race in post-apartheid urban South Africa: improving the streets or removing unwelcome residents?’ Paper presented at ‘Ordinary Spaces of Development” session at RGS/IBG Conference, September, London. Lemanski, C. (2007) Global cities in the South: Deepening social and spatial polarisation in Cape Town. Cities, 24 (6); pp. 448–461. Lienberg, A. (2014) Personal communication between R de Villiers and A Lienberg on the development of Zeitz MOCAA at the Clock Tower, May 29, 2014. Madanipour, A. (2004) Marginal Public Spaces in European Cities. Journal of Urban Design, 9 (3); pp. 267–286. Moolman, G (2013) Events. Personal e-mail communication between Moolman G and R. de Villiers 19 August 2013). Nikitini, C. (2011) What is the place for public space in our cities? Proceedings of a Conference on Public Space, La Fabrique de la Cité/The City Factory’s, 4 May 2011, Barcelona. O’Callaghan, C. & Linehan, D. (2007) Identity, politics and conflict in dockland development in Cork, Ireland: European Capital of Culture 2005. Cities, pp. 311–323. Orvell, M. & Meike, J.L. (2009) Public Space and the Ideology of Place in American Culture: Architecture Technology Culture. Amsterdam: Rodopi. Pirie, G. H. (2007) Reanimating a comatose goddess: Reconfiguring central Cape Town. Urban Forum, 18(3), pp.125–151. Quinn, K.J. (2012) Sustainable Urban Waterfront: Re-imagining waterfronts as inclusive public spaces. Master's thesis. Arizona: The University of Arizona, Department of Landscape Architecture. Robinson, P. (2012) Good quality public spaces. Proceedings from the discussion summary segment 3 of the World Urban Forum conference held 1 - 7 September 2012, Naples, Italy.


S81 Rogerson, C. M. (1997) Local economic development and post-apartheid reconstruction in South Africa. Singapore Journal of Tropical Geography, 18(2), pp.175–195. Rogerson, C. M. (1999) Local economic development and urban poverty alleviation: The experience of post-apartheid South Africa – lessons on demand. Habitat International, 13(4), pp.511–534. Rogerson, C. M. (2006) Creative industries and urban tourism: South African perspectives. Urban Forum, 17(2), pp.149–166. Rogerson, C. M. & Visser, G. (2006) International tourism flows and urban tourism in South Africa. Urban Forum, 17(2), pp.199–213. Rogerson, C.M. & Visser, G (2007). Tourism in urban Africa: Setting the scene. In Urban tourism in the developing world: The South African experience, edited by C.M. Rogerson & G. Visser. New Brunswick, London: Transaction Press. pp. 1-9. Standish, B. Boting, A. Ridgard, C. & White, J. (2013) Economic contribution of the V&A Waterfront. Economic Information Services: 1 – 120. Tonnelat, S. (2010) The sociology of urban public spaces. Territorial evolution and planning solution: Experiences from China and France. Paris: Atlantis Press. V&AW (2011) V&AW facts and figures 2011. Available from: http://www.waterfront.co.za/home/pages/home_introduction.aspx. [Accessed 31 July 2011] V&AW (2013) Clock Tower precinct and development plans: 2014-2016. Available from: http://www.waterfront.co.za/home/corporate/pages/corporate_groupofcompanies.aspx. [Accessed 18 August 2013] V&AW (2014) Use of public certain public spaces. Available from: http://www.waterfront.co.za/home/pages/home_introduction.aspx. [Accessed 31 July 2011] Van Zyl, P. S. (2005) The V&A Waterfront project in Cape Town, South Africa – An African success story in the integration of water, working harbour, heritage, urban revitalization and tourism development. Paper presented at Conference on Development and Tourism in Coastal Areas, Sharm El-Sheikh, Egypt, 9–12 March 2005. Van Zyl, P. S. (2006) From brown to green to gold waterfronts and the future of cities, Paper presented at World Planners Congress, 17–20 June 2006 Vancouver, Canada. White, C. (2014) V&AW 2013 Festive Season Trading Results Final January 2014. Unpublished report, V&AW Company. Young, I.M. (1995) City life and difference. In: Kasinitz, P. (Ed.), Metropolis: Center and symbol of our times. New York University Press, New York, pp. 250–270. Young, I. M. (2000) Inclusion and Democracy. New York: Oxford University Press.



Changing hotel location patterns in Ekurhuleni, South Africa’s industrial workshop Jayne M. Rogerson Jayne M. Rogerson, University of Johannesburg, Faculty of Science, School of Geography, Environmental Management & Energy Studies, South Africa ([email protected]) Abstract The accommodation sector is of central importance to research on urban tourism. A number of studies seek to understand the location of hotels in urban areas. This article contributes to the limited scholarship on hotel location in African cities. Under investigation is hotel development in Ekurhuleni, one of South Africa’s newest metropolitan areas with a strong tradition of mining and industrial activities. This is a non-traditional tourism destination where until recently leisure tourism was not a component of the local economy. In terms of tourism development Ekurhuleni has expanded its share of business tourism as a result of its geographical location in South Africa’s economic heartland. Importantly, business tourism has been driven by the location in Ekurhuleni of OR Tambo Airport, South Africa’s major international gateway airport. Between 1990 and 2010 this investigation shows that the local hotel economy of Ekurhuleni has been transformed. One aspect of restructuring has been the collapse of the low quality liquor dominated hotel which was numerically the major accommodation type of the pre-1990 period. The booming business tourism economy caused new investments and hotel property developments in medium-size and high quality four and five star hotel establishments. Growth has clustered geographically in and around the international airport which is the key contemporary locational influence for hotel location in this investigation. Keywords: accommodation, urban tourism, hotel location, airport hotels, Ekurhuleni; Gauteng

Introduction An expanding body of scholarship addresses various topics of tourism in urban destinations. One issue of particular importance is research around accommodation services. In the United States Raitz & Jones (1988) consider hotels as the historical cornerstone of urban development and marking the early business and social core of cities. In the historical landscapes of colonial cities, such as Colombo or Singapore, ’European hotels’ became a common phenomenon of the built environment offering high standards of accommodation and functioning as comfort zones and localizers of modernity (Peleggi, 2012). According to Jansen-Verbeke (1986) all commercial forms of accommodation establishments constitute temporary homes away from home for tourists and focal points from which most tourism activity begins in any destination. Shoval et al. (2011: 1594) observe tourists commence “their day by leaving the hotel, possibly returning to the hotel intermittently during the day before engaging the destination once more, and finished their day by returning to the hotel to sleep”. With rising demand for accommodation services to cater to tourist requirements the provision of commercial forms of accommodation emerged and consolidated as a vital service sector activity in cities. Tourism accommodation impacts urban form, structure and morphology as well as the image of cities (Timothy & Wall, 1995). Wall et al. (1985) point out that the structures built to satisfy the needs of tourists are increasingly visible features of the urban landscape. As hotels constitute the essential facilities to support urban tourism the growth and success of cities as tourism destinations is associated strongly with the establishment and expansion of the accommodation service sector (Jansen-Verbeke, 1986; Law, 1992, 1993; Yang et al., 2014).


S83 According to Williams (2014) the largest amount of international research conducted on the accommodation sector is pursued from the perspective of hospitality management rather than tourism studies. For international hospitality students the hotel represents a core focus for research surrounding management issues. Timothy & Teye (2009) point out that existing scholarly work concentrates on the business management side of hotels with a clustering of studies around marketing, human resources, facilities, guest satisfaction, reservation and information systems, housekeeping, catering, and budgeting. This trend is in evidence from reviews undertaken of tourism studies about sub-Saharan Africa (Rogerson, 2013a). Once again, it is revealed most accommodation research centres upon questions of service management, hospitality resource training, or customer satisfaction issues (Nunkoo et al. 2014). Outside of these considerations only sporadic research so far has been undertaken on the position of accommodation in the African tourism economy (Ernst & Young, 2011). Furthermore, given the rural emphasis in African tourism research as a whole, the urban accommodation sector is a knowledge theme that is particularly overlooked in Africa (Rogerson & Rogerson, 2011). In terms of the role of hotels in tourism economies the location decision is a matter of critical concern (Egan & Nield, 2000; Medlik & Ingram, 2000; Adam & Amuquandoh (2013). Among others the works of Baum and Mezias (1992) stress that location is one of the most critical determinants of a tourist’s decision to purchase accommodation services. As tourism development is uneven, however, spatial variations occur in the demand for hotel services at the international, national and intra-urban scales of analysis. At the international level, aspects of the globalization of the hotel industry have been scrutinized in works produced by Niewiadomski (2013a, 2013b) for Europe, by Zhang et al. (2012) for Asia and by Rogerson (2014a) for hotel chain development in Africa. At the national scale of analysis research on the spatial distribution of accommodation services has been undertaken variously for USA (Van Doren & Gustke, 1982), Spain (Pearce & Grimmeau, 1985; Barke & France, 1986), China (Zhang et al. 2012) and South Africa (Rogerson, 2013b, 2013c). The focus in this investigation is hotel development and location decisions at the urban scale. The case study research is centred on the South African metropolitan area of Ekurhuleni which is situated in Gauteng province, the country’s economic heartland. An analysis is conducted of the changing location patterns of hotel establishments in Ekurhuleni from 1990 to 2010. The research discloses different structural and location issues to those which have been revealed either in Johannesburg, the country’s largest and most vibrant metropolitan area (Rogerson, 2014b) or South Africa’s major coastal centres of Cape Town, Durban and Port Elizabeth (Rogerson, 2012a). At one level this study is a contribution to the growing debates and scholarship taking place around uneven tourism development in South Africa, urban tourism and landscapes of hotel development in particular (see eg. Rogerson & Visser, 2007; Rogerson, 2010, 2011a, 2011b; Rogerson & Kotze, 2011; Rogerson & Visser, 2011; Rogerson & Sims, 2012; Rogerson, 2012a, 2012b, 2013d, 2013e, 2014b; Ferreira & Boshoff, 2014). More broadly, the research seeks to extend the corpus of international scholarship both in the contexts of developed and developing countries which aims to understand and interpret the evolution, changes, and locational logic of urban hotels (see Arbel & Pizam, 1977; Wall et al., 1985; Oppermann et al. 1996; Dokmeci & Balta, 1999; Begin, 2000; Shoval & Cohen-Hattab, 2001; Shoval, 2006; Shoval et al., 2011; Adam, 2012; Adam and Mensah, 2013; Yang et al., 2014). The Intra-Urban Location of Hotels In an important contribution, Egan & Nield (2000: 613) pointed out the sparseness of research on the intra-urban location of hotels. Likewise, Shoval & Cohen-Hattab (2001) assert that as compared to other urban functions such as housing, industry, commerce or offices,


S84 research on the location of the hotel sector is relatively limited. Nevertheless, some empirical investigations on the spatial structure of accommodation in cities have been completed. It is observed most existing work investigates hotel location in ‘tourist-historic’ cities either in Europe (Ashworth & Tunbridge, 1990; Urtasan & Gutiérrez, 2006) or Asia (Timothy & Wall 1995). Beyond these areas other contexts where the geography of urban accommodation has been scrutinised include Canada (Wall et al., 1985), China (Bégin, 2000; Yang et al. 2012), Israel (Arbel & Pizam, 1977; Shoval & Cohen-Hattab, 2001; Shoval, 2006), Malaysia (Oppermann, et al. 1996), Turkey (Dökmeci & Balta, 1999), and USA (Baum & Mezias, 1992). In sub-Saharan Africa empirical work now is available for certain cities in both Ghana (Adam, 2012, 2013, Adam & Amuquandoh, 2013; Adam & Mensah, 2013) and South Africa (Rogerson, 2012b, 2014b). From the findings of several international studies it is evident that tourism accommodation is not evenly or randomly distributed throughout cities rather it is confined in spatial clusters to certain specific locations (Yang et al., 2014). In understanding patterns of urban hotel location one influential early work was that by Ritter (1986: 355) who remarked that “Hotel location seems to be a singularly neglected field of tourism research and, we might add, in locational theory”. Based upon empirical work of hotel development in Nuremberg, Germany from the start of the 19th century Ritter (1986) forwarded a model for the evolution of hotels in tourist centres. The model stressed that the location of hotels was associated closely with the dominant form of transportation technology of the time. Prior to the dominance of railways, hotels in inland urban centres were developed mainly in the city centre and those on lakes or rivers tended to situate along waterfronts. With the appearance of railways the patterns of hotel development shifted and became concentrated around railway stations. However, the rise of the automobile era precipitated “a decline in the importance of hotel districts close to railroad stations and to the construction of large hotels on the outskirts of the city in close proximity to the ‘ring road’ and access routes leading from the outskirts to the city centre” (Shoval & Cohen-Hattib, 2001: 911). More recent trends in hotel location are unaccounted for by the Ritter (1986) model and include the clustering of hotels beyond the city centre in the environs of airports, trade fair sites and business convention centres (Van Doren & Gutske, 1982; Wall et al., 1985; Medlik & Ingram, 2000; Shoval, 2006; McNeill, 2009). The analysis of Ashworth & Tunbridge (1990) on tourism accommodation patterns in historic cities spawned a similar model of urban hotel location patterns for the ‘tourist-historic city’. The model demarcates the city into distinct zones where specific hotel clusters occur. Specifically, Ashworth & Tunbridge (1990) differentiate six kinds of hotel locations, namely: (1) historic city locations, (2) railway station locations, (3) along main access routes (4) clusters of small and medium hotels in ‘nice’ locations, (5) large modern hotels in a transition zone between the CBD and historic city, and (6) the urban periphery including along motorways and airport transport interchanges. Each of these zones corresponds to a particular hotel profile. Other research adapts classic land use theory models such as that of von Thünen to interpret the question of urban hotel location. In applying a concentric land use model based on the principle of land rent curves and representing a derivative of the classic agricultural land use model Shoval (2006) situates the hotel district in the city centre and more specifically between the CBD and a zone of commerce. As is detailed elsewhere (Rogerson, 2014b), in examining contemporary scholarship on the intra-urban location of hotels two broad sets of locational determinants must be recognised. The first are location attributes concerning accessibility, agglomeration advantages, and general level of urban development. In particular, Yang et al. (2012: 676) argue that accessibility is considered a prime factor as “hotels are keen on locations that are proximate to their potential markets because hotels seek for increased demand from potential


S85 guests”. Agglomeration is viewed another critical dimension of hotel location because in most cities hotels cluster in certain areas. Within compact and well-defined ‘hotel districts’ there are high levels of localized competition as exemplified by the case of Manhattan, New York (Baum & Mezias, 1992). In such hotel districts Urtasun & Gutiérrez (2006) maintain entrepreneurs confront important location choices for new establishments, whether to locate a new hotel property close to competitors or be differentiated in geographic and product space. Both Medlik & Ingram (2000) and Yang et al. (2012) point to the significance for hotel location decision-making of certain individual hotel characteristics. The most notable characteristics for interpreting the intra-urban location of hotels relate to size of establishment, quality as indicated by star rating, and market segment. It is argued that hotels of different size, star rating and those focused on different market segments may have different influences upon their location choice (Yang et al., 2012). Overall, it is clear from several studies that hotel location patterns evolve through time with shifting patterns of urban development (Wall et al., 1985; Timothy & Wall, 1995; Oppermann, et al. 1996; Begin, 2000; Shoval & Cohen-Hattib, 2001; Urtasun & Gutiérrez, 2006; Yang et al. 2014). Indeed, decision-making about hotel location in urban areas is highly contingent upon shifting patterns of city development which inevitably recasts urban structures over time. In addition, the importance of location attributes varies between individual cities (Rogerson, 2014b). Critical influences upon the geography of hotels in specific cities relate to the morphology, history and various economic functions of the particular city in question, as well as the particular type of urban tourism, whether focussed on leisure or business tourism products. It is against this background that attention moves in the next section to the case study of hotel development in the South African metropolitan area of Ekurhuleni. Recent surveys of trends in South African urban research show the emphasis upon Cape Town by local and international urban scholars (Visser, 2013; Visser & Rogerson, 2014). As compared to cities such as Cape Town, Durban or Johannesburg, the metropolitan area of Ekurhuleni is a relatively under-researched urban centre. The analytical focus on changing hotel development in Ekurhuleni is on the period 1990 to 2010 which is highly significant for tourism development in South Africa as a whole. Importantly, it includes the 1994 democratic transition which ushered in a phase of rapid growth of both international and domestic tourism following the country’s re-entry into the global economy after several years of economic boycotts and sanctions (Rogerson & Visser, 2004). The closing year for this study 2010 is also a critical landmark for the tourism industry of South Africa as it marks the country’s hosting of the FIFA Soccer World Cup. The Ekurhuleni Case Study The analysis of Ekurhuleni is organised into three uneven subsections of material. First, a brief background is given of the establishment and changing economic base of this metropolitan area. The second section discusses data issues regarding the hotel economy. The third and major section examines the changing structure of the Ekurhuleni hotel economy between 1990 and 2010 and subsequently unpacks the intra-metropolitan patterns of hotel developments. Locating The Metropolitan Area of Ekurhuleni The Ekurhuleni metropolitan area was formed as a unified entity only after the country’s municipal elections which were held in December 2000. It is thus one of South Africa’s newest metropolitan areas (Rogerson, 2005). The new metropolitan area is organized around the regions previously known as the East Rand and Far East Rand. However, unlike other newly constituted South African metropolitan areas, Ekurhuleni does not represent the


S86 extension of an existing city. Instead, it was an amalgamation of several long-established towns, namely the six East Rand centres of Alberton, Benoni, Boksburg, Edenvale, Germiston and Kempton Park which merged with the three Far East Rand centres of Brakpan, Nigel and Springs (Figure 1). Prior to the 1970s these areas were a bastion of the gold mining industry. Structural economic change linked to the decline of gold mining and the rise of manufacturing resulted in these regions subsequently reborn and restyled as the country’s national industrial workshop or South Africa’s Ruhr (Bloch, 1993; Centre for Development and Enterprise, 1997; Roberts, 2006). Despite a shakeout of the manufacturing economy and considerable job losses which occurred during the 1990s the industrial sector remained at the heart of formal employment in Ekurhuleni by the early 2000s (Rogerson, 2006). The key components of manufacturing in terms of value-added were metal products, machinery and household appliances, fuel, petroleum, chemical and rubber products, and food, beverages and tobacco products (Rogerson, 2005).

Figure 1: Ekurhuleni By 2009 Ekurhuleni contributed an estimated 9 percent of gross value added which made it the third most important metropolitan area in South Africa in terms of economic output (South African Cities Network, 2011). As compared to Cape Town or Johannesburg, Ekurhuleni is distinguished by the continued strength and significance of manufacturing in the local economy. Indeed, the report by South African Cities Network (2011: 36) describes Ekurhuleni as “predominantly a manufacturing centre, with a diverse industrial base”. Leading sectors of concentration were identified as in the following activities, viz., chemicals, rubber and plastics; metal products and machinery; electrical machinery; radio, television and instruments; and transport and storage.


S87 The area’s added competitive strengths in transport and storage are inseparable from the fact that Ekurhuleni is the location of South Africa’s major international airport and Africa’s busiest airport, namely OR Tambo Airport. Diversification of the local economy from manufacturing has been made possible by the attractions of the airport for tourism developments which have included the opening of casinos, conference centres and hotels. Ekurhuleni is therefore a non-traditional tourism destination as its major tourism assets are for attracting business rather than leisure tourists. The economy of business travel and tourism is anchored around the OR Tambo international airport. This flagship gateway airport for South Africa experienced post-2000 massive infrastructural investment for upgrading and expansion which was triggered by the award to South Africa of the 2010 FIFA World Cup. Future development planning for Ekurhuleni aims to capitalise further on this asset and on the city’s logistical advantages. Flagship proposals surround planning for Ekurhuleni to become the first ‘aerotropolis’ in Africa (Hancock, 2011; Smith, 2013). Data and Sources The analysis of the growth and changing patterns of hotels in Ekurhuleni is part of a wider investigation of the structural and spatial changes which have reconfigured the South African hotel industry over the period 1990 to 2010 (Rogerson, 2013a, 2013b). In South Africa no official record of registered hotels is maintained. The national department of tourism acknowledges that the country “lacks an adequate data base of the tourism supply side” (Department of Tourism, 2011: 15). Accordingly, the data in this analysis derives from a comprehensive national audit, compiled by the author, of all hotels in South Africa for the two time periods of 1990 and 2010. The challenging task of building a complete database involved the triangulation of a range of different hotel listings. At the core of the 1990 base was the 1989 SATOUR listing of hotels which was updated by cross-checks with other 1990 directory listings. The 2010 audit was undertaken by triangulating information from several different hotel listings. Among these were the lists of the Tourism Grading Council of South Africa, AA Accommodation guide, lists of leading hotel chains and hotels listed by local tourism boards. In addition to published listings a comprehensive internet search was undertaken of accommodation search engines including; SA Venues, Where To Stay, Sleeping Out, Solomon Guide, Safari Now, The Portfolio Collections, Exclusive Getaways, Rooms for Africa, SA Cheap Hotels and Country Roads. This process resulted in the building up of a data set for all urban centres. The two lists were cross-checked in order to ascertain if existing hotels were births (new properties in 2010 not in existence in 1990), deaths (establishments listed in 1990 but not in operation in 2010) or ‘stayers’. In this respect considerable care was taken to cross-check addresses of hotel establishments in 1990 and 2010 in order to capture changes which often were the result of corporate take-overs or the repositioning of hotels within certain hotel group portfolios which caused name changes. The final database incorporates an information record for each hotel establishment giving for 1990 and 2010, its province, town or city, hotel name, street address, size (number of rooms), and star grading. The Growth and Location of Hotels in Ekurhuleni Before addressing the growth and shifts of the hotel economy in Ekurhuleni between 1990 and 2010 a brief contextual background is needed on the changing nature of the South African hotel industry. It must be understood that until the late 1980s the majority of hotels in South Africa were geared to service only the market of (white) domestic tourists rather than standards of international tourism. One distinguishing feature of the historical development of the national hotel industry was its close relationship to liquor selling. The legislative framework for the 20th century growth of the South African hotel industry was set by liquor


S88 legislation and, as a consequence, a large segment of the hotel industry operated primarily as liquor rather than accommodation outlets (Rogerson, 2011). The legislation resulted in the proliferation of small so-called hotels of sub-economic size which were located irrespective of the need for accommodation. Under the 1928 Liquor Act licensees of existing bars in urban areas were forced to provide ten bedrooms in order to secure a liquor license. Walker (1977: 9) states “the conditions that the licensees had to meet were largely physical with little regard being given to the service aspect, and all new licensees carried the obligation to build an ‘hotel’”. With limited funds available to individual licensees the outcome was the takeover of the hotel sector by alcohol interests which supplied finance to hoteliers through the tied house system. The consequence was “a host of haphazardly sited ‘mini-hotels with ‘maxi-bars’” (Walker, 1977: 10). This was a result of the tied house system and that the prime function of South African hotels was liquor selling with the function of accommodation provision relegated to secondary status (Rogerson, 2011). The marriage of the hotel industry to liquor selling shaped the essential character of the national hotel industry from the 1920s to the late 1960s. Only from that time was there an element of the hotel economy that started to focus on accommodation as its core service (Rogerson, 2011). With legislative changes in the late 1960s there occurred a gradual shift away from liquor dominance to the emergence of a modern hotel sector in South Africa which centred upon the supply of accommodation services for profitable purposes. With the establishment and growth of large domestic hotel chains from the 1970s and 1980s the South African hotel industry became more differentiated as international standard hotels were constructed (Rogerson, 2013b, 2013c).

Figure 2: The Liquor Dominated Hotel in Bapsfontein, which subsequently became part of Ekurhuleni.


S89

These new forms of hotel development were, however, mainly concentrated in the country’s major cities of Johannesburg, Durban, and Cape Town. At this time the mining and industrial settlements of the East Rand and Far East Rand were not favoured destinations for such international standard hotels. It must be understood therefore that much of the early development of hotels in the mining and industrial towns that later would form the metropolitan area of Ekurhuleni was inseparable from the activity of liquor selling. By 1990 the majority of the so-called ‘hotels’ in towns such as Alberton, Brakpan, Benoni, or Springs were the liquor-dominated small establishments which were the legacy of early legislation which had shaped the contours of national hotel development. Figure 2 shows one typical example from the metropolitan area of Ekurhuleni, the Bapsfontein Hotel. Table 1: Ekurhuleni Hotel Economy 1990 and 2010 1990 2010 Net Change No of Hotels 47 45 -2 No. of Rooms 1,539 4,386 +2,847 Table 2: Hotel Stock Property Turnover in Ekurhuleni, 1990-2010 Location % 1990 Hotel Property Stock Not % 2010 Hotel Property Stock Existing in 2010 Constructed Since 1990 South 63.8 68.8 Africa Ekurhuleni 76.6 75.6 Table 1 indicates the basic profile of the hotel economy of Ekurhuleni for 1990 and 2010. It reveals that in terms of actual numbers of hotels there is an overall net reduction of two hotel establishments. Nevertheless, between 1990 and 2010 the total room capacity nearly triples over this 20 year period. The analysis of the changing number of hotels in Ekurhuleni as a whole provides insight into the churning of the accommodation sector. Between 1990 and 2010 36 of the original 47 hotels ceased to exist as accommodation establishments. Only 11 of the original 47 hotels were in existence by 2010. During the 20 year study period 34 new hotel establishments were opened. These findings confirm a major turnover in the hotel property stock in Ekurhuleni between 1990 and 2010. Table 2 shows the remarkable overhaul of the local hotel stock. In total more than three-quarters of the 1990 hotel stock ceased to exist by 2010; this represents a much higher rate of change than that recorded for the country as a whole. Further, by 2010 three quarters of all hotels existing in Ekurhuleni were new property developments which had occurred post-1990, again a rate of renewal of the hotel stock which is shown as above the national average (Table 2). Table 3: Ekurhuleni Hotels by Size Class 1990 and 2010 1990 2010 1-50 51-250 >250 1-50 51-250 >250 Number 42 5 0 18 24 3 Percent 89.4 10.6 0.0 40.0 53.3 6.7 Table 4: Ekurhuleni Hotels by Star Rating of Quality Standard, 1990 and 2010 1990 2010 1 2 3 1 2 3 4 5 Number 39 6 2 16 2 15 9 3 Percent 83.0 12.8 4.2 35.6 4.4 33.3 20.0 6.7


S90

Tables 3 and 4 provide further data about the restructuring that occurred in the Ekurhuleni hotel economy between 1990 and 2010. Table 3 shows the distribution of hotels by different size categories. It discloses a major shift in the nature of the hotel economy with the demise of the small hotels which in 1990 comprised nearly 90 percent of the total hotel stock. The hollowing out of small hotels in Ekurhuleni is explained by the closure of many of the former low quality establishments typical of the standard of hotel in the late apartheid period. What has occurred between 1990 and 2010 is the appearance of new medium-sized hotels with between 51 and 250 rooms and of a number of large hotels with over 250 rooms. The growth in the proportion of medium-sized hotel accommodation establishments in Ekurhuleni parallels trends in the changing size structure of hotels for South Africa as a whole (Rogerson, 2013a, 2013b, 2013c). Table 4 provides data on the number of hotel establishments by graded star rating. It confirms that a radical change has occurred in the quality standards of hotels in Ekurhuleni between 1990 and 2010. The most obvious shift is the disappearance and reduced share of the low-quality one class hotel establishments, the major share of which in 1990 was the liquordominated hotel. It should be noted, however, that between 1990 and 2010 there has been the appearance of a new form of one-star and two star budget accommodation by branded hotel chains which offer clean, convenient budget forms of accommodation which is line with international standards (Rogerson, 2013d). The upgrading in the quality standards of the hotel stock as a whole is revealed further by the finding that whereas in 1990 the category of three star hotels represented only 4 percent of total hotel stock by 2010 60 percent of hotels in the area were graded at least as three star quality establishments. Indeed, more than a quarter of hotels would now be classed as 4 or 5 star establishments offering high quality standards of accommodation (Table 4). The growth of business tourism around the OR Tambo Airport has been the core driver for upgrading and expansion of the Ekurhuleni hotel economy between 1990 and 2010. The business tourism economy is a mix of local business tourism as well as an increasing share of regional African business tourism. New hotel developments around South Africa’s major international airport have been accompanied by an expansion in conference venues and meeting rooms in the local cluster of business hotels. These major business hotels have been mainly developed by South African hotel chains, the most notable of which are Tsogo Sun, Protea, and City Lodge. A further post-1990 development in Ekurhuleni has been the result of changing legislation regarding casino developments which formerly were permitted only in the so-termed ‘independent Homelands during the apartheid era. New casino legislation post1994 allowed the urbanisation of casino gambling. This resulted in the establishment in Ekurhuleni of two casino/entertainment hotel complexes, one close to the airport and the second on the outskirts of the metropolitan area at Brakpan. These casino complexes afforded a basis for developing leisure tourism alongside business tourism in Ekurhuleni. Table 4: Ekurhuleni – Number of hotels and number of hotel rooms by centre 1990 2010 Centre Number of Number of Number of Number of hotels rooms Hotels rooms Alberton 2 60 1 56 Bapsfontein 1 11 0 0 Bedfordview 0 0 3 192 Benoni 3 52 4 458 Boksburg 6 93 5 711 Brakpan 6 105 5 240


S91 Edenvale Germiston Kempton Park Modderfontein Nigel Springs Total

2 14 3 1 2 7 47

225 277 427 89 42 158 1,539

3 7 16 0 0 1 45

Table 5: Ekurhuleni – Number of hotels of different sizes by centre 1990 2010 Town 1-50 51-250 >250 1-50 Alberton 2 0 0 0 Bapsfontein 1 0 0 0 Bedfordview 0 0 0 1 Benoni 3 0 0 1 Boksburg 6 0 0 2 Brakpan 6 0 0 3 Edenvale 0 2 0 1 Germiston 14 0 0 6 Kempton Park 1 2 0 3 Modderfontein 0 1 0 0 Nigel 2 0 0 1 Springs 7 0 0 1 Total 42 5 0 18

291 222 2149 0 0 40 4,386

51-250 1 0 2 3 2 2 2 1 11 0 0 0 24

>250 0 0 0 0 1 0 0 0 2 0 0 0 3

Table 6: Ekurhuleni – Number of hotels and rooms of different quality standards by centre 1990 2010 Centre 1 star 2 star 3 star 1 star 2 star 3 star 4 star 5 star Alberton 1 1 0 1 0 0 0 0 30 30 0 56 0 0 0 0 Bapsfontein 1 0 0 0 0 0 0 0 11 0 0 0 0 0 0 0 Bedfordview 0 0 0 0 0 1 1 1 0 0 0 0 0 120 56 16 Benoni 2 1 0 1 0 2 1 0 33 19 0 58 0 187 240 0 Boksburg 6 0 0 0 0 3 2 0 93 0 0 0 0 538 173 0 Brakpan 6 0 0 4 0 0 1 0 105 0 0 135 0 0 105 0 Edenvale 0 2 0 2 0 1 0 0 0 225 0 72 0 219 0 0 Germiston 13 1 0 5 1 0 0 1 277 14 0 166 14 0 0 42 Kempton Park 1 0 2 3 1 7 4 1 26 0 401 245 135 754 819 196 Modderfontein 0 1 0 0 0 0 0 0 0 89 0 0 0 0 0 0 Nigel 2 0 0 0 0 0 0 0 42 0 0 0 0 0 0 0


S92 Springs

7 158

0 0

0 0

0 0

0 0

1 40

0 0

0 0

The growth and restructuring of the hotel economy of Ekurhuleni exhibits spatial differentiation and change. The spatial changes occurring in patterns of hotel location in Ekurhuleni can be understood in terms of the findings presented on Tables 4, 5 and 6. These show respectively the distribution across Ekurhuleni for 11 centres of the absolute numbers of hotels and rooms (Table 4), the numbers of hotels by different sizes (Table 5) and the different quality of hotel establishments as indicated by star grading (Table 6). Several points can be highlighted. Table 4 reveals spatial restructuring as indexed by the absolute numbers of hotels and rooms. In 1990 the largest clusters of hotels are recorded in Germiston, Springs, Boksburg and Brakpan which together accounted for 33 hotels or 70 percent of all local hotels. Using the index of number of rooms the most important location is Kempton Park which incorporates the international airport. It is observed, however, that only three hotels existed there at this time providing a total of 427 rooms or 27.8 percent of total hotel rooms. The total of available hotel rooms in Ekurhuleni in 1990 was distributed widely across several of the old industrial and mining towns. By 2010 a number of changes can be observed. The most significant shift is the expansion and strengthening of the cluster of airport-related business hotels at Kempton Park and also in the neighbouring centres of Benoni, Boksburg and Edenvale. The growth of the Kempton Park cluster is particular striking; by 2010 this expanded to represent nearly half of all hotel rooms in Ekurhuleni. By contrast, considerable declines are recorded for Germiston, Springs and Nigel where a wave of hotel closures took place. Table 5 provides further insight into these trends. It is clear that the growth of the airport cluster has been the consequence of the establishment of a number of medium-sized and large hotels. These developments mainly have occurred at Kempton Park and the surrounds of Benoni and Boksburg. The greatest shake-out and closures of small hotels are indicated for Germiston, Springs and Nigel all of which are locations of mining and old heavy industrial activities. Finally, Table 6 unpacks the shifts in quality standards of hotels for the 11 different centres. What is shown is that the demise of the hotel economy of Germiston, Springs and Nigel and other centres can be accounted for by the disappearance of the low quality one star and liquor-dominated hotel establishments. Upgrading of quality hotel stock is especially evident in and around the international airport where a cluster of new four and five star accommodation has been made available. Of note also is the appearance of a small number of quality and often small boutique hotel establishments in a number of locations across Ekurhuleni. Conclusion Research on the location of hotels is an expanding focus of urban tourism studies. This paper aims to extend the current international literature and scholarship which is dominated by investigations of hotel development and location patterns occurring in tourist-historic cities in Europe, Asia and the Middle East as well as global cities such as New York and Beijing. The focus of investigation was Ekurhuleni, one of South Africa’s newest metropolitan areas and economically an area traditionally dominated by mining and industrial activity. This is a non-traditional tourism destination where until recently leisure tourism was not a component of the local economy. In terms of tourism development Ekurhuleni has expanded its share of business tourism as a result of its geographical location in South Africa’s economic heartland. Importantly, business tourism has been driven by the location in Ekurhuleni of OR Tambo Airport, South Africa’s major international gateway airport which has expanded considerably


S93 since the 1994 political transition and with developments linked to the hosting of the 2010 FIFA World Cup. Between 1990 and 2010 this investigation shows that the local hotel economy of Ekurhuleni has been transformed. The analysis demonstrates that one critical element in restructuring has been the collapse of the low quality liquor dominated hotel which was numerically the major accommodation type of the pre-1990 period. The expanding business tourism economy resulted in new investments and hotel property developments in mediumsize and high quality four and five star hotel establishments. In terms of spatial organization these structural shifts have brought considerable change to the urban landscape. Growth has clustered geographically in and around the international airport which is the key contemporary locational influence for hotel location in this investigation. As compared to other South African cities this cluster of hotel developments around an airport is the most distinctive feature of the Ekurhuleni case study. Acknowledgments Thanks are due to Wendy Job for preparation of the accompanying figure. Useful inputs were made by Mabel Black, Teddy Norfolk and Skye Norfolk. References Adam, I. (2012). Hotel location decision-making in the Kumasi metropolis of Ghana: With whom and why? African Journal of Hospitality, Tourism and Leisure, 2. Adam, I., (2013). Urban hotel development patterns in the Kumasi Metropolis, Ghana, Tourism Planning and Development, 10, pp. 85-98. Adam, I. & Amuquandoh, F.E. (2013). Hotel characteristics and location decisions in Kumasi Metropolis, Ghana, Tourism Geographies, DOI 10.1080/14616688.2012.762689 Adam, I & Mensah, E.A. (2013). Perceived spatial agglomeration effects and hotel location choice, Anatolia, DOI 10.1080/13032917.2013.822818 Arbel, A. & Pizam, A. (1977). Some determinants of urban hotel location: The tourists’ inclinations, Journal of Travel Research, 15, pp. 18-22. Ashworth, G.J. & Tunbridge, J.E. (1990). The Tourist-Historic City. London: Belhaven. Barke, M. & France, L. (1986). Tourist accommodation in Spain 1971-1981. Tourism Management, 7, pp. 181-196. Baum, J.A.C. & Mezias, S.J. (1992). Localized competition and organizational failure in the Manhattan hotel industry, 1898-1990. Administrative Science Quarterly, 37, pp. 580- 604. Bégin, S. (2000). The geography of a tourist business: Hotel distribution and urban development in Xiamen, China, Tourism Geographies, 2, pp. 448-471. Bloch, R. (1993). Regenerating the East Rand; Promoting growth and opportunity in the South African industrial heartland, Unpublished Report for the Urban Foundation, Johannesburg. Centre for Development and Enterprise (1997). The East Rand: Can South Africa’s Workshop be revived?. Johannesburg, CDE. Department of Tourism (2011). National Tourism Sector Strategy. Pretoria, National Department of Tourism. Dökmeci, V. & Balta, N. (1999). The evolution and distribution of hotels in Istanbul, European Planning Studies, 7, pp. 99-109. Egan, D. J. & Nield, K. (2000). Towards a theory of intraurban hotel location, Urban Studies, 37, pp. 611-621. Ernst & Young (2011). Sub-Saharan Africa Hospitality Overview. Report prepared for the World Bank, Washington DC.


