SAPOA 2014 Western Cape Commercial Property Impact Report

THE ECONOMIC VALUE of the COMMERCIAL PRIVATE PROPERTY SECTOR

MARCH & APRIL 2014 SAPOA - the voice of commercial property

1THE ROLE AND IMPACT of the

COMMERCIAL PROPERTY SECTORTHE ECONOMIC VALUE

of the COMMERCIAL PRIVATE PROPERTY SECTOR

APPLICATION PROCESSING REPORT

WESTERN CAPE

2014

WEST COAST

CAPE KAROO

GARDEN ROUTE & LITTLE KAROOWINELANDS

OVERBERGCAPE

TOWN


SAPOA - the voice of commercial property MARCH & APRIL 2014

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TABLE OF CONTENTS

SECTION ONE: INTRODUCTION

1.1 Study Area

1.2 General Research Approach

1.3 Purpose of Report

1.4 Limitations

1.5 Report Outline

SECTION TWO: DEFINITION OF THE COMMERCIAL PRIVATE PROPERTY SECTOR

2.1 Property Components as Elements of a Larger Economy

2.2 Components of the Commercial Private Property Sector

2.3 The Commercial Private Property Sector in Terms of the Relevant Economic Sectors

2.4 Relationship Between the Private and Public Property Sectors

SECTION THREE: CURRENT ECONOMIC VALUE

3.1 Economic Quantification: Approach

3.1.1 Economic Performance Projections

3.1.2 Identification of Main Role-Playing Economic Sectors

3.1.3 Economic Quantification of the Commercial Private Property Sector

3.2 Economic Performance and Main Representative Sectors

3.2.1 Overall Economic Performance

3.2.2 Sectorial Composition in Context to Property Representative Sectors

3.2.3 The Construction Sector

3.2.4 The Business and Finance Sector

3.3 Value in Terms of Gross Domestic Product (GDP)

3.4 Value in Terms of Sustained Jobs

3.5 Value in Terms of Tax Revenue Generated

SECTION FOUR: ECONOMIC VALUE OF COMMERCIAL PRIVATE PROPERTY IN BRIEF

LIST OF FIGURES

Figure 3.1: Cyclical Economic Performance: 2007-2013

Figure 3.2: Sectoral Composition of the Relevant Economy: 2013

Figure 3.3: Sectorial Growth of the Construction Sector: 2007-2013

Figure 3.4: Composition of the Construction Sector of the National Economy: 2011

Figure 3.5: Sectorial Growth of the Business and Finance Sector: 2007-2013

Figure 3.6: Composition of the Business and Finance Sector: 2010

LIST OF TABLES

Table 3.1: GDP Value: 2013

Table 3.2: Construction Sector GDP Value: 2013

Table 3.3: Business and Finance Sector GDP Value: 2013

Table 3.3: Gross Domestic Product of the Commercial Private Property Sector: 2013

Table 3.4: Employment of the Commercial Private Property Sector: 2013

Table 3.5: Tax Revenue generated by the Commercial Private Property Sector: 2013

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CONTENTS

LIST OF MAPS

Map 1.1: Districts of the Western Cape

Map 1.2: Study Area

LIST OF DIAGRAMS

Diagram 2.1: Property Components defined according to Private and Public Sector

Diagram 2.2: Components of the Commercial Private Property Sector

Diagram 2.3: Commercial Private Property Sector in terms of the Relevant Economic Sectors

Diagram 2.4: Hypothetical Situations of State and Private Sector Responsibilities

LIST OF ACRONYMS

GDP – Gross Domestic Product

MM – Metropolitan Municipality

SIC – Standard Industrial Classification

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Published by SAPOA, Paddock View, Hunt’s End Office Park, 36 Wierda Road West, Wierda Valley, SandtonPO Box 78544, Sandton 2146

t: +27 (0)11 883 0679 f: +27 (0)11 883 0684

Compiled by:

Urban-Econ

Development Economists

www.urban-econ.com

[email protected]



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TABLE OF CONTENTS


1.1 Study Area



1.4 Limitations

1.5 Report Outline

SECTION TWO: THE REGULATORY ENVIRONMENT

2.1 Current Regulatory Background

2.1.1 Western Cape Land Use Planning Ordinance (LUPO)

2.1.2 Cape Town Spatial Development Framework (CTSDF)

2.1.3 Cape Town Zoning Scheme (CTZS)

2.2 Current Regulatory Entity Responsibilities

2.2.1 Interaction Between The City Of Cape Town Metro And Provincial Government

2.3 Recent And Planned Transformation In Regulations

2.3.1 Spatial Planning And Land Use Management Act (SPLUMA)

2.3.2 Western Cape Land Use Planning Act (LUPA)

2.3.3 Proposed Improvements

2.3.4 Changes in Interaction Between The City of Cape Town Metro and Provincial Government

2.3.5 Results Of Transformation In Legislation And Operations

2.4 The Regulatory Environment In Brief


3.1 Generic Property Development Cycle

3.2 City Of Cape Town Metropolitan Municipality

3.2.1 Land Use Management (Lum) Applications

3.2.2 Building Plan Applications

3.3 Department Of Environmental Affairs And Development Planning – Western Cape

Provincial Government

3.3.1 Lupo Appeals

3.3.2 Removal Of Restrictions Application

3.4 The Application Administration Process In Brief


4.1 Building Plans

4.2 Land Use Management (Lum) Applications

4.3 Application Processing System

4.3.1 Planned Improvement - The Development Application Management System (DAMS)

4.4 The Application Administration Benchmark In Brief

SECTION FIVE: MUNICIPAL APPLICATION TRACKING CASE STUDY

5.1 Purpose And Approach

5.1.1 Case Study Summary

5.2 Building Plan Case Study

5.3 Lum Application Case Study

5.4 The Municipal Application Tracking Case Study In Brief

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SECTION SIX: PRIVATE SECTOR APPLICATION TRACKING CASE STUDY

6.1 Purpose And Approach

6.1.1 Case Study Summary

6.2 Scenario Findings

6.2.1 Scenario 1: Residential Development Applications

6.2.2 Scenario 2: Non-Residential Development Applications

6.2.3 Scenario 3: Lupo Appeals

6.2.4 Scenario 4: Removal Of Restrictions

6.2.5 Scenario Finding Summary

6.3 Factors Influencing The Administration Tempo

6.4 The Private Sector Application Tracking Case Study In Brief

SECTION SEVEN: CONCLUSION AND RECOMMENDATIONS

7.1 Application Administration Performance Summary

7.1.1 Land Use Management Applications – Municipal Proficiency

7.1.2 Building Plans – Municipal Proficiency

7.2 Administration Blockage / Delay Factor Identification

7.2.1 Uncompliant/Incomplete Submissions

7.2.2 Controversy

7.2.3 Clerical Errors

7.2.4 Advertising Delays

7.2.5 Internal And External Circulation

7.2.6 Delegation

7.3 Ways To Address Administration Blockages

7.3.1 Eight-Point Plan In Place For Municipal Administration

7.3.2 Additional Recommended Improvements For Municipal Administration

7.3.3 Responsibilities Of The Private Sector

7.4 Conclusion

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LIST OF FIGURES

Figure 4.1: <40m2 Building Plan Finalisation Efficiency

Figure 4.2: <500m2 Building Plan Finalisation Efficiency

Figure 4.3: >500m2 Building Plan Finalisation Efficiency

Figure 4.4: Total Building Plan Submissions versus Finalisations

Figure 4.5: Four Month LUM Application Finalisation Efficiency

Figure 4.6: Seven Month LUM Application Finalisation Efficiency

Figure 4.7: Total LUM Application Submissions versus Finalisations

Figure 5.1: Building Plan Processing Timeframes

Figure 5.2: Building Plan Timeous Processing

Figure 5.3: Building Plan Processing Time Median

Figure 5.4: Building Plans Affected by Delay Factors

Figure 5.5: LUM Application Processing Timeframes

Figure 5.6: LUM Application Timeous Processing

Figure 5.7: LUM Application Processing Time Median

Figure 5.8: LUM Applications Affected by Delay Factors

Figure 6.1: Scenario 1: Processing Timeframes

Figure 6.2: Scenario 1: Timeous Processing

Figure 6.3: Scenario 1: Processing Time Median










Figure 6.13: Applications Affected by Delay Factors

LIST OF TABLES

Table 6.1: Case Study Approach Description

Table 6.2: Scenario Application Summary

Table 6.3: Private Sector Application Tracking Scenario Findings

LIST OF MAPS

Map 1.1: Districts of the Western Cape

Map 1.2: Study Area

LIST OF DIAGRAMS

Diagram 2.1: Section Two Outline

Diagram 2.2: Interaction between the City of Cape Town and Western Cape

Diagram 2.3: Changed interaction between the City of Cape Town and Western Cape

Diagram 3.1: Generic Phases in Property Development

Diagram 3.2: Generic Development Cycle

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Diagram 3.3: Generic Land Use Planning Ordinance Application Process

Diagram 3.4: Generic Building Plan Application Process

Diagram 3.5: Generic Land Use Planning Ordinance Appeal Process

Diagram 3.6: Generic Removal of Restrictions Application Process

Diagram 3.7: Application Administration Summary

Diagram 4.1: Application Processing

Diagram 6.1: Potential Delay Factor Description

Diagram 6.2: Top Delay Factors per Scenario

Diagram 6.3: Private Sector Application Tracking Summary

Diagram 7.1: Section Seven Outline

Diagram 7.3: Major Administration Blockages / Delay Factors

Diagram 7.4: Eight Main Points of Municipal Administration Strategy

LIST OF ACRONYMS

CLUMR – Chief Land Use Management Regulator

CoCT – City of Cape Town

CTIDP – Cape Town Integrated Development Plan

CTSDF – Cape Town Spatial Development Framework

CTZS – Cape Town Zoning Scheme

DAMS – Development Application Management System

DEADP – Department of Environmental Affairs and Development Planning

DFA – Development Facilitation Act

IDP – Integrated Development Plan

LFTEA – Less Formalised Township Establishment Act

LUM – Land Use Management

LUPA – Land Use Planning Act

LUPO – Land Use Planning Ordinance

MM – Metropolitan Municipality

MSA – Municipal Systems Act

NEMA – National Environmental Management Act

NHRA – National Heritage Resources Act

NIMBY – Not In My Backyard

PAB – Planning Authority Board

PBDM – Planning and Building Development Management

RSA – Republic of South Africa

SAPOA – South African Property Owners Association

SDF – Spatial Development Framework

SPLUMA – Spatial Planning and Land Use Management Act

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1.1. Study Area

The Western Cape is the most southern

province of the nine provinces situated in

the Republic of South Africa. It is located

in the south-western part of the country

and comprises of one metropolitan and

five district municipalities. The metropolitan

area is known as the City of Cape Town and

the five district municipalities are the West

Coast, the Central Karoo, Overberg, Eden

and the Cape Winelands regions (Map 1.1).

The five district municipalities are divided into

24 local municipalities. The City of Cape Town

Metropolitan Municipality (MM) is home to

one of the major cities within South Africa.

It accommodates the majority of economic

and commercial activities within the province,

with the higher portion of the Western Cape

population residing within its borders. The City

of Cape Town MM is analysed as a representative

case study in combination with the province

owing to the fact that a large portion of the

private commercial developments is centred in

the city of Cape Town.

Map 1.2 illustrates the metropolitan focus area.

The study is envisioned to analyse the

commercial private property sector within

the Western Cape Province. The City of Cape

Town MM is the capital of the Western Cape

Province. An active commercial property

market and prominent economy are centred

Urban-Econ Development Economists was commissioned by the South African Property Owners

Association (SAPOA) to undertake a detailed investigation of the private property industry in

the Western Cape Province, with special reference made to the City of Cape Town Metro.

This report is the first component of the “The Role and Impact of the Commercial Property

Sector in the Western Cape” study. This report aims to contextualise the size and quantity of

the private property sector in the Western Cape to provide a foundation for cost calculations

related to application and other administrative processing timeframes. The second report

supplements the first by analysing development application case studies in order to link

processing timeframes to economic performance.

Map 1.1

Districts of the Western Cape

Source: ArcGIS Explorer, 2013




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within Cape Town therefore it is the centre of

major economic growth and expansion within

the province.


The general research approach describes the

basic methodology implemented to measure

the economic value of the private commercial

property sector of the Western Cape.

In essence all economic activity has to take

place in a specific space, thus all economic

activities are related to property either directly

or indirectly. In order to measure the economic

value of the private commercial property

industry the relevant activities within the

specific sectors needs to be identified and

evaluated according to specific analysis factors

which complies with standard case practise for

economic impact calculations. For the purpose

of this report only property-centred economic

activities with a direct impact are evaluated, in

line with generic economic impact practises.

The directly impacting factors analysed are Gross

Domestic Product (GDP), direct employment and

tax revenue generated by the private commercial

property sector in the Western Cape.

The below illustrated factors are considered

to be prominent measurements which can be

utilised to assess the economic intervention of

a specific sector within a geographic scale. The

exact quantification approach are illustrated in

the subsequent sections of the report.


The purpose of this research component is

to quantify the commercial private property

industry in terms of its value for the provincial

economy. This will assist in developing an

understanding of the role that the private

property sector plays in economic development

within the jurisdiction area of the governing

entities (public sector). It is important to take

cognisance of the fact that the report does

not represent an asset audit of the commercial

private property industry. It presents a statistical

evaluation of the total contribution that the

Map 1.2

Study Area


The study area comprises of

the Western Cape Province in

its entirety. The City of Cape

Town MM is highlighted as

the main avenue for property

development and economic

role-player within the province.

The City of Cape Town MM is

analysed as a representative case

study in combination with the

province considering that a large

portion of the private commercial

developments is centred in the City

of Cape Town.

*Please note: Tax refers

to the level of tax revenue

generated by the South

African Revenue Service

(SARS). The tax calculations

present tax income of SARS

and not the local municipal

tax revenue



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Objective of the report:

quantifying the size and scope of

the commercial private property

sector’s impact on the economy

measured in terms of Gross

Domestic Product, employment

and tax revenue generated.

The report will conclude by

presenting the value of the

commercial private property sector

in terms of economic performance,

employment and public sector

revenue (tax) catalyst.

private commercial property sector makes

to the provincial economy in terms of GDP,

employment etc.

Additionally, it is understood that “The Role

and Impact of the Commercial Property Sector

in the Western Cape” study will be utilised to

obtain valuable information regarding the civic

administration of property development within

the study area in order to quantify the distinct

role that the public sector plays in property

development, especially in terms of timeframes.

Through quantifying the economic value of the

sector and applying the findings to estimated

application processing timeframes, one can

determine whether the effect of possible

processing delays by the public sector have any

impact on the provincial economy.

1.4 Limitations

Due to the qualitative and quantitative

investigation methodology a few limitations

were noted during the research process. It

is vital that the limitations are stated and

recognised in order to have a contextual

understanding of the results.

The basic limitations to the economic

quantification process are:

• Data sourced for the economic analysis is

reliant on statistical data publications from

reliable sources. The most recent available

detailed information pertaining to the

national business and finance sector is

representative of 2010 figures. Whereas

the local (City of Cape Town MM) GDP

and national construction industry figures

are representative for 2011. Projections

for 2013 was therefore required.

• Data sourced for the economic analysis

is reliant on statistical data publications

from reliable sources. These statistical

publications present economic data on

various geographic levels for different

time periods.

Please note that the limitations are addressed

within a detailed quantification process and

thus mitigated to not affect the results if the

report in any negative manner.

1.5 Report Outline

The report outlines the economic value of the

commercial private property sector according

to the various components of property

construction and management. It illustrates the

economic value of commercial private property

construction and management on the basis of

job creation, economic production/growth and

tax revenue generated.

The remainder of the report will be structured

under the following sections:

Section Two: Definition of the

Commercial Private Property Sector

Private property is defined as part of the

property components of a larger economy in

order to identify the relevant economic sectors

representing the private property sector.

Section Three: Current Economic Value

Analysis illustrating the present value of

the private property sector in terms of

economic production, job creation and tax

revenue generated.

Section Four: Economic Value of Private

Property in Brief

Summary of the findings of the afore-

mentioned analysis presenting the value

of the private property industry for the

Western Cape economy.



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Prior to the analysis of the economic value of the commercial private property sector, its role

is defined as part of the property components of a larger economy in order to identify the

relevant economic sectors representing the private property sector.

Activities within the commercial private property sector can be grouped into two main categories,

namely construction and management activities. These activities have been critically analysed to

identify the economic sub and main sectors in, which they operate.

