Addressing the International Housing Solutions Conference
Investors in Affordable Housing are most welcome in the Western Cape.
I am very excited to hear of International Housing Solutions' involvement in the financing of affordable housing in South Africa and, more particularly, the Western Cape. It is indeed pleasing that you already have $35 million worth of projects in the pipeline in this province, and I hope that we can work together to grow that investment here.
Those who have encountered me since my appointment to this portfolio will tell you that a regular theme of mine is the need to encourage greater private sector investment and involvement in the affordable housing sector.
In his State of the Nation Address in February, President Zuma announced that a R1 billion guarantee fund will be created to encourage banks to increase their loan books in this market. The national Department of Human Settlements, together with Treasury, is busy working out the details of the implementation plan for this fund, but the national department has already set the very ambitious target of 600 000 affordable units over the next five years.
For our own part, in acknowledgement of the need to service this market, we have created a Directorate of Affordable Housing under the Chief Directorate of Human Settlement Planning in our provincial Department of Human Settlements. This directorate will be responsible for driving our rental housing strategy, which we will be launching shortly, as well as building partnerships with investors, developers and other stakeholders to increase the development of affordable housing and thus close the gap in the housing market between the traditional bonded market and the fully-subsidised market.
We must acknowledge that rental stock must be a significant contributor to the provision of affordable housing. If managed properly, it is the most sustainable means of servicing this market.
Last month, I visited the UK to attend a Social Housing Conference, and to visit social housing projects and meet with experts in the field.
In the UK, the state does not provide housing; social housing associations do. And the state only finances 40 percent of any housing project; the rest is funded from a combination of the associations' own income (from rental collections) and private finance. We need to move towards this model here.
We have much to learn from the social housing associations in the UK, and a number of partners there indicated their willingness to assist us with developing our social housing institutions here in the Western Cape, as well as building capacity and sharing expertise with our department.
But we need to draw in more partners, especially those that can finance social housing projects, and I would like to invite you to be a part of this initiative.
In the Provincial Government of the Western Cape, you have a partner that is committed to making it as easy as possible to make a success of your venture - from the general environment we create to the specific assistance we can provide in facilitating the development of affordable housing in the province. I invite you to continue to engage with us and to build a partnership that will benefit you and the people of the Western Cape, and South Africa generally.