Affordable Housing Boost: Approval of Housing Fund sparks optimism in Western Cape Townships
The announcement that the City of Cape Town has approved a fund aimed at supporting micro-developers who build affordable housing in lower-income communities is a boost for aspiring property entrepreneurs in the Province. Nomfundo Molemohi, Portfolio Manager for uMaStandi in the Western and Eastern Cape shares her views about the enormous potential to provide quality, affordable rental housing in the townships.
uMaStandi a property financing company; providing commercial mortgage finance, training, mentorship and guidance to property entrepreneurs who wish to build quality, compliant and sustainable income-producing rental accommodation in townships. To date they have financed 700 units, expanded their footprint to KwaZulu Natal, Western and Eastern Capes and grown their loan book to R80 million.
Cape Town's townships have long faced a demand for quality, affordable rental housing, a need that continues to grow. Since its establishment in 2018, uMaStandi, TUHF’s township-focused finance arm, has expanded its reach to finance projects in 11 Western Cape townships. However, supporting property entrepreneurs in township development comes with its own set of challenges.
Nomfundo highlights one key challenge: town planning. Insufficient infrastructure often leads to slow and difficult zoning and building plan approvals. uMaStandi addresses this by engaging with local government to ensure projects have the necessary approvals, enabling clients to access resources like building insurance.
The City of Cape Town's support for micro-developments in affordable housing through the new Development Charges Fund is seen as a positive step, likely to facilitate smoother processes. Nomfundo anticipates several new developments in the Province as a result.
Private investors, Nomfundo stresses, are essential in addressing the housing need. uMaStandi, with its unique focus on township developments, supports property entrepreneurs who understand their communities' needs and have a vision for change. These micro-developers see affordable housing as an opportunity to build sustainable wealth and improve their communities.
uMaStandi encourages mixed-use developments, incorporating retail spaces and greening elements to enhance tenant lifestyles and attract reliable occupants. The company's success is evident, with 100% occupancy rates in its developments and waitlists for units before completion.
Expanding into the Eastern Cape, uMaStandi aims to support local municipalities' plans for affordable housing, contributing to urban densification and inclusive growth. By empowering property entrepreneurs and creating commercially viable rental housing businesses, uMaStandi plays a vital role in fostering generational wealth and transforming South Africa's socio-economic landscape.