As with any economy the two main role-players are the state and private sectors. This applies to

the property industry in the following way:

Public property (also known as government property) can be commonly defined as the land

and improvements owned by the South African government or one of its agencies, divisions, or

entities.2 It is commonly a reference to property regularly used by the general public including

basic and social infrastructure.

Commercial private property is basically defined as land or buildings belonging to a private

individual or company/group of individuals, rather than the government.3 In other words, the

property owned by non-governmental entities. Private commercial property for the purpose of

this report, will specifically include retail, office and industrial buildings as well as large-scale

residential property developments and not refer to individual private residences.

2 Derived from http://www.

dictionary.cambridge.org,

http://www.dictionary.

com and http://www.

thefreedictionary.com/


dictionary.cambridge.org and

http://www.dictionary.com

2.1 Property Components as Elements of a Larger Economy

The public sector plays the role of financier

in property construction and administrator

in property management. The construction

responsibilities of the public sector mainly

pertain to the financing of primary roads and

services etc. and supporting infrastructure such

as libraries, administration offices and other

social facilities. The public sector therefore

employs contractors and professionals from the

private sector to undertake the construction of

primary and supporting infrastructure.

The public sector does not have any construction

implementing bodies in the state, therefore

the private sector plays a dual role in terms

of property construction. Private contractors

are responsible for both privately driven and

public property construction activities. The

responsibilities of the private sector in terms

of property management mainly pertains

to activities such as sales and operation of

privately owned land. Recent trends indicate

that government departments are nowadays

inclined to lease private buildings rather than

occupying their own in, which case the private

sector acts as the property manager/landlord.

Diagram 2.1 classifies all components of

property according to its relevance to public

and private sectors.

The role of the commercial private property

sector is discussed in more detail in the

following sub-section.

2.2 Components of the Commercial Private Property Sector

Diagram 2.2 summarises the property

construction and management components of

the private sector.

As previously mentioned, the private sector

is responsible for all physical construction

activities of private and government-owned

land. In addition to the construction of privately

owned property entities, private contractors

and professionals are employed by the public

sector to construct public infrastructure and

buildings.

In terms of property management, the private

sector is mainly responsible for the exchange of

private land by controlling the sales and leasing

of property entities. Additionally, operation of

SECTION TWO: DEFINITION OF THE COMMERCIAL PRIVATE PROPERTY SECTOR



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Diagram 2.1

Property Components defined

according to Private and

Public Sectors

Diagram 2.2

Components of the

Commercial Private

Property Sector

property including maintenance, cleaning and

security are also the responsibility of the private

property sector.

2.3 The Commercial Private Property Sector in terms of the Relevant Economic Sectors

Commercial activities associated with the

private property sector are related to the

applicable economic sectors as per the

Standard Industrial Classification (SIC) as

utilised by Statistics South Africa. This is done

to identify relevant sectors that make up the

industry and ultimately contributes to its value.

The major components within the commercial

private property construction sector mainly

relate to the ‘construction activities’ sub-sector

as defined by the SIC comprising of major

activities such as site preparation, building

construction, building installation, building



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completion and renting of building equipment.

Hence, the economic construction sector

presents the main indicator for performance

measurement of such activities. Nonetheless,

the professional services component includes

architectural, engineering and other technical

activities, which are categorised within the

business and finance sector of the SIC.

Commercial private property management

pertains to all ‘real estate activities’ with

owned or leased properties as well as per fee

or contract basis. Real estate activities also

form part of the business and finance sector

as classified within the SIC.

Diagram 2.3 presents the relevant sectors

and activities.

The identified economic components are

analysed in the subsequent sections in order to

quantify the monetary value of the commercial

private property sector. However, hypothetical

scenarios are used to show how the process

of relating the economic value of the private

property sector is done with the use of

realistic examples.

2.4 Relationship between the Private and Public Property Sectors

Diagram 2.4 provides hypothetical scenarios in

order to show an example of the responsibilities

of the public and private sector in a

real-world situation.

• The first hypothetical situation plots

the development of a privately owned

mixed-use development in which

private contractors and professionals

are responsible for the construction and

preparation of specialised applications to

submit to local authorities for approval,

after which property management is

totally within the competence of the

private sector. This scenario highlights the

important regulatory and administrative

role that the public sector plays in

private development.

• The second hypothetical situation plots

the development of governmental

administration offices in addition to

supposed upgrades to the surrounding

road infrastructure. It emphasises the

financial provider role of the public

Diagram 2.3

Commercial Private Property

Sector in terms of the

Relevant Economic Sectors

The strongest component of

private property construction is

the construction activities sub-

sector, which forms part of the

construction main sector, with

the business and finance main

sector also represented in the

form of specialised services. The

real estate activities of private

property management highlight

the business and finance sector as

its main representative

economic sector.

Please note that the economic

value calculations for the private

sector construction in Section

Three will only be based on

the construction of properties/

buildings and not the provision of

infrastructure and bulk services.

The economic value of private

sector management will pertain to

all operational sales and leasing

activities of private properties.



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sector in terms of construction with all

construction activities and construction of

major bulk services that are outsourced to

the private sector.

The economic value of the private property

sector is investigated in the following section.

The hypothetical situations explain

the value of the private sector for

the construction of public sector

developments. To another extent it

also illustrates the importance of

public sector administration and

regulation for private commercial

property development.

Diagram 2.4

Hypothetical Situations of

State and Private Sector

Responsibilities



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Economic value of the commercial private property sector refers to its contribution towards

the Gross Domestic Product (GDP) of the Western Cape provincial and City of Cape Town

municipal economies.

The Gross Domestic Product (GDP) can be defined as the monetary value of all finished

goods and services produced during a specific time period, within the borders of a specific

geographic area.4

The value of the commercial private property sector is measured by analysing the economic

contribution made by the relevant economic sub-sectors and relating the findings to the total

GDP output of the focus regions. Additional captured findings include information regarding jobs

sustained and tax generated by the private property sector.

3.1 Economic Quantification: Approach

The quantification approach illustrates the

methodology used in order to determine the

current economic value of the commercial

private property sector in terms of construction

and management of buildings.

Please note that the approach was adapted

according to the following limitations:

• Availability of recent statistical releases:

The most recent published economic

figures for the lower geographic levels

(such as the City of Cape Town Metro) are

only available up to 2011.

•Availability of detailed economic statistics:

Comprehensive composition break-downs

are only available on national level.

The methodology was developed based on a

uniform distribution analysis technique, which

collate projections regarding the current (2013)

economic performance with the composition

of relevant national economic sectors in

order to present up-to-date statistics for the

Western Cape Province and the City of Cape

Town Metro.

The approach comprise of the following

components:

• Economic performance projections and

cyclical analysis

• Identification of the main economic role-

playing sectors in the commercial private

property sector

•Quantification of the economic value of

the commercial private property sector

as derived from the main role-playing

economic sectors.

3.1.1 Economic Performance ProjectionsThe cyclical performance of the overall

economy is analysed. The following projections

were made for GDP figures:


investopedia.com, http://

www.dictionary.cambridge.

org and http://www.

dictionary.com

Economic Indicator

Projection Period

Reason for Projection Assumption

National GDP 2013 Q4 National GDP is presented in a quarterly bulletin released by Statistics South Africa; therefore the latest release indicates GDP up to the third quarter of 2013. In order to present the annual GDP an average of the first three quarters was derived and applied to project the fourth quarter.

Economic performance in the final quarter of 2013 will be on par with the trend observed for the rest of the year.

Provincial GDP 2013 Provincial GDP is presented in an annual bulletin released by Statistics South Africa, therefore the latest release indicates the GDP up to 2012. In order to present the 2013 annual GDP for the province the average proportional provincial GDP values in relation to the national GDP (over the analysis period) was applied to the 2013 National GDP.

Proportional economic growth of the Western Cape Province in relation to the South African market remained in line with the performance over the past five years (2007-2012).




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It is important to note that the most recent

available statistics was utilised for projection

purposes. Published data sources are presented

unless otherwise indicated.

3.1.2 Identification of Main Role-Playing Economic SectorsThe value and cyclical performance of important

economic sectors are presented to assist in the

economic quantification of the commercial

private property sector.

The main economic components were identified

in accordance with the economic activities

identified in Diagram 2.3.

3.1.3 Economic Quantification of the Commercial Private Property SectorThe contribution of the private property

sector to the provincial and local economy

is quantified by analysing the composition

of the various economic indicators namely

construction, business, and finance.

Economic quantification of the commercial

private property sector is given in terms of the

value of the following features:

• GDP generated

• Jobs sustained

• Tax revenue generated

The detailed composition of the representative

sectors are only available on national level.

Projections regarding the provincial and local

contribution to GDP, jobs and tax are calculated

by applying the national distribution of GDP, jobs

and taxes to the relevant values of economies

in 2013 for the construction as well as business

and finance sectors. It is consequently assumed

that the local and provincial contribution

of the sub-sectors are in line with the most

recent published national composition, which

represent current values (2013).

The following projections were made for

employment and tax data gaps in addition to

the above stipulated GDP projections:

Economic Indicator

Projection Period


Local GDP 2012 - 2013 Latest local GDP figures is only available for 2011 as presented by Quantec Standardised Regional database derived from employment and economic performance variables as published by Statistics South Africa. In order to present the 2012 and 2013 annual GDP the average proportional local GDP values in relation to the national GDP (over the analysis period) were applied to the 2012 and 2013 National GDP.

Proportional economic growth of the City of Cape Town Metro in relation to the Western Cape and South African market remained in line with the performance over the past four years (2007-2011).

Economic Indicator

Projection Period


Provincial Local Employment Value

2012 - 2013 Provincial employment is presented in the quarterly bulletin released by Statistics South Africa, therefore the latest release indicates the total employment per sector for the third quarter of 2013. The 2013 Q3 employment total was utilised as the most recent employment value representing the annual employment for 2013. In order to present the local 2012/2013 employment values the average local employment to GDP ratio for the period 2007-2011 was applied to the 2012 and 2013 local GDP figures to derive employment numbers.

Provincial: The most recent available (third quarter) 2013 employment per industry figures are representative of the annual values for that year.Local: The average proportional employment versus economic growth ratio recorded from 2007 to 2011 is representative of the ratio to be expected in the years 2012 and 2013.



17

Economic Indicator

Projection Period


Provincial and Local Tax Revenue Generated

2012 - 2013 Tax revenue is a function of income generated. Therefore the average tax to income (GDP) ratio of 2007-2011 period was applied to the 2012/2013 provincial and local GDP figures to present the relevant levels of tax revenue generated.

PThe average proportional tax versus income ratio recorded from 2007 to 2011 is representative of the ratio to be expected for the following years (2012-2013).

3.2 Economic Performance and Main Representative Sectors

Direct and indirect influences were taken into

account to determine the overall value of the

private commercial property sector.

3.2.1 Overall Economic PerformanceThe overall performance of the relevant

economies serves as a proxy for the subsequent

performance of the applicable property market

and is illustrated in Figure 3.1.

All economies record stable average growth

rates for the analysis period with the provincial

and local economies outperforming the

national economy at 2% with average growth

rates of 2.2% and 2.1% respectively during

this period. Table 3.1 presents the projected

value of the relevant economies for 2013.

According to projections, the Western Cape

economy constitutes approximately 14.9%

of the 2013 national economy with a GDP

contribution of approximately R293.5 billion.

The value of the Cape Town local economy was

projected to be roughly R215.1 billion in 2013.

3.2.2 Sectorial Composition in context to Property Representative SectorsIn essence any economic activity has to take

place in a specific space, thus all economic

activities are related to property either directly

or indirectly. However, for the purpose of this

assessment only property-centred economic

activities with a more direct impact are

evaluated. Figure 3.2 presents the sectoral

composition of the Western Cape and the

City of Cape Town economies in terms of

GDP contribution. Special attention should be

Figure 3.1

Cyclical Economic

Performance: 2007-2013

Source: Quantec EasyData:

Standardised Regional and

Statistics South Africa data, 2014

Table 3.1

GDP Value: 2013




Economy 2013 GDP Value (Rands millions)

Share of National Economy

South Africa 1 974 343 100%

Western Cape 293 506 14.9%

City of Cape Town MM 215 089 10.9%



18

granted to the contribution of the construction

and business and finance sectors considering

these are the sectors that encompasses the

main role-playing activities in the private

property sector (refer to Section 2.3). These

sectors are therefore used as proxy for the

commercial private property sector.

From Figure 3.2 it is evident that the

construction sector constitutes 3.9% and 3.6%

to economic activity in the Western Cape and

City of Cape Town economies respectively. The

supplementary business and finance sector drives

approximately 29.9% of the provincial economy

and 33.0% of the municipal economy. It should

be noted that a smaller portion of the business

and finance sector forms part of the commercial

private property sector when considering that

the entire construction sector contributes to its

performance in a more direct way. An in-depth

analysis of the main economic sub-sectors is

required to form a better understanding of the

economic value of the private property sector.

Figure 3.4 and Figure 3.6 offer this detailed

inspection of the composition of each of

the main role-playing economic sectors in

the national economy as provided in most

recent statistical publications of Statistics

South Africa. As previously stated, data

limitations necessitate the assumption that

the composition within the main sectors

are uniform for the national, provincial and

municipal economies considering that similar

activities within the sectors relates to similar

contributing sub-sectors.

3.2.3 The Construction SectorFigure 3.3 presents the comparative cyclical

performance of the construction sectors in

South Africa, the Western Cape and the City

of Cape Town.

From Figure 3.3 it is clear that the local

construction sector has surpassed its provincial

counterpart in recent times. Nonetheless, the

Western Cape economy recorded stronger

Figure 3.2

Sectoral Composition of the

Relevant Economy: 2013




Figure 3.3

Sectorial Growth of the

Construction Sector: 2007-2013






19

growth during the 2012/2013 period. Table

3.2 presents the projected value of the

construction sector for the relevant study areas

in 2013.

Projections indicate that the Western Cape

economy forms approximately 19.2% of the

2013 national construction sector with a GDP

contribution of approximately R59.7 billion.

The local construction sector is valued at

roughly R7.6 billion in 2013, which constitutes

approximately 12.8% of the national

construction sector.

The composition of the national construction

sector is presented below, which will be

applied to the respective local economies to

inform calculations regarding the value of the

particular private commercial property sectors.

The building of civil engineering structures

(infrastructure) accounts for more than a

third (39%) of the economic activity recorded

within the national construction sector.

This is however not a representation of the

commercial private property sector as it is

financed by the public sector (please refer to

Diagram 2.1 and Diagram 2.4). The private

sector is represented by the remaining 61%

of the construction sector with the ‘building

of complete constructions or parts thereof’

being the major contributor (32.1%) of the

construction sector overall.

3.2.4 The Business and Finance SectorFigure 3.5 illustrates the cyclical growth

performance of the relevant business and

finance sectors.

Figure 3.5 indicates that the provincial business

and finance sector (average 3.5%) performed

slightly stronger than the local business and

finance sector (average: 3.4%) over the analysis

period. Table 3.3 presents the projected value

of the business and finance sector for the

relevant study areas in 2013.

According to estimates, the Western Cape

business and finance sector is valued at

approximately R87.9 billion in GDP, which

accounts for roughly 20.4% of the national

business and finance sector. The local business

and finance sector also presents a prominent

share of 16.5% of the national sector with a


Share of National Construction Sector

South Africa 59 741 100%



Table 3.2

Construction Sector

GDP Value: 2013




Figure 3.4

Composition of the

Construction Sector of the

National Economy: 2011

Source: Statistics South Africa

Publication: The Construction

Industry, 2011

Approximately 61% of the national

construction sector comprise of

private construction activities.



20


Share of National Business and Finance Sector

South Africa 431 449 100%



Figure 3.5

Sectorial Growth of the

Business and Finance Sector:

2007-2013




Figure 3.6

Composition of the Business

and Finance Sector: 2010

Source: Statistics South Africa

Publication: Real estate, activities

auxiliary to financial intermediation

and business services industry, 2010

Table 3.3

Business and Finance Sector

GDP Value: 2013




Private property construction

activities constitutes approximately

8.9% of the South African business

and finance sector and a further

18.8% related to private

property management

(real estate) activities.

projected value of approximately R 71 billion.

The composition of the national business and

finance sector is presented below, which will

be applied to the respective local economies

to enable estimates regarding the value of the

particular private property sectors.

From Figure 3.6 it is evident that the professional

services component of commercial private

property construction namely architectural,

engineering and other technical activities

encompasses approximately 8.9% of the

national business and finance sector.

