‘Affordable housing’ for Johannesburg’s growing middle class is a developmentalist imperative and potentially lucrative market. However, few greenfield developers have found this market profitable. Fundamental to those who have, is control over land and its development. This paper puts heterodox urban land rent theory to work vis-à-vis the logics and practices of these developers. I illustrate how greenfield affordable housing developers work to (re)produce differential and monopoly rents in this context. Differential rents rely on investing in cheap land produced through the city’s racialised geography, and controlling land’s development through vertical integration, dynamic negotiations with local government and development finance institutions, and steering money and people into developments. Monopoly rents rely on the power of developers to act together as a class to secure land, give the appearance of competition and lobby the state in their interests. This power is built through racialised control over land and long personal connections. It is also consolidated by the state’s own land development bureaucracy and preference for ‘mega’ developments and recognisable developers. Together, these developer strategies to accrue differential and monopoly rents demonstrate their active role in the everyday making of land and housing markets. They also demand extensions of heterodox urban land rent theory: first, a more articulated understanding of how class monopoly power over land is built through race, and second, a more contingent analysis of capital’s relations to other actors and institutions, especially the state.
In downtown Johannesburg, daring entrepreneurs have found that they can profitably reintroduce previously abandoned high-rise buildings back into the market by converting them into working-class rental accommodation (Mosselson, 2019). New markets have also been 'discovered' on the city's periphery where owners of historically agricultural land supply entry-level detached housing to first-time black homeowners (Butcher, 2019). In the north east of the city, a Shanghai-based firm-attempting to diversify away from the flagging Chinese property market-bought an undeveloped site and planned to build a 'new city' for middle-class residents and commerce (Ballard and Harrison, 2019). Meanwhile, city authorities have worked to attract affordable housing developers into transit-oriented corridors in central parts of the city (Todes and Robinson, 2019). A core commitment of the post-apartheid state has been the transformation of South African cities away from their segregated histories (e.g. RSA, 2012, 2016). Yet after a quarter of a century of democracy, many officials are exasperated over the persistence of segregated urban forms. As Harrison and Todes (2015) note, spatial transformation cannot be decreed through policy but must rather reckon with the ongoing production of postapartheid urban space, not least by individual residents and the private sector. In South Africa's largest conurbation, in which Johannesburg is embedded, the number of residential buildings of all sizes and types has increased by 60 per cent, from 2.1m in 2001 to 3.4m in 2016 (Hamann, 2018), and commercial buildings have increased by 30 per cent over the
As the housing bubble burst in overheated property markets around the world, South Africa’s so-called ‘affordable housing market’ appeared to be bucking the trend. From 2010, affordable housing prices were rising and selling quickly, especially in Gauteng, Johannesburg’s city-region, chronically short of actually affordable housing and with a growing black middle class. Touted as ‘SA’s best-kept investment secret’, the affordable housing market offered a lifeline to the property industry and the potential to democratize segregated property markets. Yet, in practice, the tapping of South Africa’s lower-income housing market by capital has been a limited one, narrowly catering to particular subjects and spaces. Drawing on heterodox approaches to ‘actually existing markets’ and qualitative fieldwork conducted in Johannesburg between 2012 and 2013, this paper traces how the boundaries of the affordable housing and mortgage submarket are produced and shift through the investments of multiple communities with their own theories of housing markets and different interests in ‘making the market work’. Despite these investments and contestations, the submarket is narrowly territorialized within developer-driven housing largely in Gauteng for public-sector workers, to optimize the market within mortgage capital’s frameworks of risk, return, race and space. The South African mortgaged affordable housing submarket is not so much in need of market information or constitutive of a new frontier of global finance, as a territorial fix for domestic capital vis-à-vis development imperatives. To investigate struggles over this submarket, I draw together socio-institutional approaches to markets with critical political economy of housing markets and put them into conversation with critical development studies scholarship on markets. This combination allows us to make space for multiple projects of ‘improvement’ and profit in our analyses of market-making, as well as how these are shaped by, and shape, space and conjuncture. I seek to contribute to a growing literature on the geographies of markets from a Global South context where housing is framed as both a market good and constitutional right by examining a case of apparent ‘market failure’.
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