This is according to Manie Annandale, head of Affordable Housing Development Finance, Nedbank Corporate and Investment Banking (NCIB), who says, “The establishment of social housing can act as a catalyst to aid economic development and growth. By bringing affordable, central housing to this sector of the population, social housing empowers its tenants to live and work in more centrally located hubs, rather than having to commute to work from the outskirts of an urban area.
“This in turn tends to increase the lifestyle stability in an individual’s life, with subsequent positive ripple effects on communities and ultimately the economy. Against this background, social housing provides an excellent opportunity for PPPs to take part in sustainable, long-term projects.”
Annandale says it is particularly important during tough economic times to ensure the ongoing operational viability of social housing. “In this regard, the collaborative business model offered by a PPP is highly recommended. The Belhar Social Housing Project showcases one such partnership. It is a PPP between Nedbank, the Social Housing Regulatory Authority (SHRA) and the Western Cape Government.”
Developers of the project, the Madulammoho Housing Association (MHA), are one of six fully accredited social housing institutions with the SHRA. The project entails the development of over 600 sectional title units for rent in the Belhar CBD. Funding will come from the SHRA’s Social Housing Restructuring Capital Grant, contributions from the Western Cape Provincial Government and bond finance from Nedbank CIB.
The Belhar social housing development is located on the corner of Symphony Way and Carmen End, Belhar, and is in close proximity to the University of the Western Cape, the Cape Peninsula University of Technology, the Belhar indoor sports complex, two railway stations and taxi ranks, schools, a library, a clinic and a Shoprite. With over 35% of the population in dire need of the assistance offered by social housing, this development adds significantly to Nedbank’s portfolio of social housing developments to date.
In 2013, the government allocated R4bn toward social housing development subsidies allocated through the Social Housing Investment Programme, which is run by the SHRA. Spread over five years, this represents significant funding opportunities for commercial banks, due to the strict controls imposed on developers by the SHRA that minimise the lending risks.
Annandale concludes, “Nedbank CIB spent time working with authorities such as the SHRA and Finmark Trust’s Centre for Affordable Housing Finance in Africa to assess viable frameworks and a strategy for funding social housing investment. With significant experience in this market, NCIB has identified key considerations that will allow it, particularly as part of ongoing PPPs, to play a pivotal role in funding developments by reputable developers with a robust rental management policy in place.”
