But in Franschhoek in the Western Cape, opposing interest groups are generating money from homes built for the rich on disputed land, and that money is being used to build free homes elsewhere for the poor. The resulting R1bn development on commonage owned by the town council will also have:

• A working black-empowered wine farm with 19 R5,5m subdivisions ;
• A 15 ha tourist precinct with a community-owned hotel, conference centre and art gallery;
• A Red Shed craft centre, a twin of the centre of the same name at the V&A Waterfront;
• A plastic surgery clinic (presumably to meet the growing overseas demand for more affordable nose jobs);
• Training for entrepreneurs;
• A 2 ha prime residential development whose profits will go to organised land claimants;
• One hundred sectional title units; and
• Fourteen riverside plots, 10 of which the Pam Golding agency has sold by word of mouth for between R1m and R2,7m.

The dispute started 10 years ago when the Franschhoek municipality tried to sell its 102 ha commonage to neighbouring landowner Chris Hellinger for R2m, to stop it being taken over by land claimants and squatters. Squatters and land claimants interdicted the sale, starting a long, hard battle.

But government policy developments and a set of remarkable individuals coincided to provide a creative solution. One of the first people to move to centre stage was SA's first postapartheid ambassador to French-speaking Africa, Willem Steenkamp, who had recently retired to Franschhoek.

Steenkamp had become chairman of the local Rapportryers, the Afrikaans cultural organisation, as well as secretary of the regional ANC. These connections, added to his diplomatic skills, enabled him to work with all sides.

One early contact was Wilfred Moses, head of the Franschhoek community forum that opposed the council. Another was Franschhoek town clerk Piet Smit, who first got the warring parties to meet.

Inch by argumentative inch, the community came to the idea that development was good if the profit was used to build free housing. But a suspicious community demanded that its houses be built before the commonage was developed.

Amazingly, everyone agreed to this. In 1998 a social accord was drawn up to develop the commonage and use part of the proceeds to build affordable housing and compensate the land claimants. This transformed conflict into a planning process.

The council advertised for development proposals. Proposers included the V&A Waterfront Co (V&A) and New Housing Co (NewHco), a social-housing nongovernment organisation . Then a broad grouping of V&A, NewHco and local businessmen formed the Franschhoek Development Co (Frandevco) with 10 shareholders. They include Steenkamp, former Cape academic Franklin Sonn, former Sanlam asset management chief Johan van Reenen, New Age Construction chief Dawie du Preez, former marketing executive Peter Middleton and local business people Val Ackerman, Jean-Pierre Snyman, Gordon Jones and Brett Gage.

In 2000 they signed a "deed of sale and co-operation agreement" with the council. The agreement provided for:

• A 1% levy on sales, and 0,25% on resales, to go to the Franschhoek Empowerment & Conservation Trust (Fremco) for the disadvantaged who were living in Franschhoek in December 2000;
• A commitment to sustainable development, as set out in the Winelands development framework;
• Commitment to an economic empowerment policy to be approved by Fremco;
• Preferential labour training and recruiting for locals;
• A plan for maintaining and commercially harvesting indigenous plants;
• A commitment to the ISO 14001 environmental standards;
• Architectural controls;
• Getting approval of Fremco-nominated "interact" groups for conservation, aesthetic, tourist, architectural and agricultural development; and
• No changes to the development without the approval of 90% of the owners.

This produced the funds for NewHco to develop the first 770 free homes, built at Mooiwater on the northern edge of the village. Land was also found for middle-income teachers, policemen and others who were being priced out of the house market. Frandevco also agreed to pay more than a further R1,2m in purchase price to the council for the land claimants.

Urban and environmental planner Dennis Moss then entered the process. His Stellenbosch-based practice had been promoting sustainable development since the mid-1980s and he had completed one of SA's most enlightened development frameworks for the Winelands regional services council. Steenkamp read Moss's work and saw in it the route to ensure the project's success .

Last year, Frandevco and Fremco, chaired by Mandela Foundation CE John Samuels, appointed Moss to prepare a development framework. "It says something about the trust created within the community that they supported the rezoning of a proclaimed nature reserve into development land - unheard of in the Cape," says Moss.

He says the key to the success of the project is commitment to sustainable development: human well-being, economic efficiency and environmental integrity "that meets the needs of the present generation without compromising the ability of future generations to meet their needs", as it is expressed by the 1987 Brundtland commission on international environmental standards. Also important is the fact that the project architecture fits in with the history and scale of the town.

"The lesson for other developers is that capital always flows to quality," says Moss. "And quality goes right to the detail of how the bricks are laid."

National government's new sustainable development policies, adopted with vigour by the Western Cape government, also played a role. "Agriculture MEC Johan Gelderblom's support was an important factor," adds Moss.

He says appointing Sonn as chairman "added enormously to the credibility of the developers".

The developers should eventually gross R600m and net more than R100m, despite the added complexity of sustainable development. But the financial benefits will be broader. A study by development economists Urban Econ shows that the biggest gain goes to the local council. Its income from the project over the next 10 years will be R230m.

Steenkamp accepts that the pressure for development from the disadvantaged could result in further degradation of many platteland towns. "But this can be prevented by requiring the agreement of all parties to any development," he says. The Franschhoek land and housing development policy framework, for instance, has signatories including the land claims committee, wine makers and tourism groups. Even the Franschhoek leeskring (book club) signed in support.

So what's the catch? It's not easy to find people who can provide the necessary mix of sensitivity, funding, political connections, hard work, vision and diplomacy.

Sadly, developers like things to be simple and tend to resist sustainable development until pushed by the authorities. Maybe, just maybe, the Franschhoek experience will open a few eyes.

• The writer's airfare was paid for by Fremco and Frandevco