Integrating Poor Populations in South African Cities - Agence ...

8. The Limits of the Government’s Actions
1950s, and in a more complete manner since the decentralization in 1982, many
SPCs have specialized in the field of urban policy and development. Many SPCs are
also used to manage specific urban services, such as public transit. SPCs are companies
whose capital is mostly public but also includes a share of private investment. The
majority of shareholders remains public, often the city or the state or other public
governments. On Reunion Island, there are numerous property development companies
initially specialized in the construction of social housing that now have more general urban
development activities, as well as semi-public development companies.
A Territorial Approach
124
When a municipality wishes to develop a neighbourhood — renovate an old
neighbourhood or build a new urban project — it can do so itself or produce
specifications (95% of cases) and entrust the project to a development company. It has
recently become mandatory to open its offer to competition but it is still generally the
SPCs, used to working in the territory, that take charge of implementing the project. It
is frequent that the municipality classifies the zone concerned as a Zone
d’Aménagement Concertée (ZAC, concerted development zone). This classification
is a legal tool that gives the municipality greater freedom in subdividing the land and
in fund management. In the case of general interest projects, ZAC classification is
often combined with a Déclaration d’Utilité Publique (DUP, declaration of public
usefulness), which gives the commune large expropriation powers. This territorial
approach to urban development that consists of identifying a territory and reflecting on
its development makes it possible to analyze how the surrounding settlements operate,
determine urban needs, and integrate the various urban functions.
Functional Diversity and the Search for a Balanced Bottom Line
Thus, the city or development company is in charge of the urban development of
a zone as a whole: from the acquisition of land to planning the various types of housing,
public spaces, economic activities, and the sale of land. In financial terms, this notably
allows for multiple financing. The development operation must be financially balanced.
For instance, if the commune wishes to produce social housing, it can sell land to social
donors at low cost, and then pay itself by selling land at higher prices for shops,
economic activities or even high-end housing. This technique in some way echoes what
Integrating Poor Populations in South African Cities © AFD 2009