SA Affordable Housing May - June 2020 // ISSUE: 82 | Page 23

PROFILE
A common feature of many affordable housing schemes is
for affordability to come not at the expense of quality, but
rather the result of innovation. Schooling says that its student
accommodation tracks international trends and provides
South Africans with accommodation “equivalent to what their
peers in Boston, London and Paris live in”.
“But by incredibly smart use of technology and a careful
viewing of every cost component, our aim is to get it down
to a cost of R150 000 to R180 000, and we’re heading in
that direction. The government alone cannot come up with a
solution to affordability, it requires a conversation between
the private sector, universities and the government.”
At the core of the issue of affordability, he says, is
the additional expense and delays that are a natural
consequence of in-situ construction, subject to variables
of weather and human error. The components used in the
construction process by STAG African are prefabricated in a
factory, meaning they are precision manufactured. “In situ
construction entails three risks: to budget, to programme
and to quality. We’ve reduced the on-site time dramatically
by increasing the manufacturing time, by modularising the
construction process. Our patented pods are measured
right down to the last metre, and this reduces the cost of
components by about 40%. No matter where we build, the
process and product is exactly the same and ticks every one
of the ACUHO-I principles. Everything is completely standard
– the position of not one light fitting changes. Our people
assemble on site – they don’t build.
“On site variables are largely responsible for: time
overruns, cost overruns and lower quality. The product we
provide performs better than bricks and mortar in terms of
its thermal qualities, acoustics, structural, durability and
future maintenance costs. The frame of the accommodation
is built with a lightweight polymer product with air spaces in
between which makes the apartment warmer in winter and
cooler in summer.”
Furthermore, the factory is a ‘bush’ factory that can be
erected on site. The main factory in Cape Town is a design
factory where every component is designed, the mixes
perfected and the moulds manufactured, while the mixes for
the components are done on site – as is currently happening
on its Kenya project. He says an important aspect of their
model is that it also manages its own developments, “as
maintenance usually is not a priority and a building can
rapidly deteriorate”.
STAG has now completed four university residences and
proven the concept, having used various materials but now
settled on foam concrete. “This is adequate for a four-story
development, and with a little intervention up to eight stories.
These residences have to last a hundred years and therefore
be flexible enough to suit later generations who may be able
to afford to pay higher rentals, as well as in an emergency
to be able to house more students. In our model this can be
accomplished simply by re-arranging the furniture.”
Schooling says it has taken a decade of discussion to
get greener building materials on the specifications of
government housing projects, but local authorities have now
been instructed that innovative building material must be
used in all student accommodation developments.
A further saving comes in the design phase of a university
accommodation: Schooling says it could traditionally take
eight months to design a 3 000 unit development – the size
of the development it is undertaking in Kenya – but STAG
is able to do so in two weeks as everything is standardised,
and another two weeks to cost it. “Furthermore, with PV
power cells and our own source of clean water, we are
able to take the entire development off grid, by providing
our own sewerage and recycling, employing rainwater
harvesting and greywater treatment. We are able to be a
little more adventurous in going off-grid because of the
grant funding we receive, where the primary consideration is
less the cost as how green it is. For instance, the sewerage is
being processed and turned into biomass to generate more
electricity,” he says.
This grant, or humanitarian. Funding stems from the US
where its IRS has developed an 501c ‘humanitarian’ tax
incentive scheme for student accommodation (mostly in the
US itself) to attract private funding through private equity or
private financiers. “We register with the IRS to tap into this
funding. The US has 86 000 high net worth individuals with
USD186-billion involved in this scheme. We have to issue a
guarantee from a AAA-rated bank on a loan of, say USD-150-
million to USD250-million, and when the project is complete
and audited by a top-four audit firm, the loan converts to
grant funding.”
Of interest, says Schooling, is that students living
in STAG accommodation receive a 98% to 100% pass
rate, attributable (at least in part) to a more pleasant
environment.
www.saaffordablehousing.co.za MAY - JUNE 2020 21