Making space for informal traders in SA’s formal retail areas

Inclusivity and spatial justice are two emerging themes that increasingly dominate discussions around urban areas. Internationally, Goal 11 of the recently launched Sustainable Development Goals focuses on making “cities and human settlements inclusive, safe, resilient and sustainable.” In South Africa, similar commitments have been made, with the National Development Plan arguing for “an inclusive society and economy,” and arguing for spatial development to be guided by a series of normative values, including Spatial Justice. This has been reinforced in legislation through the promulgation of the Spatial Planning and Land Use Management Act No. 16 of 2013, which includes in Section 7(a) the principle of Spatial Justice as being a guiding normative value for land development.

South Africans are now faced with finding a way to achieve this. Traditionally the focus has been on providing better located housing for the poor; however, there is an argument to be made that an inclusive (and spatially just) urban settlement is not just one which provides housing in the correct locations, but is also a settlement that economically makes space for the poor. At a broader city level, the transition of the city economy should be encouraged towards industries that are labor-intensive and provide work for low, or semi-skilled workers. But while this is certainly needed, there are also micro-level changes to the urban form that could be made.

One method of achieving these micro-level changes is to mandate the inclusion of micro-enterprises and informal traders in formal retail areas, something which a few retailers have already begun doing. For instance, Old Mutual and the City of Cape Town in 2008 set up the Dreyer Street Market in the road running between the two buildings which make up Cavendish Square in Claremont, Cape Town. This market attracts wealthier consumers who shop at Cavendish Square and thus the informal traders of the area gain access to these customers. Another example of this is 27 Boxes in Mellville, Johannesburg. This unconventional shopping centre is made of shipping containers and has stores ranging in size from 9.22m2 to over 226m2, with rental rates varying from ZAR1 844 to ZAR27,173 a month, with a median value of ZAR4 174 a month. This enables a wide mix of entrepreneurs to sell from this shopping centre, from emerging microenterprises to established small businesses.

Another aspect to consider is the design of formal shopping malls, and how this can exclude or include poorer consumers. For example, Kuben Pillay has demonstrated in his case study of Menlyn Shopping Centre how originally the position of public transport stops and lack of formal facilities for taxis around the centre forced pedestrians to cross unsafe public roads to be able to access the shopping centre. Fortunately, in this case Tshwane Metropolitan Municipality, in partnership with Old Mutual, upgraded the public transport and pedestrian facilities around the shopping centre, remedying this unpleasant and unsafe situation.

However, the question remains; which mechanisms(s) could be used to make these interventions the norm in formal retail areas, not the exception? One possible mechanism is using zoning schemes. For instance, zoning schemes could require all property owners who build medium to large shopping centres to set aside space for informal traders and/or microenterprises, in line with the approach taken in the Dreyer Street Market and the 27 Boxes development. These property owners could also be required to design the shopping centre to be inviting to, and provide safe access, to public transport users and pedestrians. These types of measures would be in line with the normative principle of Spatial Justice, and would incrementally facilitate the development of inclusive formal retail areas in South African urban areas.

However, to ensure that this does not negatively affect property developers certain incentives could also be offered, for instance not counting the space used by microenterprises in the floor area calculations of buildings. Municipalities could also provide a rates rebate for a portion of the cost of the upgrades to the public environment, and possibly the cost of building the structures for the informal traders and micro-enterprises.

Incentives such as this hold the potential to unlock one piece of the much larger puzzle of how to create inclusive urban areas in South Africa, and would remove one of the many barriers emerging entrepreneurs in South Africa face in gaining access to potential consumers.


Stuart Denoon-Stevens is a professional planner, a junior lecturer at the University of the Free State, and a researcher focusing on municipal land management, with a particular emphasis on pro-poor approaches.

Photo: Traders at Dreyer Street Market in Claremont, Cape Town. Brendon Bosworth.

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