sapoa 2014 western cape commercial property impact report
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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
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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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THE ECONOMIC VALUE of the COMMERCIAL PRIVATE PROPERTY SECTOR
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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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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.
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
pta@urban-econ.com
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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: 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
SECTION THREE: CURRENT ECONOMIC VALUE
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
SECTION FOUR: ECONOMIC VALUE OF COMMERCIAL PRIVATE PROPERTY 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 6.4: Scenario 2: Processing Timeframes
Figure 6.5: Scenario 2: Timeous Processing
Figure 6.6: Scenario 2: Processing Time Median
Figure 6.7: Scenario 3: Processing Timeframes
Figure 6.8: Scenario 3: Timeous Processing
Figure 6.9: Scenario 3: Processing Time Median
Figure 6.10: Scenario 4: Processing Timeframes
Figure 6.11: Scenario 4: Timeous Processing
Figure 6.12: Scenario 4: 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
SECTION ONE: INTRODUCTION
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within Cape Town therefore it is the centre of
major economic growth and expansion within
the province.
1.2 General Research Approach
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.
1.3 Purpose of 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
Source: ArcGIS Explorer, 2013
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/
3 Derived from http://www.
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:
4 Derived from http://www.
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).
SECTION THREE: CURRENT ECONOMIC VALUE
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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
Reason for Projection Assumption
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
Reason for Projection Assumption
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.
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Economic Indicator
Projection Period
Reason for Projection Assumption
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
Source: Quantec EasyData:
Standardised Regional and
Statistics South Africa data, 2014
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%
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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
Source: Quantec EasyData:
Standardised Regional and
Statistics South Africa data, 2014
Figure 3.3
Sectorial Growth of the
Construction Sector: 2007-2013
Source: Quantec EasyData:
Standardised Regional and
Statistics South Africa data, 2014
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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
Economy 2013 GDP Value (Rands millions)
Share of National Construction Sector
South Africa 59 741 100%
Western Cape 11 463 19.2%
City of Cape Town MM 7 608 12.8%
Table 3.2
Construction Sector
GDP Value: 2013
Source: Quantec EasyData:
Standardised Regional and
Statistics South Africa data, 2014
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.
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Economy 2013 GDP Value (Rands millions)
Share of National Business and Finance Sector
South Africa 431 449 100%
Western Cape 87 880 20.4%
City of Cape Town MM 71 036 16.5%
Figure 3.5
Sectorial Growth of the
Business and Finance Sector:
2007-2013
Source: Quantec EasyData:
Standardised Regional and
Statistics South Africa data, 2014
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
Source: Quantec EasyData:
Standardised Regional and
Statistics South Africa data, 2014
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.
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Table 3.4
Gross Domestic Product of the
Commercial Private Property
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
Construction activities
Building of complete constructions or parts thereof (excluding civil engineering)
3 676.62 2 462.01
Construction sector
Construction activities
Building installation 1 737.17 1 163.27
Construction sector
Construction activities
Building completion 760.02 508.94
Construction sector
Construction activities
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
Business and finance sector
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
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NM
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AG
EMEN
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Main Sector Sub-Sector Major Activities
2013 Employment (Persons)
Western CapeCity of Cape Town MM
Construction sector
Construction activities
Site preparation 5 081 2 972
Construction sector
Construction activities
Building of complete constructions or parts thereof (excluding civil engineering)
42 384 24 794
Construction sector
Construction activities
Building installation 43 164 25 251
Construction sector
Construction activities
Building completion 24 424 14 288
Construction sector
Construction activities
Renting of construction or demolition equipment with operators
13 153 7 694
Business and finance sector
Other business activities
Architectural, engineering and other technical activities
12 807 11 388
Business and finance sector
Real estate activities
Real estate activities with owned or leased properties and on a fee or contract basis
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
Share of total economy 8.4% 7.2%
CO
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Table 3.5
Employment of the
Commercial Private Property
Sector: 2013
Source: Calculations based on
Quantec EasyData: Standardised
Regional and Statistics South
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
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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.
Main Sector Sub-Sector Major Activities
2013 Tax Value (Rands millions)
Western CapeCity of Cape Town MM
Construction sector
Construction activities
Site preparation 3.43 2.30
Construction sector
Construction activities
Building of complete constructions or parts thereof (excluding civil engineering)
33.40 22.37
Construction sector
Construction activities
Building installation 15.78 10.57
Construction sector
Construction activities
Building completion 6.91 4.62
Construction sector
Construction activities
Renting of construction or demolition equipment with operators
3.98 2.66
Business and finance sector
Other business activities
Architectural, engineering and other technical activities
338.28 273.91
Business and finance sector
Real estate activities
Real estate activities with owned or leased properties and on a fee or contract basis
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
Share of total economy 15.8% 16.6%
CO
NST
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NM
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Table 3.6
Tax Revenue generated by the
Commercial Private Property
Sector: 2013
Source: Calculations based on
Quantec EasyData: Standardised
Regional and Statistics South
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.
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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/.
