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					                                                                              Development Action Group:

                                         Who really benefits from the World Cup 2010 in South Africa?

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                                                     Press delegation from Germany, 15 October 2009


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Background to the World Cup

Today, there is a huge push amongst cities in the global south to become „world class‟ – a title that has
taken on many different meanings in different contexts, but tends to describe the process of shaping so-
called “under-developed” urban areas into viable destinations for global capital. Large international events
– the Olympics, World Cup, World Expos, and World Fairs – provide the rationale for global corporations
to invest their surplus liquidity in the construction of convention centers, sporting stadia, 5-star hotels,
restaurants, and shopping complexes in emerging markets. Such megaevents put tremendous pressure
on local economies to submit to certain laws and provide certain financial benefits to encourage capital
investment.

This phenomenon of „world class cities‟ has been born of the inequality between developed and
developing nations: where developed countries require ever-increasing markets beyond their borders for
continued growth, while developing countries require foreign investment to finance structural
improvements. This interdependence between developed countries requiring markets and developing
countries requiring investment means that Southern cities the world over are tending to grow in the same
ways – with Hyatt hotels, fancy nightclubs, golf courses, beach front restaurants, and whatever else is
deemed viable based on the priorities and profit margins of Northern donors. With so many development
decisions being made in the Northern hemisphere, Southern cities are extremely limited when it comes to
setting the terms of their own growth, and increasingly vulnerable to fluctuations in the global economic
market.

With the vast majority of such investment benefiting a minority of Southern citizens, the dark under side of
the „world class city‟ sees the creation of increasing inequality between the domestic elite on one hand,
and marginalized urban-dwellers on the other. The poor are further removed, dislocated and restricted
from the urban core, as central real estate is bought and redeveloped in line with a neo-liberal vision.
Adding credence to this, the UN Centre for Human Settlements identified that more than one in seven
massive evictions worldwide were related to „world class cities‟ hosting mega-events. If we continue on
this course, it appears certain that such inequality will only deepen, and development will remain interest
driven – and therefore conflict ridden. With cities acting as the engines of modern economic growth and
development, they will inevitably be key battle sites for the poor and disenfranchised.

This is exactly what is happening in the many cities of South Africa with regards to the World Cup. Since
democracy, the ANC has followed a neo-liberal agenda with the adoption of the Growth Employment and
Redistribution (GEAR) economic policy, allowing the privatization of service delivery, encouraging foreign
investment, consolidating the wealth of the domestic elite, achieving strong economic growth – and,
consequently increasing the numbers of people living in poverty. With South Africa‟s Gini coefficient (the
measure of inequality) topping the international charts, it is no surprise that we are seeing the worst
protest season in many years: with army uprisings in Pretoria, xenophobic riots in Durban, and service
delivery upsets across the country. Against this fraught backdrop, the World Cup has merely highlighted
the palpable truth that the State is neither willing nor capable of raising billions of rands for social
programmes, but will quite ready do so for international sporting events.

Despite the rhetoric about the World Cup‟s potential developmental legacy that went into the original FIFA
bid, it has become quite clear that the majority of South African‟s will not benefit from the event. In 2007,
Kwa-Zulu Natal provincial government spokesperson, Mandla Msomi was still forwarding this optimistic
position: “The 2010 World Cup will not happen in isolation, it will go hand in hand with service delivery.”



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Now however, many poor South Africa citizens feel like Angel Nyoka, from the Rainbow Housing
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Coalition: “I cannot see one benefit for my life from the Greenpoint Stadium.”

Given this, here are a few vital statistics about how the World Cup is affecting Cape Town‟s poor….

