Tuesday, May 26, 2009

Service Delivery or Emotional Baggage

Today I'm commenting on a M&G article that you can read here


And another here


Some of the land transferred and ear marked for development is in affluent areas and has an extremely high value (particularly the land in Constantia).

It boggles my mind why such land would be used for low cost housing. The biggest issue in providing low cost housing is budget, why not sell the expensive land to property developers and use the proceeds to build even more houses in less affluent areas.

This would also have the effect of increased stimulation of the building industry. Instead of having "x" low cost homes built in the affluent area they could build "x" with the original funds and "y" low cost homes with the proceeds from the sale, as well as the property developments in the affluent areas paid for by investors (call them "z"). "x" + "y" + "z" = more jobs in the building industry then "x" alone. Not to mention that "z" are larger and would result in more jobs than the low cost homes.

So, in conclusion selling the expensive land and building more houses on cheaper land results in more houses and more jobs, two problems being addressed.

The only reason I can think for not doing this is the emotional argument of "why do only rich people get to live in Constantia?". Obviously that's worth more votes to the politicians than more houses and more jobs!