From slums to suburbs

Solving the continent’s housing problems requires a mind shift. And there are benefits for those who change gear. speaks to a man who is passionate about putting a roof over Africa’s head

and to put rental on the table as an alternative to ownership.”

The conference focused on looking at different types of instruments for financing.

“Housing finance is the critical link in the housing delivery chain and we need to address that. Affordability is the fundamental challenge. The mortgage is an important instrument in housing finance but the majority of people cannot afford a mortgage. Parts of Africa are still underdeveloped in the mortgage market.”

An alternative to mortgages is micro-financing. “We are trying to provide the environment to get micro-finances in housing delivery and housing finance. The scale of delivery needs to go up. We are just not building enough houses.”

Policy environment is fundamental to an efficient delivery system, and the role of government is important.

“There needs to be transparent land management systems. Governments need to invest in infrastructure and service land. They need to give attention to what impact the monetary policy has on housing delivery and how it inhibits it. They need to put housing microfinancing on the agenda. A consistent national policy framework is needed.”

But governments cannot do it alone.

“We recognised the role that private investors and developers can play because they are in a powerful position. They need to interact with government to see how they can develop innovative instruments and products. We are stressing partnerships.”

Sourcing local building supplies can bring down the price of housing.

“On the continent, we import most of our building material, which puts up the cost of housing. We need to develop local building suppliers. Green housing is important because you need to use sustainable materials. We need to use materials other than bricks and mortar. It is a culture shift.”

The approach to housing needs to shift.”We concentrate too much on homeownership. We need to now put rental housing on the agenda. Densification of cities and public transport infrastructure needs to be looked at.”

The construction industry is set to benefit. “The union is courting membership from construction companies, including small and medium ones. We will arrange one-on-one meetings between these companies, housing finance companies and other relevant stakeholders to spur business deals. Construction companies will benefit from the union’s lobbying efforts to improve the regulatory environment.”

At the conference, the union’s Urban Development Coordinating Unit presented the “Draft Africa Common Position”. This is Africa’s input into the Habitat III process where private sector organisations involved in housing finance are contributing towards what is normally a stateoriented effort.

“The draft position has noted that slums are on the increase. Instead of saying ‘let’s get rid of the slums’, let’s say ‘how can we develop the slums’. People can on an incremental level build their own houses and governments can put in the relevant infrastructure.”

The draft position points to governments creating the environment through bulk infrastructure, and land title, while developmental agencies come it with funding to facilitate training.

“Governments need to put in place subsidies and the private sector needs to develop instruments to do the financing. It is to promote that type of partnership and promote significant effort to tackle shelter issues for the low income people.”

Except for South Africa, banks in the rest of the continent are not involved in housing finance.

“South Africa is very different because we have a sophisticated banking sector that has been traditionally involved in mortgage finance and is looking at other instruments. I think the trick in many parts of the continent is to look at how banks will work with micro-financing institutions to provide capital. The capital market is very shallow in other parts of the continent.”

Banks need to work with authorities to build the mortgage market in Africa.