        Though there was much original discussion about building the Cape Town stadium in one of the
         outlying communities, FIFA only allows stadiums to be in picturesque surroundings for the
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         purposes of the corporate media. Therefore, Greenpoint was the only option.
        The cost of the stadium is 4.5 Billion Rand. Around 115,000 houses could be built for the same
         price. Other investments into Greenpoint (including the beachfront, the urban park, and fan mile)
         amount to 469 Million Rand. That‟s another 11,700 houses.
        In other host cities, privately owned stadiums (Lotus Versfeild and Royal Bafokeng) and facilities
         with long lease agreements (Ellis Park and Vodacom Park) have been upgraded with State funds.
         Though the money has been raised through taxes, these improvements inordinately benefit the
         stadium owners or lessees.
        Most of the land around the Greenpoint stadium is leased to historically significant sporting clubs
         at sub-market rates. Until recently, the Hamilton rugby club was paying the City of Cape Town 180
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         rand per year (less than 20 Euro) for 3 practice fields, which are only used by paying members.
         Residents in the newly-built Joe Slovo flats in the N2 Gateway project must pay at least 400 rand
         per month for their poorly-built double-storey two-room shelters.
        Four major road upgrades are in progress around the city: Hospital Bend/N2 upgrade; Koeberg
         Interchange; Main Road in Muizenberg, and the construction of the new Granger Bay Boulevard
         and elevated traffic circle in Green Point. None of these will alleviate the N2 Traffic from
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         Khayelitsha to the CBD that most South Africans deal with daily.
        At least eight new hotels are being built in Cape Town. This will mean there are at least 3 500
         rooms within walking distance of the stadium; 7 000 rooms within a 15 minute driving radius, and
         16 000 rooms within a 45 minute driving radius. By the end of 2009, there will be 26,500 rooms for
         foreign tourist families, most of which are located on prime city land, which could have been used
         as medium-density infill housing. FYI: the City of Cape Town only builds 20,000 low-income
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         houses per year.
        Free primary healthcare will be provided for all spectators at official venues, including a script or
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         referral to a health facility if necessary. The Department of Health is investing 8 million rand to
         upgrade emergency centers designated for the World Cup, 27 million for a helicopter service, 37
         million for national communication centers, and 135 million for vehicle upgrading. Though most
         South Africans have very poor access to health care themselves, these investments are meant to
         benefit foreign spectators.
        R666 million will be spent on safety and security in Cape Town during the month of the World
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         Cup. This budget is focused almost exclusively on tourist areas.
        The entire Greenpoint area will be controlled by FIFA during the event: only FIFA sponsors will be
         allowed to advertise and trade in the high-traffic areas around the stadium and all street traders
         currently working in Adderly Street and around the Golden Acre will be moved out for the duration
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         of the World Cup.
        After the World Cup, SAIL Group and Stade de France Consortium have a 30-year lease to jointly
         operate the Greenpoint Stadium. Only 20% of their yearly profits will be recouped by the City of
         Cape Town – if they run at a loss, the city will only receive 1 rand. The city has no projections on
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         how long it will take to recoup their investment.



1
  Personal Interview with DAG Staff: October 8 2009.
2
  Mcetywa, Nomfundo. “Hiding the shame of poverty for 2010.” Sunday Times. 11 November 2007.
3
  Conversation with Pete Van Heredeen at the City of Cape Town
4
  Power point presentation from Pete Van Heredeen at the City of Cape Town
5
  City of Cape Town website: http://www.capetown.gov.za
6
  City of Cape Town website: http://www.capetown.gov.za
7
  www.sa2010.gov.za/government/safety.php
8
  Cape Town Draft FIFA Bylaws: http://www.capetown.gov.za/en/ByLaws/Draft%20bylaws/2010%20By-laws%20-
%2005%20August%202008.pdf
9
  Power point presentation from Pete Van Heredeen at the City of Cape Town


14 October 2009                                                                                   Page 2 of 6
           According to Revenue Laws Amendment Act 20 or 2006: “The Act creates a “tax-free bubble”
            around FIFA designated sites so that profits on consumable and semi-durable goods sold within
            these areas will not be subject to income tax; neither will VAT be applied.” This “tax-free bubble”
            ensures the South African state will not be able to collect income tax from FIFA employees or their
            investment partners, including: FIFA delegation members, referees, officials of national
            associations, FZFA confederation official, Commercial affiliates, broadcasters, media
            merchandising partners, designated service providers, concession provider, hospitality service
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            provider, and nominated FIFA flagship store operator. Although the state has made an incredible
            investment into infrastructure for FIFA, it cannot be recovered in income taxes at the event.

We at the Development Action Group are concerned with the land use management policies in South
African cities, particularly as they are increasingly geared toward foreign (not local) benefit. For us,
investment patterns for the World Cup merely highlight this fact.

About Development Action Group

DAG has a long history of urban advocacy to create South African cities which enhance human rights,
dignity and equity. We have built a considerable track record in community-centred development through
self-help housing, informal settlement upgrading and pro-poor policy which addresses economic, social
and spatial imbalances. Through DAG support, 5,150 new houses have been built, resulting in improved
tenure security for more than 25,000 people and direct assistance has been provided in securing land,
infrastructure, housing and community services to more than 100,000 households in over 60 projects.

However, adequate housing means more than just shelter. In order for housing to enhance human rights
and dignity, it needs to be located in areas that are close to urban opportunities, including employment,
education and healthcare, so that all citizens can live in integrated, equitable and efficient
neighbourhoods. Unfortunately, it is becoming increasingly evident that isolated projects will not achieve
housing on the scale that is needed to alleviate South Africa‟s shelter backlog and revise apartheid‟s
legacy of urban segregation. The current urban inequity will continue unabated unless there are huge
changes made in the ways that land is managed in South Africa‟s cities.

