CONTRIBUTOR
Taking the sector to the next level
The provision of affordable housing is a vital component of the social transformation and empowerment efforts of local and national governments across South Africa.
By Leanne Govender, sales manager: Affordable Housing Division at Nedbank Corporate and Investment Banking( NCIB) Property Finance
While much admirable work is being done to put roofs over the heads of increasing numbers of South Africans, true redress in the area of human settlements requires that stakeholders go beyond merely erecting masses of low cost houses.
The truth is that if we want the delivery of housing opportunities to be truly transformative for beneficiaries, affordable housing developments need to start offering individuals, families and communities that inhabit these housing units( at least) some of the comforts and benefits that have previously been reserved for homeowners of greater means.
SUSTAINABILITY COMPONENTS
For Nedbank Corporate and Investment Banking( NCIB), the inclusion of sustainability components, and particularly energy efficiency benefits, is the logical place to start with the transformation of South Africa’ s affordable housing sector. Our long-standing funding partnership with private equity firm International Housing Solutions( IHS) is a good example of how it is possible to build sustainability into affordable housing, and how beneficial this can be for those who take up residence in these sustainable, affordable homes.
As part of our ongoing commitment to doing our share to get more South Africans into homes, the Nedbank Affordable Housing Development Finance division has been one of the key finance providers to IHS for the past five years. In 2016 alone, we disbursed over R500-million in funding for several of its South African-based affordable housing developments and acquisitions.
In that time, IHS has delivered more than 27 000 affordable homes, many of which were made possible by Nedbank’ s finance solutions. These include the Candlewood development in Ravenswood, Boksburg; and the acquisition of 253 sectional title units in Glenhaven, Cape Town; 368 units in Ormonde, Johannesburg South; and 180 units near the Gautrain station in Grand Central, Midrand that are still being built.
CREATING HEALTHIER LIVING ENVIRONMENTS
While the primary focus of these IHS developments is the provision of much needed housing for lower- to middleincome earners, the appeal of NCIB’ s funding relationship with IHS is significantly enhanced by the fact that IHS places a particular focus, within its Fund II projects, on the efficient use of energy, water and materials in the funded dwellings. Importantly, this sustainability focus is not only for the building phase of the project, but is also aimed at creating healthier living environments and reducing longterm energy costs for owners and tenants.
Our experience has shown that increasing adoption of Excellence in Design for Greater Efficiencies( EDGE) certification is critical to the development of a sustainable affordable housing market in South Africa. Meeting the EDGE standard requires the achievement of at least 20 % savings, as measured by the EDGE software, in the three dimensions of energy, water and embodied energy in building materials.
While energy- and water-efficient affordable housing is still in its infancy in the country, early indications are that the inclusion of these sustainability components in the design of low cost houses could cut the utility costs of the people living in them by as much as 20 % per year. Given that electricity and water prices are set to rise significantly in future, these savings represent immense value, particularly for lower- and middle-income households.
ACCESS TO AMENITIES, OPPORTUNITIES
Another imperative for transformative social housing is that it provides tenants and owners with access to amenities and arguably more importantly, opportunities. Here, too, the IHS model is delivering real value to new homeowners. The affordable housing developments within its Fund II category typically comprise a combination of one-, two- or three-bedroomed units, situated as close as possible to essential amenities, including schools, shopping centres and transport hubs. The approach also prioritises human settlements over mere housing development, and a percentage of the finance provided by Nedbank and other IHS financiers goes towards the
" Affordable housing can no longer be just about providing shelter."
– Leanne Govender.
See more on page 32.
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SEPTEMBER- OCTOBER 2017
AFFORDABLE
SA HOUSING