In addition, roughly 18.8% of the business

and finance sector consist of the relevant real

estate activities identified in Diagram 2.3 that

is applicable to commercial private property

management industries.

3.3 Value in terms of Gross Domestic Product (GDP)

The value of the commercial private property

sector in terms of GDP output is measured by

applying the above-referenced national GDP

distribution to the Western Cape and City of

Cape Town GDP outputs of 2013. It is assumed

that the composition of the relevant sectors

within the provincial and local economies are

in accordance with the national economy.



21

Table 3.4

Gross Domestic Product of the


Sector: 2013

Source: Calculations based on

Quantec EasyData: Standardised

Regional and Statistics South

Africa data, 2010/2011/2014

Table 3.4 provides the resultant calculated GDP

output of the commercial private property sector.

The provincial private property sector consists

of roughly R31.3 billion and R24.3 billion on

municipal level.

3.4 Value in terms of Sustained Jobs

The number of jobs sustained by the

construction and management of commercial

private property is derived from the national

employment distribution per major activity,

which is applied to the total employment of

the relevant regions.

It is therefore assumed that the distribution

of employment in the relevant sectors within

the provincial and local economies are in

accordance with the composition of the

national employment market.

Table 3.5 presents the value in terms of jobs

sustained by the private property sector within

the Western Cape and the City of Cape Town.

Main Sector Sub-Sector Major Activities

2013 GDP Value (Rands millions)

Western CapeCity of Cape Town MM

Construction sector

Construction activities

Site preparation 377.25 252.62

Construction sector


Building of complete constructions or parts thereof (excluding civil engineering)

3 676.62 2 462.01

Construction sector


Building installation 1 737.17 1 163.27

Construction sector


Building completion 760.02 508.94

Construction sector


Renting of construction or demolition equipment with operators

437.88 293.22

Business and finance sector

Other business activities

Architectural, engineering and other technical activities

7 822.94 6 323.49


Real estate activities

Real estate activities with owned or leased properties and on a fee or contract basis

16 502.63 13 339.51

Total commercial private property construction 14 811.89 11 003.55

Total commercial private property management 16 502.63 13 339.51

Total commercial private property sector 31 314.52 24 343.06

Share of total economy 10.7% 11.3%

CO

NST

RUC

TIO

NM

AN

AG

EMEN

T



22


2013 Employment (Persons)


Construction sector


Site preparation 5 081 2 972

Construction sector



42 384 24 794

Construction sector


Building installation 43 164 25 251

Construction sector


Building completion 24 424 14 288

Construction sector



13 153 7 694




12 807 11 388




14 384 12 789

Total commercial private property construction 141 013 86 387

Total commercial private property management 14 384 12 789

Total commercial private property sector 155 396 99 177


CO

NST

RUC

TIO

NM

AN

AG

EMEN

T

Table 3.5

Employment of the


Sector: 2013




Africa data, 2010/2011/2014

Private property management

sustains nearly 14 400 jobs

within the Western Cape

Province in addition to the 141

00 employment opportunities

sustained by property

construction activities.

The commercial private property sector

employs approximately 155 400 Western

Cape residents accounting for 8.4% of all jobs

within the province. In the City of Cape Town

approximately 99 200 people are employed

within the commercial private property sector.

3.5 Value in terms of Tax Revenue Generated

Tax revenue generated on production activities

related to the commercial private property

sector illustrates the contribution made to state

revenue by this sector.

Tax revenue is a function of income generated.

The revenue gained from tax is therefore

estimated by calculating the national

proportion of production for each relevant

activity and equating it to total tax received

by the construction and business and finance

sectors of the Western Cape and the City of

Cape Town economies in 2013.

This calculation is anchored in the assumption

that the GDP composition of the relevant



23

sectors within the provincial and local

economies are in accordance with the national

economy, which in turn presents the level of

tax revenue generated by the South African

Revenue Service (SARS). Please note that the

tax calculations present tax income of SARS

and not the local municipal tax revenue.

Table 3.6 presents the tax revenue calculations

for the Western Cape Province and City of

Cape Town Metropolitan Municipality.

The private property sector contributes

approximately 15.8% of tax revenue

generated within the provincial economy

(R1.1 billion). The local private property

sector contributes 16.6% of all tax revenue

generated within the Metro, equating to

R890 million generated in 2013. It is clear

from Table 3.6 that the activities related to

private property management exhibit a higher

contribution to state revenue than private

property construction.


2013 Tax Value (Rands millions)


Construction sector


Site preparation 3.43 2.30

Construction sector



33.40 22.37

Construction sector


Building installation 15.78 10.57

Construction sector


Building completion 6.91 4.62

Construction sector



3.98 2.66




338.28 273.91




713.61 577.82

Total commercial private property construction 401.78 316.43

Total commercial private property management 713.61 577.82

Total commercial private property sector 1 115.39 894.25


CO

NST

RUC

TIO

NM

AN

AG

EMEN

T

Table 3.6

Tax Revenue generated by the


Sector: 2013




Africa data, 2010/2011/2014

Private property management

generated R700 million in 2013,

which is considerably higher than

the R400 million tax generated by

private construction activities.



24

Commercial private property construction performance is mainly derived from the

construction activities sub-sector comprising of 61% of the construction main sector,

with 8.9% of the business and finance main sector also represented in the form of

specialised services. The real estate activities of commercial private property management

highlights the business and finance sector as its main economic role-player, with 18.8% of the

main sector comprising of commercial private property management related activities.

Accordingly, the estimated economic value of the private property sector can be summarised

as follow:

• GDP - The private property sector contributes approximately R31.3 billion to the provincial

economy (10.7%), with construction encompassing R14.8 billion and property management

R16.5 billion. Approximately 11.3% (R24.3 billion) of the Cape Town MM economy

consists of private property sector activities of which R11.0 billion is attributed to property

construction and R13.3 billion to property management activities.

• Jobs sustained - The private property management sustains nearly 14 400 jobs within the

Western Cape Province in addition to the 141 000 employment opportunities maintained

by property construction activities. In the local economy approximately 86 400 jobs are

sustained by private property construction and 12 800 by private property management.

• Tax generated - Private property management generated R700 million in 2013, which is

considerably higher than the R400 million tax generated by private construction activities.

This is also seen in the local metropolitan economy in which private property management

contributed approximately R580 million in tax revenue in relation to R320 million generated

by private property construction.

It is clear from this analysis that the commercial private property sector currently contributes

significantly to the economy within the Western Cape Province. The local and provincial

contribution in terms of GDP and tax (to a lesser extent employment) are generally above-

average when considering an equal contribution from all sectors (11.11%), thus indicating that

the contribution by the private commercial property sector is in fact more significant than the

majority of the other sectors. It is therefore paramount to examine the effects that application

processes have on the private property sector, especially in terms of time management. The

‘lost’ economic value/benefits of the property sector due to delayed application processes are

measured via an application tracking process, which highlights the performance of the entities

handling applications.

Cambridge Online Dictionary, 2014, http://www.dictionary.cambridge.org.Dictionary.com, 2014, http://www.dictionary.com.Quantec Easydata, 2014, Standardised Regional statistical database.Statistics South Africa Publication, 2011, The Construction Industry.Statistics South Africa, 2010, Real estate, activities auxiliary to financial intermediation and business services industry.Statistics South Africa, 2012, Standard Industrial Classification of All Economic Activities (Seventh Edition).The Free Dictionary, 2014, http://www.thefreedictionary.com/.


REFERENCES



2525APPLICATION PROCESSING REPORT THE ROLE AND IMPACT of the

COMMERCIAL PROPERTY SECTOR

APPLICATION PROCESSING REPORT

WESTERN CAPE

2014

WEST COAST

CAPE KAROO

GARDEN ROUTE & LITTLE KAROOWINELANDS

OVERBERGCAPE

TOWN



26



Urban-Econ Development Economists was commissioned by the South African Property

Owners Association (SAPOA) to undertake an investigation of the private property

industry in the Western Cape Province, with special reference made to the City of Cape

Town Metro.

This report is the second component of the “The Role and Impact of the Commercial Property

Sector in the Western Cape” study. The first component contextualises the size and quantity

of the private property sector in the Western Cape to provide a foundation informing on the

prominence and importance of the industry and value it holds as a contributor to the Western

Cape economy. This report supplements the first by analysing development application case

studies as an influencing factor of new development and growth in the property industry

with special reference to application submissions at the City of Cape Town and Western Cape

Provincial Government.

The report should thus be viewed in relation to the first component as it aims to provide

a perspective on administrative processes, highlighting areas of concern and possible

improvement where required.

1.1 Study Area

The Western Cape is the most southern

province of the nine provinces situated in

the Republic of South Africa. It is located

in the south-western part of the country

and comprises of one metropolitan and five

district municipalities. The metropolitan area

is known as the City of Cape Town and the

five district municipalities are the West Coast,

the Central Karoo, Overberg, Eden and the

Cape Winelands regions (Map 1.1). The five

district municipalities are divided into 24 local

municipalities. The City of Cape Town (CoCT)

Metropolitan Municipality (MM) is home

to one of the major cities in South Africa. It

accommodates the majority of economic and

commercial activities in the province, with the

higher portion of the Western Cape population

residing within its borders. The City of Cape

Town MM is analysed as a representative case

study in combination with the province owing

to the fact that a large portion of the private

Map 1.1

Districts of the Western Cape





commercial developments are centred in the

City of Cape Town.

Map 1.2 illustrates the metropolitan focus area.

The study is envisioned to analyse the

commercial private property sector in the

Western Cape Province. The City of Cape

Town MM is the capital of the Western Cape

Province and the most active commercial

property market in the province. As a result

prominent economic contributors are centred

within Cape Town. It is therefore considered

to be the centre of major economic growth

and expansion within the province and an

important analysis area.


The general research approach describes the

basic methodology implemented to measure

the application administration tempo1 of

the relevant departments within the City of

Cape Town MM and of the Western Cape

Provincial Government.

The private commercial property sector

comprises of various construction and

property management activities identified in

the Economic Value Report (component 1 of

the study). Various administration processes

are involved within the value chain of these

identified activities. It is impracticable to

measure administration efficiency within

the entire development cycle. This report

identifies the administration of development

applications such as building plans and

Land Use Management (LUM) applications

as the most important phase in the cycle in

the requirement for timeous management.

Administration of the relevant development

applications are handled in this report

considering that it is a municipal function

within the development cycle, which

influences the private commercial property

market in the province. Specific reference

is made to external processes involved with

development application administration such

as environmental, heritage and transport

impact assessments, however these processes

are not analysed in detail in this report.

Application processing proficiency is measured

by utilising two application tracking case

studies provided by the private and public

sector respectively, in addition to an overall

assessment of the municipal development

application database.

However, before the afore mentioned a brief

overview of the regulatory environment and

Map 1.2

Study Area


The study area comprises of the

Western Cape Province in its

entirety. The City of Cape Town

MM is highlighted as a prominent

economic role-player and the main

avenue for property development in

the province. The City of Cape Town

MM is analysed as a representative

case study in combination with the

province considering that a large

portion of the private commercial

developments are centred in the

City of Cape Town and the Metro

has a detailed database of

sample applications.

For the purpose of this report

only the timeframes relevant to

the processing of development

applications are analysed.

Development applications consists

of building plans and

LUM applications.

1 Administration tempo

refers to the speed in which

development applications

are finalised by the relevant

governing entity. This tempo

is measured by determining

the duration of administrative

processes of typical

development applications.




administration processes are given in order

to present the relevant governing entity

responsibilities, along with the general

timeframes prescribed for administration.

After a firm understanding of the regulations

and processes involved in building plan and

LUM application administration is formed,

the municipal benchmark for development

application over the past two years is

analysed to provide background in terms of

the total number of plans and applications

handled and finalised by the municipality. The

subsequent application tracking analyses of

sample applications provided by the public

and private sector are then employed to

identify delay factors as per the experience of

the private sector respondents on the one side

and the municipal respondents on the other.

The City of Cape Town Metro is responsible

for the administration of the majority of

the most prominent and economically

significant developments in the commercial

private property sector. Please note that the

analysis is mainly aimed at the City of Cape

Town MM to offer a basic representation

of the Western Cape Province considering

that regulatory entity responsibilities differ

and the prominence of development

applications handled by this governing entity.

Nonetheless, the private sector application

tracking case study includes samples received

for applications submitted to the Western

Cape Provincial Government.


The application processing report utilises

application tracking scenarios as instruments to

measure the turnaround times of development

applications in terms of timeframes prescribed

by the relevant regulatory entity.

It is important to take cognisance of the fact

that the report does not represent an audit

of all applications administered by the City of

Cape Town Metro and Western Cape Provincial

Government. It presents an evaluation of

application tracking case studies provided

by the public and private sectors in order to

identify and highlight the most frequent delay

factors and administrative blockages. The

report was compiled at a time of fundamental

change in national and provincial planning

legislation. It therefore seeks to identify

factors currently influencing the tempo of

development application administration

as well as recognising its relevance for the

transformed legislation.

Additionally, it is understood that “The Role

and Impact of the Commercial Property Sector

in the Western Cape” study will be utilised

to obtain valuable information regarding the

civic administration of property development

within the study area in order to quantify

the distinct role that the public sector plays

in property development, especially in terms

of timeframes. Through quantifying the

economic value of the sector and determining

estimated application processing timeframes,

the study provides the reader with insight

and an understanding on the level of impact

that the tempo of development application

administration has on the provincial economy

according to his/her own deductions.

1.4 Limitations

Due to the qualitative and quantitative

investigation methodology a few limitations

were noted during the research process.

It is vital that the limitations are stated and

recognised in order to have a contextual

understanding of the results.

The basic limitations to the economic

quantification process are:

• Primary data sourced is typically reliant on

verbal explanations by different government

officials and private property professionals.

For the sake of fairness in analysis, all

detrimental remarks were excluded from

the research. The information captured

provides a multi-sided perspective with the

respondents widely consulted to provide

the most reliable representation possible.

The objective of the report is

to measure civic administration

timeframes in order to identify

factors influencing the processing

duration of development

applications.




• Primary data is also reliant on information

provided by representatives of the private

and public sector. Limited response among

local private property professionals were

noted mainly owing to capacity pressures.

•Due to the limited and unrepresentative

information, building plan finalisation

was omitted from the private sector case

study analysis.

•Additionally it should be acknowledged

that the public sector was more willing

to assist and provided the required

information promptly. It is clear that the

governing entities exhibit dedication from

their side to promote transparency and

access to information, especially during

this research campaign.

•Applications are not all identically

comparable and each application

has a unique spatial component,

timeframe, activity, and process.

Informed generalisations were used to

make applications more comparable

by sorting them according to basic

representative features.

• The negative cases are anticipated to

be the main submission of the private

sector. Therefore, the private sector

survey sample may illustrate a worst-

case scenario in terms of time taken to

finalise applications.

• The manner and format in which the

municipal statistics are captured does not

allow the tracking of the exact processing

time per application for the entire

database; therefore specific high value

development projects of R5 million or

more were identified and traced in detail

to act as a representative sample.

• The report was compiled at a time of

fundamental change in national and

provincial planning legislation with

the recent introduction of the Spatial

Planning and Land Use Act and ongoing

formulation of the Western Cape Land Use

Planning Act. All applications tracked were

historically submitted under the current,

soon to be replaced, legislation. However,

the application tracking campaign still

has research value considering that the

findings will be presented according to its

relevance for future legislation.

Please note that the limitations are addressed

via the provision of a wide variety of case

studies and ground level audits. The limitations

are thus mitigated to not affect the results of

the report in any negative manner.

1.5 Report Outline

The report outlines a development application

processing tempo as identified in various

benchmark and application tracking analyses.

It illustrates the administration efficiency on

the basis of the general guidelines provided

in national and provincial legislation to

ultimately identify factors influencing the

processing tempo.

The remainder of the report will be structured

under the following sections:

Section Two: The Regulatory Environment

The regulatory environment in which

development application operates is

defined and planned future transformations

in legislation are discussed in order

to provide background to the type of

development applications and its relevant

administration processes.

Section Three: Application

Administration Processes

Breakdown of the development application

administration processes and identification

of timeframes prescribed by the

regulatory entities.

Section Four: Application

Administration Benchmark

Overview of the application processing

efficiency of the City of Cape Town MM

in terms of building plan approvals and

land use application finalisation during a

two-year analysis period ranging from the

third quarter of 2011 to the third quarter

of 2013.




Section Five: Municipal Application

Tracking Case Study

Primary analysis of high value (R5 million +)

development applications as provided by

the relevant governing entity.

