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The Western Cape Cabinet has approved a R3bn development where Conradie Hospital in Cape Town used to be.
Premier Helen Zille made the announcement during a press briefing this week.
The development, known as the "Conradie Better Living Model", is a step at redressing "apartheid urban space", Zille said. It is situated between Thornton and Pinelands.
Zille was accompanied by MEC for Human Settlements Bongani Madikizela, Public Works and Transport MEC Donald Grant and Local Government, Environmental Affairs and Development Planning MEC Anton Bredell.
The development brings to an end more than three years of planning and consultation with various stakeholders, including members of the public, through public hearings. It is expected to include affordable housing and catalyse upgrades to road infrastructure and public transport in the surrounding area.
"Transforming apartheid's spatial planning is a big priority for the City, and this project will help accelerate our efforts in this regard. We are planning on getting more projects like these going [in other areas]," a visibly upbeat Zille said.
It was announced earlier this year that the Western Cape government was planning to sell the site to Concor Construction for R202m.
Conradie Hospital closed some 16 years ago.
Public comments on the sale closed on November 14.
Keep housing units in affordability model
Zille said it would be important for the State to subsidise the residential units in collaboration with the private sector.
"The State makes the land available and the private sector comes in to assist financially because we need to have an eye on viability and whether it can be replicated in other areas."
Jared Rossouw, co-director at activist organisation Ndifuna Ukwazi praised the move.
Ndifuna Ukwazi has been supporting lobby group Reclaim the City (RTC) in their campaign for affordable housing and urban land justice.
This week they protested at "Site B" on Cape Town's Foreshore over the alleged "undervalued" sale of the land to Growthpoint properties. The City has instituted a forensic probe into the sale.
READ: Civic groups protest at controversial Cape Town development site
"Too often, neighbours object to new developments because they don't like change but change is needed in the midst of the current housing and segregation crisis. The 'Better Living Model' is exactly what the city needs. It brings together families with different incomes in a well-designed dense development," Rossouw said.
Prioritising the poor
Madikizela said people who would be given first preference would be within a 7km radius of the area within a certain income bracket.
"The existing threshold is those earning between R1 500 to R5 500 [will be given preference], but we are thinking of increasing it to R15 000 and maybe later to R22 000. Our main priority, of course is the poor," he said.
He also emphasised that it was social housing and was for rentals only, determined on a sliding scale: The less you earn, the more subsidy you get and vice versa.
Physical construction is set to start toward the end of 2019.
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