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Renting shacks: Landlords and tenants in the informal housing sector in Johannesburg South Africa Ashley Gunter Ashley Gunter, University of South Africa, Department of Geography, South Africa ([email protected]) Abstract Renting is a common form of tenure in many developing countries in the global south. This is due to a housing shortage in these countries and has led to a situation where the vast majority of individuals in major cities find accommodation in the rental market. This situation can be put down to the difficulty to entering the market as a homeowner. While this condition is found in much of the formal housing market in the global south, little has been explored in the informal housing market. This state of affairs has pushed many residence in informal settlements into the rental market. This paper examines the rental market in informal settlements in Johannesburg, South Africa by conducting a qualitative investigation into the experiences of landlords (n = 11) and tenants (n = 15) in three informal settlements in Johannesburg. Overall, there is an asymmetric relationship between the two actors within this market, with the perception that landlords, who view their role as noble provider, impose arbitrary rental terms on tenants in an illegal tenancy market. Keywords: Housing; Informal Sector; Rental; Johannesburg; Informal

Introduction Entry to the housing market in many cities in the global south is the informal housing market (Huchzermeyer, 2009; Van Gelder, 2009; Landman & Napier, 2010; Anand & Rademacher, 2011). In Johannesburg, for example, 16% of all the households in the city are found in informal settlements (HAD, 2012). Factors such as high and rising costs of ownership, inability to apply for subsidised housing, irregular and low income have limited access to formal housing by the urban poor. This lack of access is also due, in part, to the lack of formal housing stock at the lower end of the property market (Moolla et al, 2011; Arku et al, 2012). This shortage of formal housing stock is found for both home ownership and within the rental market (Fekade, 2000). The formal low cost housing backlog in Johannesburg is estimated to be approximately one million houses, this number has remained stable over the past 20 years despite the building of a million social houses by the national and local government (HAD, 2012). The backlog indicates the huge influx of immigrants into the city and region and the inability for the social housing sector and the commercial housing sector to keep up with demand for low cost housing (Jenkins & Smith, 2001; Lemanski, 2009). The housing shortage has brought about a proliferation of informal settlements and informal dwellings on the periphery of Johannesburg, as well as ‘backyard’ shacks found in poorer areas of the formal city (Del Mistro & Hensher, 2009; Lemanski, 2009). A large minority of the residence of the city of Johannesburg live in informal settlements with overcrowding, poor infrastructure, inadequate access to their basic needs and low levels of security (Bénit, 2002). Yet despite these conditions, the number of informal settlements on the urban fringe is growing, particularly on the northern edge of the city (Cousins et al, 2005). The barriers to development of an informal settlement are relatively low, the biggest obstacle being access to land, once this is secured, though invasion or squatting (in some instances, even purchase by a community), all that is needed is the construction material and knowledge to construct a dwellings (Huchzermeyer & Karam, 2006; Gunter & Scheepers, 2012). The demand for


S98 informal dwellings and the relative ease of supply should lead to an influx of owner occupiers, where new immigrants settlement, construct and live in their own dwellings. This however, does not seem to be the case, with a significant portion of residence in informal settlements renting their accommodation (Jones & Datta, 2000; Berner, 2001; Arku, 2011; Gunter, 2013). This rental market takes on a similar situation to the formal renting market, with tenants requiring to ‘put down’ deposits to secure a rental unit and landlords harbouring some requirements to maintain the residence. This segment of the housing market is severely under researched as the informal housing market is a ‘grey’ economic space with little to no legal framework and a reluctant constituency, often due to the potential legal status of the resident (Gilbert, 2002). This paper seeks to address this gap by asking two questions, namely, what are the rental experiences of tenants in an informal rental market? Secondly, what are the landlord/tenant relationship dynamics in an informal housing market? The findings of this study hope to provide insight into the dynamics of this informal market as well as develop the debate on the role of the informal sector in developing economies. Informal Housing in South Africa The housing market in South Africa is broadly divided into three sectors, the formal housing sector, characterised by a sophisticated legal framework and financial mechanisms (Huchzermeyer & Karam, 2006; Rust, 2006). The informal housing sector, characterised by little framework and poor quality access to services and the ‘backyard’ sector, which has informal dwelling in formal housing suburbs, where residence will live in informal dwellings but often have access to basic services such as water and electricity (Goebel, 2007; de Wet, et al, 2011). For the most part, the urban poor find themselves confined to the informal housing market; here access does not require some of the sophisticated tools for access, such as a bank account or identity documentation (Gerxhani, 2004). For this reason, the informal housing stock plays a critical role in housing provision in the city (Shapurjee & Charlton, 2013). The post-apartheid South African government has spent billions of rands in developing social housing (Landman & Napier, 2010). Much of these developments have been in the form of social housing known as RDP housing, this housing stock is often found in areas previously designated for black Africans under apartheid (Lemanski, 2011). The reason for this development was that during apartheid, urban land for the development of housing for black Africans was restricted, thus there was and still is a severe shortage of low cost housing for new entrants into the city (Charlton & Kihato, 2006). This lack of housing stock has led to the increase in informal settlements in urban centres and despite the extensive social housing programme, informal settlements and dwellings has continued to develop (Ramabodu et al, 2007; Moolla et al, 2011). The informal housing market in South Africa is characterised by poverty and lack of control, it is within this sector that the most vulnerable of the urban poor find themselves and equally the sector that provides the least support and poorest legal framework in which transactions take place (Rogerson & Letsie, 2013). This sector of the housing market is the most likely to be an exploitative neoliberal market, where supply and demand are distorted by access to resources and acceptance of below standard product (Obeng-Odoom, 2011). The informal rental housing stock has led to a number of small scale landlords that rent out rooms within their residence; however, it has also created a larger scale informal landlord who develops informal housing stock on squatted land for the exclusive use of the rental market. The informal housing sector in South Africa, with its large size and rapid development, has the structure of a neoliberal economic market (Gilbert, 2014). The informal market mirrors the shape of the formal housing market and provided an additional income for many individuals who have benefited from the social housing programmes of the post-apartheid government by renting informal dwellings on their properties (Poulsen, 2010). While this has


S99 created a class of small scale landlords, the development of large informal settlements on the periphery of urban centres has also opened up a market for the large scale renting of informal dwellings to new arrivals in the city. The informal housing sector is a vital form of shelter for many of the urban poor, the structure and nature of this market is not clear as it is found in the informal sector (Napier, 2009). However, this sector is a vital source of income and services for the poor and the informal housing sector forms a central part of absorbing new immigrants and impoverished individuals into the urban fabric. Tenure, Landlordism and Informal Housing A brief overview of the key features of the informal rental housing market is now analysed to provide context to the study. As the informal rental market has commonalities with the formal housing market, examples are drawn from the broader low-end rental market to provide a framework in which to analyse the state of the informal housing rental sector. While anecdotally, many informal settlements have a significant proportion of individuals living in rented accommodation, government has placed very little emphasis on tenure within the informal sector (Adebayo, 2011; Maass, 2011). Rather, it has focused on developing formal social housing. Even more critically, government in South Africa has not focused on rental tenure and renting as a viable form of stable tenure. The government’s longstanding and targeted approach to home ownership has meant that renting in the low end of the property market has been dominated by private landlords (Lemanski, 2009). The government has gone as far as to specifically preclude building a social housing rental stock from their strategy for providing formal housing (Lemanski, 2011). Formal rental stock in the low end of the market is fairly rare and the majority of rental accommodation is provided in either informal dwellings within formal suburbs or informal dwellings in informal settlements (Arku et al, 2011). This informal sector has a range of actors, from petty landlords who rent dwellings on their properties to a few large scale landlords who might rent dozens of informal properties. Informal dwellings in this market segment are built without proper planning regulation and are not registered making the growth and development of this segment of the market difficult to determine (Bargain & Kwenda, 2010). Tenancy in this market is equally informal, with payments often taking place in cash and oral agreements being the norm. Landlords do not function in any formal market and do not give receipts or record tenancy agreements (Hooper & Cadstedt, 2014). This places the tenant in a vulnerable situation where rents can be increased without notice and safety regulations and basic maintenance ignored with little recourse. However, because of the lack of formal housing in this segment of the market, tenants have little choice but to accept the conditions, move out or be forcibly removed. In similar informal rental markets in Tanzania, it has been indicated that tenants are at high risk of being evicted as no policy exists to protect them (Cadstedt, 2010). Equally, because of the tenuous nature of the informal tenant, landlords may often add rental dwellings to a site or add rooms to a dwelling for additional rental income without informing the current tenants (Arku et al, 2011). The relationship between landlord and tenant can be very unfavourable towards the tenant who is in a crowded market. In many informal rental markets, rental units are rarely advertised and potential renters will find accommodation through social networks like friends and relatives. This means that the rental amounts are difficult to standardise and rental amounts will vary across a city or even across a settlement. As in the formal rental market, rents will rise with location, size of dwelling and quality of the structure (Gilbert, 2003).


S100 Despite the emphasis of home ownership as a form of tenure by the South African government (Özler, 2007), the rental markets in the country are experiencing significant growth and returns. This demonstrates the huge demand for housing in the country (Pottie, 2004). This situation is mirrored by the informal property market where demand is equally high for property and in formal low income suburbs like Diepsloot in Johannesburg, population densities have tripled in the last 10 years due to the construction of informal dwellings in the ‘back yards’ of formal social housing (Venter et al, 2004; Todes, 2012). The informal tenancy has thus become the bottom step on the property ladder. Method A qualitative approach was used to understand the tenant/landlord relationship in the informal rental market in settlements in Johannesburg. Participants were selected from three randomly selected low-cost and informal settlements in the city. The formal settlement of Diepsloot and the informal settlements of Radio City and Zandspruit, were randomly chosen out of the 16 low income settlements in Northern Johannesburg. For this study, in-depth interviews were conducted with informal landlords (n=11) and informal tenants (n=15), the sample size was determined through data saturation. The sample was initially selected through convenience sampling where the researcher identified a willing landlord and tenant to participate in the study. The sampling then continued through snowball sampling. While it is recognised that this sampling method will not create representative sample, this method is most useful when no pre-existing databases of the target population exist. This method is widely used when it is hard to reach and identify the population. Landlords and tenants from the same household were interviewed, however not at the same time and neither the landlord nor the tenants were privy to the information provided by each other. The individuals were then asked to identify another person who might be interest in participating in the research. They were then asked to contact that person and arrange a meeting between the researchers and the new interviewees. All interviews were conducted by the researcher and an individual from the community fluent in both English and the local vernacular. The interview followed semi-structured interview questions with open ended answers. Themes and content analysis guided the deconstruction of the interview data with the themes driving the collation of information. All interviews were coded using the same coding scheme depending on whether they were a landlord or tenant. Two researchers independently coded the research and categorised it into themes to compare and analyse. Direct quotes from the transcripts provide context for the coding. The themes identified by the coding were used to unpack the relationship between landlords and tenants in the informal rental market. The Study Sample There were more female tenants (9) interviewees and landlords (7) than males; this could reflect the demographic of inhabitants of informal settlements and the marginalised existence of females in the formal economy that pushes them into the informal economy, both for income and services. Table 1 shows the general characteristics of the sample group. Table 1. The Profile of the Sample Group Profile Landlords (n=11) Gender Male 4 Female 7 Average age

52

Tenants (n=15)

Total (n=26 )

6 9

10 16

36

43


S101

Educational Level No Schooling Some Schooling Completed High school Tertiary Education

4 4 2 1

Average Longevity in 10.9 Community (years) Nationality

SA Citizen 7

2 7 6 0

6 11 8 1

3.6

14.5

Foreigner SA Citizen 4 6

Foreigner SA Citizen 11 13

Foreigner 15

It is clear from the table that the average tenant interviewee was a young female foreigner with some schooling who had recently moved into the community while the average landlord interviewee was a middle aged female South African with some education that had been in the community for a number of years. The Tenant Experience The majority experience for the interviewed tenants was that renting in the informal housing market is difficult and unstable. The tenants expressed concerns about security of tenure, the scarcity of ‘decent’ accommodation, high rental costs and the arbitrary nature of changes and decisions made by the landlord. They claimed that the situation was exacerbated by the large demand for accommodation and that they were aware that if they left their current accommodation there was no guarantee that they would find an alternative, one tenant went on to say: “In this place there are too many people looking for a house and not enough places, if I go from my shack, there will be 20, 30 people wanting to come here. I cannot move because I will not find another place like this here.” (Tenant Interviewee 10) There was a clear indication from tenant interviewees that there is a lack of informal housing stock for rental, this is surprising because of the low economic costs to building an informal dwelling. The demand for and supply of housing stock in the surveyed settlements points to a market structure that is demanding higher rents due to high demand and a lack of production to fulfil this demand, one participant stated. “I cannot just build a shack here; I have to get permission from the [housing] association. You cannot just build so you must rent. These rents [cost] are too much [expensive]. I have no other way but to pay because I cannot build.” (Tenant Interviewee 3) Other interviewees also pointed to the inability to construct their own dwelling and the high cost of renting when there are no alternatives: “I have asked the association for permission to build over there by the river, they have not said yes and want money to give me permission. I cannot pay so I must rent.” (Tenant Interviewee 2) “These rents take all my money, I must buy food and fuel but all I do is spend money on rent” (Tenant Interviewee 11)


S102 Tenant Interviewee 6: “When I came here I wanted to build a shack but I was told that there was no place to build so I must buy or rent, I rent now until I have saved enough to buy a shack.” Researcher: “How much do you need to buy a place?” Tenant Interviewee 6: “R35 000” There is an obvious anxiety about the inability to build a dwelling and stress about finding informal renting and the cost of the rental units. The informal housing rental is guided by supply and demand and in settlements in the northern periphery of Johannesburg; there is an indication that demand is outstripping supply. Tenuous Tenure All of the tenants in the study agreed that renting in the informal housing market created insecure tenure and were unhappy with their renting status. They expressed anxiety over the lack of security and the ability of the landlord to extort rent increases as well as evict them without notice. They described the insecurity with varying degrees of displeasure such as ‘unstable’, ‘terrible’, ‘vulnerable’ and often ‘scary’. They feared the power relationship that they experienced with their landlord and that they had no recourse to unfair practice such as rent increases. They felt that this created a situation where the tenant with the most buying power could push out the existing occupant. The landlords often using force and intimidation to remove the current tenants to make way for the new. The tenuous nature of this tenure lead 7 of the participants to express that they ‘constantly’ worried about the threat of being evicted. These individuals spoke of the desire to build and own their own dwelling within the informal settlement. Tenant interviewee 6 stated: “I wish I had my own house here, then I wouldn’t have to pay rent every month. If I had my own [house] then the landlord won’t bother me and I wouldn’t have to spend so much money on rent.” Tenant interviewee 3 continues on this trend: “I was moved from my last house because the landlord wanted more money and I could not give it. I had to take my child and find a new place in one night. Now I’m saving to buy a house here so I don’t have to deal with a landlord, but buying is expensive here.” This level of anxiety is often expressed as fear, one participant stated: “I am so scared that I will be asked to just go, if I hear someone at night, it might just be the landlord telling me to go.” (Tenant interviewee 7) This state of fear is not unique to housing tenure in South Africa. There is a clear trend in informal settlements globally where tenure is insecure; there are heightened levels of stress and anxiety over the issues (Wekesa et al, 2011). In many cities in the global south, this state of insecurity is contributing to the general levels of poor conditions for the urban poor. In Johannesburg, the general level of insecurity was further exacerbated by the perceived criminality of the landlords and their use of gang thugs to intimidate their tenants. One tenant pointed out: “If you complain about the shack and ask for things to be fixed, the next day there will be some totsies [criminals] hanging around the next day watching you. They won’t even greet you when you come out, they just sit and watch. Then you won’t complain anymore, because you are scared ... If I could move I would, but where will I find a place that I can afford?” (Tenant Interviewee 1)


S103 Tenants felt extremely vulnerable and that the verbal tenant agreement between landlords and tenants meant they were never certain about the status of their tenure. Many tenants expressed the efforts they go to maintain their tenancy, by fostering good social relations with the landlord. Yet despite this, most felt that their rights were being abused by the arbitrary imposition of conditions and increase of rent that they currently experienced. They recognised that their current position falls outside the law and thus were left to the mercies of the landlord. The tenants felt that as long as they were trapped in the informal housing rental market, they would not be able to access the rights of decent housing. They did not feel there was any recourse if they were exploited or evicted and pointed to the lack of maintenance on their dwelling as proof that the landlord was simply there to make money, not to look after the welfare of the occupants. All the interviewees felt that this was an undesirable position to be in and expressed an interest in building or buying their own informal dwelling. The informal rental market; the landlord’s perspective. Landlords tended to have a very high opinion of the service they were providing to the tenants and many of the landlords saw their role as service provider in a under serviced market. There was a pride for the provision of this service and a sense of achievement that the landlord has found an alternative income stream in a poor environment. Landlords were aware of the need to provide basic conditions to their tenants, although none would provide a list of basic condition that they saw as essential in their housing stock. In total, 8 of the landlords interviewed rented their property on a month to month payment basis and the remaining 3 rented on a week to week payment basis. The landlords were not willing to divulge the lease agreements, they did however, express that as long as the tenant paid their rent they would have tenure security, landlord interviewee 8 states: “My tenants pay me once a month, I ask them to pay me on payday so they don’t spend all their money before they pay me. If they don’t pay I will take away something of value from the house, like a TV, for two weeks, if they still haven’t paid me after two weeks then I keep the TV and kick them out. But if they pay, why would I want them to go, good tenants are hard to find, so if they pay I won’t ever kick them [out].” The main concern among the landlords was that their tenants worked in low end or informal jobs and did not always have regular income, this they felt could jeopardise the payment of rents and lead to non-payment. They also felt that the tenants were quite mobile and if they secured alternative accommodation, closer to work or in a more desirable location, they would not give notice but just move out. In total, 6 of the 11 landlords relied on rental income for their living and felt that the threat of non-payment was a significant issue, one rental dependant participant referred to his rental properties as his cattle and how he needed them to provide milk to survive. Most of the landlords felt that their rental properties were priced reasonably for the level of quality of the informal dwelling, they did feel that the dwelling provided a good return on investment for the capital invested. One landlord explained that it is not profitable to constantly upgrade properties. Many of the landlords expressed that financing was hard to come by and that they were finding it difficult to make money off the rental incomes they received. They did show remorse about raising rents but were very clear that it needed to be done, as stated: “I live off my rents, so if the price of living goes up the price of rent has to go up as well. I cannot wait one year, two years to raise the rent, when costs go up I have to cover them now so I raise the rent.” (Landlord interviewee 1)


S104 “… petrol goes up, food goes up, taxi fare goes up… so rent goes up, that is how the world works, if they are not happy renting here then they can go find another place. I put up rents so I can make a living, and then the price must go up when my costs go up. (Landlord interviewee 7) However, when asked if they thought the ability to raise rents indiscriminately, none of the landlords felt that they were doing anything illegal or abusing their positions. This is in sharp contrast to the tenant’s view that the indiscriminate raising of rent was a direct abuse of the landlord’s access to housing. Landlords also held themselves in high esteem as providers of what they saw as a much needed commodity, housing and did not feel that they were in any way exploiting a vulnerable market. Discussion of Findings and the Implications The findings of this study points to the opposition in the housing market in Northern Johannesburg, with tenants concerned about the quality, price and security of the rental properties. The landlords feel that they provide an essential commodity in an underutilised market. The rental market in these informal areas is exacerbated by the illegal status of the settlements; tenants have no recourse in the law and often do not have much social capital in the local community. Landlords, however, are not accountable to building standards or legal obligations due to this illegality and demonstrate their social standing by the ability to acquire land in the informal economy and build dwellings. The tenuous state of informal renters creates an environment that is ripe for abuse. Landlords are not accountable and the lack of alternative housing stock point to the ability for there to be exploitation. The shortage of available rental stock has increased the sense of insecurity for informal tenants. This anxiety only increases the overall anxiety of the informal sector resident who is on the margins, not only the economy but even the informal economy (Blunch et al, 2001). The inability to find adequate rental stock in the informal housing sector has also influenced the mobility of renters as they grapple with the task of finding new accommodation if they wish to move. This demonstrates the negative effects of seemingly unrelated aspects of the wellbeing of tenants. While it is clear that tenants are in a precarious situation, the reliance of landlords on the income from rental units also leaves this group exposed to risks, the challenges of collecting rent from a group of individuals who have irregular incomes and the risk of tenants defaulting leads landlords to feel that they are providing a noble service, rather than exploiting a vulnerable community. It would appear that with the idea that the provision of informal dwellings for rent is a noble occupation; the raising of rents indiscriminately is justifiable by the landlord. The justification being that if costs are to increase, then this needs to be passed on to the tenant as they are simply fortunate to have a dwelling to rent. Equally, rental income is an important source of income for landlords and if returns on rental properties diminish, landlords are at risk of falling into poverty. The challenges of the informal housing market are exasperated by the lack of a low cost housing stock; the South African government’s inability to reduce the housing backlog has fuelled the demand for informal dwellings as the formal housing stock demands a premium (Huchzermeyer, 2001; Charlton & Kihato, 2006; Landman & Napier, 2010). This forces more and more rent seekers into the informal housing sector and impact the landlord/tenant relationship, where the landlord has increasing power due to the high demand for housing. The high demand for informal housing and the economic power of the informal landlord leads many tenants to view the relationship as exploitative, however, in a classical economic model, when demand outstrips supply of any commodity, price will increase and quality can suffer


S105 (Yates & Wulff, 2000). This situation is seen in the formal housing sector as well. Thus the formal markets inability to keep pace with supply of formal housing leads to the economic principles being experienced in the informal sector (Lemanski, 2011; Kotze, 2013). The complexity of the informal housing market and the on-going juxtaposition between landlords and tenants clearly point to the need for policy intervention. There is clear need for some regulation and control of this informal market (Huchzermeyer, 2003). This need to legislate the informal sector is not often present in the South African legislative framework. The informal is often ignored and not governed by formal structures (Chen, 2005). However, in the context of cities in the global south, there are a number of examples of formal legislation being used to govern informal activities (Wells, 2001; Nwaka, 2005; Tipple, 2005). This should be duplicated in the informal housing market in Northern Johannesburg to prevent the exploitation of tenants as well as to prevent the neoliberal market from exploiting a supply gap. Further, there is a need for a stock of rental social housing. Although it was a government mandated decision to develop social housing for ownership, the creation of a rental housing stock would provide a second revenue stream, through rentals, for the development of more housing. Conclusion The low cost formal housing stock in Johannesburg has simple been unable to develop at the pace of population growth (Todes, 2012). This has seen the increase in the informal housing and many new immigrants into the city are forced to find shelter in these informal settlements. While it would appear that the development of new informal dwellings would be easy for new arrivals, there is clear evidence that ownership informal dwellings are out of reach of the poorest and newest arrivals in cities (Huchzermeyer, 2003). This pushes these individuals into the informal rental market. This market, a by-product of the lack of formal housing, is a classical neoliberal market, where supply is weak and demand constantly high. This places undue stress on the vulnerable in society as they function in the informal economy with little protection and legislative support. Despite this exploitation of renters in the informal markets, many landlords see their role as essential and the function of providing shelter for the poor as a noble cause. This is used to justify the often arbitrary changes in conditions and lack of maintenance of the rental stock. Due to the high demand for rental units in the informal sector, many tenants do not have the choice of moving or finding alternative accommodation. The informal sector is a vital element of the modern developing city, many residence conduct almost all of their economic activities within this informal economy (Rogerson & Rogerson, 2010). This paper points to the informal housing market as another instance of the importance of the informal sector as well as the exploitation that can take place without the necessary legislation within this sector. Acknowledgments I would like to thank Jayne Rogerson for asking me to contribute to this special issue. I would also like to thank my reviewer for the comments that helped imporve the article and finally I would like to thank the participants who invited me into their homes and helped me in the community. References Adebayo, P. W. (2011) Post-apartheid Housing Policy and a Somewhat Altered State Role: Does Incremental Housing Still Have a Place in South Africa?. The Built and Human Environment Review, 4(2), pp. 3-16.


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A second wave of gentrification: The case of Parkhurst, Johannesburg, South Africa Paul Tsietsi Monare Nico Kotzé Tracey Morton McKay Paul Monare, University of Johannesburg, Department of Geography, Environmental Management and Energy Studies, South Africa ([email protected]) Nico Kotze, University of Johannesburg, Department of Geography, Environmental Management and Energy Studies, South Africa ([email protected]) Tracey Morton McKay, University of South Africa, Department of Environmental Sciences, South Africa ([email protected]) Abstract As in many other countries, gentrification and urban regeneration occurs across South Africa. Despite this, geographical research on gentrification in South Africa is limited. This study adds to the literature by presenting the case of Parkhurst, a Johannesburg surburb. The study found that Parkhurst displays numerous characteristics of gentrification. The housing stock has undergone extensive physical improvement, with almost one third renovated or under renovation. Property values have increased and the original residents have been displaced. Parkhurst has a demographic and a socio-economic profile typical of a gentrified suburb. It is populated by young, white, educated, weathy professionals people. In addition, gentrification has resulted in the conversion of residential into commercial space, with some residences converted into business premises. The result is a distinct linear commerical zone within the neigbourhood. Gentrification is also associated with a change in housing tenure from rentals to ownership, it was found that ownership was a common feature of Parkhurst. Overall, it was concluded that gentrification of the suburb has occurred over an extensive period of time and is now in a super-gentrification stage. Keywords: gentrification, Parkhurst, Johannesburg, South Africa, urban renewal

Introduction Although the definition of gentrification has become a contested concept over time, the original definition was coined by Ruth Glass in 1964 (Lees, 2008). That is, gentrification is associated with the residential displacement of working class people by middle class individuals who then use their financial resources to physical transform residential suburbs into upmarket accommodation, the consequence of which is rising property values (Hoogendoorn, 2006; Butler, 2007). In terms of the property investment cycle, disinvestment is often the first step in the process. That is, buildings fall into disrepair, values decline and municipal revenue from the area falls. Subsequently municipal-wide disinvestment from the area occurs, where municipal services - such as pavement cleaning and park maintenance become either intermittent or completely withdrawn. A downward spiral ensues, where rental returns become depressed. Landlords, under pressure to obtain sufficient return on investment, often subdivide to increase the number of tenants per unit so as to compensate for loss of revenue. The lower rentals usually attract only lower income people and the area becomes locked into a system that limits economic growth (Slater, 2004; Fyfe & Kenny, 2005). Should such a ‘run-down’ area be located within an economically attractive zone, or is characterised by unique architecture and/or is home to restaurants, then gentrification, that is re-investment, could later occur. Once this happens, poorer or working-class residents are Urbani izziv, volume 25, supplement, 2014 (special issue)

S110 displaced by rising rentals (Kennedy & Leonard, 2001). Thus, it is argued that gentrification is a varied form of urban regeneration and results in a class transformation of the neighbourhood owing to tenure and housing stock value changes (Bourne, 1993; Bridge & Watson, 2000). Gentrification is, therefore, a process by which urban space is re-shaped to accommodate the demands of production and the desire for profit by builders, developers, landlords, mortgage lenders and real estate agents (Smith, 1996). Within the South African context, gentrification has been researched by a number of investugators, most of which focused on the City of Cape Town (see Garside, 1993; Kotzé, 1998; Kotzé & Van der Merwe; 2000; Visser & Kotzé, 2008, Kotzé, 2013). Other cities such as Bloemfontein and Johannesburg have been subjected to much more limited scrutiny (Rule, 2002; 2006; Hoogendoorn, 2006). Thus there is a gap in the literature concerning the process of gentrification in South Africa and Johannesburg in particular (Visser, 2002). This study, therefore, was undertaken to partly address this lack of academic reflection and takes on the following format: Firstly the international trends in gentrification are outlined, followed by a more detailed description of gentrification patterns in South Africa. The study area and methodology is then described. Results, in terms of demographic and socio-economic profile, as well as analysis of the property renovations, is then given and a number of conclusions drawn. Gentrification Trends: An International Perspective Internationally, there are a number of examples of ‘classic’ gentrification (Lees et al., 2008). One of which is that of Barnsbury in London. Barnsbury underwent a serious decline after World War II when upper-income residents relocated to newly-built suburban houses on the outskirts of the London CBD. The suburbs became deserted and working-class people moved in as rentals were low. Sub-letting and large families meant that overcrowding began to characterise the area and soon physical deterioration, due to the inability of these households to adequately maintain their homes, set in. In the late 1950s building societies began to lend money to invest in old properties such as those in Barnsbury and so gentrification commenced. The result was the proportion of middle-class people living there started yo increas (Lees et al., 2008). Another example of classic gentrification is that Park Slope, New York City. Park Slope experienced a significant loss of middle-class residents due to suburbanisation at the beginning of the 20th century. The 1930s Depression years led to the physical decline of Park Slope until it was classified as a slum. Matters become worse in the 1940s to 1970s when ‘white flight’ occurred and white people left the New York inner city for the surroundings suburbs (Lees et al., 2008). A vicious circle ensued as the white population was replaced by black and Hispanic people, most of whom were low-income earners or unemployed, thus systematic disinvestment followed. Eventually the neighbourhood was trapped in a cycle of economic depression and physical decline (Carpenter & Lees, 1995). Finally, in the 1970s, the government intervened, passing legislation to encourage reinvestment in the area. Property developers, neighbourhood organisations and pioneer gentrifiers (or sweat workers) moved in. The ‘sweat workers’ did much of the renovation work themselves, although they received loans to finance some of the renovation costs (Carpenter & Lees, 1995). Contemporary gentrification is now taking place in many different locations across the world (Atkinson & Bridge, 2005). Unlike in the past, where this process was found mainly in English-speaking countries, it is now emerging in Eastern Europe, Asia and South America (Smith, 2002). Furthermore, gentrification has moved away occurring in inner city suburbs to more peripheral ones, and even to rural areas (Badcock, 2001; Philips, 2004). The result of which led Phillips (2004) to call for geographers to focus on alternative gentrification geographies, such as the ‘gentrification’ of commercial development (Curran, 2004). It was also found that some


S111 suburban areas are undergoing a second form of re-investment and re-generation, which is dubbed ‘super-gentrification’ or ‘new-build gentrification’ (Butler & Lees, 2006; Lees, 2003; Rose, 2004). Clearly, gentrification has becoming more complex over time (Davidson & Lees, 2005). The gentrification process can be viewed in two main ways, the production-side focuses on the economics of the process, namely the relationship between inflows of capital into an urban space and the subsequent production of such a space. The second, consumption-side view, focuses on the characteristics of the gentrifiers and their consumption patterns and is located in broader spheres of urban culture and the post-industrial society debates (Ley, 1996; Visser, 2002). Gentrification can have both negative and positive consequences (Lees, 2000; Kennedy & Leonard, 2001). There is, for example, much written in the popular press on how gentrification can lead to high levels of social mixing, which, in turn improves the quality of life. That said, a study of gentrification in the United Kingdom and Scotland did not find much evidence of gentrification induced social-mixing actually improving well-being (Doherty et al., 2009). In addition, original residents may suffer a ‘loss’ when a former ‘well loved’ and popular corner store is replaced by major chain pharmacy. But this pharmacy may offer residents greater retail choice and lower prices per item (Kennedy & Leonard, 2001). However, often the negative consequences are not as benign as the loss of a corner store. They can include racial injustice, conficts between old and new residents, the loss of cheap rental accommodation or commerical space and increased property taxes (Atkinson, 2000; Kennedy & Leonard, 2001; Powell & Spencer, 2003). For many cities, gentrification is linked to public policy (Lees & Ley, 2008; Lees et al, 2008). As has been noted, for gentrification to take place in London, government grants were essential (Hamnett, 1973). In addition, a core driver of gentrifiction are public policies that place gentrification at the heart of urban renewal (Cameron & Coafee, 2005). Thus, “more than ever before, gentrification is incorporated into public policy either as a justification to obey market forces and private sector entrepeneurialism, or as a tool to direct market processes in the hopes of restructuring urban landscapes in a slightly more benevolent fashion” (Wyly & Hammel, 2005: 35). As a consequence, it has been argued that gentrification is not a process that can be resisted, but rather one that needs to be managed (Freeman, 2006; Slater, 2006). They argue that if gentrification is embraced and well managed, it can be used to retain a more equitable and just society. The international literature also notes that gay and lesbian households are often key ‘pioneer’ gentrifiers. In particular, it has been found that gay men play a significant role in urban inner-city re-development (Sibalis, 2004). That is, internationally, gay and lesbian households use their cultural and financial resources to create new meanings in the urban landscape. This redefinition of space is usually associated with a resexualation of space and it taking on a more cosmopolitan ‘feel’ (Bell & Binnie, 2003; Smith & Holt, 2005). Despite the paupicy of specific literature on gentrification and homosexuality, the relationship between space and sexuality has been explored by a number of scholars. Space plays a significant role in the expression of sexuality. In particular, gay and lesbian people actively create and seek out both public and residential spaces where their sexuality does not have to be hidden (Visser, 2003). Other scholars have focused on the way in which gay and lesbian spaces have been created and maintained (Valentine, 2002; Gorman-Murray & Waitt, 2009). A prominent example is Castro, an inner city suburb of San Francisco in the USA. In Castro, gay men enthusiastically committed to the renovation of both the commercial and residential space of the area. However, although space plays a significant role in the expression of sexuality, the role of sexual orientation in gentrification and the construction of urban space are relatively unexplored in the literature (Visser, 2003).


