The impact of the integrated residential development programme on surrounding property values: Case study of Fleurhof, Johannesburg
Keywords:hedonic price modelling, housing characteristics, Integrated Residential Development Programme (IRDP), subsidised affordable housing, property value
South Africa is challenged with an increased backlog of adequate subsidised affordable housing for the marginalised in well-located areas that provide access to urban amenities and places of employment. However, the perception of subsidised affordable housing developments built in the urban core in close proximity to bonded properties is significantly negative. This article seeks to address whether the presence of subsidised affordable housing provided through South Africa’s Integrated Residential Develop-ment Programme (IRDP) impacts on the property value of bonded properties located nearby. This article examines the impact of the subsidised affordable housing development of Fleurhof, Johannesburg, on surrounding property values. It investigates, in particular, whether the IRDP housing development decreases property values. Using hedonic pricing models (HPM) with regressions, the housing attributes (characteristics) and property price data, dating from 2001 to 2017, were used to determine the effect on the value of properties in the suburbs of Meadowlands East Zone 1 and Orlando West in Soweto and Florida in Roodepoort, as the two closest residential communities to Fleurhof. The article reveals that the close proximity of the housing development in the initial stages (2001-2010) of the development affected property values negatively. However, in the long run, the housing development does not affect property values.
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