Equally importantly, our focus on impact investment enables ordinary South Africans to enter the property market and stimulates inclusive, local economic growth. Job creation, small enterprise creation and access to opportunity are some of the micro-economic impacts we measure over and above our affordable housing outcomes.
AFFORDABLE HOUSING
Public sector budgets must be realigned to prioritise infill and well-located housing projects. Though these investments may require higher initial allocations, the alternative exacerbates urban sprawl which necessitates new infrastructure and services. These are often not paid for due to indigence, adding to an already considerable fiscal burden.
By contrast, in-city housing developments yield long-term benefits, including increased property values, enhanced service payments, and broader economic growth. The cost of in-city development is more than justified when considering the medium-term fiscal and economic impacts.
The role of private investment The challenge of affordable housing is not one that government can tackle alone. Private investment, particularly from micro- and medium-scale property developers, is essential. TUHF, with its 21-year track record, has demonstrated that it is possible to achieve significant scale in affordable rental housing. We provide inclusive development finance to property entrepreneurs in cities and townships, supporting urban densification and the economic benefits that come with it.
TUHF and its subsidiaries stand out as one of the few institutions willing to provide inclusive development finance to property entrepreneurs in inner-cities, in-cities and townships, achieving significant scale in affordable rental housing. Our model- if taken seriously as a national investment strategy aiming for 10,000 small-scale( average 20-unit) projects per year- is not only achievable but also crucial for addressing the affordable housing backlog.
We recognise that addressing urban sprawl requires tailored approaches, as each region presents distinct opportunities and challenges. Our‘ feet-on-the-ground’ strategy allows us to leverage local insights, ensuring our developments meet the unique needs of the communities we serve. In-depth, local market knowledge is a critical factor we consider when assessing potential financing partners and enhances our specialised approach to risk. We have found that local market knowledge and lived experience are often more reliable indicators of success for the entrepreneurs we finance, compared to traditional metrics. This hands-on approach increases our ability to make sound, well-informed business decisions.
Equally importantly, our focus on impact investment enables ordinary South Africans to enter the property market and stimulates inclusive, local economic growth. Job creation, small enterprise creation and access to opportunity are some of the micro-economic impacts we measure over and above our affordable housing outcomes.
52 REI MAGAZINE DECEMBER 2024 / JANUARY 2025