Providing affordable housing finance solutions
Providing affordable housing finance solutions
Moladi Affordable housing
Housing provision remains one of the greatest items on the public finance policy agenda in South Africa.
Millions of people are still waiting for suitably located, affordable accommodation, which would improve the quality of their livelihood. This is evidenced by continuous national debates and various policy pronouncements by government regarding the need for rapid delivery of sustainable human settlements.
The housing challenge is severe in Gauteng, with people flooding to the economic hub in search of work and a better quality of life.
The banking sector has, for some time, been reluctant to fund the low-income housing market due to perceived high risk of the low-end housing market segment.
Finance provider, the Gauteng Partnership Fund (GPF), is looking to partner with companies seeking to develop affordable residential properties for rental for households with an income of up to R12 000. The GPF aims to assist companies especially those owned by historically disadvantaged individuals (HDIs) to enter the affordable housing rental market.
GPF chief investment officer Boni Muvevi says each prospective project must cater for the low-middle income market, with the goals of empowerment, ownership and to encourage the community to build better lives.
The GPF was founded by the Gauteng Department of Housing in 2002 as a mechanism to mitigate the project finance risks, faced by private sector funding institutions in financing the low-end housing developments in the province.
The GPF has managed to achieve this by taking on up to 30% first loss position in the funding arrangements towards the developments, provided that these meet the target beneficiary group, which are households earning between R2 500 and R12 000 a month, and that the private senior debt financing of the balance would be forthcoming.
The fund prides itself on having been a key player in the facilitation of affordable housing developments in Gauteng. Since its inception as a public entity under the auspices of the Gauteng Department of Housing, it has focused programmes on the mobilisation of private sector funding to address the funding constraints that are experienced by social housing providers and low-income housing developers in putting up affordable, well-located housing developments.
“We aim to ensure the community benefits at the end of the day, the buidings need to be child-friendly and safe,” says Muvevi, “our focus areas for projects are underdeveloped areas and urban renewal areas”.
Up to now, the GPF has committed up to R450-million of public risk capital towards the financing of affordable housing projects, enticing the banking sector to enter the market to the tune of close to R2.2-billion, resulting in over 17 000 housing units for the target population.
The GPF started out with a mission to design and implement innovative funding solutions to normalise the social housing market in Gauteng.
The conventional banking risk evaluation criteria for affordable housing projects was not structured with a clear understanding of the market segment and therefore banks were not well-disposed to optimally price the risk associated with their funding facilities. The GPF then entered the market with innovative funding instruments wherein it provides the first layer of risk capital, very favourably priced relative to the market, to enable banks to mitigate their financing risk.
“Our interventions have made a great deal of difference and the value we have added to this critical sector speaks volumes,” states GPF marketing and communications executive Ismail Carr.
The GPF states that it is aware of the challenges still facing provincial government given the massive backlog of suitable housing in Gauteng and has aligned the current strategic objectives closely with those of the Gauteng Department of Local Government and Housing, especially the strategic outcome of accelerating delivery of housing opportunities through provision of adequate shelter by implementing rapid developments of mixed housing and provision of adequate rental housing solutions in partnership with the private sector.
The fund’s impetus has always been on building a networked ecosystem of partners involving private financiers, local government structures, relevant provincial government departments and affordable housing developers, including social housing institutions.
The GPF is now well-poised to drive its strategy for the next three years, which entails sourcing housing projects, packaging them appropriately for clients and going to market to raise suitably structured funding instruments. The focus is to be actively involved in setting the agenda for sustainable human settlements and advocating suitable policy interventions to assist the province in meeting its housing objectives.
The GPF continuously calls upon new and existing partners to join it as it drives the strategic interventions forward. It wants to see new players (developers and investors) that are interested in developing rental projects in Gauteng. These projects could be green field or acquiring old buildings in the citinodes and converting them into suitable quality dwelling units.
Emerging black entrepreneurs are urged to take risk alongside the public funds under the administration of the GPF for a mutually rewarding partnership.
The GPF aims to realise the national policy objective of achieving cohesion within communities through new developments within the sustainable human settlements context.
The criteria for partnering with the GPF is that you are a legal entity with an interest in catering to the affordable housing rental market. Preference will be given to black applicants as per the definition in the board-based Black Economic Empowerment (BBE) Act.
Call for proposalThe entity must have an unencumbered minimum capital of R200 000, entrepreneurial acumen and a willingness to be hands on. Companies must have a comprehensive business case for a potential rental project located in Gauteng, and priority will be given to projects located in Emfuleni, Ekurhuleni, the City of Tshwane, Sedibeng and the West Rand.
http://www.moladi.net/
Keywords - moladi, finance, bank, public finance policy, entrepreneurial, Housing provision, CPF, Gauteng Partnership Fund, risk, low-end housing market segment, mixed housing
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| Affordable Housing |
Moladi Affordable housing
Housing provision remains one of the greatest items on the public finance policy agenda in South Africa.
