The primary challenge that has constrained the social housing property development sector in South Africa is the 20-30% equity contribution that is required by developers to unlock the grant funding from the Social Housing Regulatory Authority (SHRA).
Since the inception of our democracy in 1994, of critical importance for the government, and the country as a whole, has been to address the housing backlog and historical spacial planning. Globally, social housing rental schemes have been used as a sustainable means to address housing deficits. What is of critical importance in such schemes is the incorporation of continuous property maintenance and strong property management into the income streams. The result of not doing so may see these properties become urban slums.
With continuous property maintenance and strong property management, social housing developments have the potential to provide excellent rental yields for developers. This is further strengthened by the SHRA grant, which is granted to qualifying developers and developments within the SHRA determined “Restructuring Zones”.