Affordable rental market white paper

The township affordable rental market is under discussion. This is what you need to know.

The Department of Public Works and Infrastructure gazetted its National Infrastructure Plan (NIP) 2050 Phase Two for public comment late in 2022.

What is NIP all about?

The NIP is designed to create a foundation for achieving the National Development Plan’s vision for inclusive growth in South Africa. Phase one focused on bulk infrastructure related to energy, water, freight transport and telecommunications. Phase two plan details how government aims to achieve its broader infrastructure goals for housing, roads, health and education.

As part of phase two, the National Department of Human Settlements will be developing a new human settlements policy white paper. The objective is an overhaul of the housing subsidy scheme and delivery systems to enable public-private sector partnerships. In keeping with these goals, some South African cities have already started working on new policies and programmes that will enable the development of small-scale affordable rental accommodation. This will support the urban densification mission, which is an important feature of phase two of the NIP.

The Trust for Urban Housing Finance (TUHF21) welcomed the publishing of the NIP Phase Two white paper. The TUHF21’s uMaStandi subsidiary is an impact-driven property finance company focused on township developments – a major focus of the NIP.

TUHF21 chief executive, Lusanda Netshitenzhe, says: “TUHF21 strongly supports the intentions of this plan around the commitment to systematically support the provision of affordable housing in township areas.

“We hope that government implementing this new thinking will provide the impetus for speeding up town planning procedures. We also hope that government will closely examine the associated processes with the National Home Builders Registration Council (NHBRC) and the support that is provided to micro-developers in this rapidly growing segment of the housing industry.”

She says there is significant potential for affordable rental properties, but the complexities of operating in the townships must be acknowledged. In particular, micro-developers, private sector property entrepreneurs and resident landlords – the traditional backyard housing providers – need to receive equal government support.

“For phase two to work, there will have to be cooperation between national, provincial, and local government departments. It will be interesting to see how synergies will be created between the different departments to ensure there are no policy conflicts.

“This process should have started sooner, and it’s important that the 2024 implementation goal is not delayed. Many township developers have already started moving ahead – with or without government support,” says Netshitenzhe.

She says government’s willingness to work with private sector partners and promote an environment where knowledge sharing takes place will be critical to the successful implementation of phase two of the NIP. In particular, training on essential business management skills and financial literacy are key in ensuring the long-term success of developers and landlords in the townships.

Netshitenzhe says government can’t be expected to effect change without involvement from the private sector. This provides opportunities for initiatives like TUHF21’s uMaStandi commercial mortgage facility, which enables township property developers to become property entrepreneurs.

“Government must consider leveraging the experience of companies like TUHF21, which understand this market segment and have been providing finance to support micro-developers and resident landlords in townships for many years now.

“It’s important for all stakeholders to work together to enable the sector to perform better,” says Netshitenzhe.

See the Department of Public Works and Infrastructure’s National Infrastructure Plan (NIP) 2050 Phase 2, which was gazetted for public comment in 2022.

Writer : Sarah-Jane Meyer

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