Millions of people are still waiting for suitably located, affordable accommodation, which would improve the quality of their livelihood. This is evidenced by continuous national debates and various policy pronouncements by government regarding the need for rapid delivery of sustainable human settlements.
The housing challenge is severe in Gauteng, with people flooding to the economic hub in search of work and a better quality of life.
The banking sector has, for some time, been reluctant to fund the low-income housing market due to perceived high risk of the low-end housing market segment.
Finance provider, the Gauteng Partnership Fund (GPF), is looking to partner with companies seeking to develop affordable residential properties for rental for households with an income of up to R12 000. The GPF aims to assist companies especially those owned by historically disadvantaged individuals (HDIs) to enter the affordable housing rental market.
GPF chief investment officer Boni Muvevi says each prospective project must cater for the low-middle income market, with the goals of empowerment, ownership and to encourage the community to build better lives.
The GPF was founded by the Gauteng Department of Housing in 2002 as a mechanism to mitigate the project finance risks, faced by private sector funding institutions in financing the low-end housing developments in the province.
The GPF has managed to achieve this by taking on up to 30% first loss position in the funding arrangements towards the developments, provided that these meet the target beneficiary group, which are households earning between R2 500 and R12 000 a month, and that the private senior debt financing of the balance would be forthcoming.
The fund prides itself on having been a key player in the facilitation of affordable housing developments in Gauteng. Since its inception as a public entity under the auspices of the Gauteng Department of Housing, it has focused programmes on the mobilisation of private sector funding to address the funding constraints that are experienced by social housing providers and low-income housing developers in putting up affordable, well-located housing developments.
“We aim to ensure the community benefits at the end of the day, the buidings need to be child-friendly and safe,” says Muvevi, “our focus areas for projects are underdeveloped areas and urban renewal areas”.
Up to now, the GPF has committed up to R450-million of public risk capital towards the financing of affordable housing projects, enticing the banking sector to enter the market to the tune of close to R2.2-billion, resulting in over 17 000 housing units for the target population.
The GPF started out with a mission to design and implement innovative funding solutions to normalise the social housing market in Gauteng.
The conventional banking risk evaluation criteria for affordable housing projects was not structured with a clear understanding of the market segment and therefore banks were not well-disposed to optimally price the risk associated with their funding facilities. The GPF then entered the market with innovative funding instruments wherein it provides the first layer of risk capital, very favourably priced relative to the market, to enable banks to mitigate their financing risk.
“Our interventions have made a great deal of difference and the value we have added to this critical sector speaks volumes,” states GPF marketing and communications executive Ismail Carr.
The GPF states that it is aware of the challenges still facing provincial government given the massive backlog of suitable housing in Gauteng and has aligned the current strategic objectives closely with those of the Gauteng Department of Local Government and Housing, especially the strategic outcome of accelerating delivery of housing opportunities through provision of adequate shelter by implementing rapid developments of mixed housing and provision of adequate rental housing solutions in partnership with the private sector.
The fund’s impetus has always been on building a networked ecosystem of partners involving private financiers, local government structures, relevant provincial government departments and affordable housing developers, including social housing institutions.
The GPF is now well-poised to drive its strategy for the next three years, which entails sourcing housing projects, packaging them appropriately for clients and going to market to raise suitably structured funding instruments. The focus is to be actively involved in setting the agenda for sustainable human settlements and advocating suitable policy interventions to assist the province in meeting its housing objectives.
The GPF continuously calls upon new and existing partners to join it as it drives the strategic interventions forward. It wants to see new players (developers and investors) that are interested in developing rental projects in Gauteng. These projects could be green field or acquiring old buildings in the citinodes and converting them into suitable quality dwelling units.
Emerging black entrepreneurs are urged to take risk alongside the public funds under the administration of the GPF for a mutually rewarding partnership.
The GPF aims to realise the national policy objective of achieving cohesion within communities through new developments within the sustainable human settlements context.
The criteria for partnering with the GPF is that you are a legal entity with an interest in catering to the affordable housing rental market. Preference will be given to black applicants as per the definition in the board-based Black Economic Empowerment (BBE) Act.
Call for proposalThe entity must have an unencumbered minimum capital of R200 000, entrepreneurial acumen and a willingness to be hands on. Companies must have a comprehensive business case for a potential rental project located in Gauteng, and priority will be given to projects located in Emfuleni, Ekurhuleni, the City of Tshwane, Sedibeng and the West Rand.
http://www.moladi.net/
Keywords - moladi, finance, bank, public finance policy, entrepreneurial, Housing provision, CPF, Gauteng Partnership Fund, risk, low-end housing market segment, mixed housing