Section Six: Private Sector Application

Case Study

Primary analysis of development applications

submitted to the relevant governing entities

by the private sector.

Section Seven: The Application

Processing Report in Brief

Summary of the findings of the afore-

mentioned analyses in order to assist in the

formulation of recommendations regarding

ways to improve application management

proficiency of the public sector.




SECTION TWO: THE REGULATORY ENVIRONMENT

It is important to understand the regulatory environment in which development applications

are submitted, prior to the detailed analysis and tracking of applications submitted to the

Provincial and Metropolitan Municipalities.

As previously mentioned, the report was compiled at a time of fundamental change in national

and provincial planning legislation. It is therefore vital to understand that this section summarises

the current planning legislation as well as the recent and proposed transformations. ‘Current’

legislation refers to the governing documents under, which the historical sample applications

were tracked. Future/transformed legislation refers to policies and acts, which are currently in

the process of being introduced or were introduced in 2013. Due to the recent implementation,

no representative sample of development applications are available at this time.

The section outline, illustrated in Diagram 2.1, therefore firstly consists of a basic overview of

the current regulations which guides municipal decision making with respect to the sample

case studies and informs approval processes given below. Followed by an explanation of the

responsibilities of each regulatory entity and new transformations in the planning legislation

relevant to the Western Cape Province and all applications submitted from 2013 going forward.

Diagram 2.1

Section Two Outline

2 Source: Department of

Rural Development and

Land Reform, Overview

of Legislation and Existing

Classification Effort, 2012

2.1 Current Regulatory Background

The National Department of Rural

Development and Land Reform2 identifies

the following key regulatory documents that

govern municipal decision-making in terms of

building standards and land use planning in

South Africa:

National level:

•Constitution of RSA No 108 of 1996: the

primary role being the assigning of municipal

planning responsibility to municipalities.

•Municipal Systems Act (MSA) No 32

of 2000: setting out in Chapter 2 the

requirement, among others, for newly

elected municipal councils to prepare

and adopt an Integrated Development

Plan (IDP) for their respective areas

and to provide for annual revision

thereof. The IDP is required in terms of

the act to include a Spatial Development

Framework (SDF), which must include the

provision of basic guidelines for a land use

system in the municipality.

• National Building Regulations and

Building Standards Act No 103 of 1977:

solely implemented for the purpose of building

control, prescribing building standards and

other related matters. All proposed building

plans should be submitted in line with

this Act.

• Less Formal Township Establishment

Act No 113 of 1991: this act provides for

shortened procedures for the establishment

of townships, for less formal forms of

residential settlements and to regulate

the use of land by tribal communities for

communal forms of residential settlements.




Provincial level:

• Planning Acts and Ordinances in the

provinces: the majority of legislation

directly controlling planning in the nine

provinces are still pre-1994 legislation

enacted by the original four provinces of

South Africa and they are all also generally

unconstitutional in some or other aspect.

The local planning ordinance (Western

Cape Land Use Planning Ordinance) is one

example of pre-1994 legislation, which

has undergone numerous amendments

following new legal presidents set in

various court cases. The Habitat Council

and other vs the Western Cape Provincial

Government is the most prominent of

these cases and the implications thereof

will be handled in Section 3.1.1 and 3.3.

Auxiliary regulatory documents affecting

property development in the national

environment includes:

•National Environmental Management

Act (NEMA) No 107 of 19983: NEMA is

environmental framework legislation, which

provides for environmental management.

The Act aims to provide for cooperative

environmental governance by establishing

principles for decision-making on matters

affecting the environment, institutions that

will promote cooperative governance and

procedures for coordinating environmental

functions exercised by organs of state;

and to provide for matters connected

therewith. Other specific environmental

management Acts were promulgated

to deal with specific mediums of the

environment. Various amendments to the

Act ensure that it remains relevant.

•National Heritage Resources Act

(NHRA) No 25 of 19994: NHRA aims to

introduce an integrated, three-tier system

for the identification, assessment and

management of the national estate. That

will operate on a national, provincial and

local level. The legislation also makes

provision for a grading system for the

evaluation of heritage resources on three

levels, which broadly coincide with their

national, provincial and local significance.

Please note:

• The Development Facilitation Act No 67

of 1995 (DFA) is no longer considered to

be relevant governing documentation

considering that a section of this legislation

have been declared unconstitutional by

the Constitutional Court as it usurped the

decision-making powers of municipalities

and is required to be repealed or amended

by June 2012. Despite sections of the

Act being declared unconstitutional by

the court, its General Principles for Land

Development as contained in Chapter 1,

Section 3 of the act, are still deemed valid.

• The national Spatial Planning and Land

Use Management Act (SPLUMA), and the

Provincial Land Use Planning Act (LUPA)

are regarded as recent transformations

in planning legislation and are discussed

under Section 3.3.

The overall purpose of the presented Acts

is to ensure that municipalities develop

their land use planning processes, and

approval of such applications in line with the

national development goals and strategies.

It is therefore important to note that all

development applications submitted to the

local governing entities should be aligned with

the national policies (some of which might not

be mentioned above).

This sub-section briefly discusses the main policies

and guidelines relevant to private property

development and all development applications

submitted before the instatement of the LUPA

within the Western Cape Province, with specific

reference to the City of Cape Town Metro.

These regulatory documents include:

•Western Cape Land Use Planning

Ordinance (LUPO), 1985 (Ordinance 15

of 1985).

•Cape Town Spatial Development

Framework (CTSDF).

•Cape Town Zoning Scheme (CTZS).

3 Source: South Africa

National Environmental

Management Act –

Legislation and Environmental

Acts, http://www.

environment.co.za, 2014

4 Source: Construction

Industry Development

Board, Overview of National

Heritage Resources Act, 2005



33APPLICATION PROCESSING REPORT 33

5 Source: Derived from

http://www.investopedia.

com, http://www.dictionary.

cambridge.org and http://

www.dictionary.com

6 Source: City of Cape Town

Integrated Development Plan

Draft, Five Year Plan for Cape

Town, 2012 – 2017




Town, 2012 – 2017

2.1.1 Western Cape Land Use Planning Ordinance (LUPO)A Land Use Planning Ordinance can be

defined as an authoritative rule prescribed

to guide the development of land passed

by a legislative body, enacted by a city or

provincial government.5

The Western Cape Land Use Planning Ordinance

(LUPO), 1985 (Ordinance 15 of 1985) is the

most important legislative policy governing

land use development within the Western

Cape Province. The LUPO provides a set of

written regulations and laws that define how

property in the Western Cape Province may

be used. The ordinance therefore constitutes

a legal framework for land use within the

province as it facilitates the formulation and

implementation of municipal structure plans

and zoning schemes. The LUPO describes the

procedures for handling land use applications

submitted (such as rezoning and sub-division

of land etc.) to the relevant municipal entity in

terms of general provisions and the planning

advisory board.

One of the most important aspects currently

covered by the ordinance is the process of appeal,

which allows the movement to appeal a decision

made by the MM in front of the provincially

assembled committee. However, the Western

Cape Province and City of Cape Town Metro are

currently in the process of revising the LUPO and

replacing it with the proposed Western Cape

Land Use Planning Act/Bill (LUPA), which may

disband the current appeal process, following the

Habitat Council and other vs. the Western Cape

Provincial Government court case.

The Habitat Council and other vs. the Western

Cape Provincial Government court case had the

most prominent impact on the review of the

LUPO and introduction of the LUPA. In August

2013 the Western Cape High Court ruled that

the LUPO is unconstitutional in the way that it

governs the appeal process. As a result, appeals

will now fall within the competency of the City

of Cape Town MM under the new LUPA. Please

note that the LUPA will be handled in detail in

Section 3.3.

2.1.2 Cape Town Spatial Development Framework (CTSDF)As previously mentioned the Municipal Systems

Act No 32 of 2000 mandates the Cape Town

Integrated Development Plan (CTIDP) to

provide strategic framework guiding future

economic and spatial development within

the municipality over the course of a political

term. It should therefore be revised every five

years and includes a Spatial Development

Framework (SDF) to steer spatial planning

projects encompassed by the IDP.

According to the 2012-2017 IDP, the Cape

Town Spatial Development Framework

(CTSDF) guides the spatial form and structure

of Cape Town in the future. In effect, providing

a long-term (20+-year) plan to manage new

growth and change in Cape Town.6

The CTSDF indicates the areas most suited

for urban development in contrast to areas

that should be protected (or areas of sensitive

management) while offering a clear guide for

sustainable private and public investment.

According to the IDP, the CTSDF will be

utilised in the future to assess applications

submitted by property developers and guide

changes in land use rights. All land use

planning applications should be in line with

the local SDF. However, the CTSDF does not

grant or take away zoning rights.

The main objective of the CTSDF is to

synchronise spatial and infrastructure planning

for the way forward in order to ensure the

sustainable development of the City of Cape

Town. Ultimately, to realise the vision, goals and

objectives set out in the municipal Integrated

Development Plan.

“For the City to meet the commitments outlined

in the CTSDF and sector-based policies, all plans

and budgets need to be aligned in the IDP.” 7

2.1.3 Cape Town Zoning Scheme (CTZS)“A zoning scheme is a legal document that

records all land use rights on properties in

its area of jurisdiction. It includes regulations



34

and restrictions on such rights and how they

can be exercised. All municipalities have such

a scheme, and they usually serve to manage

urban growth and development, as well as

conserve the natural and cultural environment

within their area of jurisdiction.” 8

According to the CTZS regulations9, the

scheme consists of zoning regulations, zoning

map(s) and a register or record of all approved

departures, consent uses and conditions.

The City of Cape Town MM recently

collapsed 27 area-specific zoning schemes

into one integrated zoning scheme. The

Integrated Zoning Scheme is mainly utilised

to determine land use rights and to provide

for control over use rights and over the

utilisation of land in the area of jurisdiction

of the City of Cape Town.

2.2 Current Regulatory Entity Responsibilities

This sub-section presents the regulatory entity

responsibilities as at the time of the application

tracking survey. Therefore, the responsibilities

listed below form the foundation for the

application tracking process and do not consider

any recent transformations in planning legislation.

It is firstly important to state that the Western

Cape Provincial and City of Cape Town

Metropolitan Municipalities operate in the

capacity of equal spheres of government

for the administration of local development

applications. Each entity has specific

responsibilities in terms of processing different

types of applications. The City of Cape Town

MM is currently responsible for the processing

of building plans and basic LUPO applications

with the Western Cape Department of

Environmental Affairs and Development

Planning (DEADP) handling applications

submitted under more specialised legislation

and LUPO appeals.

The applications and appeals submitted to the

City of Cape Town Metropolitan Municipality

for Land Use Management can be summarised

as, in no particular order10:

• Site Development Plan

LUM Applications:

submitted to obtain approval for the

proposed form and layout of envisaged

development on a property in order to

accelerate building plans approval.

•Consent Use LUM Applications:

submitted to obtain special consent from

local authority to utilise land outside

its primary use as stated in zoning

scheme regulations.

•Rezoning LUM Applications:

submitted to change the primary zoning

classification prescribing the admissible land

uses of a property in the relevant zoning

scheme regulations in order to allow new

permitted land uses for the property.

• Subdivision LUM Applications:

submitted to allow the division of one or

more properties into smaller units with

separate title deeds for each in order to

enable the transfer of land.

• Temporary and Permanent Departure

LUM Applications:

submitted to permit the permanent or

temporary departure from provisions of the

zoning scheme regulations applicable to a

specific property.

•Amendment of Conditions LUM

Applications:

submitted to change certain conditions

of use as prescribed by the conditions of

establishment document coupled to the

title deed of a specific property.

•Building Plan Applications:

submitted to permit the new construction

or reconstruction of buildings in order

to comply with minimum construction

standards and specifications, specified in

the relevant national legislation.

•Municipal Systems Act Appeals:

an internal appeal lodged against any of

the conditions imposed by a decision or

the decision itself. Decisions granted by

un-delegated powers can be appealed

to the City Manager while delegated

decisions can be appealed to the Planning


Municipal Website,

http://www.capetown.gov.

za/en/Planningportal/Pages/

Zoningscheme.aspx, 2014

9 Source: City of Cape

Town Zoning Scheme

Regulations, A Component

of the Policy-Driven Land Use

Management System, 2012


Town Zoning Scheme





Town Zoning Scheme








11 The City of Cape Town

competencies were identified

via interviews with the

municipal officials and

documentation from the

municipal website

(www.capetown.gov.za).

and General Appeals Committee. Once the

Municipal Systems Act appeal is resolved, it

becomes the final decision of Council.

The competence of the Western Cape

Provincial Government in terms of type of

applications processed can be summarised as,

in no particular order11:

•Removal of Restrictions and

Relaxation of Title Deed Conditions -

Act 84 of 1967:

submitted to remove restrictive conditions

in terms of permitted land uses and

development, as stipulated on the title

deed of a property.

• LUPO Appeals - Ordinance 15 of 1985:

submitted to request a revaluation of a

decision given on a LUPO application by

the Metropolitan Municipality. Appeals on

all LUPO applications may be lodged by

land-owners as well as objectors with un-

delegated rezoning applications (such as in

the case when public open space is involved)

and regulation appeals of applications with

delayed decision (in excess of 210 days)

also referred to the Provincial Government.

As previously mentioned, LUPO appeals are

likely to become a Metropolitan Municipal

function with the introduction of LUPA

as an implication of the Habitat Council

and other vs. the Western Cape Provincial

Government court case.

• Less Formal Township Establishment

(LFTEA) Applications - Act 113 of 1991:

specialised applications submitted for

the establishment of townships and

regulation of land use for less formal forms

of residential settlement such as tribal/

community land as propagated under the

Less Formal Township Establishment Act

(Act 113 of 1991). Please note that LFTEA

is repealed by SPLUMA and will therefore

have little to no impact in the near future.

Section Three offers an overview of the generic

processes involved with the identified applications

following the Regulatory Environment.

2.2.1 Interaction between the City of Cape Town Metro and Provincial GovernmentAs previously mentioned, the City of Cape Town

MM and Western Cape DEADP currently operates

in the capacity of equal spheres of government,

with each entity responsible for processing

different types of development applications.

Diagram 2.2 summarises the relationship of

the governing bodies.

The application tracking case

study was conducted according

to the identified type of

applications above.

Diagram 2.2

Interaction between the

City of Cape Town and

Western Cape



36

The City of Cape Town MM processes building

plan approvals and LUPO applications, with

the interaction from the MM with Provincial

Government only recorded when appeals

are lodged against these application results.

The DEADP manages LFTEA and Removal of

Restrictions applications. The City of Cape

Town MM assists in the collection of Removal

of Restriction applications.

2.3 Recent and Planned Transformation in Regulations

Recent and planned transformations in

legislation within the land use planning

environment affects the way property

development is governed and therefore

influences property developers operating

within the private sector.

Noteworthy changes include:

• The amendment of national and provincial

administration with the signing into law

of SPLUMA and alignment of the Western

Cape LUPA with national legislation.

• The transformation of local spatial planning

processes and management of land.

2.3.1 Spatial Planning and Land Use Management Act (SPLUMA)SPLUMA was introduced in the National

Assembly in June of 2012 and approved in

February 2013. In August 2013, President Jacob

Zuma signed it into law to provide a uniform

and comprehensive system of spatial planning

and land use management in South Africa.

The spatial planning system, as defined in

the Spatial Planning Land Use Management

Act, should integrate spatial development

frameworks, development principles, land

use facilitation and processes of land

development applications.

The objective of SPLUMA according to

the proposed Spatial Planning and Land Use

Management Bill (2012): “1) To provide a

framework for spatial planning and land use

management in the Republic; 2) to specify the

relationship between the spatial planning and

the land use management system and other

kinds of planning; 3) to provide for the inclusive,

developmental, equitable and efficient spatial

planning at the different spheres of government;

4) to provide a framework for the monitoring,

coordination and review of the spatial planning

and land use management system; 5) to provide

a framework for policies, principles, norms and

standards for spatial development planning

and land use management; 6) to address

past spatial and regulatory imbalances; 7) to

promote greater consistency and uniformity in

the application procedures and decision-making

by authorities responsible for land use decisions

and development applications; 8) to provide for

the establishment, functions and operations of

Municipal Planning Tribunals; 9) to provide for

the facilitation and enforcement of land use and

development measures; and 10) to provide for

matters connected therewith.” 12

The SPLUMA will therefore regulate all spatial

development within the national borders with

specific aim to:

• Promote sustainable agricultural

development.

• Prevent urban sprawl.

• Improve environmental management

instruments.

