ANTHONY BUTLER | Cape Town faces tough questions about inclusive urban development

Healthy debate around the V&A Waterfront’s role in reinforcing or bridging Cape Town’s divide

First published in Business Day

September 10, 2026

The Victoria & Alfred (V&A) Waterfront is often presented as one of the world’s most successful urban regeneration projects. Jointly owned since 2011 by Growthpoint Properties and the Public Investment Corporation, the Waterfront this year boasts 13 hotels, 15 conference venues, 400 small and medium sized businesses, 170,000 cruise passengers from 63 ships, and 25 million visits from locals and tourists.

The V&A has also attracted sustained criticism over the years. It has been described by its critics as an exclusive enclave in an unequal city. Despite public accessibility, the precinct is managed by a private company, with its own security, rules, and commercial priorities. It offers a polished, safe version of Cape Town that is largely disconnected from the poverty visible only a few kilometres away.

While the Waterfront has been successful economically, moreover, that success has pushed up surrounding property values in Green Point, De Waterkant and the Foreshore. Disagreement has simmered about whether this represents healthy urban regeneration or displacement of lower-income residents and businesses – a reason new luxury residential developments provoke strong reactions.

The V&A therefore embodies a fascinating tension, serving as a great post-apartheid urban success story and a major engine of employment and tourism, but also as a symbol of the city’s – and the country’s — enduring spatial inequality.

A new phase of V&A development promises further controversy. New residential blocks and hotels (one rather spectacular) are under construction, and both retail and entertainment spaces are expanding. A “superyacht arena” will shortly open to host the mega-ships of the world’s typically rather odious but high-spending billionaires.

Now a planned R24bn Granger Bay expansion project proposes to reclaim about 3.8 hectares from the sea and create a new protected bay, tidal pools, beaches, hotels, apartments, offices and public promenades.

Speaking at the Cape Town Press Club earlier this week, Waterfront CEO Graham Wood claimed the project will create thousands of construction and permanent jobs, improve coastal protection against storm surges, and provide new public access to the shoreline. Opponents continue to raise concerns about building heights, years of heavy construction traffic as breakwaters are built, and impacts on marine ecosystems and archaeological remains.

Litigation-happy local residents can be bought off, and city mayor Geordin Hill-Lewis and national environment minister David Maynier — both of whom belong to the more reputable wing of the Democratic Alliance (DA) — are likely to give the reclamation application a sympathetic hearing. Necessary parliamentary ratification, however, is likely to prove challenging.

In key respects, the Waterfront exemplifies a controversial model of urban development and city growth championed by the DA. Perhaps best conceptualised by influential urban economist Ted Graeber, this approach suggests that city governments should conceptually separate two fundamentally different roles: a “for-profit” function, in which the city acts like a real estate developer, assembling land, investing in infrastructure, enabling density, and capturing increases in land value to generate revenue; and a “social” function, through which revenue generated from land and property development is used to pay for the city’s central public mission of reducing poverty through housing, services, transport, and other social investments.

Graeber’s memorable formulation is that a city should think of itself as owning a profitable real estate company whose purpose is to fund a non-profit poverty reduction organisation.

If this is indeed the DA’s position, the pre-election period would be an appropriate time for DA leaders to set it out. The interesting debate is not whether the Waterfront can succeed economically, but whether the City is appropriately separating its revenue-generating property business from its redistributive activities, whether valuable public land is being managed with a coherent value-capture model, and how the overall strategy will ultimately produce a more inclusive and prosperous city.

Butler teaches public policy at the University of Cape Town