AdVoice BY THE GAUTENG DEPARTMENT OF HUMAN SETTLEMENTS 22 February 2017
Financial Mail – Affordable able housing for all March 30 – April 5, 2017
GPF Funding Housing and Entrepreneurs – March 2014
FM Corporate Report – Seeking Housing Investors – November 2013
Housing provision remains one of the greatest items on the public finance policy agenda in South Africa, with millions of our people still awaiting suitably located, affordable accommodation which would improve the quality of their livelihood. This is evidenced by continuos national debates and various policy pronouncements by government regarding the need for rapid delivery of sustainable human settlements. In Gauteng the housing challenge is particularly severe, with people continuously flooding to this economic hub in search of work and better quality of life. For some time the banking sector had been reluctant to fund in the low income housing market due to perceived high risk associated with the low end housing market segment.
Gauteng Partnership Fund (GPF) was therefore founded by The Gauteng Department of Housing in 2002 as a mechanism for mitigating risk facedby private sector funding institutions in financing the low end housing developments in the province. This we have been able to achieve by taking up to 30% first loss position in the funding arrangements towards the developments, provided that these meet our target beneficiary group which are the households earning between R1500 to R12000 per month in 2004 prices, and that the private senior debt financing of the balance would be forthcoming.
To date we have committed up to R450 million.
We at Gauteng Partnership Fund pride ourselves of having been a key player in the facilitation of affordable housing developments in the Gauteng Province. Since our inception as a public entity under the auspices of the Gauteng Department of Housing, we have focused our programmes on mobilization 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. To date we have committed up to R450 million of public risk capital towards financing of affordable housing projects, enticing banking sector to enter the market to the tune of close to R2.2 billion, resulting in over 17000 housing units for our target population.
When we started our mandate was to design and implement innovative funding solutions to normalize the social housing market in Gauteng. At the time banks were reluctant to fund social housing projects due to the perceived riskiness of those investments. Moreover the conventional banking risk evaluation criteria were not structured with a clear understanding of this market segment and therefore banks were not well disposed to optimally price the risk associated with their funding facilities.
We therefore entered the market with innovatie funding instruments where in we would provide the first layer of capital, very favourably priced relative to 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.
While we have managed to successfully put the GPF on the pedestal as a premier vehicle in the housing delivery chain in the province we are starkly aware of the challenges still facing the provincial government given the massive backlogs of suitable housing in Gauteng. We have aligned our 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 solution in partnership with the private sector. GPF’s impetus has always been on building a networked ecosystem of partners involving the private financiers, local government structures, relevant provincial government departments and affordable housing developers, including social housing institutions.
We are now well poised to drive much more aggressively our strategy for the next three years which entails proactively sourcing housing projects in the province, packaging them appropriately for our clients and going to market to raise suitably structured funding instruments. Our focus will involve active participation in setting the agenda for sustainable human settlements and advocating appropriate policy interventions to assist the province in meeting its housing objectives.
We continually call upon all our existing partners and new ones to join us as we drive our strategic interventions forward in this market. We are more than ever keen to see new players (developers and investors) who are interested in acquiring the old buildings in the inner-cities and converting them into suitable quality dwelling units. We particularly wish to assist emerging black entrepreneurs who would want to take risk alongside the public funds under our administration for a mutually rewarding partnership. We aim to realize the national policy objective of achieving cohesion within our communities through new developments within sustainable human settlement context.
The Gauteng Partnership Fund (GPF), an agency of the Gauteng Department of Local Government and Housing responsible for affordable housing has been able to attract almost R2.4 billion from the private sector to fund housing projects in Gauteng over the past ten years. The funding has been able to deliver approximately 20 000 affordable housing units in the province. The announcement was made today at the “AFFORDABLE HOUSING INDABA” hosted by GPF during its 10 years anniversary in Fourways, Johannesburg. The event was themed, “Working Together to Build Sustainable Human Settlements”, and the conference focused on the lessons drawn from GPFs pioneering models in Public Private Partnerships (PPPs) for affordable housing in support of DLG&H.Recounting ten years of marked success in leveraging state capital to secure private sector investment the presenters at the indaba presented lessons, challenges and opportunities for the future of housing in Gauteng.