S112 Gentrification in the South African context South African cities in general face serious urban planning challenges such as decentralisation and suburbanisation. The consequences of which are major capital disinvestments from the inner city and ‘white middle class flight’ from suburbs that surroud the CBDs. Many CBDs are now faced with significant urban decay (McDonald, 2008). Thus, since the early 1990s, urban development strategies have been implemented in South Africa that track global urban regeneration trends. That is, urban planners, private developers and government bodies have been working on urban development policies to combat decentralisation (McDonald, 2008; Visser & Kotzé, 2008). As property value decline it has undermined the ability of muncipalities to generate property tax income with many South African cities adopting gentrification as a form of urban regeneration (Visser & Kotzé, 2008). Despite such trends, little geographical research has been conducted of late on genertrification of inner city suburbs in South Africa. In the past, most South African urban geographers focused on researching the development of the apartheid city, the urban economy, as well as black townships (McCarthy, 1992; Visser, 2013; Visser & Rogerson, 2014). Recent literature though, is starting to reflect the role of gentrification in influenting the physical, economic and social characteristics of South African cities (Kotzé & Van der Merwe, 2000; Visser & Kotzé, 2008). Gentrification emerged in South Africa in two distinct phases. The first phase occurred between the 1950s and 1980s. This first phase can be described as typical ‘classic’ gentrification with class displacement (Bond, 2000). Investigations by both Garside (1993) and Kotzé (1998) demonstrate that this first phase was consumption-driven, with middle-class residents renovating their dilapidated properties to increase their value, driving working class people out due to increased property values. For Garside (1993) this was linked to the racial desegregation of the city, with Coloured people displacing White residents in the suburb of Lower Woodstock. Such trends have continued throughout Cape Town and Johannesburg, as the cities have slowly, but steadily desegregated. Gentrification in South Africa has different racial implications compared to that of the United States of America (Garside, 1993; Visser, 2002). Unlike the United States of America, where the Black working class often fall victim to gentrification, Black, Coloured and Indian people in South Africa can be the agents of gentrification, owing to the rise of a Black middle class and the demand for housing. The result is the displacement of poor and working class White people. The second phase is linked to the emergence of a state sponsored ‘urban renaissance’ that coincided with the demise of apartheid post 1994 (Visser & Kotzé, 2008). This second phase can be located in urban regeneration debates (Kotzé & Van der Merwe, 2000). That is, local government came to view gentrification as a means to combat inner city decline. For the private sector, the incentive is clearly the “rent-gap”, which opens up opportunities for good returns on property investment (see Smith, 1987). Thus, as opportunities for investment and re-development have accelerated in South Africa, gentrification continues apace (Visser & Kotzé, 2008). The result is the rise of new Central City Improvement Districts (in Cape Town, Johannesburg and Pretoria’ for example) and other large infrastructural investments in former CBDs, such as the re-development projects at the Victoria & Albert Waterfront, the Foreshore (both in Cape Town) and the Blue IQ Projects in Johannesburg (Van Zyl, 2005; BlueIQ, 2014). There is also some evidence of a possible ‘third’ phase of gentrification taking place in South Africa with the rise of gentrification in peripheral ‘black’ townships, where residents are investing in their housing stock (Visser, 2002). Much more research is required on this new gentrification process, in particular, to determine if it is resulting in class displacement or not. Finally, Visser (2002) argues that there is an emerging trend of rural gentrification, where wealthy urbanites, usually white South Africans, are purchasing and renovating second homes in smaller rural towns. In most cases this is for retirement purposes or as a holiday home.


S113 Importantly, in terms of gentrification, it was found that some areas in Cape Town have experienced gentrification by developing as sites for gay leisure and tourism consumption (Visser, 2002; Elder, 2003). De Waterkant, a suburb of Cape Town, is one of the best examples of a gentrified and re-sexualised area. Between the years 1994 and 1999, close to three-quarters of all properties in the suburb had undergone some form of renovation. Most of this gentrification occurred because of wealthy white gay individuals purchasing the properties as second homes. When not owner occupied, the majority are let out as either serviced and/or self-catering accommodation for tourists, with almost all these tourists being gay (Visser, 2002). Thus, the property market in De Waterkant, has been positively affected by the movement of gay-tourism-generated capital (Visser, 2003). The suburb is favoured by wealthy international gay tourists due to the upmarket facilities and close proximity to Cape Town’s gay leisure spaces (Elder, 2003; Visser, 2002 & 2003). There are a number of key trends emerging in the South African gentrification and urban literature: Firstly, South Africa has experienced a significant change in the cycle of urban decline over the past decades (Visser, 2002). The decay of many of South Africa’s inner cities however, provides opportunities for both the public and private sectors to address the urban regeneration and gentrification processes by creating living spaces in former commercial zones, such as the Central Business Districts of Johannesburg, Cape Town and Pretoria. Secondly, gentrification in South Africa is currently not taking on the American (USA) form of black-white displacement (Visser, 2002). Unlike the case in the United States of America, where the black working class often fall victim to gentrification, black, Coloured and Indian people in South Africa are also agents of gentrification, owing to the rise of a black middle class. A third theme in the South African gentrification literature is establishing where displaced working class and poor whites have re-located to. To date, these studies in postApartheid South Africa as is the case of most gentrification studies all over the world often fails to follow up or establish what happens to these displaced people (Visser, 2002). A fourth theme is that of investigating the rise of a Black middle class in the former Black townships. Although the townships are often portrayed as impoverished neighbourhoods occupied by struggling Black working-class residents, without a doubt some are showing the signs of accommodating an emerging black middle class (Visser, 2002). A fifth theme to emerge is that of academics questioning the desirability of gentrification, as it certainly has the potential to result in the destruction of South Africa’s historical architectural legacy. In South Africa, restored historical sites are significant tourist attractions in Cape Town, Johannesburg, Durban and Pretoria, for example (Visser, 2002). Thus, there is a need to explore the cost benefit ratio of gentrification and urban renewal within a broader economic debate, a path some South African gentrification researchers are sure to tread. Lastly, there is an emerging theme concerning rural gentrification. Displacement becomes an issue once again and raises the question as to whether more impoverished rural towns can benefit from the new incoming migrants (Visser & Kotzé, 2008). The study area The residential suburb of Parkhurst is about 162 hectares in size and situated northwest of the Johannesburg city centre (see Figure 1). Topographically, Parkhurst is sited on one of Johannesburg’s steeper hills, with most of the neighbourhood boundaries demarcated by streams or watercourses. Adjacent to Parkhurst are the suburbs of Parktown North, Westcliff, Saxonwold, Emmarentia and Greenside. Originally forming part of an old farm, Braamfontein, Parkhurst was established in 1904. For much of the early years, land sales and housing development was slow, only intensifying as a result of the serious housing shortage that faced Johannesburg after the Second World War. It became a popular residential area for returning soldiers as houses were cheap (Truluck, 2004). Most of the houses are on small


S114 erven, ranging from 495m2 to almost half a hectare (Rule, 2006). By the end of the 1950s Parkhurst was officially classified as a suburb and sported its own sewerage system, piped water, electricity, street trees, a junior school, tarred roads, shops, churches and sports fields.

Figure 1: Parkhurst, Johannesburg, north of the CBD By the 1960s, the suburb gained popularity (Truluck, 2004; Rule, 2006). Until the repeal of the 1950 Group Areas Act, Parkhurst was legally designated as a ‘white space’ and home to white residents only (Rule, 2006). Commercial development in Parkhurst was well established by the 1980s, along Fourth Avenue, with small corner cafés, clothing shops, butcheries and barbers, serving the local community. The scenario remained unchanged until the 1990s when commercial transformation commenced, with modern retail services being established. Over time, antique stores, upmarket restaurants and interior-design consultancies came to dominate the commercial space. Such retail outlets appeal to wealthy home buyers and many purchased homes in Parkhurst as a result (Rule, 2006). Adding to the popularity of the suburb is its close proximity to popular shopping and commercial nodes, such as Rosebank, Parktown North and Greenside (see Figure 2).


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Figure 2: Positioning Parkhurst in relation to major shopping malls Methodology Mixed methods (qualitative and quantitative) were used for the purpose of this study. The focus was on qualitative methods to gain an in-depth understanding of gentrification in the suburb. The quantitative methods were used as a supplement to gaining empirical support for the research hypotheses (Holiday, 2007). This study had three research questions, namely: First, has the demographic profile of Parkhurst undergone a change? Secondly, has the original physical character (built environment) of Parkhurst changed? And finally, have the original residents been displaced? In order to determine the socio-economic and demographical profile of the residents, as well as to ascertain the level of investment into the housing stock, a self-administrative questionnaire was randomly distributed to various Parkhurst residences. Of the 200 questionnaires were distributed, 54.5% were completed and returned. The questionnaire was based on a similar one used in other gentrification studies in South Africa (see Kotzé, 1998; Kotzé & Van der Merwe, 2000). Data was verified by conducting semi-structure in-depth interviews with key stakeholders, such as tenants, homeowners, landlords, estate agent, the local councillor and business-owners in Parkhurst. All participants gave informed consent, anonymity was guaranteed and all could opt out of the study should they have wished to. Results and Discussion The study found that there has been a significant change within the suburb and its residents. Racially, there was minimal change, as the residents are still overwhelmingly white, but the study found that the gender and age profile of the suburb had changed significantly.


S116 Firstly, Parkhurst has a skewed gender ratio, with 54% being male. This is in stark contrast to the rest of South Africa, where males constitute 48% of the population (Statistics South Africa, 2011). Not only does this skewed gender ratio differ from the rest of South Africa, it also differs from a decade ago, when males only constituted 44 % of Parkhurst’s population (Statistics South Africa, 2001). Thus, the suburb has seen a significant influx of men (10% in ten years). Furthermore, a significant proportion of these males self reported that they lived in a male only household (only a few women self reported that they lived with other women). Secondly, in terms of age, unlike the findings of Statistics South Africa (2001), where the majority of residents were below the age of thirty, this study found that most of the residents are aged between the ages of 30 and 50. Thus the suburb has witnessed a decrease in the number of children and people over 50 and an influx of younger people. Internationally, the demographic characteristics of a typical gentrifier are: young, white and single (Badcock, 2001; Lees et al., 2008). Parkhurst residents fit this profile, except that marriage rates are higher. The difference in marriage rates could be attributed to generally higher marriage rates in South Africa compared to most developed nations. Internationally, the characteristics of a typical gentrifier also include being educated, wealthy and enjoying elevated social status, such as working in the creative professions or white-collar occupations (Cameron, 1992; Kotzé, 1998; Badcock, 2001; Lees et al., 2008). In terms the socio-economic profile, Parkhurst also mirrors these international trends. The majority of Parkhurst residents are educated and have a much higher household income than the rest of South Africa, Johannesburg included (Statistics South Africa, 2011). The education levels for residents in Parkhurst have, for instance, improved significantly since 2001. The overwhelming majority of Parkhurst’s residents now possess at least a university degree. This education profile is radically different from that of the rest of Johannesburg, where the majority of residents only have a high school qualification. Furthermore, many Parkhurst residents are white collar professionals and many of the households are dual income, a trend that mirrors that found by Nico Kotze (1998) for Cape Town.

Figure 3: A typical Parkhurst residence, high perimeter walls, electrical fencing, and additional security.


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Figure 4: The commercial ribbon development along 4th and 7th Ave, Parkhurst, with the few houses unchanged shown. In terms of the physical (housing) characteristics, the typical Parkhurst house is now a, low maintenance, middle-class home with a garden, car ports and a double garage (Rule, 2006). High perimeter walls, topped with electrical fencing and sometimes CCTV security equipment dominate (see Figure 3). Typical of many northern Johannesburg suburbs, access into certain portions of the suburb is limited due to road closures (Landman, 2002). Property prices reflect both increased investment in the homes, and considerable market demand (Rule, 2006). For example, in the late 1990s, the average price of a house on sale in Parkhurst was R355 000. Ten years later, the asking price for a renovated home was R600 000 (Rule, 2006). By 2012, the asking prices of houses (virtually all renovated) in Parkhurst ranged from a low of R1.8 million to a high of R3.3 million (Property24, 2012; Kings Real Estate, 2012; Geraldine Lewis Estates, 2012; Vered Estates, 2012; Sotheby’s, 2012; and Pam Golding Estates, 2012). More bedrooms and greater degree of renovation accounts for the 2012 price range. Additionally, gentrified suburbs usually experience a conversion of residential properties to commercial properties. This is also the case for Parkhurst, with much commercial activity taking place along Fourth Avenue and Sixth Street (see Figure 4). Along these two main ‘commercial’ streets, houses are being converted into offices, retail and restaurants and business being renovated and redeveloped, by adding additional floors to the units (Figure 5 & 6) at an increasing pace. To determine the spatial extent of the commercial development, the streets were measured. Along Fourth Ave, the total length of commercial conversions was found to be 822.5m, where 67.7% of the business conversions are for retail functions such as shops and supermarkets (e.g. “Hip-Hop”, “Christina Marina”,


S118 “Paul Smith”, “Parkhurst Paint”, “Urban Spaza” and “Polly Porter”) or bookstores. Restaurants (such as “Peroni”, “Georges on 4th”, and “Possum’s Bistro and Deli”) occupy 17.2% of the commercial space, with the majority of restaurants in Parkhurst being located along this street. Other streets would come under similar pressure, except that the residents and city council are vigorous in their monitoring of all conversion applications and systematically turn down those outside of the main commercial ‘ribbon’ streets. This is partly owing to the significant traffic congestion such conversions cause, as well as, noise pollution that emanates from the restaurants and pubs.

Figure 5: Business-unit renovation and redevelopment

Figure 6: A typical home-to-office space conversion Although there are some remarkable similarities between Parkhurst and international case studies of suburbs which have undergone gentrification, there are also some differences. In the process of its gentrification, the suburb of Parkhurst, like its international counterparts, lost its original residents - returning soldiers and working class residents. However, in the case of Parkhurst, this occurred in the 1970s and 1980s. Thus, Parkhurst has passed a peak of the first gentrification cycle and the suburb is now in the process of super-gentrification.


S119 Therefore, the typical displacement pattern found internationally, where upper-income residents replace lower-income residents is not occurring in Parkhurst at present. This notion of a ‘second round’ or super-gentrification process is also supported by the finding that most houses were already renovated prior to the newer residents moving in. The newer residents have embarked on additional renovations, further driving property values. This clustering of upmarket homes draws in upmarket residents and the subsequent pool of consumer demand created by such densities of wealth places pressure on the land use zoning of the suburb. In particular, despite zoning by-laws and vigilance by the local councillor, commercial property market pressures on Fourth Ave, for example, see the continued conversion of residential property into valuable office and retail space. The proximity of Parkhurst to major shopping centres and the rise of the Gautrain Rosebank station will continue to re-shape property values and development into the future. Conclusion This study found that in the South African context, gentrification, while involving neighbourhood change, does not necessarily involve residential succession and the displacement of the original working class residents. However, this study found that although the demographic profile of Parkhurst has changed significantly through the years, to that of wealthier residents, the overall class nature and the housing stock of the suburb has moved even moved further upmarket. That is, it is still home to some middle class residents, but increasing number of upper income white people is calling it home. These changes and upgrading of residential and urban space may represent super-gentrification cycle (displacement of middle class individuals with the urban elite). Recent restoration and renovation has significantly changed the physical features of the houses, helping to drive increased property values and encourage the influx of businesses servicing an upper class or elite clientele. As such, gentrification in Parkhurst may represent the demands of the South African elite for the production of ‘elite urban space’ and a house is not only a home or shelter, but also an investment vehicle. Interesting is the gendered nature of this process, where more white males have made Parkhurst their ‘home’. To this end, this study is also positioned within South Africa’s emerging economy and reflects the extent to which Johannesburg is rapidly transforming to mirror global trends in gentrification. Acknowledgements The authors would like to thank Wendy Job of the UJ Cartographic Unit for the maps, Tim Trulock for assistance in data collection, the residents and business owners of Parkhurst for their extensive co-operation. Errors and omissions are our own. All photographs are the authors’ own. References Atkinson, R. (2000) Measuring gentrification and displacement in Greater London. Urban Studies, (37), pp.149-166. Atkinson, R, & Bridge, G. (eds.) (2005) Gentrification in a global context: the new urban colonialism, London: Routledge, pp. 18-38. Badcock, B. (2001) Thirty years on: Gentrification and class changeover in Adelaide’s inner suburbs, 1966-96. Urban Studies, (38), pp. 1559-1572. Bell, D. & Binnie, J. (2004) Authenticating queer space: citizenship, urbanism and governance. Urban Studies, 41(9), pp. 1807-1820. BlueIQ (2014) Joburg, my city, our future. http://joburg.org.za [Accessed on 22 August 2014].


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The greening of industrial property developments in South Africa Desire A. Greenberg Jayne M. Rogerson Desire A. Greenberg, University of Johannesburg, Faculty of Science, School of Geography, Environmental Management and Energy Studies, South Africa Jayne M. Rogerson, University of Johannesburg, Faculty of Science, School of Geography, Environmental Management and Energy Studies, South Africa ([email protected])

Abstract The greening of industrial property in the developing world context of South Africa is under examination. In particular, the focus is specifically on green property developments and planning for eco-industrial parks. The South African record on greening industrial property is situated as part of broader international scholarship and debates around eco-industrial parks. The analysis reveals South Africa currently is far behind a number of other emerging economies in terms of the making of eco-industrial parks. Driven by cost considerations and the image demands of international investors a process of the greening of industrial property developments in urban areas is taking root in the country. Nevertheless, at present there exists no eco-industrial parks using principles of industrial ecology that can parallel those in other parts of the world. Overall, it is shown that planning for ecoindustrial parks is in its infancy in South Africa. Keywords: greening, industrial property, eco-industrial parks, South Africa

Introduction Globally research interest around the ‘green economy’ has expanded particularly since the 2008 financial crisis. Notwithstanding critiques about ‘green-washing’ Borel-Saladin & Turok (2013a) contend from an examination of the international experience that the greening of the economy potentially can result in substantive and transformative changes towards the goal of sustainable development. In the case of South Africa the greening of the economy has become an important policy issue for two major reasons, namely the high level of national unemployment and the high carbon impact of the economy (Borel-Saladin & Turok, 2013b: 1). The country is ranked globally as the 14th largest emitter of greenhouse gases. South Africa’s current growth model is viewed as “heavily resource and energy-intensive, aggravating pressures on the environment and the threat of climate change” (MontmassonClair, 2012: 5). The greening of the South African economy is incorporated into national economic development planning with the New Growth Path, launched in 2009, stressing the imperative to integrate green considerations into economic growth by decreasing the carbon emission of economic activities as well as actively identifying new opportunities in the green economy (Nattrass, 2011). Several analysts maintain that with its abundance of renewable resources (especially solar and wind power) South Africa is in a unique position to exploit opportunities related to the emergence of green economic development (Montmasson-Clair, 2012: Kaggwa et al. 2013). In 2011 the Green Economy Accord was formulated in response to concerns about climate change in South Africa. It represents a “green partnership: to create jobs, provide a spur for industrialisation, and help to create a sustainable future” (Department of Economic Development 2011: 3). With appropriate investments it is projected over the next


S124 decade that the growth of the green economy can create as much as 300 000 employment opportunities in South Africa (Borel-Saladin & Turok, 2013; Rogerson, 2014). Among others Nhamo (2013) argues that national government has exhibited a high level of commitment, enhanced institutional structures and developed necessary legislation to support green economic development. Furthermore, in order to nurture South Africa’s transition towards a green economy national government has launched the Green Fund which offers catalytic finance to project initiation, policy and research, and capacity building activities (Mohamed et al. 2014). During 2011 the National Strategy for Sustainable Development and Action Plan confirmed the green economy as a national priority for planning and development seeking to facilitate a just transition towards a resource-efficient, low carbon and pro-employment growth trajectory. Various greening initiatives are ongoing in different sectors of the economy albeit at uneven rates of progress (Nhamo, 2014). Overall, Kaggwa et al. (2013: 5) assert “the green economy in South Africa is viewed as a path to sustainable development based on its potential to address the interdependence among inclusive economic growth, social protection and natural ecosystems”. It is observed that most existing scholarship on green economy issues concentrates on Europe and North America with so far only limited attention devoted to countries of the global South (Cidell, 2012; Death, 2014). The objective in this paper is to examine one aspect of the evolution of the green economy in South Africa, namely the first moves taking place towards the greening of urban industrial property developments. Although some academic attention has been given to the greening of tourism accommodation, especially of the urban hotel sector (Rogerson & Sims, 2012), the arena of industrial property development so far has not been documented. It is widely recognized, however, that traditional industrial estates can have serious environmental impacts on the physical, natural and social landscape (Sakr et al. 2011; Panyathanakun et al. 2013). The need was recognized for the innovation of new industrial development models and practices so that goals of sustainable development may be realized at local, regional, national and global scales (Geng et al., 2014). One international trend is towards establishing ‘eco-industrial parks’ in order to mitigate or avoid the negative impacts often associated with industrial zones (Côté & Cohen-Rosenthal, 1998; Singhala & Kapurb, 2002; Van Leeuwen et al. 2003; Zhu & Côté, 2004; Gibbs & Deutz, 2007; Shi et al. 2012a, 2012b; Taddeo et al. 2012; Conticelli & Tondelli, 2013; Lowitt & Côté, 2013; Tian et al., 2014). Veiga & Magrini (2009: 653) assert that the establishment of such parks “is a concept that is spread in many nations as a new industrial model that can reconcile the three dimensions of sustainability: social, economic and environmental”. Gibbs et al (2005) suggest eco-industrial development as a potential “new paradigm” for local and regional development. In addition, Gibbs & Deutz (2007) highlight the growing attention given to eco-industrial park development by national, regional and local governments in many developed countries. This article examines the new phenomenon of the greening of industrial property in the developing world context of South Africa and specifically examines green property developments and planning for eco-industrial parks. In terms of methods and sources the paper draws together existing documentary material and reports on the greening of industrial property in South Africa, the results from field site visits, and most importantly the findings from several semi-structured interviews which were conducted during 2013 with key property stakeholders. The South African record on greening industrial property is situated as part of broader international scholarship and debates around eco-industrial parks. Eco-Industrial Parks: International Debates Eco-industrial parks are considered examples of the application of the principles of industrial ecology (Gibbs et al., 2005; Gibbs & Deutz, 2007). The concept of industrial ecology emerged out of the study and appreciation of the functioning of natural ecosystems


S125 which demonstrate the efficient recycling of resources. As argued by Hewes & Lyons (2008; 1330) a core “element of industrial ecology is the concept of closed loop systems where energy and waste materials are continuously recycled between geographical proximate firms”. According to Panyathanakun et al. (2013: 71) industrial ecology as a concept essentially describes a ”closed-loop system similar to that in nature, which is both complex and selforganised”. The notion is that of recycling materials through industrial systems as they are in natural ecosystems such that the “byproducts of one process would become the feedstock of another” (Veigas & Magrini, 2009: 654). During the late 1990s Côté & Cohen-Rosenthal (1998: 181) observed that whilst still “in its infancy as a study, industrial ecology is emerging as an exciting approach to the application of environmentally sustainable development”. A decade later works by Gibbs & Deutz (2007) and by Veigas & Magrini (2009) could reflect on the maturation of industrial ecology. Gibbs & Deutz (2007: 1683) draw attention to “an increasing interest in industrial ecology” in recent years whereas Veigas & Magrini (2009: 654) state that it “emerged over the years as a potential guide to create opportunities for improving environmental and business performance, and for restructuring the industrial system in compatible fashion with notions of sustainability”. Applied, developed and implemented in various projects industrialized countries the concept is used to attain cleaner production and a level of sustainable growth, including through the establishment of so-termed eco-industrial estates or eco-industrial parks (Gibbs & Deutz, 2007). The classic model of industrial symbiosis is that of Kalundborg in Denmark where a close web of water and energy exchanges emerged between the local city administration, a power plant, a refinery, a pharmaceuticals factory, a fish farm and a wallboard manufacturer (Ehrenfeld & Gertler, 1997; Jacobsen, 2006; Gibbs & Deutz, 2007; Veiga & Magrini, 2009; Domenecha & Davies, 2011; Kalundborg Symbiosis, 2011). It is argued that the successful operations of the Kalundborg project “boosted the concept of industrial ecology and industrial symbiosis as well as promoting more practices in EcoIndustrial Parks” (Bai et al. 2014: 4). Indeed, Yu et al. (2014: 464) maintain that ecoindustrial parks “have become a policy-driven attempt to apply the principles of Industrial Ecology in specific locations”. They contend the essential core of an eco-industrial park is industrial symbiosis that seeks to “engage otherwise separated industries in a collective approach to reduce their environmental impact” and to incorporate the “physical exchange of materials and by-products, shared management of common utilities and infrastructures for water, energy and waste” (Yu et al., 2014: 464). Overall, for Bai et al. (2014: 4) one essential defining feature of eco-industrial parks is “they use industrial ecology and industrial symbiosis principles to simulate natural ecological systems within industrial systems”. Scholarship around the concept of eco-industrial parks, however, has spawned a number of different definitions. In one of the earliest attempts at demarcating the concept Côté & Hall (1995: 41) proposed that it “is an industrial system which conserves natural and economic resources; reduces production, material, energy, insurance and treatment costs and liabilities; improves operating efficiency, quality, worker health and public image; and provides opportunities for income generation from use and sale of wasted materials”. The United Nations Environment Programme applies a complex definition that eco-industrial parks are “the systems-oriented study of the physical, chemical and biological interactions and interrelationships both within industrial systems and between industrial and natural ecological systems (Bai et al., 2014: 4). Bugnar et al. (2013: 82) offer the view that eco-industrial parks “represent a special category compared to industrial parks, a category which is different from the classical ones due to the fact that they are designed in such a way so that they promote the collaboration between companies in order to reuse recyclable materials and green energy sources”.


S126 These distinctions between classic industrial parks or estates and eco-industrial variants were highlighted most strongly by Côté & Cohen-Rosenthal (1998). These authors suggested 11 essential distinctions. It was argued that as compared to a classical industrial park an ecoindustrial park would be distinguished as follows: “1. Define the community of interests and involve that community in the design of the park. 2. Reduce environmental impact or ecological footprint through substitution of toxic materials, absorption of carbon dioxide, material exchanges and integrated treatment of wastes. 3. Maximize energy efficiency through facility design and construction, co-generation and cascading. 4. Conserve materials through facility design and construction, reuse, recovery and recycling. 5. Link or network companies with suppliers and customers in the wider community in which the eco-industrial park is situated. 6. Continuously improve the environmental performance by the individual businesses and the community as a whole. 7. Have a regulatory system which permits some flexibility while encouraging companies to meet performance goals. 8. Use economic instruments which discourage waste and pollution. 9. Employ an information management system which facilitates the flow of energy and materials within a more or less closed-loop. 10. Create a mechanism which seeks to train and educate managers and workers about new strategies, tools and technologies to improve the system. 11. Orient its marketing to attract companies which fill niches and complement other businesses” (Côté & Cohen-Rosenthal, 1998: 181). In 2003 another definition of an eco-industrial park was published by Cohen-Rosenthal (2003) which importantly incorporates the requirement for enterprise networking. It was argued that an eco-industrial park now represented “a community of businesses that cooperate with each other and with the local community to efficiently share resources (information, materials, water, energy, infrastructure and natural habitat) … leading to economic gains, gains in environmental quality and equitable enhancement of human resources for the business and local community” (cited in Gibbs & Deutz, 2007, 1685). A broadened perspective is one of eco-industrial parks as part of the activity of eco-industrial development, an approach which is “designed to address both global and local environmental problems while contributing to the local development needs since it provides strategies to achieve greater materials and energy efficiency, environmental safety and social integrity through economies of systems integration, whereby partnerships among businesses meet common service, transportation, and infrastructure needs, and the concept adds value to businesses and communities by optimizing the use of energy, materials and community resources” (Geng et al., 2014: 1). Over the past 20 years eco-industrial park developments have occurred in a range of countries particularly in North America and Western Europe (Côté & Cohen-Rosenthal, 1998; Van Leeuwen et al. 2003; Eilering & Vermeulen, 2004; Gibbs & Deutz, 2007; Taddeo et al. 2012; Conticelli & Tondelli, 2013). As confirmed by Veiga & Magrini (2009) and Tian et al. (2014) the eco-industrial park concept has diffused internationally and now has spread to developing and newly industrializing nations particularly in Latin America and Asia as a way to foster sustainable development. More specifically, given that rapid industrialization has been accompanied by environmental degradation, the concept is “being considered a possible


S127 way to overcome environmental damage and at the same time to improve industrial and community economic and social welfare and development” (Veiga & Magrini, 2009: 653). In recent years much interest surrounds the concept’s application and the quest for eco-industrial parks in China (Lowe, 2003; Shi et al., 2012a, 2012b; Bai et al., 2014; Tian et al., 2014; Yu et al., 2014). Behind the embrace and expansion of global interest in the concept of ecoindustrial parks is the perceived benefits for local communities of increased competitiveness, the generation of additional revenues, the creation of jobs, and advantages of reducing pressures on existing infrastructure, reduced pollution and use of energy from regenerated sources (Bugnar & Mester, 2013). This said, as a public policy tool Gibbs & Deutz (2007: 1692) point out the central importance of ensuring collaborative behaviour between industrial and other enterprises and the building of trust and cooperative relationships which are deemed a prerequisite before firms are prepared to link processes together. In addition, Hewes & Lyons (2008: 1339) add the importance of ‘champions’ who are able to bring groups of stakeholders together and motivate them to become involved in the making of eco-industrial parks. Arguably, eco-industrial parks exist in many different forms (Gibbs & Deutz, 2007). Indeed, Côté & Cohen-Rosenthal (1998) stress that one of unique characteristics of the experiments with eco-industrial parks is their differentiation. In terms of the nature of property developments, however, it is clear from the international experience that an important distinction must be drawn between eco-industrial park developments which involve building upon and transforming an existing industrial park or cluster on the one hand and of greenfield property developments of eco-industrial parks which are planned and developed from scratch on the other (Veiga & Magrini, 2009; Yu et al., 2014). There is consensus from what has been accomplished so far that most eco-industrial parks are “at an early stage of development” (Veiga & Magrini, 2009: 660). The most recent international overview points to the conclusion that most eco-industrial parks “are at a very early stage of development because the key features of industrial ecology such as inter-firm networking and collaboration in the form of materials interchange and energy cascading are either absent or in the early planning stages” (Bai et al., 2014: 4). It is in light of this assessment that our attention turns to examine the current state of green industrial property developments in South Africa. The Greening of Industrial Property in South Africa In terms of discussing the greening of commercial industrial property in South Africa two sub-sections of material are presented. The first focuses on the progress made in respect of rating and the construction of individual green industrial buildings. The second turns attention back to eco-industrial parks and critically reviews the development of so-termed ecoindustrial parks in this developing world case study. Green Industrial Property The greening of new commercial property developments in South Africa is increasingly becoming a mainstream rather than a marginal activity. The growing propensity for developing sustainable or green building initiatives is driven mainly by cost considerations in respect of South Africa’s rapidly rising charges for electricity (Rogerson & Sims, 2012). The Green Building Council South Africa (GBCSA) constitutes the official certification body which offers the tools and information to support green building practices in South Africa. The GBCSA has developed the Green Star SA rating tools which are closely based on the rating system used by the Green Building Council of Australia (GBCA). These tools are used to assist green building practices from the design phase, construction phase, through to the operations phase (GBCSA, 2013).


