3 disruptions to change Cape Town

I once had a lecturer who said when thinking about the future the biggest mistake we can make is merely projecting the trends of the past.

He also spoke about our orientation to the waves of change that inevitably come — you get the folks who are standing with their backs to the ocean, watching the water run back under their feet wondering where its going; the folks facing the ocean analyzing the waves, debating at what point it will break; and then you get the surfers.

I found this on Pinterest.

Here are three things I see disrupting the Cape Town metro in the near-term, and ideas on how to be the “surfers”.

  1. From providing infrastructure and services to creating the standards for inter-operable microgrids and private services.

Municipalities have typically provided access to services like water, energy and mobility through the provision of large scale infrastructure and services that run on/through that infrastructure. This is financed through national taxes, local savings and debt, and consumption charging. Telecoms is a service that teaches us a new model — that of setting standards and allowing licensed operators to provide access directly. Telecoms are, arguably, also the only service to keep up with rapid urbanisation in under-resourced/highly unequal cities.

To some extent this differentiation already happens in the transport space, with anything from Amaphela to Uber forming a signification part of mobility alongside state-run services like MyCiti and Metrorail. In the energy sector loadshedding was a “disruptor” that saw people move off grid and/or reduce consumption, with large impacts on the City’s revenue from energy consumption; and talk begining about local feed-in systems where the City owns the distribution infrastructure, but trading of energy is decentralised and “peer to peer” or “business to business”. The idea of blockchain enabled micrgrids has been explored in other contexts. The current water crisis presents another potential shift in this direction — if the “new normal” is reduced consumption, jojo tanks, on-site treatment, closed-loop showers, boreholes, private desalination and private air-to-water; what does “post-new-normal” look like from a water and sanitation service delivery perspective?

In this context the role of the municipality is to create inter-operable system standards, and introduce regulations and/or cross-subsidization that ensures social equity in access to energy, water and movement.

In order to ride this wave:

The City of Cape Town should be investing in thought leadership and introducing knowledge sets into their administration such as artificial intelligence, blockchain, data analytics and “API” development so that control of the protocols, and the revenue models, remains at least mostly in the realm of public benefit.

2. The biggest land transfer my generation will see?

I’ve (tongue in cheek?) been referring to the City’s plan to have the rail function devolved to the local level as a “land transfer deal disguised as a transport project”.

My full support of the city’s intention to offer a high quality integrated mobility system notwithstanding, the fine print of the plan reveals that over R3trillion in station precincts (i.e. incredibly well-located LAND, my fellow South Africans!) will be devolved along with the rail infrastructure. This amount doesn't even include the value of the rail reserves and, arguably, some stretches of rail that can feasibly be sunk or elevated, unlocking development opportunity.

Control of this amount of land for an administration geared towards Transport Oriented Development (TOD) offers locally unprecedented opportunities for integrated development and land value capture.

If done well, this land can be used to integrated communities, create new development models, create new developers, and, hopefully, balance social and economic economic value creation with enough revenue creation to handle the transition described in 1 above, and many others for generations to come.

In order to ride this wave:

The City, communities and their partners need to start planning what to do with this land, now, keeping in mind guiding principles of SPLUMA, and looking to global best practice for land-value capture that is sustained over the long-term (i.e. through partnerships, leases and concessions rather than outright sales). This requires economic, land use, legal and social facilitation knowledge.

Spatial Planning and Land Use Management Act (16 of 2013)

3. Gearing investment and growth to the bottom-up.

The days when we sit around a table with Uber and AirBnB as disruptive partners, but send law enforcement to arrest a tuk-tuk driver or a backyard landlord have to come to an end.

If we recognized that, when thinking about innovation, our greatest disruptors are local, we will unlock opportunities like:

  • Decentralized call center: if a constraint to investment in a township call centre is the costs of building and securing a high-tech facility, but all a call centre operator needs to do their job is a connection and a screen, why not advance the ideas of at-home/location-of-device call centres? Apparently, this already exists in Delft.
  • Digitalised stokvel — groups savings, insurance and buying schemes are the original local “sharing economy”. Can these be digitalised and exported? (Without stealing or appropriating the idea, but genuinely building on existing structures and protocols?) Pineapple and SpazApp are two examples.
  • Pre-approved micro-developers- in Philippi they call it “the pig”, in Joe Slovo city planners note the “incremental densification”. A BNG house is not just a place to sleep, it is a capital asset — and some are converting these assets into small apartment blocks to get capital gains in otherwise slow-value-growth locations. Can we, on giving over the key (or even just the land and title deed), also offer a pre-approved building plan and a finance product to stimulate a world of micro-developers that is already proving its viability?

In order to ride this wave:

The City and its investment and economic development agencies need to orientate their (our) outlook not just to international investors, but to the “hippos in the desert” (those examples of businesses thriving where constraints to investment appear to be the greatest) — these innovative businesses offer us the strongest clues about our future economy. And just like Uber and AirBnB, if they appear strange, or illegal, or difficult to regulate on first glance, let’s sit around the table and figure out how to innovate equitably, together.

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