Across major metros, municipalities are reviewing town planning schemes and zoning frameworks.
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The changes in the way cities are planning for growth, densification, and mixed-use integration is bringing a structural shift in South Africa’s affordable housing sector.
According to TUHF Client Coverage Executive, Velda Derrocks, inclusive development begins with how municipalities rethink spatial planning and economic activity within their urban nodes.
“Inclusive development is about how cities intentionally structure urban growth. It is about rethinking economic activity, transport systems, zoning, and densification in a way that starts correcting historical spatial inequalities,” says Derrocks.
Across major metros, municipalities are reviewing town planning schemes and zoning frameworks. Derrocks points to the City of Cape Town as a proactive example, particularly in its use of incentive overlay zones and the municipal planning bylaw revisions (2025) to reduce lengthy rezoning processes and in its cross-departmental coordination to verify infrastructure capacity before enabling densification.
“You cannot talk about densification without ensuring that the utilities and services can carry the load. Where municipalities collaborate internally and align budgets with planning, inclusive growth at scale becomes possible,” she says.
There is a common perception that densification correlates with overcrowding. This misses the point.
“Densification is not a fancy word for overcrowding. It is about making maximum legal and compliant use of the available space in a manner that supports sustainability and not undermine it and using design as a social stabiliser and not an afterthought,” she explains.
Densification is also not synonymous with high-rise development.
“It does not mean adding ten floors to a building as high-rise is just one typology, and often not the most appropriate for South African metros. Most effective densification occurs in the 3-6 storey range which is cost-effective, supports walkability, fits existing neighbourhood structures and works well for mixed-income and social housing. It can mean redesigning oversized units so that space is used more efficiently, improving yield for the landlord while increasing affordability for tenants.”
Well-planned densification can also improve service delivery.
“When more people live within structured nodes, it becomes easier to maintain infrastructure, roads, security, and utilities. It prompts planning authorities to review capacity and upgrade services rather than allowing degradation. The real strain comes from sprawl, not density.”
One of the clearest examples of inclusive densification is the Conradie Park precinct in Cape Town, developed through collaboration among the Western Cape Provincial Government, the Department of Human Settlements, the City of Cape Town, and private-sector partners.
“This shows what mixed-use urban inclusivity can look like. You have social housing and open-market units in the same precinct, with schools and other retail and commercial amenities to be developed within the same precinct. Different income groups are living in one integrated node.”
Such developments demonstrate that financial sustainability and social integration can coexist when public and private stakeholders align around long-term outcomes.
Affordable housing demand remains strong wherever economic activity is present.
“In Cape Town, demand is influenced by migration and displacement pressures. In Johannesburg, young professionals are drawn by economic opportunity and comparatively lower living costs,” says Derrocks.
National policy signals are also influencing demand for ownership. Residential properties valued at up to R1.21 million are currently exempt from transfer duty, reducing transaction costs for entry-level buyers and sectional title purchasers. According to SARS, properties below this threshold are subject to zero transfer duty under the 2025/26 tables.
While TUHF is best known for primarily funding rental entrepreneurs, Derrocks notes that its lending products also includes funding developers who do greenfield developments for sale to the open market, a commitment that stimulates affordable ownership demand and contributes to shaping housing supply patterns.
Another emerging dynamic is the displacement effect driven by student accommodation in major metros.
“Student accommodation often yields higher returns per unit, which can crowd out traditional family rentals in certain areas. TUHF currently caps its student accommodation exposure at 25% of its loan book and remains below that threshold to manage concentration risk.”
Beyond primary metros, growth nodes are emerging in smaller municipalities adjacent to larger economic centres, where affordability pressures in core cities are pushing demand outward.
For TUHF, inclusive development cannot be separated from commercial sustainability.
“We are a profit-driven business. Commercial returns enable us to deepen our impact. If landlords remain viable and profitable, they continue investing in affordable housing supply,” says Derrocks.
TUHF’s expertise in refurbishment, sustainable residential building design, and access to green funding structures strengthens that balance.
“Affordability for tenants and viability for landlords must coexist,” says Derrocks. “Utilities costs continue to rise. Efficiency and smart design are essential to keep housing accessible.”
“Success in the next three to five years means strengthening our commercial performance while expanding measurable social impact. If we can continue to scale localised interventions responsibly, we contribute meaningfully to South Africa’s sustainable and prosperous urban future,” Derrocks says.
Last month, the Charter Cities Institute (CCI), in partnership with Waterfall City Management Company (WCMC), will host the 2026 edition of the global New Cities Summit at Waterfall City in Johannesburg this December.
This Summit will cement its status as the leading global platform for advancing the future of urban development.
Convening governments, technology executives, private investors, city developers, entrepreneurs, infrastructure providers, philanthropists, scholars, professional service firms, and more to address the challenges and seize the opportunities of building thriving new cities around the world. The New Cities Summit is said to be the essential gathering for those committed to reimagining urban living at scale and taking action to see ideas to fruition.
The 2026 New Cities Summit will take place at Waterfall City, the largest mixed-use development in Africa.
Willie Vos, CEO of Waterfall City Management Company, said says while their 2,200-hectare smart city is only halfway complete, they believe it already reflects the pioneering urban design and human-centric principles that underpin this project.
“We are proud to showcase how innovative planning, long-term vision and dedicated property management can translate into a smart, safe and sustainable environment, where people can truly live, work, play and prosper.
"At the same time, we look forward to engaging with global thought leaders and gaining valuable insights during the Summit, as we continue building a city that raises the bar for urban development.”
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