• Reduce the impact of economic

and environmental shocks via clever

management.

• Encourage good administration among

regulatory entities.

2.3.2 Western Cape Land Use Planning Act (LUPA)The proposed LUPA aims to produce a

modernised and efficient system of land use

planning facilitating sustainable development

in the Western Cape Province, as demanded

owing to the change in national legislation.

“The Land Use Planning Bill centres around

five objectives: 1) it establishes a firm link

between forward planning and development

management by requiring development

management decisions to be aligned with

spatial development frameworks; 2) it seeks

to clarify municipal and provincial roles in land

Under the planning legislation

utilised in the application tracking

case studies, interaction between

the Metro and province pertains

to LUPO appeals and Removal of

Restriction applications.

12 Source: Department of

Rural Development and

Land Reform, Spatial

Planning and Land

Use Management

Act, 2013





13 Source: Western Cape Land

Use Planning Bill, Explanatory

Memorandum, 2012




Town, 2012 – 2017

use planning; 3) it puts in place an ‘asymmetric’

planning system, which caters for various levels

of planning capabilities; 4) it seeks to find a way

to deal with objections against land use decisions

and disputes between levels of government;

and 5) the Bill seeks to rationalise the current

fragmented legislative framework and create

mechanisms for ‘one stop’ applications. It

consolidates the various land use control

instruments (such as rezoning, subdivision,

removal of restrictions etc.) into one provincial

menu of instruments that can be addressed in

one application to the municipality.” 13

The establishment of the LUPA follows the

decision received in the Habitat Council and other

vs. the Western Cape Provincial Government high

court case in August 2013. The proposed Bill

clearly establishes the relevant responsibilities of

governing entities. The Metro will be responsible

for adopting municipal regulatory documents

such as Spatial Development Frameworks and

regulating planning by-laws while delivering

decision on all land use applications in the

municipal area. The competence of the Western

Cape Provincial Government pertains to the

approval of Provincial and Regional Spatial

Development Frameworks in addition to

regulating, supporting and monitoring land

use planning activity within the province. It is

proposed that provincial government remains

responsible for processing land use applications,

in cooperation with the Metro that has a distinct

provincial dimension.

The most significant suggested alteration to the

LUPA from the LUPO is the exclusion of the right

to appeal municipal decisions to the provincial

government. A system of internal municipal

ordinance appeals are recommended, which will

have good or bad repercussions for local private

property developers. This should not be confused

with the current internal municipal system for

appeals received according to the MSA.

2.3.3 Proposed Improvements“The world is changing. As the global economy

shifts, the developing world is generating financial

forces with greater strength and frequency than

ever before. This has brought numerous changes

and challenges, and greatly accelerated the

processes of urbanisation… To capitalise on its

strengths and meet its challenges head-on, Cape

Town must position itself accordingly and unlock

its full potential.” 14

During a speech delivered by the Executive Mayor

of Cape Town during the 45th SAPOA annual

convention in May of 2013, reference was made

to proposed changes in the method of handling

private and public property development.

The majority of the proposed changes mainly

pertain to urban management and faster

processing of land use applications, aiming to

satisfy the local property developers’ need for

efficient and effective development processes.

Current reorganisation of the internal municipal

structure forms the basis for all transformation

within the local property development sector.

Ground-breaking initiatives such as electronic

submissions (‘e-submissions’) of planning and

building plan applications intend to ease the

application process by enabling the applicant

to self-track the progress of the application.

Furthermore, a one-user-interface is proposed,

which allows for easier tracking of the submitted

application by allowing the applicant to have one

point of communication within the municipality.

These initiatives ensure that municipal officials

are held to strict timeframes for their required

inputs or comments. Ultimately, guaranteeing

that the City will adhere to the overall timeframe

when processing specific land use applications

while promoting good governance within the

municipality. Especially in terms of private-public-

partnerships and other major development

projects within the Metro, which will be driven

by a personal investment facilitator to the

Executive Mayor. For instance, the waiving of

development contribution fees in priority areas,

such as Atlantis, provides the private property

developer with private-public-partnership and

new market entry opportunities.

Nonetheless, proposed improvements do

not only relate to changes in the application



38

process, planned changes in planning

legislation will also have a profound impact

on private property development. The recent

advancement of a new integrated zoning

scheme (CTZS) and planning by-law, collapsed

27 old and complicated zoning schemes into

one modernised scheme. The purpose of this is

to simplify land use planning across the entire

Metro by providing consistent regulations to

which each administrative region is held.

All proposed interventions are in line with an

eight-point implementation plan identified

by the City, which will be handled in the final

section of the report.

2.3.4 Changes in interaction between the City of Cape Town Metro and Provincial GovernmentThe transformation in legislation will alter

the entity responsibilities and ways in which

applications are handled. The role of the

Provincial Government will be lessened in

terms of application management. Diagram

2.3 presents the potential changes in

entity responsibilities should the proposed

transformation in legislation be approved; this

is likely to take place in middle 2014.

Under the proposed LUPA, all applications

will become municipal functions with internal

appeals and municipal processing of Removal of

Restrictions applications instated. The Provincial

Government will play the role of mentor rather

than primary application processor.

2.3.5 Results of Transformation in Legislation and OperationsMajor results of the transformation in planning

legislation and operations encompass various

advantages to local private property developers:

•Well-defined application processes

promoting transparency in processing of

land use planning applications by

the municipality.

• Promotion of good governance.

- Municipality has greater capacity to

address maladministration and ineffective

management among underperforming

departments and its staff.

- Municipality has greater capacity to

address maladministration and ineffective

Diagram 2.3

Changed interaction between

the City of Cape Town and

Western Cape

Recent transformations in planning

legislation result in lower levels of

interaction between the Metro and

province, especially in terms of the

LUPO appeals, which is becoming

a function of the City.





management among underperforming

departments and its staff.

• Consistency in planning by-laws and

regulations help to minimalise confusion

among local property developers and

professionals.

• Fast-tracking of prioritised developments.

• The elimination of long appeal processes.

However, potential pitfalls include:

• Internal appeals may lead to unfair

and biased decisions on behalf of the

municipality.

•Disputes should be settled in court, which

may result in inflated legal cost.

• Fast-tracking of major development

projects at the expense of smaller

planned developments.

2.4 The Regulatory Environment in Brief

Regulations and standards are vital for the

sustainable development of any geographic

region, especially large metropolitan areas. It

promotes fair governance to ensure that the

full potential of the city structure is unlocked

by endorsing optimal integration of land

uses. The major documents regulating spatial

development in South Africa include:

•Constitution of RSA No 108 of 1996.

•Municipal Systems Act No 32 of 2000.

•National Building Regulations and

Building Standards Act 103 of 1977.

• Spatial Land Use Management Act of

2013.

Provincial planning acts and ordinances regulate

development in various provinces with the

Western Cape Land- Use Planning Ordinance

(LUPO) 1985 (Ordinance 15 of 1985); Cape Town

Spatial Develop Framework (CTSDF); and the

Cape Town Zoning Scheme (CTZS), which are the

most important strategic documents governing

land use planning in the Western Cape Province.

The responsibilities of the City of Cape Town

Metropolitan Municipality pertain to processing

of basic LUPO applications. The competence of

the Western Cape Department of Environmental

Affairs and Development Planning concerns

the handling of applications submitted

under more specialised legislation and LUPO

appeals. However, noted changes in the

national, provincial and local land use planning

environment include the implementation of

SPLUMA, the LUPA and various local initiatives.

These planned advances may influence the

responsibilities of each entity in the near future,

especially in terms of LUPO appeals.

The eradication of lengthy external appeal

processes will be advantageous for local

property developers considering the resulting

fast-tracked development projects.



40

Applications are mainly submitted to permit the construction and change of land use of a

specific terrain to make it more suitable for the envisaged development, with opportunities

for appeal granted if it is believed that these applications are not handled according to

specific rules and regulations set out in national and provincial legislation.

It is of utmost significance to understand the processes involved in the predetermined type of

applications submitted to the relevant government entities. The generic development cycle is firstly

plotted to illustrate where the application submission process is situated in the cycle. This is followed

by summaries of the way in which all relevant applications are processed by the City of Cape Town

MM and Western Cape Provincial Government.

3.1 Generic Property Development Cycle

The generic development cycle consist of twelve

(12) major processes ranging from initial vision,

technical research, conceptual design, physical

construction and property management. Please

note that the cycle listed only presents the typical

processes involved with property development

in theory. The property development cycle does

not always follow the exact processes illustrated.

Diagram 3.1 on the following page presents the

generic development cycle in which the focus

area of this report is highlighted, namely land

use management approvals.

From the diagram above it is clear that the LUM

application process starts after viability studies

and financial planning have been completed.

Diagram 3.2 illustrates the various components

of the generic LUM process. The role of

supplementary studies such as environmental,

heritage and traffic impact assessments should

be noted. Diagram 3.2 clearly illustrates that

the LUM applications are typically submitted

after pre-consultations with municipal officials.

Supplementary analysis such as environmental,

heritage or traffic impact assessments may

Diagram 3.1

Generic Phases in

Property Development

This report only analyses the

administration and processes

involved with development

applications, which consist of

LUM and building plans.

SECTION THREE: APPLICATION ADMINISTRATION PROCESSES





Diagram 3.2

Generic Development Cycle

External processes coupled to

supplementary research such

as environment, heritage, traffic

and market studies may have an

impact on the tempo at which

LUM applications are administered

when considering that it falls

within the generic LUM application

and building plan process.

be requested during the LUM application

process, which might extend the timeframe of

such applications. Building plans can only be

submitted once final approval of the proposed

LUM application has been granted.

The way in which all relevant applications

are processed by the City of Cape Town MM

and Western Cape Provincial Government are

analysed in the following sub-sections.

3.2 City of Cape Town Metropolitan Municipality

The competence of the City of Cape Town

MM concerns the processing of LUPO

applications and approval of building plans

by the Planning and Building Development

Management (PBDM) Department.

3.2.1 Land Use Management (LUM) Applications Diagram 3.3 illustrates the generic process15

for typical applications submitted under the

Western Cape LUPO and CTZS.

During interviews with city officials operating

in the Development Processes and Policies

Department of the PBDM average timeframes

of 120 days (four months) for delegated and

210 days (seven months) for un-delegated LUPO

application decisions were established.

The generic LUPO application approval process

can be summarised as follows:

1. Initial submission: applicant submits

application to the LUM Department and

a Planning Official captures it on the

15 All processes and

timeframes are sourced

from the City of Cape Town

Municipal website in addition

to interviews with municipal

officials. Please note that all

timeframes expressed in this

document presents the typical

time it takes municipal officials

to administrate the relevant

applications. Timeframes

are dependent on complete

applications.



42

Planning Module in order to generate a

tax invoice. After payment, the Planning

Official evaluates the completeness of the

application and informs the applicant if

additional information is required within 14

days of submission.

2. Scrutiny and Circulation: the application is

circulated among the relevant departments

for comments. Planning Officials evaluate

the application and starts compiling a

recommendation report in which the

decision of the council is represented

(approval/refusal). If delegated, the council

can adjudge the application to be compliant

or uncompliant. If un-delegated, the matter

is referred to a sub-council for decision.

3. Advertising: when all information is

captured, the Planning Official determines if

advertisement should commence. If required,

the application needs to be advertised in the

form of published press releases and site

notices for at least 30 days.

4. Objections: the City allows internal and

external objections on the advertised

application. The applicant has 60 days

to comment on objections, if applicable.

Applicant may also request a 30 day

extension period to comment on objections.

The Planning Official acts accordingly and

captures the findings of the objection period.

5. Council decision: decision is received

from council or sub-council and applicant

is notified. The right to appeal is also

emphasised to the applicant or objectors.

6. Appeals: appeals according to the MSA,

CTZS and LUPO may now be handled

by the council. The matter is referred

to the Western Cape DEADP if appeals

are received.

7. Final decision: final decision is given when

the appeals process has run its due course

and building plans may be submitted.

3.2.2 Building Plan ApplicationsDiagram 3.4 presents the generic process16

adhered to for the approval of building plans.

According to the PBDM Department, the average

timeframe for building plan approval is between

30 to 60 days (one to two months) depending

on the size of the envisaged construction project.

Delegated LUPO applications

should be finalised within 120

days (four months) with decision

and un-delegated applications

expected within 210 days

(seven months).


timeframes are sourced

from the City of Cape Town

Municipal website in addition

to interviews with municipal




time it takes municipal officials

to administrate the relevant

applications. Timeframes

are dependent on

complete applications.

Diagram 3.3

Generic Land Use Planning

Ordinance Application Process

Source: City of Cape Town

Metropolitan Municipality, http://

www.capetown.gov.za and

interview with officials from the

Development Processes and

Policies Department, 2013





Diagram 3.4

Generic Building Plan

Application Process


Metropolitan Municipality,

http://www.capetown.gov.za

and interview with officials from

the Development Processes and

Policies Department, 2013

Building plan approval should take

between 30 (smaller than 500m2)

and 60 (larger than 500m2) days.

“In terms of the National Building Regulations

and Building Standard Act, the City has 30 days

to approve or refuse a building plan application

for buildings smaller than 500m2 and 60 days

for buildings larger than 500m2.” 17

The building plan approval process can be

summarised as follows:

1. Initial submission: applicant hands in

plan to a City clerk to assess the land use

requirement. If the land use requirement

is not met, the case is referred to the LUM

Department to obtain the correct land use

permissions.

2. Creation of record: when the land use

requirement is met, the clerk captures

important erf details and tax invoice for

payment of the plan submission. The plan

is then handed to an administrative official

who creates an income module record, once

payment has been received

3. Plan examination: the administrative

official circulates the proposed plan to

different internal departments and the plan

examiner who then examines the plan for

approval or rejection. If basic standards or

regulations are not met, the plan is returned

to the applicant for amendments.

4. Approval: the plan may be approved once it

is adjudged to be in line with all the required

standards and regulations (as stipulated in the

National Building Regulations and Building

Standards Act). An approved building plan

is captured within the Building Inspectors

Module followed by an inspection of the

construction by a City official. If all is in order

an occupancy certificate will be generated for

the building.

3.3 Department of Environmental Affairs and Development Planning – Western Cape Provincial Government

The Western Cape DEADP mainly administers

the LUPO appeal and Removal of Restrictions

applications under the current legislation

on, which the application tracking campaign

was based.

3.3.1 LUPO AppealsDiagram 3.5 shows the generic process18 for

the management of appeals lodged against

a decision made on a LUPO application.

LFTEA applications typically run the same

general course.

As a guide the average processing timeframe

for LUPO appeals range from 230 working days

(11 months) for a typical rezoning appeal to

300 working days (14 months) for other LUPO

applications. However, it is crucial to note that

this is only prescribed guidelines. Each appeal

has its own characteristics and vary in terms of



http://www.capetown.gov.za,

2013



44

level of difficulty, especially when strict objections

are involved.

The LUPO appeal process can be summarised as

follows:

1. Registration: appeal is received and registered

by the Western Cape Provincial Government.

An Administration Clerk is responsible for

registering the appeal application once it is

assigned to a case officer.

2. Obtain information from council: the

case officer requests all available information

from the City council. If no information is

received within 30 days, a reminder should

be sent to the involved parties.

3. Application verification: the case officer

verifies the advertisement of the appeal and

establishes if all processes enabling public

participation are in order.

4. Scrutiny and circulation: once the

application is verified, a recommendation

report can be created. The preliminary

recommendation report is circulated to

the Chief Town Planner, Chief Land Use

Management Regulator (CLUMR) and

Planning Advisory Board (PAB) for inputs,

after which the recommendation report draft

is finalised.

5. Circulation for endorsement: when the

draft recommendation report has been

finalised and all errors have been rectified,

the appeal is circulated to the Director,

Chief Director and Head of Department for

endorsement and additional comments.

6. Ministerial review: the complete

recommendation report is sent to the

Minister for evaluation. The Minister is

responsible for the final decision.

7. Final decision: the ministry refers the

application back to the department once

the final decision is made. The applicant is

notified of the final decision and the case

is closed.

3.3.2 Removal of Restrictions ApplicationDiagram 3.6 illustrates the generic Removal of

Restrictions application process19.

Diagram 3.5

Generic Land Use Planning

Ordinance Appeal Process

Source: Interviews with

officials from the Western

Cape of Environmental Affairs

and Development Planning

Department, 2013

The DEADP aims to process

all LUPO appeals and LFTEA

applications within 300 working

days (14 months). However, this

is only a guideline. Timeframes

are greatly dependant on the

complexity of the applications

and appeals.


timeframes are sourced from

interviews with government




time it takes government

officials to administrate

the relevant applications.