S128 A green property in South Africa is defined as a structure which is energy efficient, resource efficient and environmentally responsible. These factors can be measured using indicators such as building design; construction materials used; recycling of waste and building materials; water efficiency; use of renewable energy and materials and socioeconomic considerations (GBCSA, 2013). Currently, the GBSCA together with the World Green Building Council are in the process of developing a rating tool category specifically for developing countries. This new rating tool would include social and economic sustainability elements designed to assist with key development challenges such as poverty, unemployment and the absence of skills (GBCSA, 2013). As GBCSA does not currently have a rating system for industrial buildings and parks, applications by industrial properties for rating are conducted using the rating tools of the GBCA (Olivier, 2013). The GBCA Industrial v1 rating tool, however, evaluates only the environmental aspects of industrial structures and the services they offer seeking to reduce the environmental impacts associated with the planning, construction and operation of industrial buildings and parks. Only a small handful of individual industrial properties currently can be classified as green industrial properties in South Africa. The research disclosed that Growthpoint Properties, which is the largest property development company in South Africa listed on the Johannesburg Stock Exchange, has been involved in the development of three industrial buildings. This company espouses a commitment to expanding sustainable building designs and has partnered with the GBCSA to develop a green lease and an energy benchmarking tool in respect of industrial property developments. It was disclosed that the design and construction of green industrial property developments is predominantly client-driven (Labuschagne, 2013) with international companies investing in South Africa often under pressure to develop or occupy green industrial spaces. It is not surprising therefore that the first industrial facility in South Africa to receive a 5 star Green Star rating from GBCSA is for the sub-Saharan African headquarters and factory of Grundfos, the world’s largest manufacturer of pumps, and based in Denmark, one of the international leaders in applications of industrial ecology. The Grundfos property is located in Germiston in the metropolitan area of Ekurhuleni which is in Gauteng province, South Africa’s economic heartland. The rating of this facility was done using the GBCA rating system guidelines for industrial facilities. The industrial space was formerly a dilapidated building that was demolished with a new building constructed using green principles. The rubble and waste material from the demolished property was removed in a responsible manner so that much of it could be recycled into the new building (Vermeulen, 2014). Important features of the green property relate to inter alia, the incorporation of timed energy-saving lights, solar panels, waterless urinals and a rainwater harvesting system. A building management system is installed to electronically monitor and control electricity. Use is made of energy-saving technologies for lighting, ventilation and water harvesting with demarcated areas for the recycling of paper, cardboard, plastics and metals (Vermeulen, 2014). The developers stress that the growing demand for green industrial properties from clients is driven both by recognition of potential cost savings and importantly of portraying a positive corporate image (Labuschagne, 2013). In this respect the location of this building is notable as it is situated between two major highways close to Johannesburg and therefore is highly visible for imaging the company. In interviews it was disclosed that further parallel individual industrial properties were planned and that the Grundfos facility “will definitely not be the last” (Labuschagne, 2013). Eco-Industrial Parks The study by Brent et al. (2008) is notable for opening up debates around the application of the concepts of industrial ecology in South Africa. These authors argue that the concept of


S129 eco-industrial parks is the most pressing and immediate application for South African conditions. Nevertheless, they contend that in South Africa the notion of eco-industrial parks is not a new phenomenon with a number of so-termed ‘eco-estates’ already in existence. Among a number of examples are a so-termed ‘eco-industrial park’ which is located between Pretoria and Hartbeespoort Dam which is owned and managed by South Africa’s Nuclear Energy Corporation. This park has over 80 tenants with shared services including recycling. However, as no by-product exchanges occur this park fits classically the characteristics as listed by Côté and Cohen-Rosenthal (1998: 182) of “what some proponents have suggested eco-industrial parks are not”. Arguably, several other early claimants to the status of ecoindustrial park in South Africa also can be dismissed on similar grounds. For example, the Capricorn Park near Muizenberg in Cape Town is an eco-friendly business and technology park but once again lacks the fundamental application of industrial ecology principles relating to interactions among businesses and exchange of by-products. Of note, however, is that certain industrial ecology principles have been incorporated into the planning of some Industrial Development Zones (IDZs), most notably at Coega near Port Elizabeth. This said, Brent et al. (2008) conclude that whilst the international concepts of eco-industrial park have been envisaged in such South African IDZs the ideal has not moved into practice. At present three so-called eco-industrial parks in South Africa are in various stages of planning, development and construction, namely the Lords View Eco-Industrial Park situated in northern Johannesburg, the Chem City Eco-Industrial Park which is under development at Sasolburg 90 km in the southern part of the Gauteng city region, and the Limpopo EcoIndustrial Park which is still currently in the planning phase and to be constructed at Musina, a city close to the Zimbabwe-South Africa border. In each of these three examples of green industrial property developments aspects of the international characteristics of eco-industrial parks are represented. The first example is of Lords View which is an industrial estate located on 2 million sq. metres of land at Chloorkop. The development is at a former sand quarry on land that was severely degraded and neglected. In 2008 the developers took the decision to establish a sustainably responsible eco-industrial park (Lord, 2013). Here are a number of features of design and operation which have parallels with international standards. The two most prominent are the sustainable urban drainage system (SUDS) and the waste-to-energy plant. The former are a series of water management practices which are designed to drain surface water in such a way as to offer a more sustainable approach to conventional run-off practices. The SUDS programme was inspired by the storm water management system used at the Century City commercial property development in Cape Town. It is claimed this is the first SUDS system to be used in an industrial park. The second innovation is a waste-to-energy plant. Lords View has a strategic relationship with Enviroserve, a waste management and solutions company, which is responsible for producing 'green energy' for the park once the development is complete. A task team established by the local Ekurhuleni Municipality has been facilitating this development which is divided into two phases. The first phase, the production of methane to energy, is a simple, slow process which requires some time for methane to be produced through the decomposition of refuse. As the refuse decays, the methane from the decomposition process will be collected and utilised. The second phase, a much larger project, involves Enviroserve developing an on-site waste-to-energy plant making use of municipal solid waste. This process will involve municipal waste going directly to the plant for processing, thereby eliminating the wait associated with the decomposition process. The tenants at Lords View have either the choice of using electricity from the national grid or of green electricity generated from the waste-to-energy plant. Other features of the Lords View development are a planned greenbelt which is to be the central area and


S130 incorporate a running track and seating areas. It is significant that in common with the local drivers for individual green industrial properties the major client of the Lords View park is to be the multinational Unilever. The waste products produced by the Unilever factory, consist of large quantities of milk by-products. Together with Enviroserv an anaerobic digester has been designed and will be developed on site to generate electricity through the decomposition process of the by-products. Although Lords View is striving towards eco-friendly industrial park designs, the park tenants are not obliged to follow green architectural designs. Many of the clients are most interested in the small greening initiatives such as natural pest control rather than use of pesticides. By contrast, Unilever follow the Leadership in Energy & Environmental Design (LEED) process of sustainable design and principles as laid out by the US Green Building Council. One final observation is in relation to local community development as Lords View have partnered with the Ekurhuleni Municipality to create a skills development and local employment project to utilize local labour sourced from the proximate Tembisa township. The second eco-industrial property development which is under construction is that of the Chem City Eco-Industrial Park (CEIP) which occupies an industrial site covering 1 700 000 m². This is currently being developed by Sasol, a large South African integrated energy and chemicals manufacturer. The park is at Sasolburg which is south of Johannesburg within the greater Vaal Triangle chemical and industrial core and incorporates a number of large industries such as Sasol, Safripol, Omnia, NatRef, Samancor and Mittal Steel. Initially the land was zoned for and developed as a chemical energy and related infrastructure facility. Sasol changed the focus of the model and the new vision was to place emphasis on creating a bio-diverse park with green initiatives which would attract green companies. The image of the site was enhanced to reflect these green initiatives by making use of the recycling of on-site materials in the construction and development of civil infrastructure such as storm water drainage and sewerage systems. In addition to the green infrastructure of the project, to further reduce the carbon footprint of the site, a significant size of land consisting of a natural wetland has been dedicated to the natural environment with the reintroduction of indigenous fauna and flora. The greenbelt covers an area of 311 791m² and comprises a natural wetland which acts as a sponge for flood water and a natural habitat. A grey water management system similar to the storm water management system is planned to be introduced. The grey water will be filtered and pumped into a storage tower for use in irrigation and other processes which do not require pure drinking water. This grey water filtration system will save 60 percent on potable water consumption for the site as a whole. Sasol is currently also exploring the possibility of a sewerage treatment facility in the future once the park is fully operational and has a higher occupancy level. A bi-methane sewerage digester is also under investigation. The idea follows the concept where solids and liquids are separated, and the liquids are treated, and the solid components are converted into compost and other useful products. ChemCity is conveniently located across the road from the National Refinery (NatRef) and the Sasol 1 plant. The management of CEIP realized that there are a number of opportunities to create good linkages. Steam which is produced as a by-product from both of these plants, is an important commodity and many industries require steam in the production and manufacture of products. A second by-product produced by the Sasol 1 plant, is coal ash. ChemCity is currently exploring the viability of creating ash bricks through compaction and chemical agglomeration. A third by-product produced by the Sasol 1 plant is plastic and polymer waste. This waste has been used already to construct a building on the CEIP site which is entirely made of plastic. The park has generated a large amount of interest from recycling companies, and CEIP currently are in negotiations with two companies to provide these businesses with business development support services and access to raw materials in order to develop the market linkages. In addition, a business incubator is being established on


S131 site that will deliver a variety of business development support services and enterprise development support services for local community development. These services will be offered to small enterprises and entrepreneurs who wish to become suppliers to the large companies in the area. However, several barriers need to be overcome regarding the development of the CEIP project, most importantly the financial viability of such a project and the lack of communication and collaboration between companies with often opposing visions (Wyeth, 2013). Although it is acknowledged that it will be a long time before CEIP will break even financially Sasol (and ChemCity), see this project as an important contribution to support local economic development (Wyeth, 2013). The third eco-industrial park is the Limpopo Eco-Industrial Park (LEIP) which currently is in the planning phase. The vision for the LEIP is to develop a superior industrial facility which incorporates social and environmental sustainability principles and offers services such as clean electricity generation; water treatment and solid waste management facilities with the additional benefit of downstream beneficiation of all stakeholders in an environmentally and socially sustainable manner (EIS, 2013). The park will be located in the vicinity of the city of Musina in the Limpopo province of South Africa (Du Toit, 2013). The LEIP will consist of five separate plants, which are planned to form a closed loop or symbiotic system. These plants will include a waste water treatment plant; a brick making plant; a plasma waste gasification plant; a gas-to-liquids plant; and a coke and co-generation power plant (EIS, 2013). According to Du Toit (2013) barriers to a project of this magnitude include balancing the correct combination of characteristics such as site suitability, environmental factors, existing infrastructure, value chain of feedstock and products, technological and economic viability, services, and proximity to a potential labour force. Overall the LEIP is planned to be an example of sustainable eco-industrial development and contribute to the local economy through social upliftment and sustainable resource use (EIS, 2013). Overall the interviews confirmed that the concept of eco-industrial park is still relatively new in South Africa and currently there is no single complete and operational park in the country (Wyeth, 2013). The South African case studies exhibit a strong and distinctive focus on contributing to local economic development, employment opportunities, and skills development. In all three parks there are contributions to local community development in the form of local labour preferences, small enterprise support initiatives and training. Arguably, as yet no so-termed eco-industrial park in South Africa can claim to have embraced the critical international criteria of a community of manufacturing businesses together exhibiting collaborative behaviour for collective benefit through green design as well as the exchange of by-products with the objective of mutual benefit to the community, economy and environment (cf. Côté & Cohen-Rosenthal, 1998; Lowe, 2001; Tudor et al. 2007; Hewes & Lyons, 2008; Veiga & Magrini, 2009). Conclusion It has been shown that greening the economy can have considerable positive impacts to stimulate growth as well as improve the environment (Borel-Saladin & Turok, 2013a, 2013b). Tapping into this potential is of particular importance for a country such as South Africa with its high levels of unemployment as well as carbon emissions. In common with other emerging economies South Africa faces the challenge of reorienting its economy towards a low-carbon trajectory (Kaggwa et al., 2013). From the side of national government a number of innovative policy initiatives have been launched such that the country is sometimes viewed as a global leader in green economic development (Death, 2014). This paper has examined one facet of the unfolding of green economic development in South Africa, namely the issue of the greening of urban industrial commercial property development. The analysis reveals that South Africa is presently behind a number of other


S132 emerging economies where considerable progress has been made towards the making of ecoindustrial parks. Driven by cost considerations and the image demands of international investors a process of the greening of industrial property developments in urban areas is taking root in the country. Nevertheless, at present, there is no advanced eco-industrial parks using principles of industrial ecology that can parallel those in other parts of the world. It is revealed therefore that planning for eco-industrial parks still is in its infancy in South Africa. A number of property developments currently are being rolled out and others are in the planning stage. Further research and monitoring is needed in order to track the progress of these unfolding developments concerning the greening of industrial property in South Africa. Acknowledgements Thanks are extended to the study interviewees as well as the critical inputs offered by Mabel Black, Skye Norfolk and Teddy Norfolk. References Bai, L., Qiao, Q., Yao, Y., Guo, J. & Xie, M. (2014). Insights on the development progress of National Demonstration eco-industrial parks in China. Journal of Cleaner Production, 70, pp. 4-14. Borel-Saladin, J.M., & Turok, I.N. (2013a). The green economy: Incremental change or transformation? Environmental Policy and Governance, 23 (4), pp. 209-220. Borel-Saladin, J.M., & Turok, I.N. (2013b) The impact of the green economy on jobs in South Africa. South African Journal of Science, 109 (9/ 10). Brent, A.C., Oelofse, S. and Godfrey, L. (2008) Advancing the concepts of industrial ecology in South African institutions. South African Journal of Science, 104 (1/2). Bugnar, N. & Mester, L.E. (2013). Eco-industrial park – A tool for sustainable development. Annals of the University of Oradea , Economic Science Series, 22(1) 82-88. Cidell, J. (2012). Building quality, building green: Conventions theory and industry transformation. Urbani izziv, 23(supplement 2), pp. 186-194. Cohen-Rosenthal, E. (2003). What is eco-industrial development? In E. Cohen-Rosenthal & J. Munsikow (eds) Eco-industrial Strategies: Unleashing synergy between economic development and the environment. Sheffield, Greenleaf, pp. 14-29. Conticelli, E. & Tondelli, S. (2012). Application of strategic environmental assessment to eco-industrial parks: Raibano case in Italy. Journal of Urban Planning and Development, 139 (3), pp. 185-196. Côté, R.P. & Cohen-Rosenthal, E. (1998). Designing eco-industrial parks: A synthesis of some experiences. Journal of Cleaner Production, 6, pp. 181-188 Côté, R.P & Hall, J. (1995). Industrial parks as ecosystems. Journal of Cleaner Production, 3 (1-2), pp. 41-46. Death, C. (2014). The green economy in South Africa: Global discourses and local politics. Politikon, 41, pp. 1-22. Department of Economic Development (2011). Accord 4: Green Economy Accord. Pretoria: DED. Domenecha, T., & Davies, M. (2011). Structure and morphology of industrial symbiosis networks: The case of Kalundborg. Procedia - Social and Behavioral Sciences, 10, pp. 79–89. Du Toit, P. (2013). Interview CEO Eco-Industrial Solutions (PTY) Ltd. Limpopo EcoIndustrial Park Project.10 October. Ehrenfeld, J., & Gertler, N. (1997): Industrial ecology in practice: The evolution of interdependence at Kalundborg. Journal of Industrial Ecology, 1(1), pp. 67-79.


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Structural equation modelling of building quality constructs as a predictor of satisfaction in subsidised low-income housing Clinton Aigbavboa Wellington Thwala Clinton Aigbavboa, University of Johannesburg, Faculty of Engineering and the Built Environment, Department of Construction Management & Quantity Surveying, South Africa ([email protected]) Wellington Thwala, University of Johannesburg, Faculty of Engineering and the Built Environment, Department of Construction Management & Quantity Surveying, South Africa ([email protected])

Abstract Residents’ satisfaction with the building quality and housing condition features has received an increasing recognition as a significant factor which influences the occupants’ satisfaction with their housing units. This paper reports the use of Structural Equation Modelling technique to test the influence of building quality features as a predictor of residents’ satisfaction. The study was conducted amongst South Africa housing practitioners’ and the low-income housing occupants’. Data used in the study were obtained from a Delphi and field questionnaire study. Primary data were collected by a face-to-face administered questionnaire survey conducted among 751 low-income housing residents’ in three metropolitan and one district municipality in the Gauteng Province of South Africa. Data gathered via the questionnaire survey were analysed using structural equation modelling (SEM) which was used to assess the factorial structure of the constructs. Using Structural Equation Modelling software - EQS version 6.2, the factorial structure, reliability and validity of building quality features indicator variables were investigated. The statistical results support the research hypothesised positive relationship that building quality feature has a direct influence in predicting residents’ satisfaction with their houses. Also, the influence of building quality feature on residents’ satisfaction was statistically significant. Further SEM analysis revealed that the Rho and the Cronbach’s alpha coefficients of internal consistency were over 0.70 criterions for acceptability, and the constructs shows a good mode fit to the sample data. The Zstatistics analysis also revealed that the constructs have direct influence in determining low-income residents’ satisfaction with their houses. The result advocates a practical consideration of these construct in future development of subsidised low-income housing in South Africa. Keywords: residential satisfaction, building quality features, Structural Equation Modelling, South Africa

Introduction Housing satisfaction describes an ‘end-state’, where an individual or household is satisfied with the residential status they have attained (Weidemann & Anderson, 1982). It is not one constant experience or state; it is an outcome, perceived by an individual or household, that their current housing status meets their needs and aspirations (Potter, Chicoine, Speicher, & Kathryn, 2001). It is based upon the perception of the housing occupants’ on the features within and around the housing environment. This process, aligns with the theories of residential satisfaction which are based on the notion that residential satisfaction measures the difference between households’ actual and desired housing and neighbourhood situations (Galster & Hesser, 1981). Hence, satisfaction with their housing conditions indicates the absence of complaints as their needs meet their aspirations. The formation of residential satisfaction is not simply based upon freedom from dissatisfaction; it is more complex (Lu, 1999). It is a differently composed construct; the


S136 causes of dissatisfaction are more likely to be a universal source of discontent for everyone (Hourihan, 1984), whilst the sources of satisfaction are much more diverse. This is the case with the beneficiaries of the South Africa low-income subsidy schemes, where there is a general dissatisfaction with the initially provided 30 square meters housing unit situated in a 250 square meters of land; though, this have since been increased to a minimum of 40 square meters based on the revision of policies governing low-income housing in South Africa. This adjustment, was driven by a political need to deliver acceptable 40 square meters houses, was not rooted in a deeper understanding of the consequences of the service levels/location/topstructure trade-off on beneficiaries. Rather, it was an irritable move related to the historic rejection of the notion of ‘incrementalism’ – the gradual consolidation of a starter house over time by the end-user – and may again, in fact, have further contributed to the spatial marginalization of the poor (Tomlinson, 1999; Charlton and Kihato, 2006). Also, the national budget allocations to housing are wholly inadequate to deal with the enormous backlog, and desperately needs to be increased and a as a result of the government’s decision to target “breadth, not depth” (Tomlinson, 1998). One of the main reasons of dissatisfaction was that the area estimation of the constructed housing units never took into consideration the housing life cycle of the beneficiaries and other dynamics that are relevant to the beneficiaries’ optimal usage of the housing units such as the improvement of the building quality features. A building's success depends not only on how effectively the building provides the setting for activities of daily living but also on the perceptions of its residents with regards to the provided features necessary to meet their daily usage (Turner, 1972; 1976). For instance, Francescato, Weidemann, and Anderson (1987) suggest that residence satisfaction with any residential dwelling depends on three elements, which are: the design of the house, (i.e. the dwelling space organisation, layout and facilities provided); the management practices; and the surrounding social aspects. Varady and Carrozza (2000) and Salleh et al. (2011), acknowledge that residential satisfaction encompasses four distinct types of satisfaction, which include: satisfaction with the dwelling unit; satisfaction with the services provided, including repair services; satisfaction with the whole package received, as in the case of public housing, where no rent is paid (dwelling and service); and satisfaction with the neighbourhood or area. In this regards, adequate provision of the right building quality features for a new housing project for the low-income (poor) goes a long way to underpin the success or failure of the housing programmes supporting the housing development. Hence, by undertaking building occupants’ satisfaction evaluation towards a product or a service; it is believed that improvements could thus be found which will be allocated to the right places and in the right direction (Yiping, 2005). This will thus enhance the efficacy of the production or service provided. Therefore, the objective for the present research is to present how structural equation modeling technique was used to test the influence of building (housing) quality features as a predictor of residents’ satisfaction in subsidised low-income housing in South Africa. The study was conducted amongst South Africa housing practitioners’ and the low-income housing occupants’. The article commences by reviewing the literature on housing quality features and a brief background of subsidised housing in South Africa. This is followed by a discussion of the research method used in achieving the research objective; followed by the presentation of the research findings and a concurrent discussion of the results. Finally, the paper draws some conclusions. The present article contributes to the existing literature in three ways. Firstly, it enriches housing literature theoretically. It extends the meaning and dimensions of housing satisfaction through the literature discussed with regards to building (housing) quality features. Secondly, the study has the potential to contribute to the literature practically; uncovering building quality factors that predict housing satisfaction of lowincome occupants. Lastly, the study contributes to the existing literature through the


S137 methodology adopted for the study which enables the validation of building quality as causative in the prediction of residents’ satisfaction. Hence, the results of this study may assist architects, city planners, and housing authorities in designing and constructing better quality, sensitive and livable housing settings with reference to the identified building quality features. This is because of the deliberate urban spatial policy which used the urban planning system as a means to segregate spatial land uses into economic class antagonism. Thus, making the housing environment in South Africa to be very complex, in large part due to the deliberate policy and legislative framework of socio-economic and spatial exclusion and marginalization created during the Apartheid Era (Huchzermeyer, 2003). Hence, this article makes a significant contribution towards understanding residential satisfaction in subsidised low-income housing developments in South Africa. The next section of the article presents some background literature on building quality feature. Building Quality Features According to Altas and Ozsoy (1998), residential satisfaction and quality of housing are two mutually related concepts in housing evaluation studies. In some previous research, satisfaction is referred to as a criterion for evaluating the quality of the residential environment by measuring the effect of perception and assessments of the objective environment upon satisfaction. While Weidemann and Anderson (1985), refers to the outcome of the perception from quality of housing as a predictor of behaviour. Numerous authors have studied the determinants of housing satisfaction and the link between satisfaction and building quality or housing conditions. Research has shown that housing satisfaction is related to; for instance the quality of the floor finishes (external and internal) amongst others (Ukoha & Beamish, 1997; Aigbavboa & Thwala, 2010). However, Hintz and Null (1988) states that satisfaction with building quality features varies by social class because people in lower socio-economic groups aspire to amenities that the upper classes tend to take for granted. This according to Kinsey and Kane (1983) is due to different preferences and expectations by each class of people. Hence, Morris and Winter (1978), defined housing (building) quality, as the perceived desirable characteristics of a dwelling by its users or observers. When there are perceived housing quality deficits, the users determines what housing quality characteristics should be in totality or those undesirable. Residents’ satisfaction towards a given housing unit is likewise derived from the satisfaction with the building quality and the housing condition features in the buildings (Ukoha & Beamish, 1997). Onibokun (1974) classified building condition features as dwelling subsystems to the human habitat that influence the level of housing satisfaction. This position was further supported by McCray and Day (1977) who states that low-income housing construction is rarely developed to reflect the needs and types of families who are going to inhabit the houses, as the building condition / quality elements are seldom considered in the establishment of human habitats. Whereas, the quality of lowincome housing should be a combination of both the user’s requirements and the principles that define adequate housing. But because public low-income housing is built for the poor and disadvantaged, with the cost being covered by the government; the choices of design and materials used during construction are only based on an affordable budget; which compromises best practices with regards to adequate housing for the low-income groups. Hence, Kutty (1999) claims that a good building structure with good quality is an important indicator that determines the residents’ satisfaction with the building and the value they place on the dwelling. Similarly, Franescato, Weidemann, Anderson and Chenoweth (1974) conceive satisfaction as a function of different categories of variables: the objective characteristics of the residents, objective characteristics of the housing environments, and the occupants’


S138 perception and beliefs about the aspects of their housing environment which are the physical environment, the housing management, and the other residents. Marans and Sprecklemeyer’s (1981) model of residents’ satisfaction recognises the attributes of housing quality features by indicating that objective attributes of a particular house have an influence upon a person’s satisfaction through the person’s perception and assessments of those environmental attributes. It further states that a person’s behavior is influenced by satisfaction - the perception and assessments of the objective environmental attributes, and the objective attributes of the environment itself. According to Duncan (1971) and Ramdane and Abdullah (2000), three dimensions of housing quality are usually considered with regards to dwellings, which include: internal aspects of a dwelling unit, its external aspects, as well the surrounding area. Furthermore, Elsinga and Hoekstra (2005) inform that the higher quality a dwelling is, the higher the resident’s satisfaction with it. Elsinga and Hoekstra further state that housing quality and condition should not be assessed based on one variable only, but from objective and subjective dimensions. This was also supported by the Marans and Sprecklemeyer’s (1981) study. Also, Kain & Quigley (1970) divided housing quality into five critical factors namely: basic housing quality factor; dwelling unit quality factor; surrounding property quality factor; non-residential land use quality factor; and structural average quality factor. According to Kain & Quigley (1970), basic housing quality factors refer to the index used to measure the surrounding areas and the external physical quality of the unit. While the dwelling unit quality factor is assessed from the structural aspects and internal hygiene of the dwelling unit; surrounding property quality factor is assessed from the general cleanliness of the surrounding area, its ambience and landscaping. The factor of quality for non-residential uses is measured from the effects of industrial and commercial uses in residential areas. These effects are assessed based on the level of discernible noise, air quality and traffic flow in the area. The structural average quality factor is assessed based on the structural quality on the building facade. Building quality factors that have been found to mostly contribute to residents’ satisfaction with their dwelling units include: wall, floor, window, roof, door and painting quality, amongst others (Salleh et al., 2011; Ukoha & Beamish, 1997). For instance, the materials used for wall construction gives effect to the building temperature. Besides, the quality of windows should provide good ventilation and air circulation in the units, because if the windows are unable to open, it will increase the heat in the unit; hence, residents will be uncomfortable in their houses. However, the housing quality standards set by most governments who embark on state own housing and the decisions made by the appointed advisers and architects compromise good practice for the total well-being of the housing occupants and falls short of the acclaimed standard for adequate housing. It is imperative to know that future generations will live and grow in the homes being built today which will be echoed through tomorrow’s society. The development will impact either positively or negatively on the quality of life of the housing residents and in the society at large. Good building standards and adequate quality of low-income housing units are at the forefront of the housing debate in South Africa. This debate, is driven by a political need to deliver acceptable houses to the poor and previously marginalised through the gradual consolidation of a starter house over time by the end-user thus correcting the spatial marginalization of the poor (Huchzermeyer, 2003). However, despite the government set documented acceptable standards required for contractors and developers; there are still gross inadequacies with the delivered product (Huchzermeyer, 2001). Various NGO’s and communities have lodged numerous complaints at the building quality of stated subsidised low-income houses in South Africa (Moolla et al, 2011; Aigbavboa & Thwala, 2012). Questions have also been raised regarding the sustainability of these communities because of


S139 the quality or the limited or substandard building quality features in the delivered houses. The building quality features considered for the present study are summarised in Table 1. Table 1.Building Quality Features Conceptual Variables Building Quality External construction quality (BQF1) Features (BQF) Internal construction quality (BQF2) Water pressure (BQF3) Wall quality (BQF4) Floor quality (BQF5) Window quality (BQF6) Door quality (BQF7) Internal painting quality (BQF8) External painting quality (BQF9) Plumbing quality (BQF10) The finished quality of sanitary system (BQF11) Electrical wiring quality (BQF12) Electrical fittings quality (BQF13) Numbers of electrical sockets (BQF14) Level of socket (BQF15) Overall unit quality (BQF16) Subsidised Housing in South Africa State subsidised housing in South Africa is a form of housing delivery system in which the property and associated infrastructure is financed by the government and transferred to either a group of qualified low-income families, elderly and handicapped individuals with little or no contribution coming from them. However, it has never proved easy to help the poor through housing subsidies, particularly in developing countries (Gilbert, 2004) such as South Africa with numerous social-economic issues and racial divides. Today, very few governments are prepared to offer housing subsidies to the poor unless they are delivered as up-front or as, targeted capital subsidies. Also, the lack of resources has forced most governments into making difficult decisions about the sise and the numbers of subsidies to be offered. In order to address the housing shortage and the urban and rural housing backlog in the Post-Apartheid South Africa State, the government instituted a number of programmes and mechanism to assist lower income households. Foremost amongst these include the housing subsidy system, as well as other innovative mechanisms to encourage the increase of affordable housing to the poor (Landman & Napier, 2010). Also dependent on these decisions, has come a series of implementation problems relating to the quality of construction, the location of the new housing solutions, the use of credit and how to allocate subsidies between so many beneficiaries. While there have certainly been positive experiences from the South Africa housing delivery mechanism, there is also a very long list of failures particularly with the process of delivery and the product that was and is still being delivered. Housing delivery for the low income groups in South Africa is reliant on the Housing Subsidy process. The subsidy scheme facilitates the provision of a range of housing types. Despite the impressive delivery of low-income houses in South Africa, the housing backlog has increased from 1.5-million in 1994 and is currently estimated at between 2.1million and 2.5-million. This, according to the Department of Human Settlement translates


S140 into approximately 12.5 million people still needing houses in the country. Despite this impressive statistics, the government’s 2010 General Household Survey showed that the portion of households still living in shacks has remained steady at about 13 percent since 2002. Also, subsidy housing for homeownership comprise 15.2% of the total stock in South Africa, with social housing (rental) constitutes 0.5% and co-operatives 1.6% (based on the 2001 Census). Though, delivery through social housing has signiﬁcantly increased since then, but this still constitutes a small percentage of the overall housing supply in the country. Other forms of state provided housing include public housing at a local level. However, Statistics SA (2010) informs that around 18.9 percent of South African households live in state subsidised homes according to its General Household Survey report and another 13 percent are waiting for a state subsidised housing unit. Government subsidised homes, usually includes a stand-alone house of about 30-40 m2 on a 250 m2 plot. Lately, developers and designers have started to experiment with alternative housing types where the units are semidetached and located on smaller sites to accommodate densiﬁcation. The critiques of South Africa’s subsidised housing policy are many, and varied. Champions of the program proclaim it for the main reason that the apartheid policy was such an utter failure; that it has attempted, and gone some of the way to providing housing for all. The scale of the project is tremendous to some extent regardless of the criticism. For instance, at macro-level, the effects of the program are plain to see - an estimated 13 million people or more, have benefited directly from the program. During a period of worsening poverty and unemployment, enormous urbanization, and high population and household growth- the rate of households living in informal housing has actually increased, especially among the African population. At the same time, however, the national budget allocations to housing are wholly inadequate to deal with the enormous backlog, and desperately needs to be increased (Tomlinson, 1998’ Aigbavboa & Thwala, 2012; 2013). Also, Lipman (1998), in an article entitled ‘Apartheid ends, but they’re still put in little boxes, little boxes all the same’, commented that newly built houses did not differ much in quality and location to the kind of housing built for migrant labourers by the apartheid government in the 1950’s and 60’s which encapsulate the two main complaints about housing policy in South Africa. The first relates to the quality of the housing, which has been of a very basic, if not insufficient, quality as a result of the government’s decision to target “breadth, not depth” (Tomlinson, 1998). Especially in the beginning of the program, the houses were far too small, and were alleged to be worse living environments than even the shacks from which people had moved. While the minimum quality requirements have been implemented ever since, the housing product delivered is still not of a very high standard. The second set of critiques take aim at the policy’s planning and the choice of project location which reinforced the spatial logic of apartheid (Huchzermeyer, 2003) by continuing to settle poor communities on the periphery of cities, missing a great opportunity to break down racial segregation and economic marginalization. Methodology The study was conducted using both qualitative and quantitative data collection methods. For the qualitative aspect, a Delphi technique was used while field questionnaire survey was used for the quantitative aspect. The Delphi survey was conducted amongst 15 sustainable human settlement experts drawn from the nine provinces of South Africa. The output from the Delphi techniques assisted to refine the conceptual variables for the building quality features (BQF) as derived from the literature. With regards to the quantitative aspect of the study, a questionnaire survey was conducted among 751 randomly selected low-income housing residents’ in three metropolitan and one district municipality in the Gauteng Province of South. The adopted sample sise was due to the kind of data analysis method (Structural


S141 Equation Modeling) to be used in this study in order to avoid negative results, which will jeopardise the model goodness-of-fit; thus failing to establish the truth with regards to the constructs which predict building quality and resident’s satisfaction. A sample sise of 751 was considered from a total of 20 658 low-income buildings. This is because the role of sample sise is crucial in SEM analysis (Lucko & Rojas, 2010). Hence, Kline (2010) suggested that a path model analysis via SEM needs a sample sise of 200 or more. Also, Bagozzi and Yi (2012) proposed that the sample sise for SEM analysis should be above 200 for analysis if covariance structure estimate. All completed, allocated and occupied subsidised low-income housing units in each housing location area in the identified metropolitan and district municipalities were chosen as the sample frame. The sample frame were the beneficiaries (occupants) of the subsidised lowincome housing that are occupied. To establish the sample frame, a list of the numbers of subsidised low-income houses in the respective population was obtained from the municipalities and confirmation from the Affordable Land & Housing Data Centre Suburb Profile, which has a comprehensive data, capturing of the number of houses in South Africa (enumerated total number of low-income houses developed in South Africa). The current study used the probability sampling method, which allows all segments of the low-income population as defined above to be represented in the sample, making sure that a representative sample of low-income housing is selected for this study. Therefore, a simple random and cluster sampling techniques were used, which allows each member of the population to have an equal chance of being selected (Kerlinger & Lee, 2000) whilst a cluster sampling technique divided the population into an expansive area with each cluster containing an equally heterogeneous mix of individuals. The rationale for selecting this method of sampling is based on the nature and composition of the low-income housing landscape in South Africa\- hence cluster random sampling was used to ensure representativeness. The selection of a representative sample for this study was based on the justification by Smith (2004) who informed that random sampling must be used for a study of this nature, hence it was adopted. The evaluated factors in the study were identified during the course of the literature review and were further validated via the Delphi study. An existing valid survey instrument was not used, but the developed questionnaire was further validated via the SEM output. Data gathered via the questionnaire survey were analysed using structural equation modelling (SEM) software, EQS Version 6.2, which was used to assess the factorial structure of the constructs. The conceptual variables were thereafter tested as a priori using SEM of the questionnaire survey results. The SEM process was therefore undertaken as confirmatory factor analysis (CFA) of the priori model. Due to the limited space in current paper, the Delphi process is not discussed. Model testing Structural equation modelling (SEM) using EQS Version 6.2 (Bentler & Wu, 1995) was used to test the BQF priori. The construct parameters were estimated using the Maximum Likelihood method. Because psychometric data have a tendency not to be normally distributed; hence, consideration was given to the Mardia coefficient. Meaning, if the Mardia values showed significant deviation from normality, the Satorra-Bentler Scaled statistics (Robust) would be used as these have been found to perform adequately under such conditions (Bentler, 1988). In establishing the score reliability, the construct validity for the variables was conducted to demonstrate the extent to which the constructs hypothetically relate to one another. This is also referred to as the test of, factorial invariance or measurement invariance (MI) or measurement equivalence between indicator variables. Factorial invariance (FI) is a very important requisite in Structural Equation Modeling. It


S142 attempts to verify that the factors are measuring the same underlying latent construct within the same condition. FI ensures that the attributes must relate to the same set of observations in the same way. The FI for BQF was determined based on examination of the residual covariance matrix from the SEM output result as opposed to the correlation matrix. Covariance matrix establishes the variables that adequately measure the BQF construct which predict residents’ satisfaction. Hereafter, preliminary Confirmatory Factor Analysis (CFA) was performed to measure the building quality variable indicators to identify which items appropriately measures the building quality features. Hence, BQF indicator variables with an unacceptably high residual covariance matrix (>2.58) were dropped, meaning that they do not sufficiently measure the building features regardless of their importance in other cultural contexts and past research studies. Residual covariance matrix values greater than 2.58 are considered large (Byrne, 2006; Joreskog & Sorbom, 1988). Therefore, in order for a variable to be described as wellfitting in measuring a construct like building quality and thus predicting residents’ satisfaction, the distribution of residuals covariance matrix should be symmetrical and centered around zero (Byrne, 2006; Joreskog & Sorbom, 1988). This procedure was adopted as a means to ensure that the indicator variables were measuring the same latent construct. Results Measurement Model for Building quality features From a total sample of 751 responses, the number of cases that were analysed was 745. Six cases were skipped because of missing variables. A detailed examination of the pattern of missing data revealed that the missing data was missing at random (MAR) and not missing completely at random (MCAR). According to McDonald and Ho (2002), the condition that data was missing completely at random is a situation where the presence or absence of the observation is independent of other observed variables and the variable itself. Hence, the robust maximum likelihood estimation solution in EQS was used to address the problem. Initial assessment of the data revealed that the residual covariance matrix scores for ten indicator variables (BQF1, BQF6 – BQF9, & BQF12 - BQF16) had high values (3.20 - 4.52). Therefore, they were dropped from further CFA analysis. Thus, only six indicator variables passed the test and were used for the assessment of the BQF measurement model goodnessof-fit. The question of how many factors a construct should have is debatable (Bollen, 1989; Hayduk & Glaser, 2000). However, some scholars have informed that a minimum of four indicator variables should be used whilst others have recommended five (Bollen, 1989; Byrne, 2006; MacCallum et al., 1996). Further, analysis of the Mardia values showed that the data deviated significantly from normality (Mardia = 27.47), hence the decision was to use the robust maximum likelihood method which assumes multivariate normality. Table 2: Robust Fit Indexes for Building quality Feature Construct Fit Index Cut-off value Estimate Comment S – Bχ2 76.438 Df 0≥ 9 Acceptable CFI 0.90≥ acceptable 0.964 Good fit 0.95≥ good fit SRMR 0.08≥ acceptable 0.039 Good fit 0.05≥ good fit RMSEA 0.08≥ acceptable 0.100 Acceptable fit 0.05≥ good fit RMSEA 0.080:0.121 Slightly out of 90% CI range


