The impact of the integrated residential development programme on surrounding property values: Case study of Fleurhof, Johannesburg

Abstract

South Africa is challenged with an increased backlog of adequate subsidised affordable housing for the marginalised in well-located areas that provide access to urban amenities and places of employment. However, the perception of subsidised affordable housing developments built in the urban core in close proximity to bonded properties is significantly negative. This article seeks to address
whether the presence of subsidised affordable housing provided through South Africa’s Integrated Residential Development  Programme (IRDP) impacts on the property value of bonded properties located nearby. This article examines the impact of the subsidised affordable housing development of Fleurhof, Johannesburg, on surrounding property values. It investigates, in particular, whether the IRDP housing development decreases property values. Using hedonic pricing models (HPM) with regressions, the housing attributes (characteristics) and property price data, dating from 2001 to 2017, were used to determine the effect on the value of properties in the suburbs of Meadowlands East Zone 1 and Orlando West in Soweto and Florida in Roodepoort, as the two closest residential communities to Fleurhof. The article reveals that the close proximity of the housing development in the initial stages (2001-2010) of the development affected property values negatively. However, in the long run, the housing development does not affect property values.

Keywords: Hedonic price modelling, housing characteristics, Integrated Residential Development Programme (IRDP), subsidised  affordable housing, property value

Die agterstand in voldoende gesubsidieerde bekostigbare behuising vir gemarginaliseerders, in goedgeleë gebiede wat toegang bied tot stedelike geriewe en werkplekke, is ’n uitdaging vir Suid-Afrika. Daar is egter ’n negatiewe persepsie oor die bou van gesubsidieerde bekostigbare behuisingsontwikkelings in die stadskern naby omgewings met eiendomme waarop verbande  geregistreer is. In hierdie artikel word aandag gegee aan die vraag of die teenwoordigheid van gesubsidieerde bekostigbare behuising wat deur die Suid-Afrikaanse Geïntegreerde Residensiële Ontwikkelingsprogram (IRDP) aangebied word, die eiendomswaarde van die
verbandgeregistreerde eiendom wat in die naby omgewing geleë is, beïnvloed. Hierdie artikel ondersoek die impak van die  gesubsidieerde ontwikkeling van bekostigbare behuising in Fleurhof, Johannesburg, op die omliggende eiendomswaardes, en veral of die IRDP-behuisingsontwikkeling eiendomswaardes verlaag. Deur gebruik te maak van hedoniese prysmodelle (HPM) met regressies, is die behuisingseienskappe en eiendomsprysgegewens vanaf 2001 tot 2017 gebruik om die waarde van eiendomme in die voorstede van Meadowlands East Zone 1 en Orlando West in Soweto en Florida in Roodepoort, as die twee woongemeenskappe naaste aan Fleurhof, te ontleed. Die studie toon dat die nabyheid van die huisontwikkeling in die beginfases (2001- 2010) van die ontwikkeling eiendomswaardes negatief beïnvloed het. Op die lange duur beïnvloed die ontwikkeling van behuising egter nie die eiendomswaardes nie.

Sleutelwoorde: Behuisingseienskappe, eiendomswaarde, Geïntegreerde Residensiële Ontwikkelingsprogram (IRDP),  gesubsidieerde bekostigbare behuising, hedoniese prysmodellering