Government's past focus on building settlements outside economic hubs was to the detriment of the poor who lived there, Human Settlements Minister Tokyo Sexwale said on Friday.

At the official launch of the Tau Village in Pretoria's busy Struben Street, Sexwale said inner-city housing was a reality.

"This is a method, it is a pointer, it lies at the heart of what we are saying," Sexwale told a gathering on the rooftop of the four-storey building.

"We want to move from the concept of human settlements to reality." He said in the past the poor had been relocated to human settlements and townships far from resources such as employment, hospitals, schools and shops.

"What happens with that type of social planning of the past is that we continue to erode the most critical parts of someone's salary," said Sexwale.

The building that housed Tau Village was once a slum and drug den that was forced to close due to human trafficking and prostitution. It had received a R30 million makeover, facilitated by the social housing provider Yeast City Housing.

It has 81 self-contained family units within the village and a home for those at risk such as the elderly and people with disabilities. In the front of the building there are five shops with a bakery, a restaurant, a hair salon, an internet cafe and a laundromat.

From the rooftop, one can look down the central atrium to newly painted walls of blue with a red border and the newly-hung curtains of tenants who moved in from May 1.

On the rooftop children have been catered for with jungle gym equipment.