S143

Examination of the Bentler-Weeks structure representation for the approved construct revealed that the BQF construct has 6 dependent variables, 7 independent variables and 12 free parameters. The number of fixed non-zero parameter was 7. As shown in Table 2, the sample data on BQF measurement model yielded an S – Bχ2 of 76.438 with 9 degrees of freedom. The associated p-value was determined to be 0.0000. In multivariate analysis, when the p-value is high, there is less possibility of an association between two variables (McClave, Benson & Sincich, 2008); while a smaller p-value gives a better likelihood of association. The chi-square value advocated that the difference between the sample data and the postulated BQF measurement model was insignificant. From these values, the normed chi-square value was determined to be 8.4931. The normed chi-square is the procedure of dividing the chisquare by the degrees of freedom. The normed values of up to 3.0 or 5.0 are recommended (Kline, 2005). The ratio of S – Bχ2 to the degrees of freedom was higher than the upper limit value of 5.0 suggesting a mediocre fit of the sample data to the construct. However, the chisquare statistics is only indicative of fit and therefore, other goodness-of-fit indexes were reviewed. The goodness-of-fit indexes are presented in Table 2. The robust Comparative fit index (CFI) of 0.964 was higher than the cut-off value for a good fitting model. A model is said to be a good fit if the CFI is above the cut-off value of 0.95 (Hu & Bentler, 1999:27; Joreskog & Sorbom, 1996). The robust root mean square error of approximation (RMSEA) with 90% confidence interval was found to be 0.100 (lower bound value = 0.080 and the upper bound value = 0.121). This value was slightly below the maximum value of 0.08 for a good fit model. However, this is considered an acceptable mediocre model fit (MacCallum et al., 1996). In addition, the absolute fit index, Standardised root mean square residual (SRMR) was found to be 0.039. This value indicated a very good fit because a good fitting model is expected to have an SRMR index lower or equal to 0.05, whilst an index of 0.08 is sufficient to accept the postulated model. The absolute fit index SRMR accounts for the average discrepancy between the sample and the postulated correlation matrices and therefore, it represents the average value across all standardised residuals and ranges between zero and 1.00 (Byrne, 2006). Evaluation of the SRMR, RMSEA (90% CI) and the CFI fit indexes indicated an acceptable fit of the measurement model for the building quality feature factors. Testing the influence of Building quality Features (BQF) on residents’ satisfaction In order to determine the internal consistency of the composition of the measurement model, the Rho coefficient and Cronbach’s (1951) alpha (α) were examined to establish the reliability. Byrne (2006) and Kline (2005) theorise that Cronbach’s alpha measures the degree to which responses are consistent across all items within a single measure and if this statistics is low, the content of the items may be so heterogeneous that the total score is not the best possible unit of analysis for the measure. Hence, the acceptance of Cronbach’s Alpha to measure internal homogeneity is limited. Table 3: Reliability and Construct Validity of BQF Model Indicator Stand. Z-Stats R2 Total Factor Variables Coff. (λ) Variance Loading BQF2 0.774 ** 0.523 60.75% 0.769 BQF3 0.441 8.551 0.450 46.87% 0.468 BQF4 0.894 28.198 0.419 64.13% 0.893 BQF5 0.894 28.944 0.579 64.13% 0.897 BQF10 0.813 25.657 0.145 61.92% 0.809

Sign. 5% level Yes Yes Yes Yes Yes


S144 BQF11 0.651 18.623 56.56% 0.649 Yes RS1 0.797 ** 0.635 61.45% 0.718 Yes RS3 0.510 13.527 0.260 50.50% 0.551 Yes RS5 0.391 9.122 0.153 43.88% 0.479 Yes RS7 0.617 14.956 0.381 55.24% 0.644 Yes Cronbach’s Alpha = 0.885; Rho Coefficient = 0.892 Notes: Robust Statistical Significance at 5% level ** SEM Analysis Norm (Kline, 2005) - One variable loading per latent factor is set equal to 1.0 in order to set the metric for that factor. *Parameter estimates are based on standardised solutions Byrne (2006) argues that the use of the Cronbach’s Alpha Coefficient to judge latent variable models especially models with multi-dimensional structure is questionable because it is based on a very restrictive model that requires all factor loading and error variances to be equal. Therefore, in establishing score reliability for the analysis, the Rho Coefficient was relied upon more than the Cronbach’s Alpha Coefficient even though it is the most common method used for assessing the reliability for a measurement scale with multi-point items (Hayes, 1998). This is because the Rho coefficient provides a good estimate of internal consistency because the model that was analysed in the current study was a full latent variable mode (Byrne, 2006). According to Kline (2005), the reliability coefficient should fall between zero and 1.00. Values close to 1.00 are desired. The Rho Coefficient of internal consistency was found to be 0.892. This was above the minimum value of 0.70. Equally, the Cronbach’s Alpha was also found to be above the minimum value of 0.70 at 0.885. Both values showed a high level of internal consistency and therefore reliability (Table 3). The construct validity was determined by examining the magnitude of the parameter coefficients. High parameter coefficients of greater than 0.5, indicate a close relation between the factor and an indicator variable. A parameter coefficient of 0.5 is interpreted as 25% of the total variance in the indicator variable being explained by the latent variable (factor). Therefore, a parameter coefficient has to be between 0.5 - 0.7or greater to explain about 50% of the variance in an indicator variable (Hair et al., 1998). Inspection of the standardised parameter coefficient presented in Table 3, shown that they were significantly high (values ranged from 0.441 to 0.894). The estimate of 0.441 being the minimum suggested that the measured factor accounts for 46.87% of the variance in predicting the residents’ satisfaction with their houses. The total variances accounted for in each indicator variables by the endogenous variable revealed that the scores were significance at 5% level. Inspection of the interfactor correlation (R2) values for the building quality feature indicators revealed that four out of the six indicator variables that were used to measure the latent factor, had values close to the desired value of 1.00. Two other variables (BQF3 & BQF11) were weak in predicting the endogenous variable (Table 3). BQF3, which measured the occupants’ level of satisfaction with the water pressure in their units, had the lowest R2 value. The interfactor correlation test statistics (Z-stats) which functions as a Z-statistics test that the estimate is statistically different from zero. Findings on this aspect revealed that the estimate is statistically different from zero. This suggests that the interfactor relationship of these variables and other indicators in determining overall residential satisfaction is minor. The reported parameter coefficient explained more than 25% of the variance in the latent variable, which were indicative of an adequate fit between the latent variables and the endogenous construct. Thus, the score results suggested that the influence of this latent factor on the endogenous variable was direct and significant.


S145 Discussion & Conclusion The finding was that building quality features indicator variables satisfied both internal reliability and the construct validity criteria. The Rho value was above the minimum value of 0.70 (Table 3) and the construct validity criteria was justified by the magnitude, and statistical significance of a majority of the parameter coefficients. The findings from the interfactor relationship revealed that building quality features have a direct influence on the prediction of residents’ housing satisfaction. From the assessment of the variance accounted for in each measure by the variable, it was also found that all scores were statistically significance at 5% level. Likewise, the reported parameter coefficient explained more than the baseline level of the variance in the latent variable, were indicative of an adequate prediction of the residents’ satisfaction with their houses. Hence, these results suggested that the influence of this latent factor on the endogenous variable was direct and statistically significant. The six indicator variables used in measuring building quality features construct were highly causative to the endogenous variable as shown in Table 3. The wall and floor quality were the most highly causative items followed by the plumbing quality indicator. The lowest causative items were the water pressure, the quality of finishing of the sanitary system and the internal construction quality. The findings suggest that the residents were satisfied with most of the building quality features, albeit, they were dissatisfied with the finish quality of the sanitary system and the internal construction quality of the units. These finding support the study done by Abdul Ghani (2008) who found that residents of low cost housing in Malaysia were partially satisfied with the building quality features. It also concurs with the findings of study done by Salleh et al. (2011) and Ukoha and Beamish (1997), which found that most respondents (low-income occupants) were dissatisfied with the qualities of the internal construction of their units. However, during the questionnaire survey, the researcher observed that most of the units had problems with the quality of their housing units. Complaints from the occupants varied from roofs and doors that were improperly built due to poor craftsmanship to doors that did not open or close properly. The lack of ceilings in most units also led to high levels of dissatisfaction because residents complained about extreme in temperature conditions during seasonal changes. According to Turner (1972), the value of a house is of greater importance to a person than the appearance of the housing unit. In addition, the structure of the house, even if the building material was of a lower standard, would not affect the person’s perception if value could be attached to the unit. This is clearly evident from the results of this study. Literature informs that good building structure with good quality is an important indicator that determines the residents’ satisfaction with the building and the value they place on the dwelling (Kutty, 1999). Also, Duncan (1971) and Ramdane and Abdullah (2000), stated that the internal construction quality of a dwelling unit are usually considered with regards to its overall satisfaction, and when adequate, the occupants will be satisfied with their housing product. Findings revealed that the occupants were not totally satisfied as the measure of covariance and interfactor association with the residential satisfaction variable was average (Table 3). The implication of these findings are that residents’ satisfaction is a product of the direct influence of building quality features and that the residential satisfaction of South Africa lowincome housing occupants can be enhanced through improvement of the building quality features. The findings originating from the building quality feature assessment were therefore significant because when attention is given to issues of dissatisfaction regarding the building features various aspects, housing satisfaction of the low-income group residing in the subsidised houses will be achieved. Besides, the findings make it possible for policy makers


S146 to address factors of building quality in a way that it will bring about occupants’ satisfaction with their houses. References Abdul Ghani, S. (2008). Neighbourhood factors in private low cost housing in Malaysia. Habitat International, Vol. 32, No. 4. (December 2008), pp. 485-493 Aigbavboa, C.O. (2010). An evaluation of the post occupancy experience of housing subsidy beneficiaries in South Africa: A case study of Gauteng. Johannesburg: University of Johannesburg. Altas, N.E and Ozsoy, A. 1998. Spatial adaptability and flexibility as parameters of user satisfaction for quality housing. Building Environment, 33(5):315-323 Bentler, P.M. (1988). Causal modeling via structural equation systems in Handbook of multivariate experimental psychology, Perspectives on individual differences, eds. J.R. Nesselroade & R.B. Cattell, Plenum Press, New York, NY, US, pp. 317-335. Bentler, P.M. & Wu, E.J. (2005). EQS 6.1 for windows. Encino, CA: Multivariate Software Inc. p. 1-26. Bollen, K.A. (1989). Structural Equations with Latent Variables. New York: John Wiley & Sons, Inc. Byrne, B.M. (2006). Structural equation modelling with EQS- Basic concepts, Applications and programming. Lawrence Erlbaum Associates, Mahwah. Duncan, T.L.C. (1971). Measuring housing quality: A study of methods. Centre for Urban and Regional Studies: University of Birmingham. Elsinga, M. & Hoekstra, J. (2005). Homeownership and housing satisfaction. Journal of Housing and the Built Environment, 20:401-424. Francescato, G., Weidemann, S. & Anderson, J.R. (1987). Residential satisfaction: its uses and limitations in housing research in Housing and neighbourhood: Theoretical and empirical contributions, W.V. Vliet, H. Choldin, W. Michelson & P. Popene, Greenwood Press: Westport, CT, pp. 43-57. Franescato, G., Weidemann, S., Anderson, J. R. and Chenoweth, R. (1974). Evaluating residents’ satisfaction in housing for low and moderate income families: A multi-method approach. In: Carson DH, editor. Man-environment interactions: Evaluation and applications, vol. 5. Washington, D.C.: Environmental Design Research Association, p. 285-96. Galster, G.C. & Hesser, G.W. (1981). Residential satisfaction: An empirical critique. Environment and behavior, 13(6):735-758. Gilbert, A. (2004). Helping the poor through housing subsidies: Lessons from Chile, Colombia and South Africa. Habitat international, 28(1):13-40. Hayes, B.E. (1998). Measuring customer satisfaction: survey design, use and statistical analysis methods. Milwaukee: ASQ Quality Press. Hourihan, K. (1984). Context-dependent models of residential satisfaction: An analysis of housing groups in cork Ireland. Environment and behavior, 16:369-393. Hintz, M and Null, R.L. 1988. Satisfaction with structural quality of condominiums by owner-occupants. Housing and Society, 15(3), 227-237 Huchzermeyer, M. (2001). Housing for the poor? Negotiated housing policy in South Africa. Habitat International, 25(3), 303-331. Huchzermeyer, M. (2003). A legacy of control? The capital subsidy for housing, and informal settlement intervention in South Africa. International Journal of Urban and Regional Research, 27(3):591-612. Huchzermeyer, M. and Karam, A. (2006). Informal settlements: a perpetual challenge? Juta Academic.


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From informality to formality to informality: Extralegal land transfers in an upgraded informal settlement of South Africa Lochner Marais John Ntema Jan Cloete Anita Venter Lochner Marais, University of the Free State, Faculty of Economic and Management Sciences, South Africa ([email protected]) John Ntema, Department of Development Studies, School of Social Science, University of South Africa, South Africa ([email protected]) Jan Clete, University of the Free State, Faculty of Economic and Management Sciences, South Africa, ([email protected]) Anita Venter, University of the Free State, Faculty of Economic and Management Sciences, South Africa, ([email protected])

Abstract The paper discusses the nature of extralegal land transfers in an upgraded informal settlement in South Africa. The paper investigates these extralegal transfers in terms of the notion of property and property law as a social construct. The paper researches two main but contradictory conclusions, namely that either extralegal transfers are the result of the current social construct of property (also related to the historic lack of formal property for black people in South Africa) and / or that they are the result of the excessively high transaction costs of a formal transfer process. Keywords: land transfers, extralegal land transfers, property, De Soto, World Bank, economic sociology

Introduction The relationship between land tenure upgrading and economic development is a common theme in development discourse and a key element in housing policy discourse. The work of Hernando De Soto (2000) suggests that the lack of appropriate land tenure systems inhibits the release of the economic value of such property – which in turn is a crucial generator of wealth, especially in the West. The World Bank (1993) also proposes land titling, and emphasises the importance of such titling for the creation of a secondary market, in order to increase the tax revenue of cities and ensure security of tenure for further housing investment. Although De Soto’s work and the World Bank’s ideas have been subjected to criticism (Gilbert, 2002; Royston, 2006; Campbell, 2013), very little work has been done in respect of longer-term evaluations of titling programmes, with most of the points of criticism being conceptually based. A recent special edition of Urban Forum focuses primarily on informal land markets in existing informal settlements (Kihato & Royston, 2013). However, longerterm evaluations of site and services programmes are emerging, suggesting that a range of extralegal (informal) land transfers are taking place in areas that received titling through the World Bank and other funded site and services programmes during the 1970s and 1980s (Ward et al., 2011; Marais & Ntema, 2013). One of the outcomes of these longer-term Urbani izziv, volume 25, supplement, 2014 (special issue)

S149 evaluations is the queries concerning the legitimacy of the deeds register. In this regard, Peter Ward et al. (2011) argue “…that cities are experiencing a new wave of informality and property transfers which, if not fully understood, and if left unfettered, is likely to create further obstacles to home improvements and market performance. It is also likely to herald a new round of title regularization as property is sub-divided and inherited by second and third generation family members”. In the South African context, Lani Roux (2013: ii) points out that: “If buyers decide not to register transactions, significant implications arise; for buyers, who may be vulnerable to eviction by the previous owner or the state, and for the integrity of the registration system which does not reflect the actual ownership of parcels” while a number of other papers have also tried to reflect on informal land markets (Gunter & Scheepers, 2012). The paper aims to assess the nature of extralegal transfers against the background of the policy imperatives and ideas of the World Bank, as well as De Soto’s thinking and the theoretical contributions from the field of economic sociology. The necessity for the research is reflected by Laura Royston’s (2006: 166) comment that “[w]e need much greater attention in South Africa to describing these extralegal processes….”. Essentially, we argue that these informal land tenure transfers reflect both social and economic attributes which complicate potential policy responses in this respect. Methods The paper developed from longitudinal research that we conducted in Freedom Square over a period of more than twenty years (Marais & Ntema, 2013). The research process over this period included four household surveys conducted in 1990, 1993, 1998 and 2008. One of the questions in the 2008 survey required the household respondents to indicate when they had settled in Freedom Square. Sixty-one of the 200 respondents indicated that they had settled there since 1995 (this date is important, as the initial settlement and upgrading programme was completed by 1994). At the same time, the deeds register information was obtained for Freedom Square. We then visited each stand in those cases where the respondent had indicated that the household had settled there since 1996, and compared the information with the available information from the deeds office. The outcomes of this survey suggested that of the 61 stands visited, 30 were indeed occupied by the original inhabitants. This can be attributed to the fact that in many cases, the 2008 questionnaire may have been completed by, for example, a spouse who was not present before 1995. In the remaining 31 cases, the current occupants did not correspond with the information on the deeds register. An original scan was conducted to determine the reason for the differences. Four main informal land transfer processes were identified during this process, namely transfers from parents to children (x 18) (no financial transaction), stand swopping (x three) (no financial transaction), the appointment of a caretaker to the stand (x one) (no financial transaction), and finally, transfers which included a financial transaction (informal selling of the housing unit) (x nine). Semistructured interviews were drafted to fit each of these transaction types. Essentially, we based some of our methods on existing network theory – something not unfamiliar to economic sociology (Swedberg, 1997) – in order to understand the nature of the networks embedded in these transactions. However, in contrast to most of the network theory studies, we employed a qualitative research method. We conducted five semi-structured interviews with respondents from households where inheritance had come into play; three interviews in cases where landswopping arrangements had been made; and four interviews with respondents who had engaged in a financial transaction. These interviews were conducted with the people currently living on the stands (as identified by the household). We indicated the various interviewees in the discussion section.


S150 De Soto and economic sociology: a different perspective De Soto’s ideas and the policy context The plight of low-income earners attempting to access urban housing and security of tenure in India, Latin America and Africa is well documented (Durand-Lasserve & Royston, 2002). Although self-help housing has long been common practice in the developing world, especially in Latin America (Harris, 1998), the concept of land titling rose to prominence following the acceptance of site and services schemes by the World Bank in the early 1970s (World Bank, 1993) and the publication of John Turner’s book Housing by People (1976), which emphasised security of tenure as a prerequisite for informal settlement upgrading. The initial World Bank land titling programmes were based on the principles of affordability, cost recovery and replicability. The underlying aims of these programmes were to create a secondary urban housing market, ensure a basis for revenue creation and provide a platform for housing investment. During the mid-1980s, World Bank housing policy approaches shifted their focus to the relationship between macroeconomic reforms and housing policy. This was a time of worldwide structural adjustment programmes that emphasised the importance of the housing sector within the economy. The early 1990s also saw the introduction of whole-sector housing development, which emphasised urban upgrading (as opposed to site and service schemes), infrastructure improvement, financial market development, regulatory reform and the formalisation of tenure arrangements (World Bank, 1993). The importance of land titling was pointed out by the World Bank (1993: 117) in the following words: “The registration of property rights in squatter settlements is ... important in making land and house transactions possible and giving occupants legal protection. It encourages the buying and selling of housing and makes it possible for households to move to a dwelling that suits their needs and their budgets. It also increases the choice of tenure available to households, allowing them to own or rent as they see fit”. These hoped-for outcomes would also allow governments to institute a system for the collection of property taxes, which in turn would generate funding for new urban development. Similarly to the World Bank approach, De Soto’s (2000) publication, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, stresses the importance of land titling in housing policy. Three points should be made about De Soto’s work. First, he argues that the biggest stumbling block preventing poor countries from developing is the lack of land titling, which if put in place would release credit markets, thereby fast-tracking growth. Second, De Soto suggests that existing informal settlements (and the informal economy as a whole) are largely the result of inappropriate planning and tenure regulation in the formal sector. De Soto states that the simplistic answer lies in deregulation and the formalisation of tenure through ownership. These two solutions will result in the poor being incorporated into the formal economy. The third important element in De Soto’s work (one which is commonly ignored by his critics) is his contextualisation of property law as a social construct. He argues (thereby contradicting his promotion of ownership, to some degree) that land titling systems around the world are – and should be – the result of the social construct of land tenure. De Soto’s ideas have been criticised by numerous authors (Gilbert, 1999; Royston, 2006; Campbell, 2013; Shaw, 2013). For example, Allan Gilbert (2002) questioned whether mortgage lenders would be willing to lend money to poor people, and whether low-income households would actually want to borrow money. From a developmental point of view, De Soto’s ideas have been criticised because he singles out one factor (land titling) as a recipe for development, while disregarding a multiplicity of other factors (Campbell, 2013). Gilbert (2002) also argues that most informal dwellers have secure tenure, or at least experience secure tenure – and that land titling plays a marginal role in ensuring security of tenure.


S151 Furthermore, the overall mobility of low-income residents in Latin American cities remains limited (Gilbert, 1999; Ward, et al., 2011), which minimises the demand for a secondary market. Existing criticism also included the assumption that poor people would want to borrow from banks to finance their housing (Gilbert, 2002); the assumed linear development path based on the Anglo-American model (Campbell, 2013); and the further assumption that banks would willingly lend money to poor people. However, De Soto’s notion of property and property law as a social construct has largely been ignored. At the same time, the other values of land ownership, such as the psychological value (Gunter, 2013), should not be ignored. De Soto and economic sociology Neil Smelser and Richard Swedberg (2005: 7) argue that economic sociology has a tradition which “combine[s] the analysis of economic interests with the analysis of social relations”. It is not our intention to provide a thorough review of the current thinking in respect of economic sociology; but a few introductory comments are required. In general, De Soto’s ideas are either hailed or criticised on the basis of the role of tenure in creating secondary markets and releasing dead capital. However, very little reference is made to the fact that De Soto acknowledges that property law is fundamentally built on social values, and that property per se is a social construct. In this respect, De Soto (2000: 156-157) writes that: “Creating one national social contract on property involves understanding the psychological and social processes – the beliefs, desires, intentions, customs and rules – that are contained in these local social contracts and then using the tools that professional law provides to weave them into one formal national social contract”. He adds: “Extralegal social contracts on property underpin nearly all property systems… even in today’s United States” (De Soto, 2000: 157). In fact, De Soto (2000) argues that in many cases, extralegal contracts portray the actual consensus about how property rights should be managed in an effective manner and that many titling programmes which do not refer to social contracts are destined to fail. Although the concept of law is underdeveloped (Edelman and Stryker, 2005) in economic sociology, many of De Soto’s ideas do, in fact, fall well within a sociological approach to law. In essence, such an approach to law accepts that “both law and economy are deeply embedded in social action…” (Edelman & Stryker, 2005:. 527). The theoretical contribution from cultural sociology is mainly derived from the work of Vivianna Zelizer (1988). In its critique of purely economic models of markets, Zelizer’s work is embedded in the ‘multiple markets model’ which accepts neither economic nor cultural determinism in respect of market studies (Zelizer, 1988). Zelizer (1988: 619) states that “… economic phenomena, although partly autonomous, are interdependent with a system of meanings and structures in social relations”, while at the same time it should be acknowledged that new economic sociology studies emphasise the importance of market processes. Against this background, Zelizer (1988: 631) argues that “…[w]e should therefore aim towards an interactive economic model that will explore and explain the complex historical, cultural and social structural variability of economic life”. In this context, Fred Block (1994: 692) is of the opinion that ‘high marketness’ means “… that there is nothing to interfere with the dominance of price considerations, but as one moves down the continuum to lower levels of marketness, non-price considerations take on greater importance”. One of the key concepts in institutional economics is the notion of transaction costs. In this respect, Ronald Coase (1988: 15) wrote that: “In order to carry out a market transaction it is necessary to discover who it is that one wishes to deal with and on what terms, to conduct negotiations leading up to a bargain, to draw up a contract, to undertake the inspection needed to make sure that the terms of the contract are being observed, and so on. These operations are often extremely costly, sufficiently costly at any rate to prevent many transactions that would


S152 be carried out in a world in which the pricing system worked without cost”. Within this context, the informal economy represents a good example in terms of which the social underpinnings of economic transactions can be explained, and it provides a platform to investigate the ambiguous relationship with state regulations (Portes & Hall, 2005). Edgar Feige (1990: 992) argues that the informal sector represents a spectrum of activities ranging from transactions that are more or less illegal, to unreported and unrecorded economic activity, and to economic activities “… that bypass the cost of, and are excluded from the protection of, laws and administrative rules covering property relationships, commercial licensing, labour contracts, torts, financial credit and social security systems”. In addition, Portes and Hall (2005: 407) are of the opinion that embeddedness, as conceptualised by Mark Granovetter, is “… nowhere clearer than in transactions where the only resource against malfeasance is mutual trust”. Violating this mutual trust can lead to exclusion from future transactions. Portes and Hall (2005) argue that the main paradox in relation to the informal economy pertains to the fact that the more it strives towards the formal economy, the more it depends on social networks for its functioning. The work of Granovetter (1985: 487) with regard to ‘embeddedness’, by which he meant that economic actions are “…embedded in concrete, ongoing systems of social relations”, also requires some attention, along with the role of social networks. In essence, network studies have focused on the role of social networks in economic transactions. In fact, the body of knowledge makes a distinction between strong and weak ties, and emphasises the role of weak ties in a range of economic activities. South African land history South Africa has had a long history of land titling, with the former African reserves (later to become homeland areas under apartheid rule) comprising the exception in this respect. The upgrading of informal settlements since the early 1990s and the subsequent housing policy in a post-apartheid dispensation were largely (but not exclusively) dominated by homeownership. Land tenure arrangements for black people changed over the years, and varied from traditional tenure arrangements in African reserves to a range of tenure options in black suburbs near large towns and cities. However, in general, home-ownership for blacks in urban South Africa was only legalised as from the mid-1980s (despite some forms of homeownership being available between the two world wars). The emphasis on ownership in the post-apartheid period was multi-faceted and included the need to release the state from the burden of its properties, placing the responsibility on the individual and addressing the negative consequences of apartheid planning by providing black South Africans with access to home-ownership outside of the original African reserves in the homelands. At the same time, a private-sector-sponsored NGO, the Urban Foundation, started to fund some informal settlement upgrading programmes at the end of the 1980s; and the Independent Development Trust funded such projects in the political transition between 1990 and 1994 (Huchzermeyer, 2004). The Independent Development Trust funded approximately 100,000 stands in terms of a site and services scheme, providing ownership and basic services to these households. The basic constituents of this policy were retained in post-apartheid housing policy, with the main difference being the addition of a core house. A number of studies have considered evaluating satisfaction levels of new housing delivery product (Moolla, Kotze & Block, 2011; Ntema and Marais, 2013) but less have considered more detail reflections on what ownership means and how it is traded. Informal land transfers The history of Freedom Square is discussed elsewhere (Marais & Krige, 1997; Marais & Ntema, 2013), and only a brief overview is provided here. Freedom Square, near


S153 Bloemfontein, was one of the largest projects financed (4,000 stands) from the funding provided by the Independent Development Trust between 1990 and 1994 (Marais & Krige, 1997). The land was originally invaded as a typical informal settlement at the beginning of 1990. Between 1992 and 1994, an informal settlement upgrading programme funded by the Independent Development Trust provided ownership, water and waterborne sanitation on individual stands and also electricity access (Marais and Krige, 1997). Between 1996 and 1999, the consolidation subsidy was used to provide a two-room house to all the households (Marais, Van Rensburg & Botes, 2003). Since the transformation of local government in 1995, the area was formally included in the local government’s domain of service delivery. In the remainder of the section, three forms of extralegal transfer are discussed. This is followed by a number of observations on such transactions. Stand swopping We were able to conduct interviews with three individuals in cases where stand swopping had taken place. In all three cases, some kind of family problem had played a crucial role that culminated in the stand swopping, while crime had also played a role. Furthermore, in all three cases, the stand swopping had been facilitated by a third person – mostly through weak ties (neighbours / friends). Interestingly enough, the new owners had all invested in their swopped land / houses (up to R30,000) – a factor that may indicate a perception of security of tenure on their part. Furthermore, all of the parties concerned were aware that the stands had not been formally transferred, and some had even made an attempt to involve attorneys in this respect. In one case, the transfer process was complicated by the fact that the original owner had bought the site through informal mechanisms from someone else prior to the standswopping arrangement. In two cases, an agreement had been reached that the transfer of title would take place at some stage, while agreements had also been entered into in respect of the payment of the various water bills. Inheritance The international experiences have revealed the complexities that arise when inheritance is not recorded in the deeds registers (Ward et al., 2011). South Africa is no exception in this respect. Respondents generally reported that a family meeting had been held in order to decide or confirm who would inherit the house (x five). This was a mere pragmatic decision based on the question as to which person was most in need of a house (strong ties). In two cases, the deceased, prior to his or her demise, had stipulated who should take ownership of the property after his or her death – usually someone very close to the deceased (strong ties). In neither of these two cases was written documentation available to corroborate the transfer of ownership; and all involved were trusted to comply with the wishes of the deceased. The five cases of inheritance varied in type between parent/s-to-child (x three), sister-to-sister (x one), and grandmother-to-grandchild (x one) inheritance – mostly involving strong ties. The grandmother-to-grandchild ‘transfer’ reflected an extremely ‘strong tie’, as the grandmother had taken care of the grandchild from a very young age, while the current owner (the grandchild) had gratefully returned the favour when her grandmother grew older. In the words of the grandchild (current owner): “I looked after her and made sure that she did not struggle with anything” (Interview One – inheritance). In one case the current owner argued that in addition to some of the factors above, he had inherited the house because he was the eldest boy in the family. The respondent stated: “Since I am the only boy in the family, it was then decided by the family and relatives after the funeral that I should take over from my parents” (Interview Two – inheritance). Thus, although in the majority of cases proximity to the deceased and the need within the family played a decisive role, cultural factors cannot be excluded in this respect.


S154 When the respondents were asked what proof the current owners could produce to confirm that the property belonged to them, a number of answers came to the fore. One respondent articulated her answer in the following words: “The only proof I have is that her children, my uncles, aunts and other relatives who were there in the meeting that was called by my grandmother shortly before she died, all could bear … witness that she told them this house [would] be mine” (Interview Four inheretance). Two respondents acknowledged that they had no proof, while the remaining two respondents argued that they had lodged a process with the Justice Department. One respondent argued as follows: “I do not have proof, except the photocopies I got from the master of [the] high court that [indicate] that I have applied for change of ownership” (Interview three – inheritance). The latter quote also suggests that the new owner does not understand the process, since the master of the High Court might only have ratified the inheritance, but not the transfer, of the property. Transferring of land to the current owner seemed to be difficult for a number of reasons. It seems as if historical extralegal transfers, transfer costs, the outstanding water bills (a municipal regulation requires all utilities to be paid for, prior to any land transfer process), the legal process required to confirm the inheritance and the wrong perception in respect of who is responsible for transfers, all played a crucial role in the five case studies. The narrative of one of the respondents best summarises this array of processes: “I first went to the municipality and requested that they assist me with change of ownership and was told that I would have to pay an amount of money which at that time I did not have since I was unemployed. They requested me to draw up an affidavit, which I did. [I] submitted [it] to them, but to date nothing has happened on their part. I also went to lawyers, Home Affairs and [the] City Hall but was never helped. Thereafter I went to the Department of Justice and was issued with [a] letter of authority by the magistrate which stated that I have inherited the property my parents left … me. I did all these [things] all by myself not knowing anyone in these institutions” (Interview Five – inheritance). In one case, the grandchild expected the children of the deceased to make the transfer. The uncertainty with regard to the process to be followed and the related transaction costs associated with the transfers can best be described in terms of the following comment from one of the respondents: “… I could not afford the money that was asked by the municipality to settle the arrears my parents incurred on their water bill. This was a condition before they could help me with transfer of ownership. Because they [were sending] me from pillar to post, I ended up giving up – I just could not afford the travelling costs, let alone the amount they were asking to settle the water bill” (Interview One – inheritance). In one of the five cases, the lack of security of tenure played a role in inhibiting the new owner from investing in the house. The respondent stated that she was keen to invest, but was somewhat uncertain about such an investment, as the stand had not been formally transferred. Financial transactions We were able to complete four interviews in this category. The first transaction involved an estate agent, and was initiated when the original owner (who was a client at the current owner’s shebeen) expressed his desire to sell his unit. The current ‘owner’ (who resided in an informal housing unit adjacent to Freedom Square and managed a shebeen) was interested in buying the unit. She expected the original owner to arrange a meeting with her to discuss the transaction. However, one morning she saw the vehicle of an estate agent outside the original owner’s house. The current owner confronted the original owner about his commitment to liaise with her with regard to his intention to sell the house. The original owner, according to the current owner, contacted the estate agent because “he was afraid that maybe we were not going to agree on certain issues, particularly the price” (Interview one – financial transaction). Thus, to some degree, the original owner wished to make use of the services of a professional


S155 person, in order to minimise his risks and to set the rules for the transaction. Furthermore, the actual negotiations took place between the new owner and the son of the original owner. It should also be noted that the estate agent intended to upgrade the house (by plastering it and carrying out crucial repairs) in order to increase the price. The current owner went to see the estate agent and they agreed on a selling price of R28,000 (without any repairs). The original offer was R25,000, but the estate agent pushed the price up by stating that the purchase price should also include transfer costs of R3,000. Furthermore, it should be noted that the original owner’s son negotiated on behalf of his father. Contrary to normal legal practice, the purchase amount was paid to the estate agent and not to a lawyer (conveyancer). The current owner paid the first R25,500 in cash and the remaining R2,500 in monthly installments to the estate agent over a period of two years – no interest was charged. The new owner raised the original R25,500 by means of a donation provided by her brother. She was also told by the estate agent that the deposit slip comprised proof of the purchase and new ownership of the property. Four main problems remained in respect of this transaction. First, the actual deeds transfer had not taken place, despite numerous attempts by the current owner to accelerate the process. Secondly, the outstanding water and electricity account from the local authority had not been paid (such payment is a legal prerequisite which must be fulfilled before a lawyer can convey the property), despite a commitment made by the original owner at the time of selling the property. Thirdly, the incorrect details on the identity document of the spouse of the original owner (which did not correspond with the details in the deeds register) were also delaying the process. Fourthly, the current owner’s husband passed away during 2012, complicating the incomplete transaction even further. The current owner was so frustrated that she declared her willingness to appear on the ‘Speak Out’ programme on television, in order to state her case against the attorney and the estate agent, because – in her own words – “I don’t understand what [has been taking] them so long to process the transaction since 2010” (Interview One – financial transaction). Her frustration was further exacerbated by the estate agent’s failure to take her calls. The second financial transaction came about through the fact that the previous owner had ‘inherited’ the house from his parents (this inheritance was also not recorded on the deeds register). He was residing in another town, Petrusburg, approximately 80km from Bloemfontein. He initially rented the house out to the current owner (who had a long history of renting housing in the area), although the current owner did not know the original owner, since the rental payments and agreements had been arranged with a third party. At some stage during this rental agreement, the original owner had contacted the current owner directly, stating that he had some personal problems and wished to sell the house. Interestingly enough, the new owner had requested the original owner to reconsider his intention: “I first asked him to go and think about what he was telling me… [about wanting to sell the house]” because “… people should not blame me tomorrow and claim that I have robbed him [by buying the house,] since he was still a young man” (Interview Two – financial transaction). The possible transaction was also discussed in detail between the current owner, his wife and his mother-in-law. They eventually agreed on a sale price of R15,000. The original owner and the current owner decided to agree on a monthly instalment (without interest). This was paid on a monthly basis to the lady who had originally managed the lease agreement. However, after paying R9,000, the new owner stopped making payments, for two reasons. First, the lady who collected the money died. Secondly, transfer had not taken place. The current owner decided that he would pay the outstanding R6,000 when a formal transfer had been realised. It is noteworthy that this lack of payment did not elicit any reaction from the original owner. Contractually, an affidavit was signed at a police station. It is also noteworthy that the affidavit was signed as a family gift from the original owner – a gift from one cousin to another – which was a deliberate lie to avoid potential problems in relation to the eight-year