Timeframes are dependent on






Diagram 3.6

Generic Removal

of Restrictions

Application Process

Source: Interviews with

officials from the Western

Cape of Environmental Affairs

and Development Planning

Department, 2013

As a general guide, the Western

Cape DEADP attempts to finalise

Removal of Restriction applications

within 610 working days (two

years and four months).

Removal of Restrictions is a complex process of

interaction between the City of Cape Town MM

and Western Cape Provincial Government with

complicated advertising requirements. Generally

such applications can take up to 610 working

days (two years and four months).

The Removal of Restrictions application process

can be summarised as follows:

1. Registration: the application is received

and registered by the City Council and

Western Cape Provincial Government.

An Administration Clerk is responsible

for registering the application once it is

assigned to a case officer.

2. Application verification: the case officer

verifies if all the required documentation is

received and establishes if the process of

public participation can commence. Case

officer then drafts the first advertisement

and sends a letter to the Council

accompanying first advertisement and

locality plan with advertising instructions

and request for comments by the Council.

3. Advertisement: Council / Applicant is

responsible for advertising application in

accordance with advertising instructions

issued by DEADP.

4. Objections: the DEADP allows internal

and external objections on the advertised

application and requests the City to provide

information on any objections if received.

If objections are noted, the applicant is



46

allowed to present comments on the

relevant objections.

5. Scrutiny and circulation: once the

advertisements and objections are verified,

a recommendation report can be created.

The preliminary recommendation report

is circulated to the Chief Town Planner (if

objections are received); the Chief Land

Use Management Regulator (CLUMR) and

Planning Advisory Board (PAB) for inputs,

after which the recommendation report

draft is finalised.

6. Circulation for endorsement: when

the peer review has been finalised and all

errors have been rectified, the appeal is

circulated to the Director, Chief Director

and Head of Department for endorsement

and additional comments.

7. Ministerial review: the complete

recommendation report is sent to the

Minister for evaluation. The Minister is

responsible for the final decision.

8. Final advertisement: Case officer

drafts final advertisement to place in

the Government Gazette. Once the

advertisement is finalised it should be

sent to gazette printers along with the

necessary annexures. The advertisement

is then circulated to the title deeds office

for endorsement.

9. Final decision: once the title deed is

endorsed and returned to the Department,

the case officer must draft a final letter to

applicant informing him/her of the decision,

where after the case is closed.

3.4 The Application Administration Process in Brief

Development applications follows the viability

and financial planning phase of the generic

property development cycle. LUM applications

are typically submitted after pre-consultation

with municipal officials regarding the required

documentation and application where after it

runs its course within the municipal structure.

Building plans can only be submitted after LUM

approval is granted. Refer to Diagram 3.7 below

for a summary of the prescribed timeframes of

the various development applications along

with the governing entity responsible for

its administration.

• Western Cape Provincial Government • 600 Working days

• Western Cape Provincial Government • 230 - 300 Working days

• City of Cape Town MM • 30 - 60 Days

• City of Cape Town MM • 120 - 210 Days

LUPO Applications

Building Plans

Removal of Restrictions

LUPO Appeals

Diagram 3.7

Application Administration

Summary




47

SECTION FOUR: APPLICATION ADMINISTRATION BENCHMARK


Figure 4.1

<40m2 Building Plan

Finalisation Efficiency



Planning and Development

Management Department, 2014

Figure 4.2

<500m2 Building Plan






Please note that all the findings

stipulated in this efficiency

analysis were derived from

information provided by the City

of Cape Town MM Planning

and Development Management

Department. The analysis

is reliant on the data made

available by the public sector

and the presentation of such

data is influenced by the form

in which it is captured by the

relevant department.

This section offers the application administration benchmark measurement to serve as

background to the subsequent municipal and private sector application tracking case studies.

The administration benchmark analysis aims to highlight the application processing efficiency of

the City of Cape Town MM in terms of building plan approvals and land use application finalisation.

For the purpose of this investigation a two-year analysis period were utilised ranging from the first

quarter of 2012 to the fourth quarter of 2013.

4.1 Building Plans

The City distinguishes between three main types

of building plans in line with the prescribed

timeframes involved. Firstly the evaluation of

plans submitted for developments (mainly

alterations and additions) smaller than 40m2 with

a timeframe of 5 days, secondly 30 day building

plans for developments between 40m2 and

500m2, lastly building plans for developments

larger than 500m2 with a timeframe of 60 days.

Figure 4.1 illustrates the finalisation efficiency

ratio of minor work (<40m2) building plans by

presenting the total number of plans finalised in-

time as a function of the total number of relevant

building plans, which was finalised during the

specific analysis period.

The finalisation efficiency ratio clearly improved

over the analysis period with 91.0% of all minor

work building plans finalised in-time during the

final quarter of 2013.

Figure 4.2 illustrates the finalisation efficiency

ratio of smaller than 500m2 building plans.

According to the analysis illustrated above,

the recent number of in-time finalisations

per quarter have increased faster than

the increase noted in the total number of

finalisations. This results in an improvement

The CoCTMM records a high

in-time finalisation ratio with

regards to building plan

administration, especially in the

case of building plans for minor

works and smaller developments

(<500m2).



48

The efficiency ratio displayed

relates to the total number of

in-time finalised building plans

according to the building plan

finalisations of the relevant

year. The year of origin for the

finalised plans are not given

and accumulation of un-

finalised submissions should be

taken into consideration. The

municipal proficiency indicator is

therefore an indicator of timeous

processing according to the

definition of in-time finalisations

defined by the Metro.

Analysis indicate that

approximately1 700 building

plans submissions are still within

the administration system or

awaiting amendments from the

applicants.

in the municipal administration proficiency

with the most recent period (2013 Q4)

recording an efficiency ratio of 91.1%.

Figure 4.3 offers a similar analysis of building

plans submitted for developments larger

than 500m2.

500+ square metre building plan finalisation

ratios illustrates a more irregular trend than

its smaller counterparts. The efficiency ratio

varies between 62.1% and 86.8% during the

analysis period with the latter achieved during

the most recent interval (2013 Q4).

It is important to note that although the

City maintains a high efficiency benchmark

in terms of in-time finalisations, un-finalised

building plans is noted within the analysis

sample. Un-finalised building plans refer to

building plans submitted but not finalised.

Building plans of this nature may still be in the

process of being administrated or withdrawn

from the process.

Figure 4.4 presents the total number of

finalisations recorded during the analysis period

in relation to the total number of plans submitted

in this time.

The City received a total of approximately 53

800 building plans from 2012 Q1 to 2013 Q4

of which roughly 52 100 were finalised. This

relates to a gap of close to 1 700 un-finalised

plans (3.2% of all submissions). The CoCTMM

employs a figurative ‘processing pool’ approach

to explain this phenomenon, which is clarified in

Section 4.3.

4.2 Land Use Management (LUM) Applications

LUM applications are captured by the City

according to the relevant timeframe under which

it is administrated. This sub-section therefore

presents the LUM application management

efficiency according to delegated (four month)

and un-delegated (seven month) applications.

Figure 4.3

>500m2 Building Plan






Figure 4.4

Total Building Plan

Submissions versus

Finalisations









The efficiency ratio displayed

relates to the total number of

in-time finalised applications

according to the application

finalisations of the relevant

year. The year of origin for the

finalised applications are not

given and accumulation of

un-finalised submissions should

be taken in consideration. The

municipal proficiency indicator is

therefore an indicator of timeous

processing according to the

definition of in-time finalisations

defined by the Metro.

Figure 4.5

Four Month LUM Application


Source: Source: City of Cape

Town Metropolitan Municipality,



Figure 4.6

Seven Month LUM Application






Figure 4.7

Total LUM Application

Submissions versus

Finalisations





Figure 4.5 illustrates the delegated (four month)

applications according to in-time finalisations.

The Planning and Development Management

Department of CoCTMM maintains high levels

of administration efficiency with an average of

92.1% over the analysis period. The most recent

available statistics indicate that the City finalised

approximately 2 000 LUM applications in the final

quarter of 2013, of which roughly 1 900 were

finalised within the prescribed timeframe (94.5%).

The un-delegated (seven month) LUM

application finalisation ratio presents a vastly

different trend, as illustrated in Figure 4.6.

In contrast to the delegated applications, only

44.4% of the un-delegated applications were

finalised within the prescribed timeframe during

the analysis period.

Nonetheless, Figure 4.7 below illustrates a high

rate of overall finalisation of LUM applications.



50

The system utilised for application processing

during the benchmark analysis period is

summarised in the subsequent section to offer

an explanation of why un-finalised applications

exist, according to the CoCTMM.

4.3 Application Processing System

It is firstly important to understand the manner

in which applications were handled before the

inception of DAMS on 1 April 2014.

Building plan and LUM applications are received

and captured within a figurative processing

pool. During this time the application

administering process is initiated and proceeds.

All applications are retained within this ‘pool’

until they have been finalised. The management

of development applications therefore operated

in the same manner a dam operates in nature.

The inflow of water (applications in this case)

is held in the dam and gradually filters out the

exit (as the applications are completed and

finalised). The management system aimed to

keep the processing pool (‘dam’) as empty as

possible. It did however not take into account

how long the specific application is retained

within the processing pool.

Diagram 4.1 offer a basic visual representation of

the manner in which submissions are managed

during the benchmark analysis period.

4.3.1 Planned Improvement - The Development Application Management System (DAMS)20 The CoCTMM Planning and Building

Development Management Department has

spent the last two years developing a new

system named the Development Application

Management System (DAMS).

The DAMS is an integrated system that

links to the City’s Property Value Chain and

accounting system (SAP). The new system

makes provision for standardised processing

of Development Applications ensuring

visibility and transparency at every step of the

process. DAMS has recently been completed

and final implementation started on the

1 April 2014.

The key features of DAMS:

Electronic (digital) submission of building plans

and land use applications.

• Electronic circulation among

departments.

•Comments are made on documentation

and is sent back and received

electronically.

• The same interface as all other SAP

applications is used.

• Standardised business processes across all

eight district offices.

• Providing progress information and

allows the applicant to know at what

stage the application is in the process.

•A single customer record of transactions

and interactions.

• Streamlined, simplified and improved

counters.

• Every customer is identified using their

business partner number throughout any

interaction with the city.

•Allowance electronic payments (EFT).

Approximately 8.7% of all

submitted LUM applications are

currently un-finalised.

DAMS is utilised to capture and

manage all building plans and

applications received in order

to ensure optimal finalisation

efficiency for the City.

The system does not enable

the prioritisation of projects,

which is still in-progress past

the prescribed timeframe.

It is therefore likely that

the administration process

enabled fast processing of

straightforward submissions

with more technical submissions

remaining in the processing pool

for longer owing to the influence

of delay factors, especially in

terms of LUM applications.

Diagram 4.1

Application Processing







https://www.capetown.gov.

za/en/Planningportal/Pages/

Development-Application-

Management-System-(DAMS).

aspx





21 Please note that the

administration proficiency

ratios are listed according

to the preceding analysis. It

therefore presents the average

municipal efficiency of in-time

finalisations over the analysis

period (2011 Q3 to 2013 Q3).

4.4 The Application Administration Benchmark in Brief

The City of Cape Town MM Planning and

Development Management Department handled

close to 54 000 building plans and 20 000 LUM

applications between the first quarter of 2012 to

the fourth quarter of 2013.

The municipality maintains a high administration

proficiency21 of 52.0%, 81.9% and 74.3% in

terms of the finalisation of minor work building

plans(<40m2), smaller building plans (40m2

- 500m2) and delegated (four month) LUM

applications over the analysis period, respectively.

It records a lower success rate of 74.3% for

buildings plans larger than 500m2 and 44.4% for

un-delegated (seven month) LUM applications. In

total, approximately 3.2% of all building plans

and 8.7% of all LUM applications submitted

during the analysis period have been withdrawn

or in the process of finalisation.



52

The municipal application tracking case study provides a collection of findings pertaining to

administration efficiency of the CoCTMM by analysing a sample of development applications

for high value projects.

5.1 Purpose and Approach

The purpose of the application tracking case study

is to investigate the timeframe taken to make a

decision for relevant high value applications in

order to identify potential delays in application

processing. The municipal tracking case study

will ultimately determine and interpret the

administration proficiency of the CoCTMM, with

reference to significant development projects

acting as economic turnkeys in the local market.

For the purpose of this assessment, all building

plans and LUM applications for developments

above R5 million in value were requested

from the Metro and analysed accordingly. The

actual timeframes achieved to conclude the

applications are compared to the timeframes

as prescribed by provincial and national

legislation. The case study tracking campaign is

concluded with a brief overview of the factors

potentially influencing the administration

tempo of the municipality.

5.1.1 Case Study SummaryThe case study sample consists of 79 entries

in total of which 37 are building plans,

28 LUM applications and 13 combined

applications (comprising of building plans and

LUM applications.

All applications analysed were finalised by the

time of the analysis. No ongoing applications

were included in the case study.

5.2 Building Plan Case Study

Figure 5.1 presents the processing time in

relation to the maximum prescribed municipal

timeframe of the total building plan sample.

The building plan case study highlights that the

median processing timeframe for building plans

of high value (R5 million +) is approximately

170 days. This is 110 days more than the

maximum prescribed timeframe of 60 days.

Only 12% of the sample has been finalised

within time. It is therefore vital to assess the

reasons for delay as stated by the municipality.

Figure 5.4 on the following page presents the

main factors influencing the administration of

building plans in the respective sample.

From the responses captured from the

CoCTMM it is clear that the administration

From the municipal building plan

tracking case study it is clear

that the CoCTMM Planning

and Development Management

Department mainly struggles

with submissions that do

not meet the predetermined

requirements and slow

responses from the private

sector after non-compliance

have been communicated.22

Figure 5.1

Building Plan

Processing Timeframes

22 Please note that this is

statement is based on the

responses received from the

municipality regarding the

specific sample.

SECTION FIVE: MUNICIPAL APPLICATION TRACKING CASE STUDY





Figure 5.2

Building Plan Timeous Processing

Figure 5.3

Building Plan

Processing Time Median

Figure 5.4

Building Plans

Affected by Delay Factors

process is mainly halted by untimely responses

to amendment requests (40% of plans

affected), followed by incomplete (14%) and

uncompliant submissions (8%).

5.3 LUM Application Case Study

Figure 5.5 below summarises the high value

LUM application case study.

Of the 41 LUM applications captured, only

18 applications extended past the maximum

prescribed processing timeframe of 210 days.

However, four of these extended applications

took longer than 800 days to process resulting

in an increased processing time median of 173

days for the administration of high value LUM

applications, which is 37 days less than the

prescribed timeframe.

Approximately 37% of the sample applications

are affected by slow responses received from

the private sector following amendment

requests. Objections clearly impacts the

application administration process with 20%

of the sample subjected to this delay factor.



54

5.4 The Municipal Application Tracking Case Study in Brief

The municipal case study concludes that

approximately 56% of all high value LUM

applications submitted over the past two

years have been finalised in-time in contrast to

only 12% of the building plans. Out-of-time

plans and applications are mainly attributed

to slow response from the private sector to

amend requests on incomplete submissions.

In addition, LUM applications are generally

delayed owing to objections received.

According to the CoCTMM,

applications are mainly delayed

owing to amendment requests

and objections received. 23

23 Please note that this

statement is based on the

responses received from the

municipality regarding the

specific sample.

Figure 5.5

LUM Application

Processing Timeframes

Figure 5.6

LUM Application

Timeous Processing

Figure 5.7

LUM Application

Processing Time Median

Figure 5.8

LUM Applications

Affected by Delay Factors




55

SECTION SIX: PRIVATE SECTOR APPLICATION TRACKING CASE STUDY


Table 6.1

Case Study

Approach Description

Table 6.2

Scenario Application Summary

The private application tracking case study benchmarks the municipal performance

according to actual building plan and land use application submissions to the City of Cape

Town Metropolitan and Western Cape Provincial Municipalities. This case study follows

the municipal comparative in order to present the experience of the private sector in terms of

applications submitted to the respective regulatory entities.

6.1 Purpose and Approach

The purpose of the application tracking case study

is to investigate the timeframe taken to make

a decision for relevant applications in order to

identify potential delays in application processing.

The case study summarises the relevant

development processes, in terms of application

submissions, to ultimately determine and interpret

the administration proficiency of the governing

entities as experienced by the private sector.

The actual timeframe achieved to conclude the

applications are compared to the timeframes as

prescribed by provincial and national legislation.

