Land value capture implied in social mandate

Following many years of apartheid land use planning the government of South Africa together with local governments initiated in 2001 the development project for Khayelitsha by way of experiment under a National Urban Renewal Program. A central business district was to be created in Khayelitsha around a transportation node. The project was to be based on development principles of partnership amongst the private sector, public sector and the community. Khayelitsha Community Trust (KCT) was established by the City of Cape Town in 2003 as the enabling vehicle for the project with a strong social mandate to create a business community by the community for the benefit of the community. Development had already been underway prior to 2003 as the government had made investments in the area by constructing various service buildings which were to attract further investment. However after completion of a retail center in 2005 no further significant development has taken place. The objective of this research has been to identify certain problems that have arisen in the development process of the Khayelitsha Community Trust since 2005. The research explores whether obstacles encountered relate to the use of the form of a community trust and whether the trust, with a multi-focus mandate, is in a position to capture the benefit of the long term vision for the Khayelitsha Business District for the benefit of the community of Khayelitsha. The role of the trust in this context has been evaluated and explained within the contours of land ownership of the trust, organizational features of the trust and implementation of certain contractual arrangements relating to the projects. After comparing the main features of KCT with those of the classic community land trust, the accomplishments of KCT in reaching its distributive goals were reviewed as well as KCT’s effectiveness in dealing with private commercial parties in developing the business district. The research is structured as a single case study where data have been collected through semi-structured interviews and document review. When comparing the KCT structure with the classic community land trust various differences become apparent relating to the regime for land ownership, the governance aspects as to appointment of responsible trustees and directors, accountability of management and certain community participation aspects. Where government does not control KCT questions arise regarding the accountability of KCT for the management of the land use and economic development of this critically located land for the benefit of the public. The dual ownership structure used in the classic land trust model whereby the trust retains ownership of the land in perpetuity subject to a lease is not a central element of the KCT objectives; economic development for the benefit of the community is the central objective. The complexity of the development has however caused various forms of delays which have been discussed. The objectives of KCT relating to the provision of affordable housing differ greatly from those of the classic community trust. In South Africa housing subsidies are granted so as to create wealth for the individual household, which can be leveraged in full by the household involved to enable it to move up the social ladder, including realization of the full equity to be applied towards improved housing or other purposes.