Consequently, DAG is calling for the creation of a new urban order – where urban areas become
equitable, inclusive and efficient with mixed income and mixed use developments. We want cities to be
places where the poor and marginalized have access to amenities, services and job opportunities. We
want the vulnerable and disenfranchised to have a voice in decision making on urban planning and
development.

To achieve this vision, DAG has developed an equitable land-use strategy, informed by the Right to the
City Statutes in Brazil, which were legislated following a campaign by social movements in 2001. The City
Statutes affirm the social value of urban space and property, provide for regulatory and financial
instruments to effect the construction and financing of a new urban order to benefit all citizens equitably,
and advocate for democratic control over city planning and development. For us, it is absolutely
imperative for the South African government to take decisive and strategic action in making land and
property markets work to benefit the poor.

DAG‟s strategy represents a new and innovative approach to participatory development processes that
address the poor‟s inability to access land. Such efforts to promote pro-poor land policies have not been
implemented or explored by other development organisations in South Africa. Our previous experience of
advocacy, planning, and working successfully with both government and communities, places us in a
strong position to lobby for a new urban order.




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     www.sa2010.gov.za/government/revenue_laws.php


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Two Communities Affected by the World Cup

Through DAG‟s two decades of experience in the urban sector, we have worked with two communities
that have been greatly affected by the World Cup: one in Delft and one in Greenpoint. Below is some
background information about our relationship with each.

Our partnership with Tsunami and Thubelisha

The Tsunami and Thubelisha settlements in Delft were created in 2004 and 2005 as a result of the N2
Gateway project in preparation for the World Cup. The National Minister of Housing took advantage of the
World Cup bid to launch a large-scale housing project between the airport and the city centre to upgrade
the most visible shacklands in Cape Town. The informal settlement of Joe Slovo was to be the first
affected by the ambitious N2 Gateway Project. Joe Slovo began in the early 1990s at the intersection of
Vanguard Drive and Washington Street and rapidly expanded westwards along the N2. Due to its good
location within Cape Town, it grew rapidly: In 1996, there were 1 195 dwellings in Joe Slovo, 2 153
dwellings by 1998, 4 300 by 2000, and almost 5 500 by 2003. These dwellings were concentrated in a 30
hectare area, making it one of the densest settlements in the city. The rapid growth of Joe Slovo resulted
in an increased fire risk, inadequate sanitation, and poor health conditions.

As with many upgrading projects, the N2 Gateway was planned in such a way that most of the current Joe
Slovo residents would not be able to afford accommodation in the new project. So, when a fire broke out
in Joe Slovo, the City of Cape Town and the National Ministry of Housing used the tragedy as an
opportunity to de-densify the settlement. Those who were displaced by fire – some 2000 households –
were not allowed to rebuild their shacks and were instead sent to temporary relocation areas (TRAs)
around Cape Town.

Immediately after the fire, nine TRA sites in Langa and two in Epping were identified for temporary
housing – but residents associations in each community expressed strong resistance to the
accommodation of Joe Slovo residents in their areas. And so, after discarding over 17 different sites, a
cemetery in Delft was chosen as the primary relocation area. Although Delft had been the site of large-
scale subsidized housing delivery over the past 15 years, it was notorious for its poor location and badly
developed transport links (especially the lack of a rail link). Still however, the City of Cape Town decided
this was the best option available and quickly built over 2000 corrugated fiber cement houses for former
Joe Slovo residents. This part of the TRA is known as Tsunami and still is managed by the City of Cape
Town. Subsequently, however, the National Minister of Housing suspended the City of Cape Town‟s
participation in the N2 Gateway Project saying the DA-led city council was using it as a “political football.”
Thubelisha Homes was, therefore, appointed as the project manager and implementing agent for the next
phase of the Delft TRAs (3200 units), which became know as Thubelisha.

Life in the TRAs was overwhelmingly bad for former Joe Slovo residents, who had very poor access to
ablution facilities, and very few basic amenities including transportation and healthcare. Many residents
lost their jobs because of the poor transportation, children dropped out of school, and social support
structures that existed in Joe Slovo were irreparably disrupted. Even though most residents living in
Tsunami and Thubelisha have now moved into formal housing, this has been a small consolation in most
cases and the immense social problems persist. As a result, there is a pervasive sense of hopelessness
and discontentment amongst residents in Delft. In 2005, DAG conducted extensive surveys amongst
Tsunami and Thubelisha residents in order to document their struggle to survive under such conditions.
DAG has engaged in an ongoing partnership with these community members to help them become more
integrated into the social fabric of the city.

