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as it is now incorporated into the
Breaking NewGround Strategy. “All of
this points to growth,” Mogane says.
Government has increased the
social housing budget and it forms
part of human settlements, inte-
grated developments and Catalytic
projects. “This is exciting. The sector
is growing and maturing.” He cites
providers who have achieved criti-
cal mass such as the Johannesburg
Housing Company, Sohco in Durban
and the Eastern and Western Cape
who are the pioneers in social hous-
ing. Communicare in the
WesternCape is alsogrowing
and is one of the oldest in
the country. It was initially
set up without much gov-
ernment support, and is
doing an excellent job. Social housing
is increasing andwe are nowentering
the second stage of social housing,
which is accelerated growth,” says
Mogane.
“Government has admitted that
to continue to provide RDP housing
is unsustainable given the high cost
of land and infrastructure for a single
unit compared with building social
housing, which is more efficient and
sustainable. Social housing lends
itself to high rise densification and
provides more units on the ground.”
Mogane is adamant that social
housing is a better way to house
more people affordably. The NHFC
has weathered rent boycotts andwas
the sole funder of social housing in
the early years.
Some social housing institutions
were hard hit by rent boycotts and
unable to repay the NHFC, whilst
others continued to make monthly
payments. Default rates were high,
up to 90% in the initial stages, com-
pared to current levels of 7%, which
is the norm. NHFC’s social housing
portfolio accounted for 10% of its
portfolio then and today is 30% and
worth R750 million.
Mogane says, “The NHFC has
survived over the years because of
great leadership at Board level and
good management.” The NHFC has
put in place robust processes and
poor quality units and workman-
ship, costly over-runs are a thing of
the past. “We ensure that we can be
proud of the projects we fund.”
The Cape Town Community Hous-
ing Company continues to be a tricky
issue. The NHFC partnered with the
City of Cape Town in 2003/2004 to
provide a social housing vehicle for
low income communities. The Cape
Town Community Housing Company
instalment sale innovative product
enabled people to rent until they had
sufficient funds to purchase a home.
It offered potential home owners the
opportunity for monthly savings. The
City of Cape Town donated the land
and between government subsidies
(R18 600) and a loan from the NHFC,
the buyer would purchase a house for
R31 600, after saving R500 per month
for a 24 month period (R12 000). It
was a brilliant concept but sadly
failed due to poor quality housing
and workmanship. The saving rules
were relaxed and people no longer
had to save in the scheme. Mogane
says, “Where else can youbuy a house
for that price.” The City of Cape Town
sold its stake in the project to the
NHFC and the state-owned entity
became the sole owner. The project
stalled as the project manager failed
to address issues fromresidents time-
ously and incessant com-
plaints led to non-payment
by tenants.
The NHFC still faces the
problemof 200 household-
erswho are not paying rent.
The state-owned entity would like to
sell the Cape Town Community Hous-
ing Company, now that all the legal
issues have been addressed.
“TheCapeTownCommunityHous-
ing was an innovative, experimental
model and its downfall was the re-
fusal of tenants to pay. The concept
was ahead of its time, boldly using
alternative materials and the units
are beautiful,” says Mogane, “but it is
nownecessary to exit, as to own such
a company is not in line with NHFC’s
mandate.”
The NHFC fulfilled its mandate as
amarket maker in establishing social
housing and introducing innovative
financial products and has diligently
funded the sector for 20 years and
assisted in making life a little easier
for the lowest income earners.
Social housing is increasing and we are
now entering the second stage of social
housing, which is accelerated growth.