The pros and cons of mixed-use developments in South Africa

 ·2 Mar 2024

South Africa has seen a surge in mixed-use sectional schemes as a result of the promise of diverse and integrated living and working spaces – however, experts say that there are both pros and cons of these emerging developments.

As more and more people flock to major business hubs, the high demand for safe and affordable homes has ultimately caused a shortage of space. As a result, the popularity of the mixed-use urban villages where people can live, work, and leisure in one place, has boomed.

Mixed-use sectional schemes in South Africa provide numerous advantages – such as offering a variety of amenities, convenience, and economic opportunities.

However, they also present certain challenges – such as traffic congestion, noise pollution, regulatory hurdles, and the need to balance different functions to keep the peace.

Director of real estate law at Cliffe Dekker Hofmeyr, Mike Collins, discussed some of these pros and cons, saying that “careful planning, community involvement, and effective management are essential for the successful implementation of mixed-use developments.”

The pros

  • Diversity of spaces

“Mixed-use sectional schemes provide a variety of spaces, including residential, commercial and recreational areas, within a single development,” said Collins.

This presents an opportunity to create a “create a vibrant and dynamic community,” he added.

  • Convenience

“Having essential services, retail outlets and recreational facilities within walking distance,” is a major driver as it can save time and reduce the need for extensive travel, said Collins.

“The appeal of this option for areas where space is limited is evident, for example in city centres,” he added.

  • Economic opportunities

Collins said that mixed-use developments can either provide an opportunity for the growth of local businesses and entrepreneurship or lead to gentrification of the area, in a more comprehensive way, which contributes to economic development within the community.

  • Increased property values

Although not guaranteed, a mix of residential and commercial spaces could increase property values as the “appeal of a self-contained community with various amenities [attracts many] buyers and investors,” said Collins.

  • Community engagement

Shared spaces and facilities have the ability to create sense of community among residents due to the need of increased engagement and interaction.

The cons

  • Traffic and congestion

Having both residential and commercial spaces within the same vicinity may lead to increased traffic and congestion, especially during peak hours or commercial deliveries.

“This may impact quality of life for residents and the overall functionality of the development – however, with proper planning and well-developed management and conduct rules the congestion can be managed skillfully,” said Collins.

  • Noise and disruptions

Due to its close proximity to one another, residential and commercial properties pose the risk of clashing with one another when it comes to noise levels and disruptions to people in the area.

“Balancing the needs of businesses and residents can be challenging, however, well-executed and thought-out developments have proven that a clever medium does exist where smart planning has been accomplished,” explained Collins.

  • Zoning and regulatory challenges

Mixed-use property developers often encounter zoning and regulatory hurdles. These challenges arise because municipal regulations and zoning laws must be flexible enough to accommodate the diverse nature of mixed-use developments.

Collins said that “various factors need to be considered by the municipality before a mixed-use scheme is approved for development, including the existing local authority infrastructure and capacity, similar developments, facilities and amenities supportive of the new development.”

  • Limited control for residents

In these areas, residents may prove to have limited control over the commercial spaces that are within close range.

Collins said that this could lead “to potential conflicts regarding issues like noise, business hours and overall management of shared areas.”

To manage this, Collins said that skilled legal input is required to draft Management and Conduct Rules that cater to the interests of different owner categories such as residential, retail, and commercial.

Appointing representative trustees, based on each group’s preponderance within the development, can further protect their interests.

Read: ‘Cautious optimism’ for property in South Africa

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