Tuesday, 07 March 2017 12:25

Making green affordable housing a reality

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Nedbank Corporate and Investment Banking (NCIB) today announced that is has made the first disbursement from an innovative R120 million Sustainable Affordable Housing finance facility that was put in place through the collaborative efforts of Nedbank’s Affordable Housing Development Finance division, and South Africa’s Green Fund.

Belhar_Gardens

The first recipient of funding from this facility is Belhar Gardens, a Cape Town-based social housing project owned and managed by Madulammoho Housing Association (MHA). The 630-unit development is the result of a public-private partnership and was made possible through the provision of land, grants and subsidies by the Western Cape Provincial Government and the Social Housing Regulatory Authority (SHRA).

Developed by Calgro M3 Holdings on behalf of MHA, Belhar Gardens is aimed at households earning between R2500 and R7500 per month.  It offers bachelor, one- and two-bedroomed unit rentals starting from as low as R750 per month and, according to Manie Annandale, Head of Affordable Housing Development Finance at NCIB, it is a prime example of Nedbank’s stated purpose to use its money expertise to do good for individuals, families, communities and businesses in South Africa.

‘Both the Sustainable Affordable Housing facility and Belhar Gardens are prime examples of Nedbanks Fair Share 2030 commitment,’ Annandale explains, ‘which is a strategic focus on channelling funding into projects with the highest possible potential of delivering sustainable benefits for all South Africans.’

In line with this strategic focus, Belhar Gardens is a case study in affordability. Not only are rentals below market levels and linked to subsidies, but units are also resource-efficient. Annandale explains that this is intentionally aimed at containing the total cost of accommodation for low-income households, which would otherwise have had to bear a heavy utility cost burden.

 ‘Considering that the total cost of occupying a home is significantly affected by electricity costs,’ he explains, ‘the inclusion of energy-saving features not only delivers environmental benefits in terms of climate change mitigation, but delivers on the immediate imperative facing South Africa to expand access to quality affordable accommodation for underserved individuals and families.’

Renier Erasmus, CEO of MHA, agrees with Annandale and adds that the cost benefit of green affordable homes is not just limited to the initial capital outlay. ‘Next to rent, electricity is one of the largest expenses for our tenants, he points out, ‘and with above-inflation tariff hikes expected to continue for the foreseeable future, escalating energy costs have the potential to undermine their financial security and increase the risk that they will eventually not be able to afford their rent.’

Erasmus explains that this scenario would be disastrous for the tenants and landlord alike, which is why the inclusion of green energy devices like centralised heat pumps and innovative ceiling insulation technology make perfect sense for Belhar Gardens and, indeed, all future social housing developments.

Based on its extensive sustainability focus, Belhar Gardens is one of the first social housing projects in South Africa to have applied for EDGE Green Building certification. Annandale explains that meeting the rigorous EDGE standard requires that the development achieves at least 20% savings within the EDGE software in each of three measurement dimensions, namely energy, water and embodied energy in building materials.

‘Nedbank views widespread EDGE certification as a non-negotiable cornerstone of the sustainable success of the affordable housing market going forward,’ he says, ‘because such certification makes it possible for consumers, valuers and investors to differentiate between conventional and resource-efficient homes, thereby creating increased demand for green housing and making such sustainable development viable for developers, despite the slightly higher building costs.’

Given that resource-saving affordable housing is still a relatively new initiative in South Africa, Annandale explains that the next step in driving the growth of this sector will be to measure and validate the actual cost savings enjoyed by tenants and owners in EDGE certified units when compared to conventional structures. ‘We are working with the Development Bank of Southern Africa (DBSA) to monitor the sustainability performance of a sample of the two types of homes over the coming year, he concludes,’ and hope to release the findings to the market in 2018 – which, we believe, should generate a significant surge in demand for green affordable homes going forward.’

Last modified on Tuesday, 07 March 2017 13:46

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