Factors influencing the administration tempo

will be investigated accordingly. Because the

types of applications processed by the governing

entities vary for the purpose of a comparison, a

standard case scenario has been developed in

order to standardise the performance. The case

study plots the research findings according to

major type of developments and applications

handled by the various regulatory entities. Table

6.1 displays the main categories in which the

sample applications were grouped.

The first two categories cover standard

applications submitted to the City of Cape

Town MM, with the former encompassing

developments with a residential component

and the latter comprising of non-

residential developments. The third and fourth

categories analyse LUPO appeals and Removal of

Restriction applications submitted to the Western

Cape Provincial Government, respectively.

6.1.1 Case Study SummaryThe respondent sample consists of 129

applications of which the majority falls within

the first and second scenario. The third and

fourth scenario have a lower representation

in the survey campaign; this is in line with the

actual quantity of submissions considering that

much fewer applications are generally submitted

for this purpose. In addition it is also important

Type of Development/Application Description

1. Residential development applications. Residential development application submitted to the City of Cape Town MM

2. Non-residential development applications. Non-residential development applications submitted to the City of Cape Town MM

3. LUPO appeals. LUPO appeals submitted to the Western Cape Provincial Government

4. Removal of Restriction applications. Removal of Restriction applications submitted to the Western Cape Provincial Government

ScenarioNumber of

applicationsFinalised Ongoing

1. Residential development applications. 59 47.5% 52.5%

2. Non-residential development applications. 47 53.2% 46.8%

3. LUPO appeals. 8 50.0% 50.0%

4. Removal of Restriction applications. 15 26.7% 73.3%

Total 129 47.3% 52.7%

It should be noted that all

the findings stipulated in this

application tracking analysis

were derived from information

provided by the local property

professionals operating within

the private sector. The analysis is

reliant on the case studies made

available and private property

professionals tend to highlight

negative performance of the

public sector administration. A

factor of perception is therefore

involved within the application

tracking case study and should

be documented as a limitation to

the benchmark analysis.



56

to emphasise that the new planning legislation

in the province recommends that the typical

scenario 3 application become a function of

the CoCTMM and no longer falls within the

competency of the Western Cape DEADP. Table

6.2 offers a detailed summary of the respondent

database per survey scenario.

As previously stated, 129 applications are captured

in the application tracking survey. Approximately

53% of this sample consists of applications which

is still ongoing24 during the time of capture.

6.2 Scenario Findings

The private sector application tracking case study

gives an account of development applications

submitted to the City of Cape Town MM and

Western Cape Provincial Government, by means

of the aforementioned scenario approach. The

City of Cape Town MM is the main processor of

applications and acts as the first contact point for

development application submissions, with the

Provincial Government administering uncommon

and specialised development applications. In

order to facilitate a clear analysis and relevant

findings, the application tracking was structured

to mainly encompass applications submitted to

the MM, with a provincial representation of close

to 20% in terms of the sample applications.

6.2.1 Scenario 1: Residential Development ApplicationsResidential development applications generally

exist of LUPO applications to obtain permission

to utilise a specific portion of land for

residential (or partial residential) use. Typical

applications include rezoning from agricultural/

commercial land to allow the construction of

residential units, and subdivisions of residential

land to authorise the development of double

dwellings on, each with individual title deeds,

on one stand.

Figure 6.1 presents the processing time in relation

to the maximum prescribed municipal timeframe

of the total residential sample.

Scenario 1 comprise of 59 residential

applications of which 52.5% are still ongoing.

Approximately 44% of the sample has been

finalised in time or is still running within the

prescribed timeframe of 210 days (seven

months). According to the median processing

time, residential LUM applications are finalised

within 273 days, which is only a 63 day

extension on the prescribed timeframe for un-

delegated applications, as illustrated in Figure

6.3. Please note that the factors influencing

the administration tempo will be handled in

Section 6.3.

Please note that only land use

applications are analysed in the

application tracking analysis.

Land use applications have

greater potential to cause

time delays than building plan

approvals, considering that

adjudication of building plans

are expected within 60 days

in contrast to the prescribed

timeframe of 210 days for LUM

applications. No building plan

case studies were sourced due to

the lack of response from private

property professionals.

24 Ongoing applications are

applications with a decision

pending at the time of

capture. In other words

applications, which are

handled by the

municipalities. It should

be noted that ongoing

applications are likely

to extend past the current

timelines identified.

Figure 6.1

Scenario 1: Processing

Timeframes

Figure 6.2

Scenario 1: Timeous

Processing





6.2.2 Scenario 2: Non-Residential Development ApplicationsNon-residential developments include the

construction of commercial offices, retail

shops, tourist accommodation facilities (hotels,

guesthouses etc.), industrial lots and mixed-use

developments excluding a residential component.

Typical analysed applications mainly comprise

of requests for departures and consent use to

allow commercial uses in residential subzones

or tourist accommodation facilities on

residentially zoned property.

Figure 6.4 illustrates the processing time in

relation to the maximum prescribed municipal

timeframe of the total residential sample.

The second scenario sample consist of 47

non-residential LUM applications of which

approximately 47% are still ongoing.

Figure 6.5 shows that roughly 60% of the

respective scenario applications extended past

the maximum prescribed timeframe of 210

days. The typical non-residential application

Figure 6.3


Time Median

Figure 6.5

Scenario 2: Timeous

Processing

Figure 6.4


Timeframes

Figure 6.6


Time Median



58

within the sample, is finalised within 358

days, which relates to an extension period of

148 days.

Please note that the factors influencing the

administration tempo will be handled in

Section 6.3.

6.2.3 Scenario 3: LUPO AppealsAs previously stated, the Western Cape DEADP

currently handles slightly more complex types

of applications submitted under specialised

legislation, involving convoluted communication

procedures between different departments of

the provincial and metropolitan municipalities.

Hence, it should be mentioned that the proposed

guidelines present a timeframe directive only for

land use applications.

Typical LUPO appeals included in the sample

consist of objections raised mainly against

decisions adjudicated by the City of Cape Town

Municipality. The majority of the applications

are for the developments of mixed-use facilities.

Figure 6.7 illustrates the processing time of

individual sample applications in relation to the

maximum prescribe timeframe, which includes

the LUM application process.

This scenario sample comprise of eight LUPO

appeals, which were handled by the Western

Cape DEADP. Half of the LUPO appeals are

still running or have been finalised within the

prescribed time frame of 454 working days (300

workings days for the appeal and 154 working

days for the LUM application) according to the

captured private sector responses. Figure 6.9

illustrates that the typical LUPO appeal runs

for approximately 407 working days, which is

47 working days shorter than the prescribed

deadline. Please note that the factors

Figure 6.7


Timeframes

Figure 6.8

Scenario 3: Timeous

Processing

Figure 6.9


Time Median





Figure 6.10


Timeframes

Figure 6.11

Scenario 4: Timeous

Processing

Table 6.3

Private Sector Application

Tracking Scenario Findings

Figure 6.12


Time Median

influencing the administration tempo will be

handled in Section 6.3

6.2.4 Scenario 4: Removal of RestrictionsRemoval of Restriction applications processed

by the Western Cape Provincial Government

constitutes roughly 12% of the total sample case

studies. The representative Removal of Restriction

applications are submitted mainly to permit the

development or expansion of accommodation

facilities (including residential dwellings and

guesthouses).

According to survey findings, approximately

53% of the 15 sample applications are

operating or have been finalised within the

prescribed timeframe of 600 working days. The

case study indicates that Removal of Restriction

ScenarioNumber of

ApplicationsProcessing Time

Median

Median Timeframe Over/Under Prescribed

TimeframeIn-Time Out-of-Time

1 59 273 63 44.1% 55.9%

2 47 358 148 40.4% 59.6%

3 8 407 working days -47 working days 50.0% 50.0%

4 15 381 working days -219 working days 53.3% 46.7%

Total 129 44.2% 55.8%



60

applications are generally finalised within 381

working days, which is 219 working days less

than the suggested benchmark.

Please note that the factors influencing the

administration tempo will be handled in

Section 6.3.

6.2.5 Scenario Finding SummaryTable 6.3 is provided below in summary of the

application tracking case study.

In general it can be noted that applications

are finalised between 273 to 358 days by

the CoCTMM. Non-residential applications

Diagram 6.1

Potential Delay

Factor Description





tend to be processed slower than residential

applications with only 40% of such

applications finalised within the timeframe

set out by the CoCTMM.

6.3 Factors Influencing the Administration Tempo

A variety of factors may cause delays in the

application administration. Analysis of the

belated applications submitted to the City

of Cape Town MM highlights the possible

reasons for postponement. These reasons are

identified according to responses received from

the private sector respondents. The potential

delay factors / administration blockages are

described in no particular order in Diagram 6.1.

Figure 6.13 summarises the level of impact from

each delay factor by illustrating the number

of applications affected by the respective

influencing factors. From the private sector

survey findings it is clear that uncompliant

applications, clerical errors, controversy and

advertisement delays are the major role-players

in the application processing tempo.

The top three delay factors / administration

blockages per scenario are summarised in

Diagram 6.2.

From the private sector analysis25 it is clear:

• Residential (Scenario 1) applications

tend to be subjected to incomplete

submissions. Clerical errors are also

recorded with applications of this nature

with documentation lost/misplaced in

13.6% of all recorded residential cases

and 10.2% delayed due to mistakes made

by municipal officials.

•Non-residential (Scenario 2) cases are mainly

delayed because of additional information

requests following submission of incomplete

Figure 6.13

Applications Affected

by Delay Factors

Diagram 6.2

Top Delay Factors

per Scenario

25 Please note that findings

illustrated concludes the

delay factors/administration

blockages as presented by

private professionals operating

within the local landscape.



62

applications. Other main delay factors are

contentious of nature. Approximately 28%

of all non-residential samples received

objections with environmental (12.8%),

heritage (6.4%) and transport (10.6%)

additional research requirements also

playing important roles in the administration

efficiency of the municipality.

• LUPO appeals (Scenario 3) are mainly

subjected to internal circulation and clerical

errors, possibly owing to the increase

requirement for communication between

internal departments within the CoCTMM

and Western DEADP. 50% of the recorded

clerical errors are attributed to lost/misplaced

documentation (25%) and internal project

allocation problems (25%).

• Uncertainty regarding advertisement (53.3%)

and application requirements (46.7%) are the

main delay factors for Removal of Restrictions

(Scenario 4) applications.

6.4 The Private Sector Application Tracking Case Study in Brief

Diagram 6.3 summarises the private sector

application tracking campaign.

Important findings include:

• Non-residential LUPO applications tend

to take 85 days longer to process when

compared to the residential counterparts.

• Residential applications have the highest

in-time administration proficiency of

approximately 56%.

• Removal of Restriction applications are the

only applications, which are generally finalised

within the prescribed timeframe, according to

the sample analysis findings.

The major causes of delay in LUPO applications

(Scenario 1 and 2) according to the surveys are

incomplete submissions, additional information

requests and clerical errors made by city officials

with the non-residential applications also

subjected to more objections. Currently, the main

delay factors for LUPO appeals can be attributed

to belated internal circulation, clerical errors and

objections. Removal of Restriction applications

are mainly delayed by uncertainty regarding

advertisement and uncompliant applications.

Diagram 6.3

Private Sector Application

Tracking Summary




63

SECTION SEVEN: CONCLUSION AND RECOMMENDATIONS


The final section of this report presents the analysis findings regarding application processing,

realistic timeframes and administration blockages in order to identify delay factors likely to

remain relevant in the future regulatory environment of the Western Cape.

The purpose of the concluding section is to identify manners in which the administration blockages

can be addressed by considering the proposed interventions of the CoCTMM and recommending

possible further interventions for the Metro. This section will also clarify the responsibilities of the

private sector in order to minimise delays. Diagram 7.1 below presents the section outline.

All findings and

recommendations stipulated in

this section are subjected to the

limitations listed in Section 1.4.

Please note that the median

calculations implemented

to identify the extensions in

processing timeframes. The

maximum processing timeframes

below do not consider major

statistical outliers.

The application tracking

case studies indicate that

administration blockages result

in the typical captured residential

LUM application to be delayed

by up to 63 days with non-

residential applications being

finalised 329 days past

the deadline.

Diagram 7.1

Section Seven Outline

7.1 Application Administration Performance Summary

The application administration performance

summary concludes the benchmark analysis

and application tracking case studies to identify

the general municipal proficiency in terms

of processing timeframes of development

applications significant for economic

contribution in the province.

For the purpose of the timeframe and municipal

proficiency analysis, attention is mainly given

to development applications with recorded

delays according to the application tracking

case studies and applications falling within

the competency of the same regulatory entity

under the new legislation. Therefore Removal

of Restriction applications and LUPO appeals

are only analysed in terms of the relevant

administration blockages and not in terms of

timeframes currently achieved.

It is essential to note that the municipal

proficiency indicated is only utilised as a

performance benchmark to illustrate the

impact of administration blockages and delay

factors. In no way or form does this represent

an audit of all applications handled by the

relevant governing entity.

7.1.1 Land Use Management Applications – Municipal Proficiency According to the conducted primary research,

the processing timeframe median ranges

between 173 and 273 days for residential

LUM applications and up to 358 days for non-

residential applications. In comparison to the

application timeframe medians, the municipal

benchmark is generally exceeded by up to 63 days

for residential LUM applications and 148 days for

non-residential LUM applications. Nonetheless,

the application tracking sample indicated some

applications (statistical outliers) which extended

past 1 600 days in the administration process.

7.1.2 Building Plans – Municipal ProficiencyPrimary research conducted illustrates that

the median processing time for high value

building plan is 170 days, which exceeds



64

the maximum timeframe prescribed by

the CoCTMM by 110 days. However, the

building plan tracking sample indicated two

building plan submissions (statistical outliers)

which have been 500 days or more in the

administration process.

7.2 Administration Blockage / Delay Factor Identification

Diagram 7.2 below illustrates the major

administration blockages, according to

the level of importance, as identified in the

application tracking case studies conducted.

Please note that delay factors are identified

according to the private and public sector

application tracking scenarios.

7.2.1 Uncompliant/Incomplete SubmissionsDescription: submitted application/plans, which

do not comply with specific requirements of

the relevant development application type.

Incomplete applications lead to an amendment

request, which in turn delays the administration

process if the private sector applicant do not

respond timeously.

Main application types affected: uncompliant

applications are the main reason identified for

delayed administration processes. This blockage is

noted in all (residential and non-residential) LUM

applications, building plans as well as Removal of

Restriction application submissions with close to

half of all sample applications affected.

Possible reasons for delay: either the

applicant does not have knowledge of the

correct procedures or the requirements per type

of application is unclear.

7.2.2 ControversyDescription: applications in which disagreement

among certain parties within the public or

private sectors delay administration. Applications

affected by controversy are subjected to

objections and appeals, which result in strenuous

consultation and circulation requirements.

Main application types affected: LUPO

appeals, non-residential LUM and Removal of

Restriction applications are often subjected

to objections and appeals from public

participation practises.

Possible reasons for delay: typically

objections are received on major development

projects, which is considered to impact its

surrounding location in a negative manner. A

factor of Not in My Back Yard (or NIMBYism)

should also be considered. Objections and

appeals are generally not the applicant or the In

crea

sing

Lev

el o

f Im

port

ance

Diagram 7.2

Major Administration

Blockages / Delay Factors

Please note that the median

calculations implemented

to identify the extensions in

processing timeframes. The

maximum processing timeframes

below do not consider major

statistical outliers.

Administration blockages cause

average delays of 110 days in

the processing of building plans.

CONTENTS




65

CONTENTS


governing entities fault, however it can still be

addressed during policy formation.

7.2.3 Clerical ErrorsDescription: delays encountered in the

application process owing to human error within

the administration value chain. Documents are

often misplaced or not circulated to the correct

internal and external departments.

Main application types affected: residential

and non-residential LUM applications are

mainly affected by clerical errors.

Possible reasons for delay: As previously

stated, clerical errors are human errors, which

are bound to occur within a bureaucratic system

in which various persons handles a submission

without taking ownership for its finalisation.

7.2.4 Advertising DelaysDescription: hold-ups in the application

process owing to problems with advertisement

or the payment thereof.

Main application types affected: applications

in which the specific entities, such as the Western

Cape Provincial Government are responsible

for the placement of advertisements tend to

be delayed by such processes. According to

the application tracking surveys, Removal of

Restriction applications are typically subjected to

delayed advertisement.

