Neighbourhood Development Programme 31 October 2014

We are trapped in a vicious cycle Poverty Built Environment Funding required Low Built Environment ROI InefficienciesLow growth 2

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6 I’m glad the hole isn’t at our end... Why is Built Environment investment ROI low?

Built Environment Public National/ SOE’s Water Electricity Transport ICT Provincial Housing Education Health Transport Local Transport Electricity Water Community Private Residential Office Retail Industrial ICT Institutional Fragmentation in the Built Environment Delivery Process 7 Infrastructure Real Estate

The whole is greater than the sum of its parts Aristotle ( BC) The Solution: A Systems Approach to the BE

A Systems Approach Systems thinking is a discipline for seeing wholes. It is a framework for seeing interrelationships rather than things ~ Peter Senge

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The Built Environment in Context Demand for goods & services Supply of goods & services Supply & Management of Built Environment assets - Real estate - Infrastructure Access (Transport cost & time)

Area-based Growth Spatial Transformation Private Sector Investment Infrastructure Delivery Infrastructure Funding (Budget Process) Public Infrastructure Project Prioritisation across Spheres & Sectors Spatial Targeting & Priotitisation (Country... City... Precinct) Holistic Built Environment Investment Strategy

Prioritise cities as the engines of the economy 18 “South Africa’s spatial landscape has to be re- shaped, including investment in dynamic city development... we will support cities to improve living conditions, modernise transport and communications infrastructure, expand the urban economy and promote trade and investment” Medium Term Budget Policy Statement Minister of Finance, Nhlanhla Nene 22 October 2014

19 Over the next three years, government will roll out a new approach to local government infrastructure financing. Incentives will encourage large urban municipalities to promote more compact, efficient and equitable cities. Planning will focus on developing mixed-use precincts that can help to catalyse economic activity, and on upgrading informal settlements. Medium Term Budget Policy Statement 22 October 2014 Spatial Targeting: The Urban Network Approach

CBD Urban Hubs Primary Public Transport Links Primary Activity Corridor Secondary Transport Links Spatial Targeting: The Urban Network Approach

CBD Spatial Prioritisation to Optimise ROI

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24 Urban Hubs in & around Gauteng

Area-based Growth Spatial Transformation Private Sector Investment Infrastructure Delivery Infrastructure Funding (Budget Process) Public Infrastructure Project Prioritisation across Spheres & Sectors Spatial Targeting & Priotitisation (Country... City... Precinct) Holistic Built Environment Investment Strategy

Area-based Investment Decision-making (across sectors and spheres) Benefit Cost High Low High 77 P The key is not to prioritize what's on your schedule, but to schedule your priorities. Stephen Covey

Area-based Growth Spatial Transformation Private Sector Investment Infrastructure Delivery Infrastructure Funding (Budget Process) Public Infrastructure Project Prioritisation across Spheres & Sectors Spatial Targeting & Priotitisation (Country... City... Precinct) Holistic Built Environment Investment Strategy

USDG IHHSG SHRZ Muni Provincial SOEs PTIS NDPG SEZ ICDG UDZ Dev Incentives CBD Developed Area Underserved Townships Spatial & Fiscal Alignment is Critical to ensure Impact

29 Approximately R78 billion of public sector funding was budgeted for capital investment in the 18 urban centres in 2013/14 Built Environment Projects in Urban Centres

Area-based Growth Spatial Transformation Private Sector Investment Infrastructure Delivery Infrastructure Funding (Budget Process) Public Infrastructure Project Prioritisation across Spheres & Sectors Precinct & Transport Management Spatial Targeting & Priotitisation (Country... City... Precinct) AB Fiscal & Regulatory Instruments Holistic Built Environment Investment Strategy

Fiscal & Regulatory Mechanisms Alignment & restructuring of fiscal and regulatory economic development incentives & instruments –UDZ –Value Capture –SEZ –DTI Incentives –Jobs Fund Windows Removal of regulatory constraints to development will reduce time and financial risks, release land on to the market and boost investment in productive assets

Area-based Growth Spatial Transformation Private Sector Investment Infrastructure Delivery Infrastructure Funding (Budget Process) Public Infrastructure Project Prioritisation across Spheres & Sectors Precinct & Transport Management Spatial Targeting & Priotitisation (Country... City... Precinct) AB Fiscal & Regulatory Instruments Holistic Built Environment Investment Strategy

Area-based Growth Spatial Transformation Private Sector Investment Infrastructure Delivery Infrastructure Funding (Budget Process) Public Infrastructure Project Prioritisation across Spheres & Sectors Precinct & Transport Management Spatial Targeting & Priotitisation (Country... City... Precinct) AB Fiscal & Regulatory Instruments Holistic Built Environment Investment Strategy

Private Sector Instruments Government Fiscal & Regulatory Instruments Spatial Targeting Built Environment Transformation Towards a Holistic Investment Partnership