Jul 20, 2012
Partnership to bridge housing capital gapBack
Design|Gauteng Partnership Fund|Housing|National Housing Finance Corporation|PROJECT|Projects|Rental|Resources|Sustainable|Funding Solution|Boni Muvevi|Kutoane Kutoane|Samson Moraba
© Reuse this
Provincial housing funder, the Gauteng Partnership Fund (GPF), has partnered with the National Housing Finance Corporation (NHFC) on a R200-million Entrepreneur Empowerment Property Fund (EEPF) programme aimed at Human Development Index-owned companies pursuing rental-housing opportunities in Gauteng.
The GPF and the NHFC formally entered into the cofunding agreement on June 18.
“The EEPF programme, which was launched in 2010, was initiated as an intervention for the affordable housing market. Black property entrepreneurs have, to date, experienced a myriad of constraints in entering the market.
“The partnership provides a funding solution to bridge the capital gap experienced by these property entrepreneurs,” says GPF CEO Kutoane Kutoane.
He adds that the global financial woes have unabatedly continued to pound on the confidence of banks to increase their quantum of funding in the low end of the housing market, as well as continued to frustrate their programmes.
Nevertheless, he says banks have shown great resilience and innovative design capabilities in their funding models. He hopes this will translate into an increased quantum of funds being allocated to affordable housing programmes.
The GPF mandate has, over the years, evolved in line with the changing provincial government housing objectives.
The GPF has extended its funding facilitation reach to cover the wider affordable rental housing market.
It is estimated that 25% of South African households have no access to housing, owing to affordability challenges.
“To promote the sustainable entry of black economic-empowerment participants in the ownership of medium-density property in the inner cities, the NHFC has partnered with the GPF to enable the transformation of the affordable rental property market,” says NHFC CEO Samson Moraba.
“This partnership will ensure that EEPF projects have up to 95% project funding available,” adds GPF chief investment officer Boni Muvevi.
These are households that earn above the government housing-subsidy threshold but do not qualify for bank mortgages, as a result of their perceived high risk and low credit rating. The assumption is that the percentage of such households is much higher in Gauteng.
“EEPF participants are selected through a public call and vigorous selection process on a yearly basis,” says Muvevi.
After a public call for proposals is made, prospective entrepreneurs are short-listed and put through a rigorous induction programme that covers aspects such as property, facilities and resources management.
The first proposal call yielded 11 participants, of which eight have had their proposals approved and secured funding.
Once a project is approved, a dedicated GPF programme manager will be available to assist with any challenges.
The GPF board of trustees has approved R100-million for the EEPF facility and another R100-million from the NHFC as part of the cofunding agreement. Additional funding will be considered depending on the programme’s success.
In line with the provincial government objective of delivering 20 000 rental accommodation units by 2014, the GPF has committed to the objective of facilitating funding for 6 000 units in its current strategy.
This will require over R1.4-billion in funding, of which government will be expected to contribute about R470-million.
With the new partnership between the GPF and the NHFC, as well as the benefit of experience, the provision of affordable accommodation makes economic sense and is a good investment for entrepreneurs, states the GPF.
Edited by: Chanel de Bruyn© Reuse this Comment Guidelines (150 word limit)
Creamer Media Senior Deputy Editor Online
Other Construction News
Electrical solutions consultant Magnet was appointed Southern African distributor for Dromex personal protection equipment (PPE) in April this year. MD Brian Howarth said that Magnet had recognised an urgent need in the electricity industry for increased safety for...
Recent Research Reports
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
Real Economy Insight: Automotive 2015 (PDF Report)
Creamer Media’s Real Economy Year Book comprises separate reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, gold, iron-ore and platinum sectors.
Real Economy Insight: Water 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
This Week's Magazine
Energy analyst and EE Publishers MD Chris Yelland warned recently against excessive optimism regarding timescales for the proposed construction of new nuclear power plants (NPPs) in South Africa. He was speaking at a Nuclear Roundtable in Johannesburg. “I think we...
Malawi’s Lilongwe Water Board (LWB) is inviting eligible bidders to prequalify for the board’s efficiency improvement works, which will be implemented as part of the E24-million Lilongwe Water Resources Efficiency Programme. LWB CEO Alfonso Chikuni explains that...
CROATIA, AN EU MEMBER BUT NOT A TDCA MEMBER On July 1, 2013, Croatia officially became the twenty-eighth member of the European Union (EU). Despite Croatia’s accession into the EU, it is yet to become party to the Trade, Development and Cooperation Agreement (TDCA)...
The Council for Scientific and Industrial Research (CSIR) has announced that its new Inundu airborne electronics testing, evaluation and training pod had made its first test flight on September 10. The successful flight was undertaken from Lanseria International...
The Development Bank of Southern Africa (DBSA) – which disbursed a record R13-billion during 2015, from R12.7-billion in the prior year – remained optimistic that it could ramp-up loan disbursements to R25-billion a year by 2018 as it sought to give greater emphasis...