Possible reasons for delay: Miscommunication

between the regulatory entities and applicants

results in uncertainty regarding advertisement

requirements and amounts payable. Some

reported cases can also be attributed to human

error such as government officials not placing

the advert in time.

7.2.5 Internal and External CirculationDescription: postponements in the application

process due to delayed correspondence

between internal and external departments.

Main application types affected: applications

generally affected requires various inputs from

various internal and external departments.

Non-residential LUM applications and LUPO

appeals records the highest occurrence

with some cases reported in building plan

administration as well.

Possible reasons for delay: delays are

caused owing to belated responses from

the departments involved. This can typically

be attributed to possible capacity overload

within specific departments or a shortage of

specialised officials.

7.2.6 DelegationDescription: timeline extensions experienced

because of allocation to third party committees.

Main application types affected: LUM

applications are usually subjected to

delegation delays.

Possible reasons for delay: delegation for

decision by committees of council mainly

hinders the administration process due to

organisational and logistical arrangements.

Respondents indicated that it is occasionally

difficult to establish a date in which the case

can be discussed with the relevant committee

members owing to capacity overloads.

7.3 Ways to Address Administration Blockages

The introduction of the newly formulated

legislation along with planned improvement

strategies posed by the City of Cape Town MM

will address some administrative blockages.

This section therefore firstly states the

proposed eight-point improvement strategy

of the Metro along with its possible impact

on the administrative delays and secondly

identifies additional recommendations for

optimal functionality.

Recommendations are not only aimed at the

public sector, but also to advise the private

sector on how to do their part to resolve

administration blockages.

7.3.1 Eight-Point Plan in Place for Municipal Administration26

“The Planning and Building Development

Management Department (PBDM) of the City of

Cape Town works on a clearly defined strategy

to address the so-called ‘blockages’ in the

development processes, while simultaneously

improving on the processing development

applications.” 27



Planning and Building

Development Management

Department, 2014



Planning and Building

Development Management

Department, 2014



66

The complexity of the task at hand is

understood by the City and significant

progress has been made in implementing an

eight-point strategy to address administration

inefficiencies. The PBDM is focussing its

approach based on the following action areas,

all which assists in reducing blockages, red

tape reduction and promoting a development

friendly environment.

Diagram 7.3 illustrates the main points of the

relevant strategy.

1. Statutory complexity /

regulatory and law reform

The implementation of new CTZS, which

replaces previously disjointed, fragmented

and outdated 27 zoning schemes has

been successful with the scheme already

undergoing its first round of improvements.

The unified CTZS has resulted in more

cohesive regulatory processes and certainty

with regard to property rights, thus clearing

any confusion, which might have existed on

the applicant’s side. In addition, it has allowed

for an approximate 25% reduction in the

number of departure applications.

The broader statutory regime setting the

norms and standards for governing planning in

the City of Cape Town is however not within

the control of the Metro. Various national,

provincial and municipal reform processes are

currently underway, which are likely to change

the legislative and regulatory framework in

terms of which the department operates.

All reform processes will ultimately result in

more decision-making power to be given to

the City itself, which may result in shorter

decision-making periods. For instance, the

establishment of a Municipal Planning Tribunal,

which will replace current political decision-

making structures, and thereby reduce current

timeframes where decisions needs to circulate

through lengthy political decision-making

processes. Another example is the appeal

authority to be established within the City,

and not in another sphere of government,

which will also reduce timeframes to deal with

appeals. This will also do away with the current

dual appeal processes (section 62 MSA Appeal

plus the section 44 LUPO appeal).

2. Policy and decision-making

The Planning Policy Rationalisation Project

resulted in withdrawal or repeal of 268

obsolete Council policies, which has

contributed significantly to simplifying the

regulatory and decision-making environment.

PBDM is continually engaged in policy clean-up

processes. Currently, a second-round of policy

rationalisation is taking place, to ensure that the

policy environment in which the Department

operates is fresh, relevant and conducive to the

strategic direction that the City is moving in.

The System of Delegations, by which decision-

Diagram 7.3

Eight Main Points of Municipal

Administration Strategy





making power is delegated to officials in the

Department, is also continually updated and

improved on to ensure a minimum of delays

in processing and finalising applications. There

were serious shortcomings in the system of

delegations that was rectified in January 2014

when the Council adopted its new System of

Delegations. The new delegations will assist in

the approval times of undelegated applications

and applications subjected to controversy.

3. Service delivery

model of PBDM Department

The Department is committed to ensure that

the decentralised district service delivery model

in which it operates, is conducive to fast

and effective regulatory processes. Decision-

making authorities are mostly decentralised

within the district planning offices to facilitate

processing and assessment of applications, in

order to speed up decision-making.

A Standard Operating Procedure is also in place

among PBDM and the services departments

who comment on applications to assist in

efficient finalisation of applications, as well as

to speedily resolve contradictory comments

and address administrative blockages coupled

to internal and external circulation.

DAMS developed by the Department and

implemented with effect from 1 April 2014

is likely to assist in making circulation to

commenting line departments faster and

more efficient when assessing applications.

This system also provides for the escalation of

work to a manager in cases where work is not

completed within set timeframes.

4. Circulation and

assessment of applications

DAMS enables electronic circulation (and

e-submission as the second phase to this

project) of applications. This is likely to assist in

reducing timeframes in the regulatory process

to a large extent. The electronic submissions

to be introduced towards the end of 2014

would also make it convenient for applicants

to submit and track their applications online.

In addition, DAMS can also be used as a

management tool for accurate reporting on

performance targets as well as an early warning

system to pick up negative or positive trends so

as to proactively respond to such trends.

5. Application submissions

The CoCTMM is actively promoting and

enforcing the submission of quality and

complete applications. This is done through

continued engagements with professional

associations representing the development

industry or the professions submitting

development applications. Quality and

complete applications will dramatically improve

processing times by eliminating time spent on

aspects of the process that could have been

avoided by a complete application submission.

Pre-submission meetings are encouraged, to

ensure that applicants are informed of the

application requirements.

6. Management systems and processes

DAMS is intended to assist in further

standardisation across different district

offices to ensure more certainty to the public,

applicants and the industry in what they can

expect throughout the regulatory process

when submitting an application to any one of

the District Planning Offices.

For the first time, the PBDM Department would

be able to draw management reports on the

performance of each of the departments in the

Council that contributes to the various elements

of the planning and building application

processes. The basis has now been put in place to

draw management information that can be used

by various managers in a complex environment.

7. Registry and records management

The records management of the PBDM

Department has been addressed corporately

and there has been facilities secured for the

storage of files. With the implementation

of DAMS there will be a shift towards an

electronic environment, which will bring huge

advantages for record keeping purposes and

the ease and speed of access to information.

From the analysis given above

it is clear that the CoCTMM

PBDM Department is focussed

on the upgrade of its internal

systems to ensure improvement

in development application

processing timeframes. Increased

transparency appears to be a

major goal of the Metro, which

will have a profound effect on

the speed in which applications

are administered considering a

potential decrease in clerical errors.

While electronic management

systems are likely to improve

internal circulation and delegation

of submissions. It should however

be noted that the success of the

eight-point strategy is reliant on its

effective implementation.



68

8. Staff resources

The department has a staffing strategy to

cater for future needs, taking into account

the mature workforce in certain areas of the

department. The department has gone on

an aggressive drive to increase its student and

interns’ component and these people have

assisted the department substantially.

It is also the intention of the department

over the next 5 years to ensure that its staff

has increased its professional stature. This

will require registration with professional

institutions and bodies, appropriate

qualifications, etc. The department has

furthermore developed internal functional

area training programmes, standard operating

procedures, manuals, standard forms and staff

circulars to work towards a base standard

method for operations in the department.

7.3.2 Additional Recommended Improvements for Municipal Administration It is currently difficult to make further

recommendations regarding the improvement

of administration processes considering that the

effect of the newly proposed transformations

cannot be measured. This section therefore

aims to highlight potential problematic focus

areas, which might still be relevant in the

transformed property development market.

1. Training in DAMS

The innovation and improvement offered by

the DAMS is noted, however it is vital that

all public and private sector representatives

are trained in the system to ensure optimal

operation. The City needs to ensure that

all municipal officials working with DAMS

understands its operation and functionality. In

addition, information dissemination with the

property professionals in the private sector are

also vital to guarantee that they understand

how to track their application and report any

perceived hold-ups in the process.

It is understood that the City have continued

consultations with various professional bodies

of the private sector. Nonetheless, all private

sector users (including professionals, which is

not part of such bodies) should be provided a

platform to discuss and report on any potential

faults or limitations that the newly developed

software may have to ensure continues process

of improvement and streamlining.

2. Different format for capturing

It is understood that the newly developed

DAMS will assists in this cause. Nonetheless,

it is imperative for the City to modify the

manner in which applications are captured

and filed within its records. Applications need

to be tracked individually with each start and

end-date clearly captured. The current system

allows for some applications to slip through

the cracks of the administration process. As

clearly seen in some LUM applications taking

almost five years to finalise.

A more detailed record of application

submissions and finalisations will assist the City

in identifying additional areas for improvement.

3. Communication with relevant persons

This document acknowledges the various

improvements in communication between the

public and private sector with various platforms

provided such as quarterly meetings with

professional bodies, workshops, forums and

pre-consultations. However, progress reporting

and communication during the administration

process seems to remain a problem within the

organisational structure.

Private sector respondents complains about

a lack of communication regarding proposed

amendments or additional information requests

and the requirement thereof. According to

the respondents, it is difficult to reach the

correct contact person within the municipal

structure in a timeous manner. Constant

follow-up attempts and miscommunication

adds on to the frustration experienced by the

private sector and this fosters an unproductive

working environment for both parties.

The possible effect of DAMS is once again

noted in this regard, however no direct





mention is made to the manner in which

communication deficiencies are going to be

addressed in the new interface provided by

the DAMS.

4. Clarification of application types

required and list of requirements

This focus area correlates with the previous

point regarding communication. The private

sector application tracking case study

highlighted the prominence of incorrect

application types submitted with a shortage

of information in some cases. It is understood

that the pre-consultations offered by the

public sector is in place to address this

problem, but somehow this problem still

lingers in the administration process.

It is recommended for the City to provide a

detailed list of requirements to the private

sector applicant and enforce the submission of


5. System of delegation and relationship

with external departments

The internal system of delegation is addressed

within the eight-point strategy listed above.

Nonetheless, it remains relevant to stress the

importance of improvement on this front.

Approximately 21% of the private sector

application tracking sample was subjected to

delegation causing delays in the administration

of these applications. It is vital to exclude

unneeded delegations and improvement of

communication between the council and sub-

committees of the council.

In addition, the private sector tracking case

study highlights that approximately 22% of

the sample was affected by delayed interaction

between the City and external departments.

Some form of accountability should be created

among municipal and external department

officials to ensure the timeous inputs in the

administration process. If capacity issues are

noted as the main reason for delayed response

from external departments it is vital to ensure

the appointment of more specialised individuals

in these fields.

6. Benefit compliant

private sector applicants

Approximately 50% of the private sector and

40% of the public sector application tracking

sample are affected by incomplete applications

with amendment requests issued by the City. It

is currently understood that once amendments

are received by the City the application

is captured within the processing pool as

illustrated on page 44.

Applicants will be more motivated to respond

timeously if benefits are provided to such

applicants. For instance, if an applicant

responds within a reasonable timeframe

conveyed by the public sector, the application

handled before new submissions to ensure

smaller delays for the application, which is

already in progress.

7.3.3 Responsibilities of the Private SectorThe private and public sector application

tracking case studies did not only highlight

shortcomings in the administration process

caused by the public sector. Certain

administration blockages have a private sector

component to it as well. It is therefore vital that

the private property professionals understand

their responsibilities in terms of development

application submission and the way in which

they can assist in the improvement of the

administration process.

1. Utilise pre-consultations

It is the responsibility of the private sector

representative to ensure that the application

submitted for approval are complete

according to the entity it is submitted to.

Pre-consultations with the municipality

enables interaction between private property

professionals and public sector officials before

the submission of applications and payments

of any fees. It provides a platform to the

private property professional to establish what

type of application is required and the specific

requirements of the relevant application type in

addition to administrative matters such as the

required payments etc.




2. Pre-check requirements of

the application before submission

Once the required application type is identified

and fees are available, it is vital to ensure

that the application submitted complies with

the requirements set by the governing entity.

These requirements may include specialised

viability or impact studies.

3. Respond timeously

to amendment requests

If amendment requests are issued, quick response

to the requests is required to ensure the process

is not unnecessarily delayed. Approximately 50%

of the private sector application tracking sample

is affected by incomplete applications.

4. Participate in consultation

platforms provided

The CoCTMM has quarterly meetings with

the Cape Town Institute of Architects, South

African Association of Consulting Professional

Planners, the Geometrics Association of

South Africa, Practice Notes Work Group

and the Western Cape Property Developers

Forum. It is recommended that private sector

representatives attend these meetings and

voice their opinion regarding specific concerns

of the administration process.

5. Participate in any training

workshops hosted by regulatory entities

The introduction of the newly developed

DAMS will be accompanied by significant

changes in the manner in which applications

are submitted to the City. It is the private

sector respondent’s responsibility to ensure

that they understand how the process have

changed and how submissions should now

be handled.

7.4 Conclusion

As seen in “The Economic Value of the

Commercial Private Property Sector” report

(Component One of the research initiative), the

commercial private property sector contributes

significantly to the economy of the Western

Cape as well as the City of Cape Town. For that

reason the streamlining of public administration

processes is of cardinal importance to ensure that

all parties involved banks on the opportunities

presented for economic growth and expansion.

The essential concluding remark posed by

the conducted research is one of cooperation

between the public and private sector.

Functionality barriers and limitations will always

be experienced when operating in any multi-

dimensional structure, such as the development

application processing structure. It is not

only the responsibility of the public sector to

address these limitations and therefore a one-

dimensional approach is not the solution. Both

the private and public sectors are responsible

for the improvement of the current manner

in which the processing structure operates by

utilising communication platforms to identify

the limitations and address it as far as possible.

It is therefore important for the private sector

to voice their opinions regarding potential ways

to improve and the public sector to take note

of the inputs received for the purpose of policy

and implementation framework formulation.




REFERENCES

Cambridge Online Dictionary, 2014, http://www.dictionary.cambridge.org.

City of Cape Town Metropolitan Municipality, 2012, City of Cape Town Zoning Scheme Regulations: A Component of the Policy-Driven Land Use

Management System.

City of Cape Town Metropolitan Municipality, 2013, City of Cape Town Integrated Development Plan Draft: Five Year Plan for Cape Town 2012 – 2017

City of Cape Town Metropolitan Municipality, 2013, City of Cape Town Municipal Webpage, www.capetown.gov.za.

City of Cape Town Metropolitan Municipality, 2014, City of Cape Town Zoning Scheme Webpage, http://www.capetown.gov.za/en/Planningportal/Pages/

Zoningscheme.aspx.

City of Cape Town Metropolitan Municipality, 2014, Development Application Management System Webpage, https://www.capetown.gov.za/en/

Planningportal/Pages/Development-Application-Management-System-(DAMS).aspx.

Construction Industry Development Board, 2005, Overview of National Heritage Resources Act.

Department of Rural Development and Land Reform, 2012, Overview of Legislation and Existing Classification Effort.

Department of Rural Development and Land Reform, 2013, Spatial Planning and Land Use Management Act.

Dictionary.com, 2014, http://www.dictionary.com.

South Africa, 2014, South Africa National Environmental Management Act – Legislation and Environmental Acts, http://www.environment.co.za.

The Free Dictionary, 2014, http://www.thefreedictionary.com/.

Western Cape Provincial Government, 2012, Land Use Planning Bill: Explanatory Memorandum.Western Cape Provincial Government, 2013, Western Cape Provincial Government Webpage, http://www.westerncape.gov.za.

SAPOA publications are intended to provide current and accurate information, and are designed to assist readers in becoming

more familiar with the subject matter covered. SAPOA published this document for a general audience in accordance with all

applicable laws. Such publications are distributed with the understanding that SAPOA does not render any legal, accounting,

or professional advice. Use of this publication is voluntary and relianceon this document should be undertaken based on an

independent review by the user.

Information provided in this document is "as is" without warranty of any kind, either express or implied, including but not

limited to the implied warranties of merchantability, fitness for a particular purpose, or freedom from infringement. SAPOA hereby

disclaims all liability for any claims, losses, or damages in connection with use or application of this document.

This document is the sole and exclusive property of SAPOA. Reproduction or redistribution in whole or in part without the

express written consent of SAPOA is prohibited.


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