Challenges in affordable housing investment However , accessing finance for affordable rental housing is only the first hurdle . Rising operational costs – including rising property taxes and service charges which have outpaced inflation – create additional challenges for developers .
Corruption in many areas of local government , including the national and metro police services , issues surrounding cross-border trade and bribery , and the rise of “ construction mafias ”, complicate the investment landscape . Some municipalities are beginning to address these challenges , but the problem persists .
Additionally , non-payment in certain areas further complicates the fiscal landscape , as demonstrated by the way inner-city revenues are used to subsidise less financially stable regions . All these factors combine to have a negative impact on property investment and are leading to disinvestment .
A net positive for inclusive growth Despite these obstacles , well-located affordable housing remains a fiscally prudent and economically inclusive investment . By refurbishing existing buildings in inner cities , developers can capitalise on existing infrastructure , reducing the costs associated with outlying developments . Quality , affordable housing boosts property values and stimulates economic activity , making urban densification a financially sound strategy .
Inclusive economic growth is fundamentally a micro-economic issue . The creation of small and medium enterprises and job opportunities happens at the neighbourhood level . When safe , decent affordable housing is available in a neighbourhood , economic activity is stimulated by virtue of the fact that tenants can pay their rent , access goods and services from local small businesses and engage in the amenities available . Access to affordable housing is crucial for unlocking wealth-generating opportunities and fostering livelihoods .
TUHF ’ s partnership with The Jobs Fund is a testament to our commitment . Together , we have successfully delivered 125 affordable housing projects , creating nearly 3,000 units and over 1,900 jobs . This collaboration demonstrates the transformative potential of well-located affordable housing for local economic development . Local economic development , in turn , stimulates the fiscus as people pay their rates , taxes ( including VAT ) and utilities .
Addressing urban sprawl requires a strategic , long-term approach that prioritises incity affordable housing . By leveraging existing infrastructure and focusing on urban densification , we can create a scalable , replicable , and sustainable environment for inclusive economic growth . And the net effect is fiscally positive . Affordable housing is not just a social need ; it is an investment in the future of our cities and our country
About the Author Paul Jackson is the CEO of TUHF a commercial property financier that provides specialised financial services and solutions to clients in urban areas of large metropolitans across South Africa , based on the Group ’ s in-depth market knowledge and targeted business model . .
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