Artist’s impression of the Stellendale affordable housing development in Kuils River.

Construction has started on 600 Stellendale units and another 1 000 are in the pipeline, and thousands of low-to-middle income families in Cape Town will soon be able to take their first step onto the property ladder, thanks to a series of major investments in local affordable housing by International Housing Solutions (IHS).

The organisation partners with financial institutions, property developers and local government authorities to provide equity finance for housing projects. Launched in 2006, its R1.9 billion SA Workforce Housing Fund received capital injections from North American and Southern African organisations, including Citibank, the Development Bank of SA, the Public Investment Corporation on behalf of the Government Employees Pension Fund (GEPF) and the Overseas Private Investment Corporation (OPIC).

Since 2008 IHS has committed more than R1bn to finance over 25 000 affordable housing units around South Africa’s major urban centres, and took its first foray into the Cape Town market last year. The initial Cape Town investments were made in projects worth close to R340 million, in 472 units in Eerste River and 284 in Paarl.

Recently, the international equity investment company made an additional investment in a R267m project of close to 600 units in Stellendale, and 187 rental units in Parklands. Several other developments are on the verge of finalisation, including 1 000 units in various projects in the CBD and the Winelands.

The affordable housing sector caters for workers who earn too little to qualify for bonds, but too much to qualify for state-subsidised homes. The dire shortage of affordable housing units recently prompted the Minister of Human Settlements, Tokyo Sexwale, as well as his Western Cape counterpart, Housing MEC Bonginkosi Madikizela, to call on the private sector to assist government in addressing the shortage.

Rob Wesselo, managing partner at IHS, says the organisation is in the process of investing R1.9bn in the affordable housing market in South Africa. The bulk of the investments have been in Gauteng, but IHS recognised that there is also a huge demand for affordable housing in the Western Cape.

“Cape Town attracts workers from across South Africa and Africa, many of whom are unable to afford to rent or buy mid-to-high end homes, compounding the shortage of available affordable housing and putting further pressure on government housing programmes. Often, these people have to make do with living in less than desirable conditions, because the demand for affordable housing far outstrips supply.

“Recent market comparisons, for instance the Lightstone index, prove that the affordable housing sector is where need and opportunity lie. Housing is the only sector of the broader SA property market where demand outstrips supply, particularly for homes priced under R600 000. In addition to providing quality living options to people who would otherwise struggle to find decent accommodation, this sector is also a huge job-creation vehicle, providing much-needed employment opportunities in communities where affordable housing development takes place.”

Wesselo says the Stellendale development in Kuils River, where construction recently started, will provide safe, community-focused housing opportunities.

“IHS is determined to improve the standard of available housing stock, and to provide not only housing but also a step up in lifestyle for many who would previously not be able to access quality housing. The Stellendale development is aesthetically pleasing, with terraced structures and landscaped gardens, access-control and it’s near shops, schools and hospitals.

“Local and national government structures have given the thumbs-up to these kinds of developments because of their potential to build strong communities and raise the quality of living expectations of thousands of working-class South Africans. IHS aims to systematically make a difference in the lives of thousands of families.”

Call Rob Wesselo on 011 215 8300, e-mail rwesselo@ihsinvestments.co.za or visit www.ihsinvestments.co.za.