Private Property chats to Roxy Goddard, Marketing Officer at Blok, who shares everything there is to know about the 80/20 Development Model and how it will benefit young professionals looking to own property in Cape Town.
Marc
So tell me, what is this 80:20 model? Tell me a little more about that?
Roxy:
So the 80/20 model is an inclusionary housing model that we're trying to pilot and get off the ground. How it came to be is there's this massive need for middle-income housing in Cape Town, and South Africa in general. A lot of the time, the people who live and mainly work, actually, within the city and the CBD can't actually afford to live really close to where they work. And they end up spending 40 percent of their time in a car getting to and from work, and also 40 percent of their income doing that. And so, kind of noticing that need, so the 80/20 model was born to really service these middle-income, or squeezed middle-income, as we call them, earners. So that's people like myself who are young professionals, who are trying to get into the property market. And it's just really difficult because Cape Town is really expensive.
The development within which this model is going to be is called Forty on L, and that's 40 Line Street in the Bo Kaap. And it is the first Blok Raw development that we've done. Blok Raw is a sub-brand of Blok, and essentially, it's just a completely new design aesthetic. It was born from the fact that we love design and we wanted to do something different other than what Blok is known for aesthetically. And the similarities of that, it's the same team who designed it. It's the same team who stress-test everything and make sure that we're happy with the product. And by doing that, we also get to offer a slightly more affordable product in different areas outside of our typical Atlantic seaboard residences. And so within that Forty on L project, then comes this 80/20 model. And how the 80/20 model works, and how it becomes even more affordable, is we are essentially asking council for a bulk departure. So we're asking them to build more space on our site than what is permissible in that current site. And we're essentially asking them to give us that bulk departure for free so that those homes that come from that, so say another 12 homes within that development, don't have any land costs associated with them. And that essentially means that they can be much more affordable because those land costs are cross-subsidized by the rest of the development. And so you're looking at about a 50 percent discount, or lesser value, on those apartments. And then those middle-income earners can come in and purchase those. The criteria to buy them, though, you have to be a first-time homeowner. You have to be within a certain income range. So that's that middle-income. So it's about a range of about 15 to about 35. And you have to also be living in that apartment yourself. You can't buy it and then try to flip it or have someone rent it from you. And there will be a restriction to make sure that that applies. So that's the 80/20 model in a nutshell.