Real Estate Investor Magazine July/ Aug 2020 July 2020 | Page 18

COVER STORY
T
he sector of affordable housing and low-rentals has
seen major backlogs. Even in the production of units,
which then translates to and affects opportunities for
employment, tenants’ ability to pay rentals and incomes
for affordable accommodation, property developers
and property owners. As well as, the weakened ability
of households to withstand lockdown and implications
posed by the virus.
Household Resilience
Kecia Rust who is the executive director of the Centre
for Affordable housing Finance in Africa (CAF), believes
that more focus during this time should be on the ability of
households to bounce back post Covid-19. Describing the
current global state of affairs as “tough times,” Rust believes
that as volatile a time this is, it can be also be seen as an
opportunity to densify households to be able to withstand
such times and be able to resist the impact of situations
and outbreaks like the coronavirus even in the future.
“Conversations during this
period should not only be
about promoting recovery
plans and opportunities, but
also about the resilience of
households in the context of
this new world.”
“In the context of affordable housing’s economic
recovery during this time, as people who are constantly
indoors, we should start contemplating about the housing
deficiency in the country among many other things that
pulling down the affordable housing industry. And we
should also be talking about the meaning of housing
deficiency in the affordable housing fraternity in South
Africa. It is only when we have had these conversations
that we should be able to come up with recovery plans,”
she says.
Regarding housing in households’ economy, Urban Real
Estate Research Unit (URERU) member, Robert McGaffin
says “The role of housing in a households’ economy
is massive, it represents approximately 50-60% of all
households’ savings. The state of housing, therefore, plays
a huge role in the ability of households to withstand such
situations.”
According to Rust, the conversation and awareness
during this time should be about the households’ “poor
quality to resist the coronavirus both medically,” and
mentally. Conversations during this period should not only
be about promoting recovery plans and opportunities, but
also about the resilience of households in the context of
this new world,” Rust says.
Affording Housing
Rust has also elaborated on the impact of the affordable
housing industry in boosting the South African GDP
post covid19. She says the Centre for Affordable housing
Finance has been looking at the impact of housing on
several economies across the continent and has looking
at all sub industries within the housing sector.
“We have been looking at the entire value chain of
housing production from primary, secondary and tertiary
sector industries and building that into the household
building economy,” says Rust.
Meanwhile, Robert McGaffin, believes that the GDP
growth contribution rate by the housing industry is a
fairly high one in the South African context, depending
on the way in which one ought to define it, but definitely
more than 3.7%.He says: “The housing industry represents
a significant part of our economy and has huge value
chain linkages, upstream and downstream, in terms of
stimulating economy.”
Seeing an opportunity out of every possible setback,
McGaffin says the housing deficiency referred to by Rust
is, in fact, an advantage to the South African housing
industry as well as the South African economy. “We have a
housing shortage which is often seen as a negative thing
and a problem, while it actually presents an opportunity
to use that deficiency to stimulate the economy.” Every
single building construction counts for a boost in
employment and GDP.
There is hope for a homeowner who has been sitting at
home on a dead property, not making any sort of income.
Moreover, there is hope and support for the unskilled
group of people in the sub industries of the affordable
housing sector.
Employment Rates
For a very long time the country has been facing a
huge backlog when it comes to employment. A very
high number of skilled graduates has been unemployed
with very limited and scarce employment opportunities
in South Africa, even before the covid19 lockdown. It is
almost the same tune for the unskilled with limited skills
development and employment opportunities for them
too.
Aligned together with the amount of the affordable
housing’s contribution to the GDP growth is the
employment of various people in the housing industry,
whether skilled or not. The sector is one of the major
contributors of employment-based rates of the GDP,
14 JULY/AUGUST 2020 SA Real Estate Investor Magazine