SECTION FOUR: ECONOMIC VALUE OF COMMERCIAL PRIVATE PROPERTY IN BRIEF
REFERENCES
THE ECONOMIC VALUE of the COMMERCIAL PRIVATE PROPERTY SECTOR
MARCH & APRIL 2014 SAPOA - the voice of commercial property
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
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26
SECTION ONE: INTRODUCTION
26 APPLICATION PROCESSING REPORT
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
Source: ArcGIS Explorer, 2013
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2727APPLICATION PROCESSING REPORT
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.
1.2 General Research Approach
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
Source: ArcGIS Explorer, 2013
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.
THE ECONOMIC VALUE of the COMMERCIAL PRIVATE PROPERTY SECTOR
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2828 APPLICATION PROCESSING REPORT
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.
1.3 Purpose of Report
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.
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• 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.
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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.
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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.
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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
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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
7 Source: City of Cape Town
Integrated Development Plan
Draft, Five Year Plan for Cape
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
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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
8 Source: City of Cape Town
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
9 Source: City of Cape
Town Zoning Scheme
Regulations, A Component
of the Policy-Driven Land Use
Management System, 2012
10 Source: City of Cape
Town Zoning Scheme
Regulations, A Component
of the Policy-Driven Land Use
Management System, 2012
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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
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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
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13 Source: Western Cape Land
Use Planning Bill, Explanatory
Memorandum, 2012
14 Source: City of Cape Town
Integrated Development Plan
Draft, Five Year Plan for Cape
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
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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.
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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.
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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
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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.
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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).
16 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.
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
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Diagram 3.4
Generic Building Plan
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
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
17 Source: City of Cape Town
Metropolitan Municipality,
http://www.capetown.gov.za,
2013
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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.
19 All processes and
timeframes are sourced from
interviews with government
officials. Please note that all
timeframes expressed in this
document presents the typical
time it takes government
officials to administrate
the relevant applications.
Timeframes are dependent on
complete applications.
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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
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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
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SECTION FOUR: APPLICATION ADMINISTRATION BENCHMARK
47APPLICATION PROCESSING REPORT
Figure 4.1
<40m2 Building Plan
Finalisation Efficiency
Source: City of Cape Town
Metropolitan Municipality,
Planning and Development
Management Department, 2014
Figure 4.2
<500m2 Building Plan
Finalisation Efficiency
Source: City of Cape Town
Metropolitan Municipality,
Planning and Development
Management Department, 2014
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).
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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
Finalisation Efficiency
Source: City of Cape Town
Metropolitan Municipality,
Planning and Development
Management Department, 2014
Figure 4.4
Total Building Plan
Submissions versus
Finalisations
Source: City of Cape Town
Metropolitan Municipality,
Planning and Development
Management Department, 2014
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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
Finalisation Efficiency
Source: Source: City of Cape
Town Metropolitan Municipality,
Planning and Development
Management Department, 2014
Figure 4.6
Seven Month LUM Application
Finalisation Efficiency
Source: City of Cape Town
Metropolitan Municipality,
Planning and Development
Management Department, 2014
Figure 4.7
Total LUM Application
Submissions versus
Finalisations
Source: City of Cape Town
Metropolitan Municipality,
Planning and Development
Management Department, 2014
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.
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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
Source: City of Cape Town
Metropolitan Municipality,
Planning and Development
Management Department, 2014
20 Source: City of Cape Town
Metropolitan Municipality,
https://www.capetown.gov.
za/en/Planningportal/Pages/
Development-Application-
Management-System-(DAMS).
aspx
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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.
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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.
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52 APPLICATION PROCESSING REPORT
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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.
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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
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SECTION SIX: PRIVATE SECTOR APPLICATION TRACKING CASE STUDY
55APPLICATION PROCESSING REPORT
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.
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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
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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
Scenario 1: Processing
Time Median
Figure 6.5
Scenario 2: Timeous
Processing
Figure 6.4
Scenario 2: Processing
Timeframes
Figure 6.6
Scenario 2: Processing
Time Median
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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
Scenario 3: Processing
Timeframes
Figure 6.8
Scenario 3: Timeous
Processing
Figure 6.9
Scenario 3: Processing
Time Median
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Figure 6.10
Scenario 4: Processing
Timeframes
Figure 6.11
Scenario 4: Timeous
Processing
Table 6.3
Private Sector Application
Tracking Scenario Findings
Figure 6.12
Scenario 4: Processing
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%
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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
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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.
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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
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SECTION SEVEN: CONCLUSION AND RECOMMENDATIONS
63APPLICATION PROCESSING REPORT
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
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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.
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64 APPLICATION PROCESSING REPORT
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CONTENTS
65APPLICATION PROCESSING REPORT
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
26 Source: City of Cape Town
Metropolitan Municipality,
Planning and Building
Development Management
Department, 2014
27 Source: City of Cape Town
Metropolitan Municipality,
Planning and Building
Development Management
Department, 2014
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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
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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.
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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
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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
complete applications.
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.
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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.
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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
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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.
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