S156 restriction on selling a government-subsidised house (Housing Amendment Act, 2001). The current owner described the discussion with the original owner that had taken place in this regard. The original owner apparently had said: “Although you and I know that our agreement is about the sale of the house, we should in an affidavit state it as a free of charge transaction [sic] to you [as] my cousin” (Interview Two – financial transaction). An affidavit to this effect was accordingly signed. A number of comments should be made with regard to this transaction, and more specifically with regard to the lack of transfer of the title. First, in an attempt to formalise the process, the current owner went to the municipality in order to attempt to change the account details. The municipality requested him to procure the death certificates of the original owner’s parents, as well as the identification document of the person who had inherited the house. Secondly, the new owner was unable to obtain access to these documents; and he claimed that the original owner was avoiding him: “I would always hear from his friends and other people who know him that he would usually come to Bloemfontein and not bother to come and see me despite being told by these people that I am desperately looking for him, so he is giving me a ‘run around’ now” (Interview Two – financial transactions). Thirdly, there seems to have been conflict about the transaction, in that the brother of the original owner disputed the latter’s authority to sell a house ‘inherited’ from their parents. The third transaction was the result of a parent’s efforts to find accommodation for his child, who had come to Bloemfontein to further her education. The new owner was employed in Kimberley as a mineworker. He had first rented a house for his daughter; but she had been informed by an acquaintance (‘weak tie’) of someone whose house was for sale (not far from the place that her father was renting for her). She contacted her father who resided in Kimberley; and an appointment was made with the prospective seller. An agreement was reached on a sale price of R15,000 and an affidavit to that effect was signed at a police station. The new owner expressed the value of owning the house in the following words: “… I used to spend a lot of money on renting, and [in the event of] a slight delay in monthly payment they would usually kick her out” (Interview Three – Financial Transaction). After an initial deposit of R2,000 had been made, the payment process occurred by means of monthly installments of R500. The new owner claims that an affidavit was signed at the police station and that the monthly installments were also paid there. The new owner reflected on this situation as follows: “We agreed and then went to the police station to make sure [that] we [went] to the law enforcement agents [to] sign the agreement in their presence” (Interview Three – financial transaction). They also agreed to go back to the police station after full payment (which they duly did), to “… officially transfer the house into my name” (Interview Three – financial transaction). The new owner is under the impression that ownership was transferred to him via the police. He stated that his child told him that “… the signed certificate from the Police Station was issued, and given to her, [thereby transferring] ownership to me” (Interview Three – financial transaction). Consequently, the new owner is under the impression that the stand is now legally his. The fourth transaction goes back as far as 1996/1997, just after the original erf had been formalised through the IDT scheme. The current owner heard, through a distant friend of her husband, about someone who wanted to sell their home. The price agreed on was R1,500, which included the serviced stand and an informal dwelling on the stand. An initial ‘deposit’ of R750 (funded through the new owner’s membership of a savings society) was required; and an agreement was reached on how the remainder would be paid. It is interesting to note that this transaction was facilitated by a colleague of the new owner’s husband. In fact, this person played a crucial role in ensuring trust between the new owner and the original owner. The new owner confirmed this in the following comment about the facilitator: “And he [the facilitator] told her that he knew my husband from work and that he [wouldn’t] do anything


S157 dishonest, she should trust us” (Interview Four – financial transaction). An informal contract was drawn up with the husband of the new owner, with the facilitator acting as a witness for the transaction. The new owner estimated her investment, since taking over the stand, at approximately R80,000 – money originating from savings that she and her husband had put aside when they were still employed. There seems to have been some conflict about this transaction at some stage, as the children of the original owner indicated that they wanted their mother’s site back (she had passed away in the meantime), and that they would, in fact, refund the R1,500 that the new owner had originally paid. The current owner described her reaction in the following words: “I told them that they should ensure that they put wheels [onto] my house and move it to another site, [which] they would have to organize for me” (Interview Four – financial transaction). The new owner has not heard from the children since then (three years ago). The new owner also attempted to get the transfer processed via an attorney, but without success. She expressed her frustration in the following words: “[W]e paid him the requested amount and [it was] later [claimed] that our papers [had been] lost; and since then he [has given] us the ‘run around’” (Interview Four – financial transactions). A complaint to the small claims court did not render the desired results; and the necessary process was initiated with a second attorney. This process also ended in a deadlock, with the end result being that the property was not transferred legally. It seems as if the debt related to the water account is the main reason why ownership cannot be transferred. In the words of the new owner: “… I no longer trust anyone when it comes to transfer of property ownership. So I do not trust anybody, even the deeds office […] I do not trust them” (Interview Four – financial transactions). Synthesis A number of observations should be made about these transactions. First, in two of the transactions, the purchasing price for a serviced stand and a two-room house was R15,000. This is equal to the original investment by the state through the housing subsidy programme (R7,500 for the site and services and R7,500 for the consolidation housing subsidy (Marais & Ntema, 2013). One of the stands was sold (before the housing subsidy was provided) for R1,500 – a considerably lower amount than the investment of R7,500. The fourth house fetched a price of R25,000, in the one instance where an estate agent played a role. If inflation is taken into account, the amounts are all lower than the original investment by the state subsidy programme. Secondly, a number of observations should be made in respect of the financing of the initial transaction. In three of the four cases, a deposit was required, with some percentage of the purchasing sum to be paid off in installments over a period of time. The deposit amount varied from nearly 90% in one transaction (initiated by the estate agent) to about 13% (excluding the transaction which did not require a deposit). It should also be noted that no interest was charged in respect of the outstanding amounts that were paid in installments. In all four cases, houses were financed partially or fully through the buyers’ own contributions from their salaries, or through an advance on their salaries. In one case, a family relation provided the largest part of the original purchase amount, while belonging to a savings society was instrumental in paying a deposit in one case (although this only involved a small amount of R750, in 1996). It is noteworthy that no formal or informal credit mechanisms were utilised in any of the cases, while formal mortgage financing was also absent (as one would expect). Thirdly, in one of the cases, the installment process of payment (after a deposit had been made) was used as a mechanism to keep the original owners to the agreement in respect of the transfer of the property. In fact, one of the new owners stopped paying the installments because transfer of property had not yet taken place.


S158 Fourthly, in three of the four cases, the financial transactions were conducted directly between the original owner and the new owner, although the payment of installments was sometimes conducted through a third party. In one case, an estate agent acted as the third party in initiating the process. In this case, the money was paid to the estate agent (in contrast to formal transactions, where the money is paid to an attorney). Third parties (usually weak ties) also played a role in ensuring trust in the transaction and collecting the monthly installments in two of the cases (including the transaction facilitated by the estate agent). Fifthly, the nature of the contracts needs further elaboration. In two cases, an affidavit was signed at a police station. In fact, in one of these cases, the new owner is under the impression that the police station also issued a legal title deed. The third transaction was effectuated by means of a signed agreement between the two parties. In the fourth case, in which the estate agent was involved, no ‘contract/agreement’ was signed. In fact, the estate agent told the buyer to keep the proof of payment as proof of the agreement. Thus, the involvement of a professional service provider did not improve legal security – in fact, this might well be the transaction with the least security. Sixthly, in one of the cases, a deliberate attempt had been made to hide the fact that the transaction was indeed a financial transaction. The affidavit signed at the police station indicated that the transaction entailed a transfer between two family members (cousins), with no costs involved. This was incorrect, in that the parties were not related, and an amount of R15,000, as agreed on between the parties, was paid for the site. This can most likely be regarded as a response to the government regulation preventing home-owners from selling their units during the first eight years, and also as an indication of how the informal market sidesteps government regulations. Seventhly, some comments are warranted in respect of the understanding of the role of the deeds office and the reliability of the information on the title deeds. In two of the four cases, the existing information on the title deeds was incorrect. Either a spouse’s name was spelled incorrectly, or the South African ID number of one of the original owners was incorrect. Furthermore, two respondents did not know that such an office existed. The other two respondents expressed negative perceptions regarding the Deeds Office. One of the new owners remarked: “Eish! Deeds office next to SARS?” (Interview Two – financial transaction). Furthermore, it should be noted that in all four cases, the new owners had invested heavily in their new housing. The relevant amounts ranged from R5,000 and R15,000 to substantial amounts of R80,000 and R160,000. The funding for these housing units varied from retirement benefits and savings made from salaries received while working, to money obtained through lottery winnings. Nobody borrowed money to fund their housing expansions. Although the sample is small, it suggests that the current owners experience a significant degree of tenure security, inducing them to upgrade and invest in their housing units. The role of professionals should also be discussed in more detail. Only one of the transactions had a formal estate agent in place. The estate agent provided some security for the original owner in the transaction, as the latter did not wish to deal directly with the buyer. It should also be noted that the highest price was obtained in the transaction in which an estate agent was involved. There is also an example of an ‘informal estate agent’ – a colleague of the husband of one of the new owners – who had vouched for the trustworthiness of the new owners (a weak tie). The colleague was not paid anything for his assistance. The role of attorneys seems to have been ambiguous, in the sense that even where attorneys were involved, land transfers still did not take place. Arrears on the municipal account were a common reason why transfers had not taken place. The arrears mostly involved water accounts, as electricity provision is based on a pre-


S159 paid system, while owners in the area do not pay land tax. It is the responsibility of the original owner to ensure that the water fees are paid prior to the finalisation of the agreement. The frustration of one of the new owners was expressed in the following words: “[T]hey (the previous owner) promised to pay arrears that the original owner incurred on his water account, but to date nothing [has been] paid as I continue to receive the monthly bill with [a] huge debt that I have inherited from the original owner” (Interview Three – financial transaction). Conclusion This paper investigated the nature of extralegal transfers against the policy notion of emphasising land titling for low-income inhabitants and the theoretical underpinnings in economic sociology. De Soto’s argument pertaining to property as a social construct and his assertion that property legislation should be based on the social construct of property came under scrutiny in the paper. The results are mixed, with the following main points that should be highlighted. First, the processes of extralegal transfers suggest that titling and the required processes thereof are unfamiliar to the inhabitants of the area. Virtually none of the new owners have a history of formal property transfer. This is not strange, in view of the exclusion of black people from home ownership under apartheid. Considering De Soto’s argument, as well as the arguments encountered in economic sociology, the question can thus be asked as to whether these extralegal transfers do not suggest that the current property rights are inappropriate for the social construct of property by the residents. It is not easy to arrive at an answer to this question, as in many cases, the new owners were in actual fact endeavouring to ensure transfer, but were hindered by the administrative processes, the inability to find professional people to assist them effectively, and the requirements and costs involved in ensuring transfer. Essentially, the question is whether the failure to effectuate legal transfers is attributable to a specific social construct of property (or the lack of a cultural history in this respect), or to the complex and expensive transaction costs that are involved, or to the exploitation of the poor by professional persons in the process. Secondly, most of those involved required some form of security in the transactions/extralegal transfers. This ranged from signed affidavits to simply requiring the trust of people (family meeting). However, despite these mechanisms, final security of tenure has not been achieved. Finally, irrespective of the answers to these questions, it seems evident that the processes initiated to transform informality to formality have merely generated a new form of informality – a factor regarding which we still know very little. Stated differently, the process of tenure formalisation that is commonly viewed as the development path has generated a new type of informality. References Block, F. (1994) The roles of the state in the economy. In: Smelser, N. & Swedberg, R. (eds.) The handbook of economic sociology, pp. 691-710. New York, Russel Sage. Campbell, P. (2013) Collateral damage? Transforming subprime slum dwellers into homeowners. Housing Studies, 28(3), pp. 453-472. DOI: 10.1080/02673037. 2013.759543. Coase, R. (1988) The firm, the market and the law. Chicago, University of Chicago Press. De Soto, H. (2000) The mystery of capital. Why capitalism triumphs in the West and fails everywhere else. New York, Basic Books. Durand-Lasserve, A. & Royston, L. (eds.) (2002) Holding their ground. Secure land tenure for the urban poor in developing countries. London, Earthscan Publications. Edelman, L. & Stryker, R. (2005) A sociological approach to law and economy. In: Smelser, N. & Swedberg, R. (eds.) The handbook of economic sociology, pp. 527-551. New York, Russel Sage.


S160 Feige, E. (1990) Defining and estimating underground informal economies: The new institutional economics approach. World Development, 18, pp. 989-1002. Gilbert, A. (1999) “A home is for ever”? Residential mobility and home ownership in selfhelp settlements. Environment and Planning A, 31, pp. 1073-1091. Gilbert, A. (2002) On the mystery of capital and the myths of Hernando De Soto: What difference does legal title make? International Development Planning Review, 24(1), pp. 1-19. DOI:10.3828/idpr.24.1.1 Granovetter, M. (1985) Economic action and social structure: The problem of embeddedness. American Sociological Journal, 91, pp. 481-510. Gunter, A. (2013) Creating co-sovereigns through the provision of low cost housing: The case of Johannesburg, South Africa. Habitat International, 39, pp. 278-283. DOI:10.1016/j.habitatint.2012.10.015. Gunter, A. & Scheepers, L. (2012) “Crisylida Capital”: Hatching Informal Township Property Markets to Benefit Low-Income Residents in Johannesburg, South Africa. Urban Forum, 23, pp. 165-180. DOI: 10.1007/s12132-011-9136-7. Harris, R. (1998) The silence of the experts: “Aided self-help housing”, 1939-1954. Habitat International, 22(2), pp. 165-189. DOI: 10.1016/S0197-3975(97)00038-6. Huchzermeyer, M. (2004) Unlawful occupation: Informal settlements and urban policy in South Africa and Brazil. Trenton, African World Press. Kihato, C. & Royston, L. (2013) Rethinking emerging land markets in rapidly growing Southern African cities. Urban Forum, 24, pp. 1-9. DOI 10.1007/s12132-012-9176-7. Marais, L. & Krige, S. (1997) The upgrading of Freedom Square informal settlement in Bloemfontein: Lessons for future low-income housing. Urban Forum, 8(2), pp. 177-194. DOI: 10.1007/BF03036768. Marais, L. & Ntema, J. (2013) The upgrading of an informal settlement in South Africa: Twenty years onwards. Habitat International, 39, pp. 85-95. DOI: 10.1016/j.habitatint.2012.11.00. Marais, L., Van Rensburg, N. & Botes, L. (2003) An empirical comparison fo self-help housing and contractor-driven housing: evidence from Thabong Welkom and Mangaung (Bloemfontein). Urban Forum, 14 (4), pp. 347-365. DOI: 10.1007/s12132-003-0018-5. Moolla, R., Kotze, N. & Block, L. (2011) Housing satisfaction and quality of life in RDP houses in Braamfischerville, Soweto: A South African case study. Urbani Izziv, 22 (1), pp. 138-143. DOI: 10.5379/urbani-izziv-en-2011-22-01-005 Ntema, J. & Marais, L. (2013) Comparing low-income housing outcomes in self-help and contractor-driven projects: the case for longitudinal research. Urban Forum, 24(3), pp. 389-405. DOI: 10.1007/s12132-012-9183-8. Portes, A. & Hall, W. (2005) The informal economy. In: Smelser, N. & Swedberg, R. (eds.) The handbook of economic sociology, pp. 403-425. New York, Russel Sage.. Housing Amendment Act, 2001 (4 of 2001). Pretoria Roux, L. (2013) Land registration use: Sales in a state-subsidised housing estate in South Africa. Doctoral thesis. Calgary, University of Calgary. Royston, L. (2006) Barking dogs and building bridges: A contribution to making sense of de Soto's ideas in the South African context. In: Huchzermeyer M & Kamram, A. (eds.) Informal settlements: A perpetual challenge? pp. 165-179. Cape Town, UCT Press. Smelser, N. & Swedberg, R. (2005) Introducing economic sociology. In: Smelser, N. & Swedberg, R. (eds.) The handbook of economic sociology, pp. 3-25. New York, Russel Sage. Swedberg, R. (1997) New economic sociology: What has been accomplished, what is ahead? Acta Sociologica, 40, pp. 161-182. DOI: 10.1177/000169939704000203.


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The evolution and consolidation of the timeshare industry in a developing economy: The South African experience Wayde R. Pandy Christian M. Rogerson Wayde R. Pandy, University of Johannesburg, Faculty of Management, School of Tourism & Hospitality, South Africa ([email protected]) Christian M. Rogerson, University of Johannesburg, Faculty of Management, School of Tourism & Hospitality, South Africa ([email protected])

Abstract The timeshare industry is one of most under-researched aspects of tourism accommodation. Within existing scholarship most writings pertain to industry development and challenges in the USA and Europe. This paper provides an examination of the evolution and consolidation of the timeshare industry in South Africa from the 1980s to the present-day. The South African timeshare industry is revealed as one of the most mature in the international timeshare economy. Historically, the industry confronted parallel challenges to those in developed countries in respect of adapting the product to local conditions and confronting a tarnished image from the impact of unscrupulous developers. Currently the South African timeshare sector faces different challenges including service management and consumer dissatisfaction, marginalization within the tourism economy, and the need to address the emerging Black middle class market. Keywords: accommodation, recreation, timeshare industry, South Africa

Introduction The provision of accommodation services represents an essential aspect of the overall tourism economy as by definition ‘tourists’ require the provision of some form of accommodation while away from their usual residential environment (Barrows and Powers, 2009). Indeed, so essential is the role played by the lodging or accommodation sector in tourism that Keller & Bieger (2008) suggest that the lack of such facilities may be considered to go so far as to undermine the sustainability of tourism in destinations. As compared to early lodging and accommodation products which were associated with mass tourism many current accommodation products and services have been differentiated to the point that they are much more flexible and cater better to the specific needs, wants or preferences of individual travellers (Timothy & Teye, 2009). Accordingly, no longer does one find in the lodging or accommodation sector a single type of standardized product that seeks to cater to or accommodate the widest possible number of consumer tastes and preferences. Instead, tourism firms have broken down consumer demands into a number of basic segments of specific consumer preferences and evolved products that seek to best cater directly to individuals within these segments (Berger & Chiofaro Jr., 2007; Deng, 2013). The tourist accommodation sector can be considered to have undergone radical changes as new developments which relate to product segmentation have arrived. Whereas the initial tourism accommodation offering was limited or restricted to inns, boarding houses and standard hotels the range and number of different types of tourist accommodation offerings in recent decades has expanded rapidly. The hotel industry has come to offer a range and variety


S163 of types from limited service and budget hotels, to full service hotels, all suite hotels, condo or apartment hotels, extended stay hotels, and boutique and lifestyle hotels (Barrows & Powers, 2009). Beyond the hotel sector a range of alternative types and varieties of tourist accommodation have also emerged and grown in significance within various tourism destinations. Timothy & Teye (2009) point to the range of new lodging phenomenon that are part of the modern tourism economy. These would include motels, bed and breakfasts, guest lodges, farm stays, youth or backpacker hostels, caravan parks, second homes and timeshare accommodation. Within the global tourism industry the ‘timeshare’ sector represents a highly distinctive segment. Upchurch & Lashley (2006) argue that timeshare or vacation ownership is a relatively recent leisure phenomenon and addition to the different forms of tourism accommodation. Although its definition is contested the term timeshare refers essentially to the practice of dividing accommodation units into (usually) weekly increments or intervals and selling them to consumers. Hahm et al. (2007: 223) consider timeshare as “the right to purchase a specific time period in which a purchaser can use a unit within the timeshare resort at a geographical location of choice”. According to Bakic et al. (2010: 18) the “main feature of the timeshare product is to ensure various consumers to own the capacities which in regular conditions, according to their income, they would not be able to afford”. The timeshare segment is widely considered one of the most rapidly growing components of the global tourism economy. Notwithstanding its rise in importance timeshare tourism accommodation has not attracted the amount of detailed scholarly attention that has been devoted to other forms of tourism accommodation, such as hotels, second homes or small-scale forms of accommodation such as guest houses. Aims, Methods and Structure The aim in this article is to analyse the evolution and consolidation challenges of timeshare accommodation in an emerging economy, namely South Africa, which has one of the most mature timeshare industries in the developing world. Situating this study within the urban research challenges facing South Africa the paper must be viewed as a response to the call made by Visser (2013) for urban contributions that look beyond the poor in the country’s cities in that it examines the growth of recreational spaces for the country’s middle to highincome populations. Indeed, to a large extent, these communities have fallen off the agenda of South African urban scholars, especially of urban geographers in the post-apartheid period (Visser, 2003a). Over the past decade several studies have examined the growth and changing character of the accommodation sector as part of the development of the tourism economy in South Africa. The radical transformation that has occurred in the South African hotel sector in the post-apartheid period, including the appearance of new segmented forms of hotel development (boutique hotels, all suite hotels, limited service hotels) has been subject of an array of investigations (Rogerson, 2010, 2011a, 2011b; Rogerson & Kotze, 2011; Rogerson, 2012a, 2012b, 2013a, 2013b, 2013c, 2013d, 2013e). At the opposite end of the accommodation spectrum there has been a burst of research around second homes tourism and of the local development implications of recreational second home development particularly for South African small towns (Hoogendoorn et al., 2005, 2009; Hoogendoorn & Visser, 2010a, 2010b; Baker & Mearns, 2011; Hoogendoorn & Visser, 2011). Other accommodation focussed research in South Africa has included works on backpacker accommodation, homestays, guest houses, the conventional bed and breakfast sector and the distinctive bed and breakfast economy of South African townships (Visser & Van Huyssteen, 1997, 1999; Visser, 2003b; Nuntsu et al. 2004; Rogerson, 2004, 2007). Within a comparative context, the timeshare industry has been a relatively undocumented component of the


S164 dynamic changes occurring within the South African accommodation sector particularly since the country’s re-insertion into the global tourism economy (Rogerson & Rogerson, 2011; Rogerson & Visser, 2011; Visser & Hoogendoorn, 2011). In terms of methods, mixed research approaches were applied. In light of the fact that the focus is to examine the development of the timeshare industry and timeshare resorts in South Africa over a thirty year time span, a number of different research approaches were used. The discussion and analysis is based upon the following research approaches and sources. First, the detailed historical collection of industry source material and financial press reports relating to timeshare developments. Second, industry source material was tracked in terms of documentary material. Three, considerable use was made of the search of internet sites of the major organizations which are involved in timeshare development and timeshare exchange, most notably, Resort Condominiums International (RCI), Interval International, Vacation Ownership Association of Southern Africa (VOASA), the American Resort Development Association (ARDA), Southern Sun, and Marriott Vacation Club International. Four, semistructured interviews were conducted with key local stakeholders in the timeshare economy. Concerning organization and structure, the remainder of this paper is ordered in three additional sections of material. First, the concept of timeshare is defined and grounded within the broader accommodation spectrum for tourists. Second, existing trends in international research on timeshare are briefly reviewed with the knowledge gap identified about research on timeshare in the developing world. It is against this background that the growth and evolution of South Africa’s timeshare industry is examined. In addition, key trends in the evolving challenges facing the development of timeshare accommodation in contemporary South Africa are discussed. The central focus here is on questions around the evolution and change of the timeshare sector in the country. Timeshare Defined and Debated Arguably, as Upchurch & Gruber (2002: 212) maintain, researchers at the outset must appreciate that “the timeshare product is drastically different from traditional lodging accommodation products due to various complexities that surround the timeshare product from legal, consumer usage and product perspectives”. Indeed, to some extent, the accepted definition of timeshare has shifted over time. An attempt is made here to locate an appropriate and working definition of timeshare as part of a broader spectrum of tourist accommodation which has at one end the notion of second homes and, at the other end, the hotel. Since its origins in the 1960s the central notion of timesharing diffused rapidly and this dynamism itself poses significant challenges to researchers attempting to define timeshare. Hovey (2002: 141) considers timeshare as “the general name for the purchase of a condominium in a shared recreational resort for a prescribed interval of time”. By contrast, Upchurch & Gruber (2002: 211) style it as “the purchase of a luxury vacation home in increments of weeks or more by a number of buyers”. The rapid spread and metamorphosis of timeshare as a product option has meant that the validity of certain definitions is timedependent or appropriate only for a particular period of time. Sharma & Chowdhary (2012: 111) prefer to describe the timeshare product simply as “unique but complex”. In unpacking the literature that has been produced on the subject over time, it is made apparent that the timeshare concept has radically changed and evolved since the product’s inception in the early 1960s (Upchurch, 2002). Attempts to position timeshare within the broader realm of tourism and lodging literature are made problematic as the concept of timeshare not only represents a recognized and established product which is at one level uniquely located within the lodging sector itself (Ladki et al., 2011) but is also a core strategy or concept that has been absorbed and adapted by a range of other accommodation types located across the lodging spectrum (Bacon, 2010). The key challenge derives from the fact that all the evolving


S165 adaptations or mutations of timeshare are classified under the same broad headings or umbrella variously as ‘timeshare’, ‘timesharing’ or ‘shared vacation ownership’ (Nabawanuka & Lee, 2009). As a whole the timeshare accommodation segment or product offering relates directly to the concept of ‘timesharing’. Although timeshare can be considered a purely commercial concept it is contended that the term ‘timesharing’ refers more specifically to an approach to property development and property law (Van der Merwe, 2010). This form of property development essentially involves that of a single unit of property being sub-divided and sold to more than one person, a sub-division of land that amounts to what legal scholars refer to as the fourth dimension of property ownership. Indeed, Van der Merwe (2010: 7) notes that from a legal perspective: “Initially, ownership of land was two-dimensional, being measured horizontally on a diagram. The third dimension height, was added with the advent of sectional titles, permitting ownership of a section of building without that section being directly attached to land. This has been characterised by some writers as the ownership of airspace within the structure. Time-sharing envisages the ownership of time, thus adding a fourth dimension”. At its most basic level, therefore, the concept of timesharing refers to the idea that anytime a single indivisible unit or object is sold to more than one person then essentially what is occurring is selling the right of usage to the object by way of time (Lee, 2003). Within the context of the lodging industry, this relates to selling the right to co-own or at least occupy a vacation property of some form at regular intervals, usually for at least once a year. Cesaret et al. (2013) clarify that the horizon of ownership of an annual timeshare block of time can vary from a few years to an indefinite period. For the purposes of this analysis, the concept of ‘timeshare’ is thus best conceived as a commercial tourism lodging offering or product which affords access to accommodation and a range of related lodging services for a set period of usually no more than four weeks a year after purchase (Goetz, 2011). This particular definition is close to the legal definition which is preferred by Upchurch & Gruber (2002: 212) that timeshare “is the right-to-use vacation accommodations and facilities for a stated period of time each year over a certain number of years”. In essence, therefore, timeshare is considered to represent a commercial tourism and lodging product, while timesharing denotes the legal manner in which property is divided for the purpose of such actions as the sale of timeshare (Van der Merwe, 2010). Such a distinction is pertinent because, whilst the commercial product of timeshare was the first to come out of the action of timesharing, numerous other products, such as fractional ownership property developments and private residence clubs, subsequently have emerged. Alongside timeshare, these newer products are also marketed as separate commercial products, albeit operating under the common legal and property mechanisms which are associated with timesharing (Woods, 2001). The term ‘shared vacation ownership’ is often applied to describe collectively the time-sharing products of timeshare, fractional ownership, and private residence clubs. It is important to note that while the central concept and products involving timeshare remain similar for consumers the actual product may vary as property rights and legal structures differ between countries (Warnken & Guilding, 2008).


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Figure 1: The Accommodation Spectrum (Source: Adapted after Upchurch and Gruber, 2002) In situating the timeshare product within the accommodation spectrum a useful start point is the work of Upchurch & Gruber (2002). These authors conceptualize the existence of a spectrum of tourism lodging or accommodation with at one end a one night stay at a hotel at a minimum price. With increases in length of stay different hotel products exist and at higher prices. Next, there is the timeshare product of a set duration for a much longer period of time for a higher price. Further, there is the “co-tenant ownership of a condominium unit or a second home, such as a beach condo, split between several people for a perpetual duration and a higher price” (Upchurch & Gruber, 2002: 212). Finally, at the opposite end of the spectrum to hotels is considered to be the position of wholly owned second homes. International Research Trends on Timeshare Industry The task in this section is to offer an overview of work on timeshare and identify the key issues which have emerged in research relating to the timeshare industry. Overall, it will be argued that the timeshare sector has attracted only a relatively small number of scholarly investigations which have ranged over a number of different themes concerning the development and, in particular, the management of timeshare operations. Of special note are the gaps in research relating to timeshare and the wider tourism economy in the global South. Relative to other forms of tourism accommodation as reviewed by Timothy & Teye (2009), timeshare is a Cinderella segment as it has failed to attract a substantial base of writings across a range of different issues. One critical assessment of the existing state of the art of scholarship on timeshare is forwarded by Zacharatos & Stavrinoudis (2009). In the opinion of these authors: “On an academic level, the research about timeshare is limited internationally, as is the number of researchers examining the product in a scientific manner, resulting in the existing international literature being inadequate and often characterised by the practical approach of the main functions of timeshare” (Zacharatos & Stavrinoudis, 2009: 3). Timeshare as an accommodation product option has been around since the 1960s. From the 1970s there occurred an era of rapid and significant expansion internationally of timeshare developments (Terry, 1994a, 1994b; Hitchcock, 2001). Importantly, over time, the timeshare product evolved in order to remain relevant to changing consumer tastes, the growth of segmented markets and accelerating segmentation of tourism accommodation products as a whole. This innovation and change of the product over time has been one of the drivers of continual dynamism in the timeshare industry. Haylock (1994a, 1994b), Upchurch & Gruber (2002) and Powanga & Powanga (2008) demonstrate that as an accommodation product timeshare has increasingly evolved and influenced shifts in the broader lodging sector within which it is located. Currently timeshare as a product can be found throughout the world in a variety of forms from single holiday flats, luxury condominiums, hotel destination resorts, mixed resorts, and single urban tourist hotels, to cruise ships, boats, villas, yachts and


S167 exclusive five star apartments (Kaufman et al., 2006). From precarious beginnings timeshare has emerged as a profitable and dynamic branch of property development and several international corporations have branded the timeshare industry with their expanding scope of development and long-term business planning (Deng, 2013). Arguably, the mass of existing timeshare research concentrates upon various questions relating to consumer behavior, service quality and especially of the marketing of timeshare (Chiang, 2001; Crotts et al. 2005; Gregory, 2013). In addition, issues of consumer satisfaction with timeshare are another critical theme (see Weaver & Lawton, 1998; Bradley & Sparks, 2012). For example, Pollard (2010) establishes a model using factor analysis and structural equation modeling to investigate the relationships between service quality, word-of-mouth recommendation and price sensitivity of individuals who undertook a timeshare holiday at a branded timeshare resort. The emphasis upon these themes is in part a reflection of the fact that researchers are responding to the core needs of the industry in terms of boosting sales of the timeshare product and more recently of understanding consumer decisions to rescind purchase of a timeshare (Rezak, 2002; Sparks et al., 2014). In addition, this heavy focus on marketing reflects also the negative feelings that consumers internationally often have associated with timeshare because of the dubious selling practices of companies which have tainted the industry as a whole. This stress upon timeshare marketing issues and of building “consumer acceptance” issues essentially highlights that for the industry “the historically questionable image of the product” is a matter of “high concern” (Stringam, 2010: 38). The development of new market segments or niches for marketing the timeshare product has been another facet of improved marketing for timeshare sales in developed countries where there is much attention to seniors (Kaufman et al., 2006). In addition to marketing issues another important and overlapping cluster of work around timeshare relates to the management of timeshare resorts (Upchurch & Lashley, 2006). Within this literature, the major perspective is that of hospitality management and of addressing managerial or servicerelated issues around timeshare developments. Central issues for timeshare resort management include improved understanding of the vacation owner; improvement and use of resort amenities, and human resource development issues (Hicks & Walker, 2006). Within this cluster of work, research studies exist on a range of issues such as the operational management of timeshare, including resort management, resort amenities and their utilization by product owners, and human resources. Another theme is “industry analysis” or synopsis (Crotts & Ragatz, 1998; Brey et al., 2007). Several studies provide general overviews of the timeshare industry as a growing segment of interest in particular countries or regions of the world. Most of this type of published academic studies focuses on the USA and Europe, the two biggest consumer markets. Other work exists for Australia, Singapore, China and parts of the Caribbean. Finally, other issues that have attracted the gaze of timeshare scholars include inter alia, timeshare governance, the role of hotel owners in entering the sector, the position of timeshare in tourism planning and the development of RCI as innovators in vacation exchange (Singh & Hurwitz, 2006). Cortés-Jimenéz et al. (2012: 155) maintain that as a whole the “academic literature on the timeshare industry, although relatively scarce, has progressed”. One concern, however, is the marked geographical unevenness in existing scholarship around timeshare with most academic works focused on the USA and Europe. By contrast, what is evident is the neglect of studies of timeshare in the developing world. South Africa’s Timeshare Industry: Growth and Evolution In an international examination of the position of the country in the global economy of timeshare it was shown that South Africa is one of the most important locations for timeshare in the developing world and certainly is the most important in sub-Saharan Africa (Pandy &


S168 Rogerson, 2013a). The timeshare industry in South Africa has an evolutionary development history that spans 35 years. Indeed, in the international context of timeshare developments South Africa is one of the pioneers or early originators of timeshare resorts.

