REZONING YOUR PROPERTY IN 2024 

Many South Africans who own real estate do often wonder how to maximize the value of their properties. Rezoning is one tactic that is starting to show promise as a choice for a wide range of property owners. The term rezoning typically refers to altering a property’s designated land use under municipal rules from one category (residential) to another, such as commercial, mixed-use, or offices. 

The question always stands why one might consider this a stepping stone to increase the property value. 

The following act as motivation on why a property owner might want to explore rezoning as a investment. 

1. Ensure Diversification

Similar to many other countries worldwide, South Africa’s real estate market is presently going through a time of uncertainty due to the aftermath of the pandemic and continued effects of global and political uncertainty. 

Residential real estate has historically been a secure investment; however, market changes have been experienced due to the higher interest rates. 

A property owner can use rezoning as a tool to mitigate risk and ensure a wider range of diversity in terms of land use. 

A good example can be to initiate a rezoning process for higher densities on a single-erf stand. This can appeal to property developers and investors for future use. 

A second example can be to prepare a sizable piece of land for subdivision which can also increase the appeal to buyers looking to build a house or developers. 

2. Affordable Housing and Social Services

The South African Government provides funding for affordable and low-cost housing, however limited services and input is provided by the Government for middle and higher class residential developments. The onus is therefore on Developers, Town Planners, Entrepreneurs and Property Owners to provide this service. 

A City or neighbourhood can face challenges in trying to make the urban areas more efficient from a land use and transportation point of view. The rezoning of a Single residential stand can bring forth and encourage greater numbers and diversity of housing stock options, mixed land use typologies and commercial opportunities to the market. 

Property owners can also potentially benefit from governments incentives and spatial guidelines.  

3. Covid and Work From Home 

The pandemic has also bought a big shift in work from home and remote working conditions which has led to an increased demand for co-working spaces and home offices. 

Rezoning a residential property to mixed-use could allow a portion of the property to be utilised for commercial purposes. 

Other trends have seen empty Office Space being converted to apartment and residential use by means of rezoning. 

4. Cater to City Growth

Major Metropolitan and South African cities like Johannesburg, Pretoria, and Cape Town, have seen an increase in demand for commercial, mixed-use buildings and higher density development due to urbanisation. Properties earmarked for higher densities, mixed use or retail uses can potentially add value. 

Properties earmarked for a variety of uses in terms of the relevant SDF (Spatial Development Framework) or Council Policies can potential increase the asking price.

WHAT’S INVOLVED IN REZONING YOUR PROPERTY?

Changing the zoning of a property can be a length and complex process, especially for property owners who have not gone through the process before. It is therefore advised that you make contact with a Professional Town Planner to ensure the process is handled correctly. 

Important factors to consider when rezoning a property?

The following items can be considered important and pointers for a rezoning application: 

• Feasibility and Funding: Make sure that you are aware of all the potential costs that can be expected within a rezoning process. Most projects fail do the poor financial planning from a property owner. 

• Timelines: Make sure you understand the timeframes and how long a rezoning can take.

• Council Policy: Speak to a Town Planner to ensure that your rezoning application aligns with Council property. 

• Infrastructure: It is important to enquire with a Town Planner or Engineer to engage with the Municipality on the availability or services in an area. A rezoning application can be stalled or refused if municipal infrastructure is not available in the area. 

• Parking: Ensure the proposed development can provide sufficient parking in terms of Council Requirements

• Density and Floor area ratio: make on the number of units that are being applied for and the floor area/m². The higher the number of units or leasable floor area applied for-can have a significant impact on bulk contribution fees. 

• Professional Team. Make sure you appoint the correct professionals to handle the rezoning process on your behalf. 

IS REZONING WORTH IT? 

Most buyers prefer to purchase property that is already rezoned, and which caters to his/her needs.  A property with approved zoning can demand a higher asking price, depending on market conditions. 

Property owners can therefore make significant profit on their original purchase price. 

Any prospective homeowner needs to understand the timeframes, costs and obligations that form part of rezoning a property. 

Contact Urban Arrow for Professional advice on your Rezoning Journey