Speaking on behalf of the MEC for Local Government and Housing LH Mekgwe, the Chairperson of the Portfolio Committee on Local Government and Housing in Gauteng Hon. Errol Magerman, commended GPF for making visible strides and progress given the fact that it was initially launched with a grant funding of R442 million 10 years ago. He said Gauteng government has for a long time identified funding as an issue needing to be addressed as part of the whole bouquet of interventions. “We had to find innovative ways of unlocking the private commercial funding into the affordable housing sector. Promotion of vibrant and honest partnerships is urgently needed to address the funding challenge,” added Magerman.
GPF CEO, Mr Kutoane Kutoane’s presentation on “Building Sustainable funding partnerships”, spoke to the GPF story moving beyond the 10 years of success, to furthering the vision 2014 of delivering 20 000 affordable and rental units in the province. Kutoane also announced that GPF’s extended mandate would go beyond affordable rental housing to include mixed and integrated housing developments. Successful projects have already been delivered in Kliptown, Roodepoort, Fleurhof and Jabulani, despite the housing credit crisis over the recent years.
Head of the Department, Mr Mongezi Mnyani stated that planning of mixed housing projects in the province is informed by the Spatial Development Framework which is already making real progress in the affordable housing market. He said flagship projects such as Cosmo City, Nelmapius and Olivenhoutbosch were already benefiting from such initiatives. The challenge of these however was overpriced land, resistance from affluent residential associations and the less investment appetite from the private sector. Mnyani encouraged GPF to forge more partnerships in order to realize the success of the programme.
The Indaba’s discussion and guest presentations reinforced conclusions that the GPF serves as an important addition to the goal of the state is to encourage nation building and development through well located, mixed development and for eradicating informal settlements.
GPF projects are also part of urban renewal drives, and the 2030 Gauteng City Region vision, aimed at creating globally competitive and sustainable human settlement. In the progression to these goals the DLG&H adopts the Gauteng Provincial government mantra, “GETTING GAUTENG WORKING-WORKING TOGETHER WE CAN DO MORE”
For further information:
The Gauteng Department of Local Government and Housing: Motsamai Motlhaolwa on 079 897 2240 or e-mail to Motsamai.email@example.com
The Gauteng Partnership Fund. Spokesperson: Ismail Carr on 083 346 1136
or e-mail to firstname.lastname@example.org
Building sustainable housing delivery partnerships
Motsweding – DEPARTMENT OF COOPERATIVE GOVERNANCE AND HUMAN SETTLEMENTS
The Gauteng Department of Housing and Human Settlements said in this financial year, service stands will be allocated to all people living in informal settlements across the city of Tshwane. The Department says the process of allocating stands has been fast tracked as it is unacceptable that some people are still on a waiting list for almost four years. The issue has been raised during an Affordable Housing Indaba under the theme planning the Future of Integrated Human Settlements.
Video 1 – ANN7 – DEPARTMENT OF COOPERATIVE GOVERNANCE AND HUMAN SETTLEMENTS
Vuka Africa – The Gauteng Human Settlements Department says it will use at least R5billion, to accelerate housing and urban renewal projects in the 2015\16 financial year. This emerged during the housing indaba, in Johannesburg that is aimed at bringing various stakeholders together from both public and private sectors.
Video 2 – ANN7 – DEPARTMENT OF COOPERATIVE GOVERNANCE AND HUMAN SETTLEMENTS
Vuka Africa – The Gauteng Human Settlements Department says it will use at least R5billion, to accelerate housing and urban renewal projects in the 2015\16 financial year. This emerged during the housing indaba, in Johannesburg that is aimed at bringing various stakeholders together from both public and private sectors