Figure 2: Timeshare development in South Africa, 1978 to 2012 (Source: Authors) The origins of the South African timeshare industry are revealed as traceable back to the apartheid period of the late 1970s and early 1980s. In understanding that evolution it is useful to periodise the industry development in South Africa into four phases. The periodization which is shown on Figure 2 is based upon the numbers of timeshare resorts which were initiated at various times. It is evident that in the three decades spanned by this investigation a total of 160 timeshare resorts have been constructed in South Africa. Bursts of growth have occurred at certain periods followed by periods of slower growth or stagnation. First, there is an early development phase when the industry was founded and the first resorts established from 1978 to 1982. Second, there is a rapid development phase stretching from 1982 to 1990 marking the period of the greatest expansion of timeshare resorts in South Africa. Three, there is a consolidation phase from 1990 to 2002 which is denoted by a period of industry reorganisation and slow expansion. Finally, there is the contemporary phase of industry development from 2002 marked by restructuring and no new resort development taking place. The period 1978 to 1982 was identified as setting the foundations for the early development of timeshare in South Africa including the key developments and central trends that would see the timeshare product in South Africa accepted and allow further growth (Pandy & Rogerson, 2013b). With these foundations in place, the period 1982 to 1990 is considered as one of a rapid expansion for the industry. This was a vibrant phase in which much new development took place, albeit with the emergence of a number of critical issues which the industry was forced to address in order that yet further development might occur. The period from the early 1990s to 2002 is characterized by industry consolidation and a slowing pace of development. Overall, this period from 1978 to 2002, a period of almost a


S169 quarter century, was critical to understanding timeshare development in South Africa. Within this period the timeshare industry of South Africa showed many of the problems that have impacted upon timeshare in other parts of the world. In particular, issues of the self-inflicted wounds around unscrupulous developers, financial instability, and dubious high pressure marketing were in evidence. The industry was compelled to address its tarnished image such that extended development might take place (Pandy, 2013). During the period of timeshare’s establishment in South Africa it is evidenced that the timeshare product was significantly shaped to suit local tourism needs (Pandy & Rogerson, 2013b). In particular, the South African timeshare product was oriented away from the international norm of holiday flats and condominium complexes and instead firmly associated with hotels, lodges, and luxury resorts along with a range of other tourist based accommodation. The analysis shows that the timeshare industry’s focus and general structure or composition continuously changed as the product of timeshare in South Africa evolved through various phases of growth and development. The target consumer market for the early timeshare developments was the white urban-based consumer as under apartheid segregation policies such products could not be sold to potential Black purchasers. During the early development phase of timeshare in South Africa from 1978 to 1982 the product was effectively shaped by a small number of large property developers (Pandy & Rogerson, 2013b). The original product was demonstrated as limited and inflexible, taking the form of fixed weeks which were sold to consumers for a particular unit in a timeshare complex or development on a sectional title basis. At the time as access to the product was achieved specifically through the ownership of property this product could be described as a variant of traditional second homes with the product originally targeting the second homes market before shifting to focus instead more on those consumers who could not afford a traditional second home. In terms of innovation, the early timeshare product in South Africa was adapted to suit a wide range of tourist accommodation types, with hotels in particular being the target of such product development or conversion. The Southern Sun hotel group was responsible for successfully attaching hotels to the timeshare product in South Africa ahead of such developments which later occurred in the timeshare industry of the USA (Pandy, 2013). It is observed also that during its early development stage, the flexibility of the timeshare product and the industry’s image in general was boosted by the arrival of RCI, the world largest international timeshare exchange company. A critical finding is that during the timeshare industry’s phase of rapid growth between 1983 and 1990 a large number of developers sought to enter the timeshare industry in South Africa seeing it as a more profitable sphere for property investment than the construction of hotel properties (Pandy, 2013). Many of these developers were shown, however, as ill equipped, inexperienced and undercapitalized. With negative outcomes these developers precipitated the first steps towards industry regulation, initially through the industry representative body of South African Property Owners Association. The launch of amended property legislation such as the Amended Share Block Controls Act was viewed as crucial in moving the timeshare product away from that of property ownership under sectional title, to instead being share block based, where the right-to-use accommodation for a stipulated period was prevalent. This underpinning legal and structural change served to make the sales product more flexible with the development of flexi-week timeshare schemes, whereby with the rightto-use accommodation, timeshare purchasers were no longer tied to a specific unit of accommodation in the same week every year. This flexi-week timeshare sales product, innovated in South Africa was subsequently copied and adapted to timeshare developments in many other parts of the world. One observed trend in South African timeshare which replicated the United States experience was, however, the documented tarnishing of the image


S170 of timeshare in the 1980s and 1990s by the unscrupulous activities of certain fly-by-night developers and by marketing scams (Pandy, 2013). Of note in South Africa as compared to the international record was the stance of national government towards timeshare in the period when it saw the conversion of hotel accommodation to timeshare as a threat to national planning for tourism promotion geared to international as opposed to domestic tourism. Arguably, the essential contours and characteristics of the timeshare industry in South Africa were established in this period 1978 to 2002. By 2002, the essential outlines of the contemporary industry were etched firmly on the South African tourism landscape, including the geography of timeshare development. In terms of international experience the South African record confirms the central role of locations with high amenity value for timeshare development (Pandy & Rogerson, 2013a). From its inception to 2002 the coastal areas of Natal and in particular around Durban emerged and consolidated as the strongest cluster for timeshare resorts. Later development included coastal beach areas elsewhere in South Africa but extended the spatial distribution of resorts to inland locations to tap the attractions of natural beauty, safari, bush and gambling. This geographical pattern of supply of timeshare accommodation was shown as targeted overwhelmingly at the white domestic tourism market and spatially focused upon the national economic heartland of the cities of modern Gauteng, most importantly, of Johannesburg, South Africa’s most economically dynamic city (Pandy & Rogerson, 2013a). Timeshare Consolidation Challenges It is evident that the period from 2002 showed that, given the changes and expansion taking place in the wider tourism economy of South Africa, this period for the timeshare industry has been one of only limited growth and new resort property development. Within South Africa’s tourism economy and its focus on international tourism expansion since 1994, the timeshare industry has been reduced in significance and, to some extent, becoming a marginal player in the national tourism system. The analysis of the current situation of the timeshare industry, however, confirms that shared vacation accommodation as offered by timeshare developments continues to be a critical facet of the domestic tourism economy in South Africa (Grant Thornton, 2012). Although the number of resorts and geography of resort development remained unchanged the contemporary period of development of the timeshare industry in South Africa is marked by considerable change in industry structure and institutional development. It was shown that whilst this period was marked by no new resort development important directional shifts have been taking place in the South African timeshare industry, most notably as the industry moved from focussing largely on selling the product to achieving sales through the delivery of a strong product that is more servicefocused (Pandy & Rogerson, 2013c). The emergence of timeshare points systems and the strengthening of the role of holiday clubs have been pivotal events for restructuring the industry through a more flexible shared vacation product. The South African timeshare industry became increasingly under the control of the timeshare based holiday clubs, which control the majority of timeshare accommodation weeks and development complexes. At least three core sets of challenges confront the contemporary timeshare industry in South Africa (Pandy & Rogerson, 2013c). These relate to issues around service management and consumer dissatisfaction with the timeshare product; the question of market extension and retention; and, the trend towards the increasing marginalization of the timeshare industry within the changing South African tourism economy as a whole. It is evident that the timeshare industry in South Africa must address identified issues of consumer concern which are causing dissatisfaction and resulting in rising levels of disinterest and foreclosures around the timeshare product. An enhanced focus on service management is considered essential for dealing with this first challenge and retaining existing consumers as part of the timeshare


S171 market. The limitations of the existing market were highlighted as a further challenge for the industry (Grant Thornton, 2012). The traditional white domestic tourism market is no longer offering a source of expansion and sales growth for the timeshare industry. Moreover, the cohort of existing timeshare owners is ageing. Accordingly, for looking towards future development new consumer markets must be tapped. As international sales of timeshare for South Africa are small (Pandy & Rogerson, 2013a), the critical market challenge is to expand the involvement of black consumers for the timeshare product. Nevertheless, at present, the industry has yet to find a solution to the limited interest of the emerging South African black middle class in purchasing timeshare development. This situation is in part a legacy of the dismal marketing practices which were targeted at the black consumer market during the 1990s after the scrapping of the Group Areas Act which had been a pillar of segregation policies. The final issue is that the timeshare industry has decreased in relative importance in the tourism economy of South Africa. In the industry’s heady growth phase of the 1980s timeshare was a vibrant part of the country’s expanding domestic tourism economy which itself was a driver of national tourism development at the time of sanctions and international boycotts on South Africa (Pandy, 2013). The industry’s prominence was highlighted particularly by government concern in the 1980s that the continued conversion of hotels to timeshare accommodation posed a threat to tourism promotion for international visitors. In the changed global environment of the 1990s as South Africa promoted international rather than domestic tourism major opportunities arose for growth in the tourism accommodation economy. These new market opportunities have been mainly taken up, however, by nontimeshare accommodation. The diminished role of timeshare is particularly so, especially if compared to the burst of new property developments in the hotel industry as well as appearance or growth of a range of other forms of tourism accommodation, including second homes and small-scale forms of accommodation such as bed and breakfasts, homestays, backpacker hostels and guest houses (see Hoogendoorn et al. 2005; Hoogendoorn & Visser, 2010a, 2010b, 2011; Rogerson, 2010, 2011a, 2011b, 2012a, 2013b, 2013c, 2013d, 2013e). Indeed, it is argued that the remarkable post-1994 expansion of the hotel industry, the surge of new bed and breakfast and guest house accommodation, the growth in the market for second homes tourism and the rise of backpacker hostels have all combined to push timeshare downwards in relative importance in the provision of accommodation for tourists. The marginalisation of the timeshare industry in South Africa is reflected in its minimal involvement in the 2010 FIFA World Cup and national government’s lack of interest in the industry despite a renewed policy focus upon stimulating domestic tourism. Conclusion The timeshare industry is one of the least researched segments of tourism accommodation. In the existing international scholarship most writings concentrate on marketing, consumer behaviour and management issues. In geographical focus most material relates to timeshare developments and the industry in either North America or Western Europe, the two leading regions for timeshare in the world. Outside of these areas minimal research has been undertaken on timeshare. This research provides a contribution to the limited body of literature and knowledge concerning the organisation and management challenges of the timeshare industry in developing world. The South African case is of particular interest as it represents one of the largest timeshare industries outside of Europe and North America. The industry emerged in the period of late apartheid and was anchored on the urban white South African consumer market. In the post-apartheid period the industry is struggling to become relevant to a rising group of urban Black middle class consumers.


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Reshaping urban space through studentification in two South African urban centres Ronnie Donaldson Julian Benn Malene Campbell Annelie de Jager Ronnie Donaldson, Stellenbosch University, Department of Geography and Environmental Studies, South Africa ([email protected]) Julian Benn, Stellenbosch University, Department of Geography and Environmental Studies, South Africa Malene Campbell, University of the Free State, Department of Town and Regional Planning, Bloemfontein, South Africa ([email protected] ) Annelie de Jager, University of the Free State, Department of Town and Regional Planning, Bloemfontein, South Africa

Abstract Accommodation shortages on campus force students to find accommodation in the private sector. These shortages result in single family residents increasingly being targeted for redevelopment into student housing. Studentification is a process where the original residents in the vicinity of tertiary institutions are gradually displaced due to an in-migration of students causing spatial dysfunctionality where, eventually, only the needs of a student subculture are catered for. The purpose of this paper is to provide insights into the reshaping of urban space due to studentification in the two South African cities of Bloemfontein and Stellenbosch. Empirical data on key aspects of studentification was obtained from two questionnaire surveys among permanent residents, as well as students, in both cities. The paper proposes that the main role-players, such as universities and local municipalities, should ideally all form part of planning strategies for student housing. Keywords: studentification, Stellenbosch, Bloemfontein, urban restructuring, neighbourhood quality

Introduction At a global scale the growth in university student population is outgrowing the supply of accommodation by the higher education institutions (Slater, Curran & Lees 2009; Duke Williams 2009). Such accommodation shortages necessitate students to find alternative accommodation in the private sector. In turn, the private sector has identified student accommodation as a niche market. To cater for these urban demands – planning policy more often than not – is formulated to change the zoning from single residential to general residential, resulting in social protest by residents against the anticipated fear of their suburb being invaded by student accommodation. Depending on the location in relation to the universities, in many cases single residential properties are increasingly targeted for redevelopment into medium and high density housing complexes. Studentification is a process where students start inhabiting certain parts of a suburb or town in the vicinity of a tertiary institution and the original residents are gradually displaced due to this in-migration. The spatial consequences of studentification are immense and include an array of economic, social, physical and cultural impacts (Allison, 2006; Chatterton, 2000). In some cases such invasion is referred to as “student ghettos” (Leavey, 2004: 22). Studentification is defined as a


S177 form of urbanism that results from the concentration of residential areas by higher education students (Sabri & Ludin, 2009). The progression of studentification eventually results in a complete spatial restructuring and re-organisation of a particular area in a city. Studentification of suburbs causes spatial dysfunctionality where, eventually, only the needs of a student subculture are catered for. Studentification as urban spatial process, therefore, has various social, cultural, physical, economic and spatial effects (Hubbard, 2006; Munro, Turok & Livingston, 2009; Smith & Holt, 2007). South Africa began restructuring its higher education system in 2000 to widen access to tertiary education and reset the priorities of the old apartheid-based system. Smaller universities and technikons (polytechnics) were incorporated into larger institutions to form comprehensive universities. Today there are 23 universities in the country and another two are in the process of being built in Kimberley and Nelspruit. Surprisingly, with the exception of the study of Potgieter (2005) there has been no academic research into the impact of student accommodation on urban space in South African cities. The paper is an attempt to provide insights into the impacts of studentification of urban space in the two South African cities of Bloemfontein and Stellenbosch. The aim of the study is not to compare the two study sites because they are too different in context, scale and size. The same process of studentification in suburbs adjacent the respective university campuses have been observed, but the spatial impacts have had different outcomes whilst the social and cultural aspects are echoed. Findings in the paper are based on empirical data obtained from two questionnaire surveys among permanent residents, as well as students, in both cities. The aim of the surveys was to identify key aspects of the studentification process. In Bloemfontein, 100 randomly sampled student houses were identified for participation in a questionnaire survey. Addresses of student houses in Universitas and Brandwag (two suburbs in Bloemfontein close to the University of the Free State) were identified from the university’s student registration list. In addition, eight in-depth interviews with permanent home owners living adjacent student houses were conducted. In Stellenbosch a total of 41 student houses and 40 permanent residents were interviewed. To track the reshaping of the urban fabric in the Stellenbosch suburb of De Weides, mapping the land use changes was done by means of a land use audit form 1999, 2005, 2008, 2010, 2011 and 2012 using GPS plotting, satellite imagery and aerial photographs. Understanding studentification impacts Urban landscapes are continuously changing (Zhang et al., 2012; Stefanovska & Koželj, 2012). Studentification is not a process that occurs in a vacuum. However, each studentification context in a given city may differ as a result of the contributions of the various roleplayers. Hubbard (2006) identifies six main roleplayers: students, higher education institutions, local authorities, developers (private sector), home-owners and permanent residents. Students have a typical demographic and social characteristic profile. They are predominantly young, come from middle-class backgrounds, have no dependents and have been brought-up relatively well-mannered (Munro, Turok & Livingston, 2009: 1807). Student accommodation in suburbs/neighbourhoods provides students a way to live an independent lifestyle where they are mostly free from house rules and regulations (Smith & Holt, 2007: 152; Smith, 2007). Their profile is that of “free and mobile” (Munro, Turok & Livingston, 2009). In the absence of parents or guardians, students see this freedom as an opportunity to enter the life cycle of adults with no one looking over their shoulders (Smith & Holt, 2007: 153). Because of demand and supply factors students are flexible tenants and they do not have all the preferences and requirements that a family would have (Rugg, Rhodes & Jones, 2000). Students are seen as profitable tenants. Additionally, they are, according to Hall (2008), the most exploited housing market, because they pay high rental for poor quality


S178 accommodation. Students are also temporary residents in an area; hence adjacent studentified suburbs literally become an extension of the university campus (Bowditch, 2001: 14). According to Smith and Holt (2007) student accommodation is a distinct niche market for developers and home-owners (who would mostly target suburb areas adjacent to campuses). However, this leads to a range of socio-spatial and economic impacts. Social aspects related to studentification refer to the replacement of established residents with those of students. New residents bring new habits, behaviours and social changes. Higher population densities, as a result of over-concentration (illegally) of students in houses, brings about an imbalance in population diversity (Hubbard, 2006: 333) and in the process studentification contributes to destabilising the homogeneity of an area. The geographic concentration of students are at times encouraged by a so-called “pub-culture” present in an area and this serves as a pull factor for them to locate in such an area (Sabri & Ludin, 2009). With studentification the spatial dimension of an area overwhelmingly becomes dominated by this new sub-culture of students. Students’ presence is also seasonal; thus contributing to a state of discontinuity and the creation of sustainable neighbourhoods (Kenyon, 1997). Student accommodation is prone to become targets for criminals due to houses being unoccupied during recess periods (generally up to a quarter of the year) (Kenyon, 1997: 291). Permanent residents are, therefore, living in fear of their area changing into crime hotspots. As crime is a main push factor to sell one’s property, a domino effect takes place with more and more permanent residents putting their properties on the market and developers moving in. However, there are also cases where studentification of an area has indeed contributed to the renewal of decaying areas (Allison, 2006; Curtis, 2005; Harris & McVaigh, 2002; www.communities.gov.uk, 2008). Social consequences of studentification will greatly depend on size, intensity and quality of student accommodation and population in a neighbourhood (Macintyre, 2003: 116). Culturally, studentification refers to lifestyle activities and a changing consumer pattern of residents (Griffiths, Bassett & Smith, 1999; Standing Conference of Principals & the Local Government Association, 2006; Wynne & O’Connor, 1998). Retail and service sector practices are becoming more diversified and in some cases the traditional restaurants and bars are replaced by fast food restaurants and outlets as well as theme bars (Wojtas, 2003). The cultural needs and interests of students are thus creating friction between students and permanent residents (Russo, Van den Berg & Lavanga 2007: 201). Anti-social behaviour of students – in many cases attributed to high consumption of alcohol (Allison, 2006: 88) – contributes to an increase in noise levels (Smith & Holt, 2007). On the contrary, Curtis (2005) believes that students bring local cultural diversity to places with a lively dynamic and according to Midgley (2002) they should also be seen as cultural investors to an area. Environmental decay is generally associated with studentification of areas in a city. Overpopulation (the increase of residents in a single family housing unit), increase in traffic, insufficient facilities, vandalism, graffiti, gardens that are not maintained, inconsiderate parking and refuse are all common types of environmental factors in such areas (Midgley, 2002; Rugg, Rhodes, & Jones, 2000: 28; Smith & Holt, 2007: 145). Russo et al. (2007: 205) argue that students have the power to transform the socio-economic structure of their areas to meet their needs. Decaying of urban space has a direct influence on the economic value of properties in an area. Economic ramifications of studentification are said to impact supply and demand, house price inflation, conditions of housing structures and a seasonal economic growth (Hall, 2008; Hubbard, 2006; Macintyre, 2003; Russo et al., 2007; Standing Conference of Principals & the Local Government Association, 2006). Similarly, as is the case in gentrification, the rent-gap theory (Smith, 1987) can be applied to studentification. From a studentification point of view gentrification contributes to the redevelopment of certain areas and this in turn restricts a


S179 certain income class to afford buying property in these areas (Lees, 2008). Gentrification, caused by studentification, at times contributes to a more affluent student being attracted and eventually pushing up property and rental prices. A last dimension of studentification, namely spatial, generally refers to a combination of social, cultural, physical and economic dimensions of the process. Studentification has an indirect impact on the control, regulation and planning of the spatial dimension of neighbourhoods. Diverse challenges for spatial planning are posed and it places the sociospatial needs of families and those of students in a direct contest (Albrechts, 2004; Wojtas, 2003). Planning policy, more often than not, is adapted to match the needs of students when single residential units are rezoned to general residential land use. Such zoning changes result in social conflicts because permanent residents opt for neighbourhoods allowing only single residential land use. High density accommodation is, however, not a direct consequence of studentification. It is rather developers that expose the housing shortage for students as an opportunity to create high density accommodation (Rey, 2007). Case studies Stellenbosch is situated 50km from Cape Town in the Western Cape province of South Africa. This historic town is located in the heartland of the Winelands and is South Africa’s oldest town established in 1679. In 1990, Stellenbosch University registered 11 379 students and the number increased by 237% to 26 964 in 2010 (Benn, 2010). At present there are just over 14 000 students in Stellenbosch (the university also has a satellite campus in Saldanha and Cape Town, respectively 200 and 30 kilometres away) and the university houses around 8000 students, leaving over 6000 students having to find alternative accommodation in the private sector. Today, the university is considered as one of the top two research universities in South Africa. Unlike most universities in South Africa, Stellenbosch University is spatially part and parcel of the cityscape. There is free movement between the campus and the city – the campus is located in the central business district (CBD). The second case study is in Bloemfontein, the provincial capital of the Free State province and recently proclaimed as one of South Africa’s metropolitan municipal areas. The city was established in 1854 and the Grey University College (University of the Free State, as it is known today) was established in 1904 - a direct ramification of Grey College, the high school that was established in 1856 (Groenewald, 1989:30). Unlike Stellenbosch, the campus is completely fenced off from the rest of the city, although it is relatively closely located to the CBD. With currently over ± 30 000 students on three campuses, two in Bloemfontein and one in QwaQwa, 345 km north east of Bloemfontein, the university can only cater for just over 5000 beds; 3970 in Bloemfontein and 1052 on the Qwaqwa campus. If 17% of students leave campus it leaves just less than 25 000 to students to find off-campus accommodation. Both case study universities are former Afrikaans-only speaking universities where the policy of apartheid, in terms of university education, benefited white Afrikaans speaking South Africans. Both urban contexts of the origins of the cities are strongly based on Afrikaner history. Today, both universities are still struggling to rid the effect of Apartheid education on the psyche of the institutions where issues of racial and language integration have become new playgrounds of struggle for equity and diversity. Stellenbosch Students that cannot find accommodation on campus generally prefer to be located as close to the institution as possible (Curtis, 2005). They will, therefore, as far as possible move into those suburbs located adjacent the campus and the spatial distribution of them in urban spaces will determine the impact it may have on the surrounding area. Figure 1 shows the spatial distribution of students living in Stellenbosch in private accommodation (not all are


S180 houses). The highest concentration is observed in the central part of the city where the university campus is located (mostly in high density flats), but a significant number of students are living in the area north of the core – suburbs such as La Colline, De Weides and Simonswyk – all as a result of rezoning from single residential to student housing (multiple accommodation housing where the owner does not live on the property; only students live there). Unlike Bloemfontein, the Stellenbosch zoning scheme makes provision for such a category.

Figure 1: Spatial location of students’ place of accommodation (2010)


S181 1999

2005

2008

2010

2011

2012

B&B Developing area Flats Houses Note: Boarding Empty plot Hospital University property in yello house Figure 2: Land use changes in De Weides between 1999 and 2012 (source: Authors and Google Earth) De Weides was proclaimed and zoned in 1929 as a single residential suburb. In 1979 the zoning was changed to general residential. The new zoning implied that students may have been accommodated, but the owner had to live on the property as well. The zoning type was known as a boarding house (losieshuis). Numerous university lecturers were, at the time, living in this suburb. In the immediate years after the rezoning of the area, houses were monitored on a regular basis by the municipality for compliance. However, as a result of regime changes taking place at local authority level since the 2000s (Seethal, 2004) the local Urbani izziv, volume 25, supplement, 2014 (special issue)

S182 authority has failed in this function and a blind-eye approach became the norm; ignoring the growth in student houses in the area. Controlling student houses did not feature as a priority on the political agenda at the time. The spatio-temporal changes in the urban fabric of De Weides are evident in Figure 2. There has been no change in land use between 1999 and 2005. In this period there were one block of flats, three guest houses/B&Bs and the remaining housing type was residential. It is not possible to account for the number of student houses. Since 2008, however, the urban geography of accommodation in De Weides started changing dramatically. According to Benn (2010) and the Stellenbosch municipality’s Integrated Development Plan of 2009, De Weides was earmarked as an area necessary for densification. This allowed for the erecting of multiple flats and boarding houses on properties. An all too familiar scene has been the following: as student houses gradually increase, more and more permanent residents are leaving the suburb. They would either sell their properties directly to a developer or will rent out their houses to students. Over time and with the accumulation of students in the suburb the area falls into decay. Houses and gardens are not maintained. In some cases, the houses bought by developers are left vacant and are vandalised by criminals and homeless people. Such houses are left to the elements of destruction. Because many of these houses are older than 60 years they are protected by the national heritage legislation (i.e. they cannot be demolished or altered).

Photo 1: Example of a historic house that has been destroyed by vagrants (source: Authors)

Developers do not want to protect a single house; instead they want to erect a block of flats on the property. As the houses deteriorate further (see Photo 1 as example in De Weides) they submit applications for destruction to the municipality in the context that the original historic house has been destroyed by the elements in any case. In 2009 the municipality has taken the decision to allow for the peripheral areas – outer fringes – of De Weides to be densified and that the inner areas remain single residential: in effect to create a doughnut shape aiming to conserve the historic fabric in the inner area. However, this did not happen as can be seen from Figure 2. In many cases single residential properties are consolidated into a


S183 bigger property on which flats are developed. These developments are also occurring anywhere in the suburb and not only as was planned for in the periphery of the area. Actual student houses were counted in 2010: there were then already 44 student houses and only 37 permanent residential housing units (guesthouses/B&Bs included) left in De Weides (Figure 2). Our survey among student houses revealed that in 51% of the houses the number of occupants were between 6 and 10 and 22% were living in houses that accommodated between 11 and 15 students. These are all houses designed for a single family of approximately 4 to 5 persons per household. On average there were for every house, eight vehicles recorded. The monthly rental paid for the houses was sufficient to cover the bond costs of the owners (if they still had a bond to pay off). In terms of not contributing to the social cohesion of a neighbourhood community, 84% of the student respondents indicated that they “have no clue” who their neighbours are. They also indicated the four main complaints received by permanent non-student residents varied from complaints of noise, having late night parties, parking in the street and the fact that they moan in general about students. Almost half (46%) of the student houses have been involved in personal quarrels with permanent residents. The permanent residents that were interviewed have been staying, on average, for 18 years in De Weides. Three-quarters of the respondents have been in conflict situations with students. The four main reasons for conflict creation were noise, public drunkenness, house parties and parking infringements. In order to determine suburb quality of life, respondents were asked to score their suburb on a Likert scale according to various physical, social and economic indicators. An overall suburb satisfaction index of 54 was then calculated. Index values of less than 66 are generally considered very bad. Respondents were asked to indicate whether the presence of students in their suburb has a negative, positive or neutral impact on them in the three categories of social, cultural and economic (Table 1). Table 1: Positive and negative impacts of students in the suburb Social factors Positive Negative None Social interaction with residents 22% 61% 17% Diversity of residents 52% 40% 8% Social cohesion of suburb 5% 87% 8% Social behaviour of students 8% 92% 0% Cultural factors Noisy 3% 97% 0% Student lifestyle 12% 85% 3% Student culture in suburb 12% 85% 3% Economic factors Demand for housing 67% 30% 3% Supply for housing 70% 27% 3% As indicated in the literature, suburbs with a high concentration of students tend to be soft targets for criminals, especially during recess periods. Seventy percent of respondents are of the opinion that the presence of student houses in their area is the main reason for increased incidences of crime. On average the respondents have been victims of break-ins twice. Bloemfontein The purpose of the Bloemfontein Town Planning Scheme of 1954 is to effectively control land use. The scheme makes provision for zoning with regulation and prescribes how and for what a property can be used for. Most properties in Brandwag and Universitas are zoned as single residential 2. This zoning category is defined as a building designed to be occupied by Urbani izziv, volume 25, supplement, 2014 (special issue)

S184 a single family with 1 to 1.5 parking spaces for every 4 sleeping rooms. This description evidently does not describe that of a student house, because students are a non-related adult group of people living together on a semi-permanent basis. In the absence of a student housing policy for the city, a policy was formulated in the late 2000s but has as yet has not been implemented. Interviews with planners, employees of the city council, yielded the following: One of the aspects attention was given to was to allow for a special consent use for student houses. In effect this would imply that should the owner sell the property it, thereafter, cannot be used as a student house unless the new owner applies for a special consent use. Instead of a student housing zoning, consent use was proposed, because within the parameters of specified rules and regulations consent use can be taken away should an owner not abide by the rules. The proposed policy also makes provision for security concerns where owners are expected to provide for at least a security fence. Owners must also be able to have proof of making use of garden services to maintain the outside areas of properties. The policy is thus not to contain and restrict the development of student houses, instead emphasis is on better control of land use. A platform will also be created for residents to complain should student houses not stick to the rules. Brandwag

Universitas

Figure 3: Distribution of student houses in Brandwag and Universitas In the two case study suburbs of Brandwag and Universitas there are 454 student houses with a total of 1454 students residing there and contributing to approximately one third of the off-campus accommodation of university students. Student houses in Brandwag (with an average of 13 students per house) are slightly more densely populated than Universitas (9 students per house). The spatial location of student houses in the two suburbs are shown in dark shading on Figure 3. There are clearly specific clusters evident in both suburbs suggesting that a process of invasion and succession is taking place. Typically in such conditions a core will develop and from thereon snowballs outwards as original residents adjacent the core start “fleeing”/leaving the area. Students staying in student houses were asked why they prefer this option of accommodation type. The two main reasons stated were that they do not want to be part of the campus hostel culture and secondly because there is not enough accommodation for them on campus (Figure 4). Transformation at the university is an added dimension to students opting to stay in student houses. Traditionally university hostels have been created on a single-sex basis at both university campuses. However, in student houses it is common for male and female students to live together and conservative neighbours responded that such dissolute behaviour among students are creating socially unacceptable experiences such as sexual practices in the neighbourhood parks (Volksblad, 7 Januarie 2006: 4). Staying in a student house is in most cases also a cheaper option than hostels. A mere 36% of students in the study


S185 area are post-graduate students. A handful of cases were observed where a house is only inhabited by post-graduate students and in such cases the average number of residents was very low (6). In addition these houses were also kept very clean and tidy.

Figure 4: Reasons for wanting to stay in a student house Unruly behaviour and noise is by far the biggest problem for permanent residents in the suburbs. Just over half the student respondents indicated that they have student house rules but they acknowledge that they do not adhere to these. According to a police superintendent (anonymous interview) cases of “rusverstooring” (disturbing the peace) rarely end up in a criminal case and in some cases, at most, the unruly students will spend a night in jail. As seen in the international literature other criminal activities thrive in areas with clusters of student houses. However, in the two suburbs of Bloemfontein available recorded criminal activity data have seen a decline over a ten year period where between 1998 and 2007 cases declined from 17 805 to 14 352. An anonymous estate agent indicated that the increase in student houses has contributed positively to the property market in both suburbs. The new owners would see the house as an investment that can easily be paid off by students over a couple of years. The demand for student houses, therefore, forced the market to respond and prices increased. The universities are seen as the source market that leads to the creation of this demand. Residents living adjacent to student houses acknowledged that their house prices increased as a consequence of the increase in student houses. However, notwithstanding this positive economic impact, these residents are highly critical of the presence of student houses in their suburb (92% in Brandwag and 46% in Universitas said that the image of their suburb has been impacted negatively). Just less than 50% of residents were also considering relocating elsewhere. None of the permanent residents were informed about the fact that their neighbouring properties were to become student houses. Those that, however, objected to the metropolitan municipality were only informed that there are currently no regulations in place to prevent or regulate such houses. The university authority is, however, adamant that they are not accountable for any affairs pertaining to the impacts of student houses on the urban fabric in


S186 the city, outside the boundaries of the university (anonymous interview with university administrator). At present, neighbours are not aware of the intentions of individuals or developers to establish a student house. The process for lodging complaints against such submissions is also rarely catered for. The application for rezoning encourages public participation. The formulation of a special zoning for student houses and creation of a definition of a student house is in the interest of the public and for broader urban planning fraternity at municipal level. Once a student house is defined, it may empower the authority to do the following: residents and new owners of properties of student houses can formally participate in the process of application for consent uses; the capacity of sufficient services per residential unit can be established beforehand; the impact on the traffic of the surrounding area can be evaluated better; access points to the units such as potentially dangerous entry points can be prevented; controlling sufficiency of parking space (as well as minimizing parking spaces in the backyard of units); and health regulations (hygiene and sanitation) can be better controlled. Conclusion The paper argues that both dramatic percentage increases of student enrolment and resident-based totals directly contributed to a fundamental spatial transformation of suburbs in both cities regarding socio-spatial relations, urban spatial expansion and the resultant spatial impacts as a consequence of these pressures. Neither the university nor the municipalities have kept pace with this influx and alternative urban social-spaces have subsequently been created. One such spatial outcome is studentification. As a consequence of the studentification of urban space, a particular spatial pattern has emerged over the past decades. Negative social, physical and cultural consequences are experienced in the studentified neighbourhoods; resulting in issues such as noise, traffic congestion, high residential density and the loss of the neighbourhood character. There is a lack of social cohesion between the permanent residents and the students and this situation is exploited by property developers. In the process, studentification has inflated the property market, thus excluding low-middle- and middleincome earners from an opportunity to buy property in the town. In the case of Stellenbosch it was seen that, notwithstanding proper zoning, regulated suburbs have experienced dramatic changes to the built and social environment. In Bloemfontein such regulations are called for but it may be too late to pro-actively and sensitively manage studentification. In terms of policy it would be ideal if all main role-players (such as the university, developers, municipality, homeowners, security agencies) form part of all planning strategies. Policing such a policy can, for example, be dealt with in collaboration with the university’s own security arm and the municipal authorities. Sustainable control measures must be implemented to achieve an orderly and legal studentification process. The controls should be restrictive to harmful and illegal studentification practices, but it will not be successful if all parties involved do not benefit and are empowered by the control measures. These measures also have to incorporate all the facets of existing legislation, zoning and policies. Consent use zoning will always create an opportunity for breaking bylaws of tenants and such zoning should not be seen as a solution to managing studentification effectively. References Albrechts, L. (2004) Strategic (spatial) planning re-examined. Environment and Planning: Planning and Design, A31, pp. 743-758. Allison, J. (2006) Over-educated, over-exuberant and over here? The impact of students on cities. Planning, Practice & Research, 21(1), pp. 79-94.


S187 Benn J.D. (2010) Studentifikasie in Stellenbosch. Master’s thesis. Stellenbosch, Stellenbosch University, Department of Geography and Environmental Studies. Bowditch, S. (2001) Good neighbours. Connection: New England's Journal of Higher Education & Economic Development, 15(3), p. 11. Chatterton, P. (2000) The cultural role of universities in the community: Revisiting the university-community debate. Environment and Planning, A32, pp. 165-181. Curtis, P. (2005) Student centres. Guardian. www.guardian.co.uk. Duke-Williams, O. (2009) The geographies of student migration in the UK. Environment and Planning, A41, pp. 1826-1848. Griffiths, R.; Bassett, K. & Smith, I. (1999) Cultural policy and the cultural economy in Bristol. Local Economy, 14 (3), pp. 257-65. Groenewald, A.C. (1989) Die sosiale lewensomstandighede in Bloemfontein, 1896-1899. Master’s thesis. Bloemfontein. University of the Free State. Hall, F. (2008) Don’t blame students for studentification. Guardian. www.guardian.co.uk. Hubbard, P. (2006). Regulating the social impacts of studentification: A Loughborough case study. Environment and Planning, A40, pp. 323-341. Kenyon, E. (1997) Seasonal sub-communities: The impact of student households on residential communities. Britain Journal of Sociology, 48(2), pp. 286-300. Leavey, K. (2004) Communities and colleges: Utilizing public relations techniques and strategies to solve chronic town-gown problems. Rowan: Rowan University. Lees, L. (2008) New-build gentrification: Forms, places, processes. Population, Space and Place, (11), pp. 251-268. Macintyre, C. (2003) New models of student housing and their impact on local communities. Journal of Higher Education Policy and Management, 25(2), pp. 109-118. Midgley, C. (2002) Hell of residence. Times Online. www.timesonline.co.uk. Munro, M.; Turok, I. & Livingston, M. (2009) Students in cities: A preliminary analysis of their patterns and effects. Environment and Planning, A41, pp.1805-1825. Potgieter, P.J. (2005) Studentehuise rondom die Universiteit van die Vrystaat. Stads- en Streekbeplanning, 48, pp 17-25. Rey, J. (2007) Off-campus apartments booming: Focus: Student housing. Buffalo News, The (NY). http://www.buffalonews.com. Rugg, J.; Rhodes, D. & Jones, A. (2000) The nature and impact of student demand on housing markets. Layerthorpe: Joseph Rowntree Foundation. Russo, A.; Van den Berg, L. & Lavanga, M. (2007) Toward a sustainable relationship between city and university. Journal of Planning Education and Research, 27(2), pp. 199216. Sabri, S. & Ludin, A.N. (2009) ‘Studentification': Is it a key factor within the residential decision-making process in Kuala Lumpur? Available at: http://www.fab.utm.my/download/ConferenceSeminar/SEATUC200904P.pdf Seethal, C. (2004) Postmodern urban politics in South Africa: the case of Stellenbosch (20002004). Paper presented at the Centennial Convention of the Association of American Geographers, March, Philadelphia, USA. Slater, T.; Curran, W. & Lees, L. (2004) Guest editorial, Environment and Planning, B36, pp. 1141–1150. Smith, D. (2007) The politics of studentification and ‘(un)balanced’ urban populations in the United Kingdom: an update. Brighton: University of Brighton. Smith, D. & Holt, L. (2007) Studentification and ‘apprentice’ gentrifiers within Britain’s provincial towns and cities: Extending the meaning of gentrification. Environment and Planning, A39, pp.142-161.


