Housing in Southern Africa July 2016

as it is now incorporated into the Breaking NewGround Strategy. “All of this points to growth,” Mogane says. Government has increased the social housing budget and it forms part of human settlements, inte- grated developments and Catalytic projects. “This is exciting. The sector is growing and maturing.” He cites providers who have achieved criti- cal mass such as the Johannesburg Housing Company, Sohco in Durban and the Eastern and Western Cape who are the pioneers in social hous- doing an excellent job. Social housing is increasing andwe are nowentering the second stage of social housing, which is accelerated growth,” says Mogane. “Government has admitted that to continue to provide RDP housing is unsustainable given the high cost of land and infrastructure for a single unit compared with building social housing, which is more efficient and sustainable. Social housing lends itself to high rise densification and provides more units on the ground.” Mogane is adamant that social housing is a better way to house more people affordably. The NHFC has weathered rent boycotts andwas the sole funder of social housing in the early years. Some social housing institutions ing. Communicare in the WesternCape is alsogrowing and is one of the oldest in the country. It was initially set up without much gov- ernment support, and is

were hard hit by rent boycotts and unable to repay the NHFC, whilst others continued to make monthly payments. Default rates were high, up to 90% in the initial stages, com- pared to current levels of 7%, which is the norm. NHFC’s social housing portfolio accounted for 10% of its portfolio then and today is 30% and worth R750 million. Mogane says, “The NHFC has survived over the years because of great leadership at Board level and good management.” The NHFC has put in place robust processes and poor quality units and workman- ship, costly over-runs are a thing of the past. “We ensure that we can be proud of the projects we fund.” The Cape Town Community Hous- ing Company continues to be a tricky issue. The NHFC partnered with the City of Cape Town in 2003/2004 to provide a social housing vehicle for low income communities. The Cape Town Community Housing Company instalment sale innovative product enabled people to rent until they had sufficient funds to purchase a home. It offered potential home owners the opportunity for monthly savings. The City of Cape Town donated the land and between government subsidies (R18 600) and a loan from the NHFC, the buyer would purchase a house for

R31 600, after saving R500 per month for a 24 month period (R12 000). It was a brilliant concept but sadly failed due to poor quality housing and workmanship. The saving rules were relaxed and people no longer had to save in the scheme. Mogane says, “Where else can youbuy a house for that price.” The City of Cape Town sold its stake in the project to the NHFC and the state-owned entity became the sole owner. The project stalled as the project manager failed to address issues fromresidents time- The state-owned entity would like to sell the Cape Town Community Hous- ing Company, now that all the legal issues have been addressed. “TheCapeTownCommunityHous- ing was an innovative, experimental model and its downfall was the re- fusal of tenants to pay. The concept was ahead of its time, boldly using alternative materials and the units are beautiful,” says Mogane, “but it is nownecessary to exit, as to own such a company is not in line with NHFC’s mandate.” The NHFC fulfilled its mandate as amarket maker in establishing social housing and introducing innovative financial products and has diligently funded the sector for 20 years and assisted in making life a little easier for the lowest income earners. ously and incessant com- plaints led to non-payment by tenants. The NHFC still faces the problemof 200 household- erswho are not paying rent.

Social housing is increasing and we are now entering the second stage of social housing, which is accelerated growth.

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