Tackling inequality in the city—Cape Town

Today’s global cities are characterised by high inequality. They need supportive multi-level governance to address it.

One of the biggest and most intractable problems faced by cities is growing intra-urban inequality. By most metrics, South African cities are among the most unequal in the world.

While intra-urban inequality is multi-faceted—manifested in the economy, education, health and urban form—Gini coefficients are typically used to measure inequalites in income and consumption. The hypothetical Gini boundary values of zero and one would represent total equality and absolute inequality respectively. A coefficient above 0.4 is regarded by the United Nations as being of concern. UN-Habitat’s State of the World’s Cities 2010/2011: Bridging the Urban Divide noted that South African cities had income coefficients ranging from 0.69 to 0.75. For instance, Cape Town’s estimated coefficient at the time was 0.69; the most recent figure (for 2021) is 0.63. Although the trend is encouraging, the level is unacceptably high.

Urban inequality in South Africa was deepened and entrenched by strict racial segregation during the apartheid era. Apartheid laws severely constrained the options available to black urban residents, in terms of where they could live, access to education and healthcare and economic opportunities. For example, the Group Areas Act of 1950 reserved certain areas for specific racial groups and resulted in the forced evictions of hundreds of thousands of black residents before it was repealed in 1991.

The Cape Town case

Take Cape Town as a case in point. Founded in 1652, it is the second-largest city in South Africa, with a population of over 4.7 million. Key dimensions of inequality include its high levels of poverty and unemployment.

Unemployment in Cape Town has been increasing, from 18.3 per cent in 2011 to 29 per cent in 2021 (the latter figure likely exacerbated by the pandemic). Poverty is also extremely high, although it declined slightly from 59.8 per cent living below the upper-bound poverty line in 2015 (as calculated by Statistics South Africa, including food and non-food expenditures) to 57.9 per cent in 2021.

As with other South African cities, Cape Town is highly inequitable, its spatial structure generally still reflective of apartheid urban patterns. Owen Crankshaw’s research shows that there is continued high social polarisation and socio-economic segregation but that these are increasingly linked to class—so that the ‘new division is between racially-mixed middle-class neighbourhoods, on one hand, and black working-class neighbourhoods characterized by high levels of unemployment, on the other’.

One of the most tangible manifestations of inequality in Cape Town is informal settlements, which are unplanned areas without adequate shelter or infrastructure. Estimates vary greatly, but the Western Cape Provincial Government’s socio-economic profile of the city reports that, out of 1,135,000 households in 2021, 185,000 (14.1 per cent) were estimated to live in informal settlements.

Post-apartheid constitution

South Africa has multiple layers of government, often with partially-overlapping functions. The City of Cape Town was created as a unified municipality for the metropolitan area in 2000. The Western Cape Provincial Government was established by the post-apartheid South African constitution of 1996.

These levels of government are required to work closely with each other and the national government. For example, in terms of housing, the national government sets the broad policy framework, including the design of the housing-subsidy scheme, and then funds subsidised housing via provincial government, with local government mainly responsible for policy implementation.

Many of the factors underpinning inequality in South Africa, such as the economy and education, largely fall within the responsibility of national government. The South African government has various policies in place to restructure the economy and make it more equitable. Particularly important in terms of reducing poverty and inequality is the welfare-grant system, which provides grants for households with young children and for the elderly.

The government has also restructured education to attempt to make it more equitable. For example, school fees have been abolished for the poorest 40 per cent of schools, which are allocated a larger proportion of the national budget—in Cape Town this applies to 47.8 per cent of schools, a total of 373. As to health, there is free provision of care at public clinics and community health centres—but demand usually tends to exceed supply.

‘Integrated and inclusive’

Local government does though have a key role to play in addressing inequality. Municipal integrated development plans are at the core, representing the high-level strategies of local administrations. Integrated development planning was introduced in South Africa by legislation in 1995 and 2000, which requires local governments to produce five-year integrated development plans (IDPs) laying out their objectives and strategies.

Since the City of Cape Town’s first IDP in 2001, these strategy documents have always included objectives related to reducing poverty and inequality. The 2022-27 plan offers the vision ‘A City of Hope for all—a prosperous, inclusive and healthy city where people can see their hopes of a better future for themselves, their children and their community become a reality’. One of the foundations for this is a ‘more spatially integrated and inclusive city, where people have more equitable access to economic opportunities and social amenities, and the barriers to inclusion and well-being are reduced’.

Addressing poverty and inequality in practice has in Cape Town’s IDPs meant commitments to job creation, free basic services for low-income households, effective and equitable service delivery, adequate housing, public transport, healthcare and social- and human-capital development. In this regard, provision of services has generally been a success story.

Free basic services

According to the 2022 socio-economic profile from the provincial government, 99.6 per cent of households in Cape Town have access to piped water, 97.3 per cent to electricity, 94.4 per cent to flush or chemical toilets and 89.1 per cent to refuse removal at least once a week. In line with national policies for free basic services, more than 40 per cent of households in the city receive free water, sanitation and refuse removal.

As to housing, in terms of quantity provision has been impressive: the City of Cape Town provides on average about 20,000 new subsidised-housing units per year. However, most of this has tended to be on the urban periphery, where cheap vacant land is available, and has thus tended to reinforce inequitable spatial patterns.

Linked to the IDPs, the City of Cape Town’s Spatial Development Framework guides urban planning and public investment. This has attempted to encourage urban densification along transport corridors, aligned with investment in new ‘bus rapid transit’ routes. Such spatial transformation has however been relatively slow; changing the urban fabric of a city inevitably takes decades.

Key strategies

Although inequality is still unacceptably high and a lot still needs to be done, Cape Town highlights some of the key strategies that can help reduce it. At national-government level, long-term programmes need to be in place to make economies and access to education and healthcare more equitable and to deliver some form of social-welfare system.

At the local level, interventions are needed to ensure more equitable access to adequate housing, infrastructure and public transport. And all of this needs to be underpinned by democratic processes and inclusive governance systems—with meaningful structures and processes for public participation.

This is part of a series on ‘global cities’ supported by the Friedrich Ebert Stiftung