To compound these problems, people already living in backyard shacks in Delft were very upset about the
expedient provision of housing for people from Joe Slovo. These backyard dwellers felt entitled to the
units as they had been living in very poor conditions and waiting for houses for many years. Thus, 148
units in Tsunami were illegally occupied. The City of Cape Town evicted these squatters, some of whom
have since taken up residence on the pavements of Symphony Way to raise awareness of their need for
shelter.




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Our partnership with Rainbow Housing Cooperative Limited

Rainbow Housing Cooperative Limited (RHCL) is an initiative of low-income earners who came together to
address their housing need. The initiative started in 1996 where caregivers, cleaners, gardeners,
caretakers, chauffeurs, restaurant and hotel staff felt that they could not continue to live under unbearable
conditions, and organized themselves into a housing project. The group named itself Rainbow Housing,
and formed a housing cooperative. Membership comprises mixed racial groups that represent „a rainbow
nation‟, and they registered as Rainbow Housing Cooperative Limited (RHCL) in 2003. RHCL is a project
of people who work and stay within or around the Atlantic Seaboard and Cape Town CBD. For the past
decade, DAG has been supporting the Cooperative whose members generally earn monthly incomes
below R3500.

Low-income earners working across South Africa are very vulnerable in terms of their basic human rights.
Some of the daily adversities they face include long and irregular working hours, huge traveling distances,
heavy workloads, low wages, overcrowded living conditions, and the need to live separately from children
and partners. Notwithstanding the critical and valuable work these workers do in private homes, shops,
hotels and restaurants, opportunities of access to housing close to their places of employment are limited,
and often non-existent.

The Cooperative‟s long list of advocacy and lobbying efforts over a ten-year period with different spheres
of government, and attempts to access affordable housing close to their places of employment have been
fruitless. Cooperative members marched peacefully to parliament on 17 May 2007 to hand over a
memorandum to the national minister of housing about the lack of affordable and adequate housing in the
CBD and environs for low-income households. The memorandum made several recommendations, of
which one is to revise the current social housing model to make social housing affordable to a greater
number of low-income households. Currently, social housing is not affordable to households earning less
than R2500 per month (66% of the CMA‟s employed population) and limited numbers are provided.
Another critical consideration is the provision of affordable good quality government subsidized rental
housing on well-located land, and the importance of this type of housing to fill a vacuum in the housing
instrument continuum, especially in inner-city areas. Public rental housing on State-owned land presents
opportunities for government to retain land as an asset put to use, in perpetuity, for the public good.
Employers of some of the Cooperative‟s members have indicated their willingness to contribute towards
housing their employees; on condition that government ensures security of tenure to beneficiaries.

It is apparent that the pursuit for affordable housing is not an easy task in the context of a market-driven
economy and property market that excludes the poor, especially in a city that ranks amongst one of the
world‟s most unequal cities. Through intergovernmental cooperation; strategic and purposeful state
intervention to regulate land and property markets; appropriate housing instruments; creative approaches
to housing; public-private partnerships; and a commitment to use public land for high-quality public rental
housing, opportunities can open up to make Cape Town an inclusive and equitable city.

Cape Town‟s distinctive role in positioning itself effectively for the opportunities of the global market does
not only depend on world class physical infrastructure (such as soccer stadia and efficient transport
systems for 2010), but also on the quality of housing opportunities for workers in the service and related
industries (predominantly women) closer to their places of employment. Distribution of wealth from the
growth of the local and regional economy can take effect in the form of better housing opportunities for
workers in the service and related industries closer to their places of employment.

Recently, on Saturday 15 August, councilor JP Smith of the City of Cape Town, a supporter of the
Rainbow Housing Cooperative‟s efforts, councilor Shehaam Sims, Mayco member for Housing (City of
Cape Town), and Mr. Trevor Mitchell from the City‟s Housing Policy and Research branch, attended the
Cooperative‟s general meeting. They commited to seek innovative ways to deal with the issue of
affordable housing in the CBD and Atlantic Seaboard for vulnerable residents who are already living and
working there. Their announcements of transferring the ownership of Wynyard Mansions from provincial to
local government; renovation and extension of the building; setting up a trust on behalf of the Cooperative;
and amending the City‟s housing policy to first allow people who live in the area to have access to the
local rental accommodation, was encouraging after years of struggle. However, it remains to be seen


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whether anything concrete will transpire. Some Cooperative members have been working and living in
these areas for more than 25 years, often in circumstances of insecure tenure and inadequate housing.
Without support from local and provincial government, especially in the form of land and/or buildings, it is
practically impossible for low-income households to access affordable housing in affluent areas.




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