S188 Smith, N. (1987) Of yuppies and housing: gentrification, social restructuring, and the urban dream, Environment and Planning D: Society and Space, 5, pp. 151 – 172 Standing Conference of Principals (SCOP) & the Local Government Association. (2006) Studentification: A guide to opportunities, challenges and practice. Available online: http://www.universitiesuk.ac.uk/highereducation/Documents/2006/StudentificationGuide. pdf Stefanovska, J. & Koželj, J. (2012) Urban planning and transitional development issues: The case of Skopje, Macedoni.. Urbani Izziv, 23(1), pp. 91–100 Volksblad. 2006. Ontstoke Brandwag-inwoners vergader. 7 Januarie, p. 4. Wojtas, O. (2003) We don’t want students on our doorstep. Times Higher Education Supplement, 1607, p.13. Wynne, D. & O’Connor, J. (1998) Consumption and the postmodern city. Urban Studies, 35, pp. 841-64. www.communities.gov.uk. (2008) New report tackles neighbourhood studentification problem Available online: www.communities.gov.uk. Zhang, J; Kotze, N & Minghui, YU. (2012) Living in a changing Chinese urban landscape: The Dalian case study. Urbani Izziv, 23(2), pp 93–102.



Urban tourism destinations in South Africa: Divergent trajectories 2001–2012 Christian M. Rogerson Jayne M. Rogerson Christian M. Rogerson, University of Johannesburg, Faculty of Management, School of Tourism & Hospitality, South Africa ([email protected]) Jayne M. Rogerson, University of Johannesburg, Faculty of Science, School of Geography, Environmental Management & Energy Studies, South Africa ([email protected])

Abstract Cities are growing tourism destinations in both developed and developing countries. For policymakers in many cities the promotion of tourism is a vital issue. The phenomenon of urban tourism has emerged as a significant research topic in tourism and urban studies. The South African experience has been one of the most well documented cases in urban tourism in the developing world. Most existing research is focussed on supply-side issues of the establishment of new tourism products in cities or of the impacts of growing urban tourism. This article examines urban tourism from a demand-side perspective and interrogates the performance of South Africa’s eight metropolitan areas as tourism destinations over the period 2001-2012.The analysis reveals that the metropolitan areas as a group are expanding in significance as tourism destinations. Divergent pathways or trajectories of development are apparent in terms of unpacking the performance of the eight different areas. Keywords: urban tourism, South Africa, purpose of travel, domestic tourism, international tourism

Introduction The stimulation of economic growth and accelerated rates of job creation have been major priorities for urban policy makers in South Africa particularly in the period since democratic transition. With the conferment of a developmental mandate upon South African local governments under the 1996 Constitution the challenge of local economic development has come under the policy spotlight (Rogerson, 2000; Binns & Nel, 2002; Nel & Rogerson, 2005a; Rogerson & Rogerson, 2010, 2012). In addressing this issue South African cities have pursued a range of different interventions in order to galvanize economic expansion, to create new employment opportunities as well as to tackle chronic problems around poverty reduction (Nel & Rogerson, 2005a, 2005b). Interventions and support initiatives have ranged across variously cluster promotion, maximising opportunities for small enterprise development, encouraging creative industries (including film), call centres, high technology activities and energising locally competitive production activities (Rogerson, 2004, 2008a, 2010, 2011a, 2011b, 2013a; Pandy & Rogerson, 2012, 2014; Visser, 2014). In many respects these forms of promotion around local economic development in cities are a mirror of parallel policy developments which have occurred in cities of the global North (see eg. Reid & Smith, 2012). For cities confronted by the challenges of embracing the service economy and information age, tourism is an alluring sector for policy-makers. It affords them an opportunity to reposition as well as to redefine their essential functions (Law, 1993). In addition, tourism has been seen by policy makers as a lever for urban regeneration and for breathing life back into the historic and often declining areas of cities (Galdini, 2007). It is recognised that several advantages accrue from successful projects of tourism-led regeneration particularly in innercity areas (Law, 1992). Arguably, of critical significance are the direct or indirect effects for


S190 job creation and other wider economic impacts. Another critical benefit, however, relates to the impact of tourism upon city imaging as well as physical and environmental improvements which can accompany tourism-driven urban regeneration projects (Rogerson, 1996; Galdini, 2007; Ioannides & Timothy, 2010). Finally, the improved images of cities can have other positive impacts in respect of enhancing the overall business climate for private sector investment as well as for the attraction of creative industries and creative individuals (Richards, 2012). Overall, tourism development in cities “has become an essential tool for economic regeneration and employment creation, for place promotion, for re-imaging cities and helping to create identity in the new global systems” (Williams, 2009: 208). In South Africa the tourism sector has been a special focus for national economic development programming particularly since 1994 and the country’s re-integration into the global tourism economy. As emphasized by Rogerson & Visser (2004) under apartheid the tourism sector was of only minor importance as international tourism was undeveloped as a consequence of international boycotts and sanctions. Although the growth of international tourism in South Africa is associated with the country’s big 5 nature attractions, the country’s cities are major destinations for tourism. In common with international experience, South African cities have taken up the challenge of promoting urban tourism, including for purposes of economic regeneration (Rogerson, 2002a, 2002b; Ferreira & Visser, 2007; Rogerson, 2013b). As has been shown elsewhere a number of different policy interventions have been undertaken to strengthen the tourism product base of the country’s cities (Rogerson & Visser, 2007). Supply-side interventions have encompassed the establishment of new entertainment complexes, casino developments, heritage tourism attractions, convention centres, and aggressive competitive bidding to hosting mega-events (Rogerson & Visser, 2007, 2011). In addition, Johannesburg has taken the lead in seeking to build the potential of township tourism and of creative tourism as well as maximising the city’s attractiveness as a shopping destination, in particular for shopper/traders from neighbouring African countries (Rogerson, 2006; Rogerson & Visser, 2006; Rogerson, 2008b; Booyens, 2010; Rogerson, 2011b, 2013b). In an overview of scholarship dealing with South African urban settlements for the period 2000-2010 Visser (2013) identifies tourism as one of the leading ‘growth poles’ in urban studies research. The importance of urban tourism for South African urban research is confirmed in a further overview of contemporary urban research (Visser & Rogerson, 2014). The expansion of research on urban tourism is acknowledged also in recent discussions of the state of the art of local and regional tourism writings (Rogerson & Rogerson, 2011; Visser & Hoogendoorn, 2011). Against this background the aim in this paper is to extend South African debates around urban tourism by analysing the changing patterns and performance of urban tourism within the country’s eight major metropolitan areas over the period 2001-2012. The timeframe for this investigation is of particular interest as it spans a phase of considerable expansion in the national tourism economy which includes the hosting of the 2010 FIFA Soccer World Cup. The findings of this investigation are set within the context of a brief contextual review of international research and debates about urban tourism. Urban Tourism Debates As pointed out by Murillo et al. (2011: 4) although tourists visiting cities represent one of the earliest forms of travel “it was only during the last decades of the twentieth century that many cities became aware of its economic potential and embraced it as a key sector inside their economies”. Indeed, during the past three decades one of the most common local development strategies in cities has been support for the tourism sector to be a vehicle for urban economic improvement. Across Western Europe, North America and Australia, cities which formerly were places of production have been re-structured and re-invented as places of consumption. Among others, Ismail & Baum (2006: 213) draw attention to “a multitude of


S191 motivations associated with visitation in urban areas”. Law (1993: 1) considers the period of the 1980s as a watershed with a “significant shift in attitude by cities towards the tourism industry“. Key trigger factors for policy interest on tourism were global restructuring and ongoing processes of deindustrialization of cities, the imperative to introduce new growth sectors and the perception of tourism as such a growth sector. Now, according to Williams (2009: 208) “urban tourism has acquired a level of significance through its new found centrality in the processes of reinvention of cities under post-industrial, postmodern change and the related restructuring of urban economies and societies around consumption”. In a landmark work on urban tourism which appeared in the early 1990s Law (1993: 2) forwarded that the study of tourism in large cities, or urban tourism, “has not attracted much attention in the academic literature”. More recently it was stated that whilst “the importance of urban tourism is now widely recognised, it is a subject that has, until very recently, been an area of relative neglect within tourism studies” (Williams, 2009: 208). This said subsequent to the publication of Law’s (1992, 1993) seminal studies in the 1990s there occurred a rise of interest around urban tourism issues (Galdini, 2007). By the early 2000s urban tourism was established as a distinct knowledge area within urban studies and tourism studies (Ismail & Baum, 2006). Currently, urban tourism continues to secure considerable research attention from a number of disciplines with contributions from urban scholars, human geographers and tourism researchers (Hall & Page, 2009; Ashworth & Page, 2011; Spirou, 2011). In reviews of international writings on urban tourism Ashworth & Page (2011: 2) underscore the “intellectual health” and the consolidation of “a well-established quantum of urban tourism research” and Selby (2012: 233) draws our attention to the significant contributions made by human geographers “to a functional understanding of urban tourism through focusing on the urban tourism product”. Arguably, urban tourism scholarship is a broad field of investigation. One critical theme in urban tourism expansion is, however, the growth of the accommodation sector, most importantly of hotels. The development of the accommodation industry in general and of the hotel economy in particular is critical to understanding the rise of urban tourism. Within urban tourism therefore there exists a stream of writings on hotels and their location in cities (eg. Arbel & Pizam, 1977; Shoval et al., 2011; Rogerson, 2012, 2014). Among a suite of broader questions that have garnered research attention are the impact of tourism upon cities; the competitiveness of urban tourism destinations; the role of urban tourism in local economic restructuring and physical revitalisation; globalisation and urban tourism; host-visitor relationships; and, the relationships between creativity and urban tourism development (Hall & Page, 2009; Ashworth & Page, 2011; Spirou, 2011; Richards, 2012). Other matters that have come under academic investigation are the local impacts of tourism for gentrification (Fuller & Michel, 2014), urban tourism occurring in less affluent or peripheral ‘edgy’ urban districts (Smith & Pappalepore, 2014), evaluations of urban tourism product and visitor satisfaction (Ben-Dalia et al., 2013), residents perceptions (Wang et al., 2005), the application of real estate as a policy stimulus (Xu et al., 2012), and the pro-poor impacts of urban tourism (Butler et al., 2013; Frenzel, 2013). Miller et al. (2014) focus attention on questions of sustainable urban tourism and of tourists’ pro-environmental behaviours. Finally, in a useful comparative investigation of Antalya, Amsterdam and Liverpool, Ozturk & Terhorst (2012) observe the divergent nature and trajectories of urban tourism development. The different pathways of urban tourism across various urban tourism destinations are further highlighted by Kadar’s (2013) recent work on Vienna and Prague. One consistent trend in urban tourism scholarship is a broadening in the geographical range of cities under investigation and confirmation of the globalising nature of the phenomenon of urban tourism. Nevertheless, in the important review articles by Hall & Page (2009) and by Ashworth & Page (2011) it is apparent that the international scholarship on


S192 urban tourism is geographically uneven with most writings focussed on cities in North America and Europe. As pointed out by Ismail & Baum (2006: 214)”many of the descriptions of what constitutes urban tourism are based on the experience of developed countries”. Nevertheless, during the past decade cities in Pacific Asia and especially China have attracted rising attention (Begin, 2000; Wang et al., 2005; Li & Bihu, 2012; Xu et al. 2012; Hong, 2014). It is observed also the appearance of works which track tourism development in the Middle Eastern Gulf region especially Dubai and Abu Dhabi (Henderson, 2014). Growing attention is evident in urban tourism destinations in the developing world. Studies have appeared on Botswana (Moswete et al., 2008), India (Singh, 1992), Iran (Azizi, 2011), Malaysia (Ismail & Baum, 2006), and most importantly South Africa where urban tourism has been a popular topic for both urban and tourism researchers over the past decade (Rogerson, 2002; Rogerson & Visser, 2004, 2006; Ferreira & Visser, 2007; Abrahams, 2009; Ferreira, 2011; Rogerson & Visser, 2011; Visser, 2013). Across the developing world one of the most distinctive aspects of urban tourism scholarship relates to the controversial phenomenon of so-termed ‘slum tourism’ in which tourists mainly from the global North travel to poor areas of cities in the global South (Rolfes, 2010; Frenzel et al., 2012; Frenzel, 2013). South Africa, Brazil, Kenya and India are among the growing number of countries where slum tourism is an expanding phenomenon and parallel focus of research attention (Burgold & Rolfes, 2013; Chege & Mwisukha, 2013; Kieti & Magio, 2013; Steinbrink, 2013; Chege & Weweru, 2014). Urban Tourism Destinations in South Africa: Divergent Trajectories As indicated the topic of urban tourism in South Africa has been explored and unpacked in a series of recent studies which review in particular the establishment of different tourism products and of new niche forms of tourism (Rogerson & Visser, 2007, 2011). Much of the existing base of works concentrates upon supply-side considerations and looks at the nature of different urban tourism products or undertakes evaluations of the impacts of this growing phenomenon. One theme that remains unexplored is the demand-side of urban tourism and of the differential growth and performance of various South African cities as tourism destinations. This gap, to a large extent, has been the result of the generally poor state of spatialised tourism data which is available from official sources such as South African Tourism.


S193

Figure 1: The Location of South Africa’s Eight Metropolitan Municipal Areas In addressing this knowledge gap about urban tourism in South Africa, a detailed analysis is undertaken of a local level data base which has been constructed by Global Insight. This data base builds upon a range of sources including official tourism data and other local sources in order to generate estimates of trips, bednights and visitor spend for all local government areas in South Africa. More specifically this data base gives details for the period 2001 to 2012 of the tourism performance of all local authorities in the country in respect of inter alia, the number of tourism trips as differentiated by purpose of trip; number of trips and bednights by origin of tourist (domestic or international); and estimated tourism spend. This data provides the base for the analysis below of the performance of South Africa’s eight metropolitan areas namely Buffalo City (East London), Cape Town, Ekurhuleni, Ethekwini (Durban), Johannesburg. Mangaung (Bloemfontein), Nelson Mandela Bay (Port Elizabeth) and Tshwane (Pretoria). Table 1: Metropolitan Areas: Growth of Tourism 2001-2012 Total % Total % Tourism National Bednights National Trips Total Total 2001 9018345 39.0 65461209 41.5 2006 11825467 35.6 76175235 40.2 2010 14026046 37.5 89580599 41.5 2012 13586902 39.3 90759798 41.9 Source: Author calculations from Global Insight data

Estimated Total % Tourism Spend National R’000s) Total 33731482 52.7 61167164 51.3 86943420 51.6 88604362 53.6


S194 Table 2: Metropolitan Areas: Growth of Tourism by source, 2001-2012 No of trips Share Bednights Dom Int. Dom Int’l Dom Int 2001 7157862 1862939 79.4 20.6 47046708 18426540 2006 9112685 2717292 77.1 22.9 53039121 23142748 2010 10407327 3618537 74.2 25.8 55454919 34116943 2012 9432573 4155493 69.4 30.6 51470690 39293449 Source: Author calculations from Global Insight data

Share Dom 71.9 69.6 61.9 56.7

Int 28.1 30.4 38.2 43.3

Table 3: Metropolitan Areas: Growth of Tourism by Purpose, 2001-2012 Leisure % Business % VFR % Other % 2001 2446132 27.1 1282610 14.2 4669539 51.7 619882 6.9 2006 2288524 19.4 1566471 13.2 7267676 61.5 696164 5.9 2010 3315584 23.6 2086962 14.9 7866595 56.1 759711 5.4 2012 3318727 24.4 2438683 17.9 6937260 51.1 894093 6.6 Source: Author calculations from Global Insight data Tables 1, 2 and 3 provide a profile of the growth of tourism in the metropolitan areas as a whole. Taken together they confirm the dominance of South Africa’s tourism space economy by the country’s metropolitan areas (Rogerson, 2014). Several important trends can be observed. Table 1 discloses that between 2001 and 2012 there has been a net growth in indicators of numbers of tourism trips, bednights and estimated visitor spend. The net expansion of trips and bednights was respectively 4.6 million trips and 25.3 million bednights or 50.7 percent and 38.6 percent growth. It is observed that whilst the numbers of tourism trips to metropolitan destinations peak in 2010, the year of South Africa’s hosting of the FIFA World Cup, that bednights have continued to grow between 2010 and 2012. Over the period 2001-2012 only marginal change occurs in the share of the metropolitan areas of the national totals; in 2012 South Africa’s metropolitan areas account for an estimated 39 percent of trips and nearly 42 percent of bednights. It is observed, however, that the share of total tourism spend which is captured by metropolitan destinations is much higher than the respective share of trips or bednights. It is revealed that between 2001 and 2012 the share of tourism spend accounted for by the eight metropolitan areas rises over 163 percent in this period and the relative share increases from 52.7 to 53.6 percent. This finding points to the higher value of the nature of tourism trips occurring to metropolitan areas as compared to non-metropolitan areas as a whole. Table 2 breaks down the data of numbers of trips and bednights in terms of source of visitors, whether domestic or international. The category ‘international’ includes both the lucrative market of longhaul travellers to South Africa, mainly leisure tourists from Europe and the USA, as well as the market of regional African tourists, the largest share of which are involved in cross-border shopping/trading and business tourism rather than leisure tourism (Rogerson & Visser, 2006). It is shown on Table 2 that as indexed both by trips and bednights that the relative importance of metropolitan areas for international tourists as opposed to domestic tourists is increasing in significance. These figures should also be read in relation to national data for domestic and international trips and bednights which show that in 2012 domestic tourists account for 75 percent of trips and two-thirds of bednights whereas international travellers represent 25 percent of trips and one-third of bednights. It is shown therefore that metropolitan areas as destinations are relatively more important for international travellers and under-represented in terms of their share of total trips/bednights in terms of domestic tourists.


S195 Table 3 is revealing in terms of unpacking the numbers of trips in terms of purpose of travel. Four categories of tourism are recognised, namely leisure, business, visiting friends and relatives (VFR) and other, which is mainly constituted by religious travel and travel for health purposes. It is shown that in terms of absolute numbers of trips the largest proportion of tourism to metropolitan destinations is represented by VFR travel. This finding is in line with national data that VFR travel in 2012 accounted for 60.8 of all tourism trips. Beyond VFR travel, the next significant purposes of travel are for leisure and business purposes with the category other of only minor significance. Between 2001-2012 it is shown that the largest absolute growth of trips to metropolitan destinations is in VFR travel followed significantly by business rather than leisure trips. This finding points to the critical importance of business tourism as a rising component in the tourism economy of South Africa’s leading cities (Rogerson, 2014). In relative terms the share of leisure and business travel in metropolitan destinations is much higher than the national pattern. For example, in 2012 business travel represented 11.9 percent of all national trips but for metropolitan areas the corresponding share is 17.9 percent. In terms of leisure the 2012 national proportion of trips was 19.7 percent whereas for metropolitan destinations it was recorded at 24.4 percent. This shows that for leisure travel in relative terms the metropolitan areas are strongly represented in this form of travel. By contrast in VFR travel and other travel the metropolitan areas as a whole are under-represented as they record a share much lower than the national share which is accounted for by these forms of tourism. Table 4: Total Tourism Trips by Metropolitan Area 2001-2012 2001 2006 2010 Trips % Trips % Trips Buffalo City 433886 4.8 582473 4.9 684591 Cape Town 1667448 18.5 1796100 15.2 2085006 Ekurhuleni 1133646 12.6 1307044 11.1 1705085 Ethekwini 1562103 17.3 2987707 25.3 2953939 Johannesburg 1922127 21.3 2350292 19.9 3116101 Mangaung 461798 5.1 598796 5.1 601250 Nelson Mandela Bay 462816 5.1 644027 5.4 762910 Tshwane 1375472 15.3 1562966 13.2 2119378 Source: Author calculations from Global Insight data Table 5: Total Bednights by Metropolitan Area 2001-2012 2001 2006 2010 Trips % Trips % Trips Buffalo City 3444138 5.3 3974305 5.2 4714718 Cape Town 14266365 21.8 16094449 21.1 17941992 Ekurhuleni 7891934 12.1 8291821 10.9 9952791 Ethekwini 10253668 15.7 15226102 20.0 17267446 Johannesburg 13346688 20.4 15048559 19.8 18587164 Mangaung 2829155 4.3 3028667 4.0 3059532 Nelson Mandela 3572897 5.5 4317155 5.7 5208060 Bay Tshwane 9856379 15.1 10181476 13.4 12858100 Source: Author calculations from Global Insight data

% 4.9 14.9 12.2 21.1 22.2 4.3 5.4 15.1

% 5.3 20.0 11.1 19.3 20.7 3.4 5.8

2012 Trips 533371 1808134 1829959 2858661 3220191 504753 599460 2236130

% 3.9 13.3 13.5 21.0 23.7 3.7 4.4 16.5

2012 Trips 3761827 16761562 11715423 17190979 20145184 2696920 4225475

% 4.1 18.5 12.9 18.9 22.2 3.0 4.7

14.4 14256554 15.7


S196 Table 6: Tourism Spend by Metropolitan Area 2001-2012 (R1000, Current prices) 2001 2006 2010 2012 R1000 % R1000 % R1000 % R1000 Buffalo City 1279256 3.8 2191610 3.6 3451429 4.0 2845336 Cape Town 8523951 25.3 15853005 25.9 20374159 23.4 18343530 Ekurhuleni 3297894 9.8 5552113 9.1 8580960 9.9 10229769 Ethekwini 4471559 13.3 9759994 16.0 13935618 16.0 14138234 Johannesburg 7541804 22.4 13495189 22.1 19905267 22.9 22106367 Mangaung 1331217 3.9 2019581 3.3 2450740 2.8 2165668 Nelson 1276486 3.8 2569675 4.2 4172988 4.8 3495454 Mandela Bay Tshwane 6014761 17.8 9713359 15.9 14078663 16.2 15285517 Source: Author calculations from Global Insight data

% 3.2 20.7 11.5 16.0 24.9 2.4 3.9 17.3

Tables 4, 5 and 6 show the important theme of the divergent trajectories of the different metropolitan destinations. These three tables unpack the data for tourism trips, bednights and tourism spend for the eight different metropolitan areas. What is evident is the differential performance of these eight urban tourism destinations. Table 4 shows that whereas numbers of tourism trips have expanded in all eight metropolitan areas there is evidenced a differential performance. Most striking in a comparison of 2001 and 2012 data is the strengthening of Johannesburg, Ethekwini, Ekurhuleni and Tshwane and the weaker performance of Cape Town and the two smaller metropolitan areas of Mangaung and Buffalo City. These findings are mirrored again by the analysis of bednights with Johannesburg and Ethekwini recording strong relative growth whereas Cape Town, Mangaung, Buffalo City and Nelson Mandela Bay show the weakest performance. The most significant indicator of tourism performance is estimated tourism spend which is given on Table 6. This shows that in absolute terms tourism spend has grown in all eight metropolitan areas over the period 2001-2012 albeit peak tourism spend is recorded in 2010 in several destinations, including Buffalo City, Cape Town, Mangaung and Nelson Mandela Bay. In these four metropolitan areas a downturn in estimated tourism spend is recorded between 2010 and 2012 as opposed to continued upward growth in Johannesburg, Tshwane, Ekurhuleni and Ethekwini. Some significant changes are noted in terms of patterns of tourism spend. In particular, between 2001 and 2010 Cape Town is the most significant destination for tourism spend but by 2012 Johannesburg emerges as the leading destination for tourism spend. Overall, in relative terms for tourism spend the performance of Cape Town is weakened as compared to Johannesburg, Ethekwini and Ekurhuleni which record significant gains. Table 7: Domestic Tourism Trips by Metropolitan Area 2001-2012 2001 2006 2010 Trips % Trips % Trips Buffalo City 377746 5.3 506040 5.6 636849 Cape Town 1374528 19.2 1393189 15.3 1552293 Ekurhuleni 908669 12.7 968774 10.6 1173837 Ethekwini 1339913 18.7 2673386 29.3 2645107 Johannesburg 1405928 19.6 1531740 16.8 1969571 Mangaung 362478 5.1 461111 5.1 433596 Nelson Mandela Bay 421123 5.9 588358 6.5 708746 Tshwane 966359 13.5 967849 10.6 1290036 Source: Author calculations from Global Insight data

% 6.1 14.9 11.3 25.4 18.9 4.2 6.8 12.4

2012 Trips 483196 1181112 1137146 2491481 1982474 285718 533846 1340289

% 5.1 12.5 12.1 26.4 21.0 3.0 5.7 14.2


S197 Table 8: International Tourism Trips by Metropolitan Area 2001-2012 2001 2006 2010 Trips % Trips % Trips % Buffalo City 56140 3.0 54292 2.0 47742 1.3 Cape Town 292920 15.7 402911 14.8 532713 14.7 Ekurhuleni 224977 12.1 338271 12.4 531248 14.7 Ethekwini 222190 11.9 314321 11.6 308833 8.5 Johannesburg 516199 27.7 818551 30.1 1146530 31.7 Mangaung 99320 5.3 137685 5.1 167654 4.6 Nelson Mandela Bay 41693 2.2 55668 2.0 54164 1.5 Tshwane 409114 22.0 595117 21.9 829342 22.9 Source: Author calculations from Global Insight data Table 9 Domestic Tourism Bednights by Metropolitan Area 2001-2012 2001 2006 2010 Trips % Trips % Trips % Buffalo City 2830587 6.0 3410734 6.4 4128026 7.4 Cape Town 10247719 21.8 9814343 18.5 9181313 16.6 Ekurhuleni 5965658 12.7 5925644 11.2 5562390 10.0 Ethekwini 7903763 16.8 12602922 23.8 14548886 26.2 Johannesburg 8877633 18.9 9305058 17.5 9313495 16.8 Mangaung 1906779 4.1 2257065 4.3 2007581 3.6 Nelson 3126697 6.6 3747082 7.1 4548237 8.2 Mandela Bay Tshwane 6170488 13.1 5963871 11.2 6185718 11.2 Source: Author calculations from Global Insight data

2012 Trips 50175 627022 692813 368180 1237716 219036 65614 895841

% 1.2 15.1 16.7 8.9 29.8 5.3 1.6 21.6

2012 Trips 3135909 6808278 5816428 13906728 10113889 1309819 3411142

% 6.1 13.2 11.3 27.0 19.6 2.5 6.6

6976638

13.6

Table 10 International Tourism Bednights by Metropolitan Area 2001-2012 2001 2006 2010 2012 Trips % Trips % Trips % Trips Buffalo City 613551 3.3 563570 2.4 586691 1.7 625918 Cape Town 4018646 21.8 6280106 27.1 8760679 25.7 9953284 Ekurhuleni 1926275 10.5 2366178 10.2 4390401 12.9 5898995 Ethekwini 2349906 12.8 2623180 11.3 2718561 8.0 3284251 Johannesburg 4469055 24.3 5743501 24.8 9273669 27.2 10031295 Mangaung 922376 5.0 721959 3.1 1051951 3.1 1387101 Nelson Mandela Bay 446200 2.4 570073 2.5 659823 1.9 814332 Tshwane 3685891 20.0 4217605 18.2 6672382 19.6 7279916 Source: Author calculations from Global Insight data

% 1.6 25.3 15.0 8.4 25.5 3.5 2.1 18.5

Tables 7 and 8 provide the breakdown for the eight metropolitan areas of tourism trips as differentiated by source of visitor, whether domestic or international. Tables 9 and 10 provide the parallel data for bednights. Taken together these four tables provide further striking evidence of the divergent trajectories taken by South Africa’s eight metropolitan areas as tourism destinations. Two critical sets of findings must be observed. First, in relation to domestic tourism is the marked strengthening in relative importance of Ethekwini and Johannesburg as domestic tourism destinations. By contrast is the considerable decline in the significance for domestic tourism relatively of Cape Town. Other destinations showing relative decline for domestic travel between 2001 and 2012 are Buffalo City, Ekurhuleni, Mangaung and Nelson Mandela Bay. Second, in terms of international tourism different


S198 trajectories are observed. The data for tourism trips reveals the rise of Johannesburg, Ekurhuleni and Tshwane for international tourism; in all cases regional African visitors represent the largest proportion of international travel cohorts in these destinations. It is observed also that in terms of numbers of bednights Cape Town is becoming ever stronger as a magnet for international tourists, albeit in this destination it is mainly long-haul travelers as opposed to regional African visitors. For international tourism, as indexed both by relative share of bednights and trips, Ethekwini experienced a weakening of its former position. Declines are also clearly evident in the performance of the smaller metropolitan areas of Buffalo City, Mangaung and Nelson Mandela Bay for international tourism. Table 11: Leisure Tourism Trips by Metropolitan Area 2001-2012 2001 2006 2010 Trips % Trips % Trips % Buffalo City 127753 5.2 90264 3.9 113226 3.4 Cape Town 658570 26.8 572591 24.9 859920 25.9 Ekurhuleni 190922 7.8 157976 6.9 282176 8.5 Ethekwini 333207 13.6 425711 18.5 491285 14.8 Johannesburg 437488 17.9 405527 17.6 680594 20.5 Mangaung 158709 6.5 155726 6.8 174834 5.3 Nelson 105679 4.3 108320 4.7 164462 5.0 Mandela Bay Tshwane 434605 17.8 382567 16.6 549656 16.6 Source: Author calculations from Global Insight data Table 12 Business Tourism Trips by Metropolitan Area 2001-2012 2001 2006 2010 Trips % Trips % Trips % Buffalo City 57934 4.5 60819 3.9 60446 2.9 Cape Town 193752 15.1 218868 14.0 268490 12.9 Ekurhuleni 134000 10.4 150168 9.6 246007 11.8 Ethekwini 175350 13.7 275720 17.6 254189 12.2 Johannesburg 336800 26.3 406172 25.9 639494 30.6 Mangaung 64491 5.0 74589 4.8 79327 3.8 Nelson Mandela Bay 51038 4.0 69302 4.4 73777 3.5 Tshwane 268965 21.0 310594 19.8 465638 22.3 Source: Author calculations from Global Insight data Table 13 VFR Tourism Trips by Metropolitan Area 2001-2012 2001 2006 2010 Trips % Trips % Trips Buffalo City 233463 5.0 415364 5.7 494628 Cape Town 762205 16.3 955487 13.1 904186 Ekurhuleni 711287 15.2 907322 12.5 1068339 Ethekwini 902313 19.3 2066786 28.4 2022770 Johannesburg 969749 20.8 1360377 18.7 1575454 Mangaung 224923 4.8 350118 4.8 326966 Nelson 270158 5.8 427884 5.9 485790 Mandela Bay Tshwane 595966 12.8 784917 10.8 987104 Source: Author calculations from Global Insight data

2012 Trips 78909 780484 365489 464648 786974 176141 125881

% 2.4 23.5 11.0 14.0 23.7 5.3 3.8

539860

16.3

2012 Trips 55890 247843 323253 264075 817696 73716 66248 590070

% 2.3 10.2 13.3 10.8 33.5 3.0 2.7 24.2

% 6.3 11.5 13.6 25.7 20.0 4.2 6.2

2012 Trips 383521 728800 1004336 1912756 1339801 237267 370273

% 5.5 10.5 14.5 27.6 19.3 3.4 5.3

12.5

962587

13.9


S199

Finally, Tables 11, 12 and 13 provide a detailed picture of total trips as differentiated by purpose of travel for the three major segments of leisure, business and VFR travel. The different paths or trajectories of the eight metropolitan areas are once again in evidence. First, in terms of leisure travel absolute growth has occurred in all metropolitan areas with the exception of Buffalo City where leisure trips between 2001 and 2012 record a net decline. In absolute terms Cape Town is the most significant destination for leisure trips from 2001-2010 but is surpassed by Johannesburg in the period 2010-2012. Tshwane, Ekurhuleni and Ethekwini emerge as the next most significant destinations as indexed by numbers of tourism trips (Table 11). Table 12 shows that in business tourism Johannesburg, South Africa’s commercial capital, and Tshwane, the country’s administrative capital, have further strengthened their positions as the leading hubs for business travel. In 2001 these two metropolitan areas accounted for 47.3 of business tourism trips whereas in 2012 this had expanded to 57.7 percent. The growth of business tourism in Johannesburg is evident in the landscape of hotel developments which cluster particularly around the Sandton and Rosebank business nodes (Rogerson, 2014a, 2014b). Ekurhuleni also records an increase in its relative share of business trips such that by 2012 it is the third most significant destination for business travel. By contrast, the two metropolitan destinations showing marked decline in their relative importance for business travel are Ethekwini and Cape Town. A downtown is also evident in the performance of Buffalo City, Mangaung and Nelson Mandela Bay for business travel. The uneven performance of the different metropolitan areas for VFR travel is demonstrated on Table 13. The most striking finding is the strengthening of Ethekwini as a hub for VFR travel. As compared to its poor performance in leisure and business travel Ethekwini experienced a near doubling in VFR trips for the period 2001-2012. In relative terms small gains were shown for Buffalo City and Tshwane in respect of VFR travel. By contrast, the other five metropolitan areas show a relative decline in their importance for VFR travel. The most precipitate decline is for the City of Cape Town which experiences even a net absolute decline in VFR travellers across the period 2001-2012. Conclusion Urban tourism research is of growing importance in the global South. In terms of current scholarship on urban tourism, research on South Africa is the best documented. The existing body of writings is mainly comprised of supply-side investigations of the establishment of new tourism products in the country’s cities. In this paper an attempt was made to provide a demand-side analysis of urban tourism across South Africa’s eight metropolitan areas. It is evident that the metropolitan areas as a whole are the leading centres for South Africa’s tourism economy and that they have experienced a phase of marked growth during the period 2001-2012. Nevertheless, it is revealed that this growth has been uneven across the eight metropolitan areas. Divergent trajectories of urban tourism development are observed. This can be illustrated by looking at the comparative performance of Cape Town, Johannesburg and Ethekwini. The most striking observations are as follows. Cape Town exhibits relative demise for domestic tourism, business travel and VFR travel and a strengthened role for international travel which in large part accounts for the city’s continued strong share of tourism spend. Johannesburg emerges as the metropolitan destination which has experienced the greatest change over the study period. Of note is the city’s dominant role for business travel, a rising importance for leisure travel and its modest performance for VFR travel. Growth in Johannesburg is on the basis of both domestic and international travelers, the latter mainly of regional African visitors. For Ethekwini, the period 2001-2012 is denoted by the city’s continued strong role as a domestic tourism destination in particular for VFR


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