Informal rental housing in the global South: managing soft densification for sustainable neighbourhoods

A growing proportion of urban residents live in informal rental housing, especially in the global South. While informally constructed rented accommodation offers multiple public policy benefits, the rapid and unplanned growth of rental units can have significant negative impacts on neighbourhoods and residents. This paper draws on neighbourhood level data from Cape Town, South Africa, to examine how informal rental housing markets drive the soft densification of a low-income settlement. It illustrates the enormous scale, density and diversity of informally constructed and commercially rented accommodation and unpacks how bottom-up building practices intersect with an inappropriate regulatory regime. Widespread informality limits government’s capacity to guide soft densification and mediate between its inherent tensions, trade-offs and conflicting public/private interests. We argue that recognising the economic logics of informal rental housing markets is crucial to understanding why, where and how informal soft densification occurs. We present a novel framework to assist policymakers in better engaging informal rental housing markets, outlining seven spheres of action, to promote the sustainable densification of urban neighbourhoods and cities. In offering concrete suggestions we contribute to wider debates about planning for informal urbanism.