Barbara Ludman
Housing policy analyst Mary Tomlinson has spent 15 years looking at innovative ways to house people who can’t walk into a formal lending institution, like a bank, and walk out with a conventional bond. As senior researcher at the Centre for Policy Studies, she monitored the implementation of the country’s new housing policy, and at the Banking Council of South Africa, she dealt with low-income housing as a transformation issue for the banks.
Michael Oelofse has also been active in housing policy for 15 years. A consultant on housing policy issues, he’s on the board of the Inner City Housing Upgrading Trust.
With the launch next week of the Housing Finance Resource Programme (HFRP), Tomlinson, as director, and Oelofse, deputy director, will be giving money to individuals and organisations to develop new ways to fund low-cost housing.
“We’re here to fund technical assistance ie brains to develop new housing finance mechanisms,” Tomlinson says. They’re interested in projects that are sustainable, can be applied across the sector, can be demonstrated at scale and will leverage other resources. HFRP is looking for partnerships, cooperative efforts, joint initiatives. “We would like proposals to be collaborative,” she says.
The HFRP, a USAID venture, is being managed by the Washington, DC-based Urban Institute, a non-profit policy research organisation.
The programme’s advisory team includes people from the government-backed National Housing Finance Corporation, the Banking Council, National Urban Reconstruction and Housing Agency and other major players in housing finance.
Intended recipients are those in the business of financing low-cost housing, from NGOs and community-based organisations to banks and alternative lenders, national, provincial and local government housing departments anyone looking at new ways to put a low-cost roof over the heads of prospective homeowners.
“Experience has clearly demonstrated that while traditional mortgage bonds are very successful in the conventional market, they are, by and large, inappropriate lending instruments for the low-income consumer. Formal banks can’t operate in this market; the absence of collateral combined with limited disposable income heightens the risk,” she notes.
She says there’s definitely a need for finance at the lower end of the market and for a different kind of institution to operate there. The development of community-based lending institutions is a possibility.
“This doesn’t mean the formal banks should be let off the hook,” she says. “Rather they should be expected to aid in the development and funding of such institutions.”
At the same time, there should be a way to use individual savings in housing delivery. “The government’s housing subsidy scheme was never intended to be the only contribution to housing delivery,” she says, quoting the 1994 White Paper to show that government regards personal equity as a cornerstone of sustainable housing delivery.
Tomlinson is also looking for better data collection, to establish, for example, the actual impact of the money spent on housing since 1994. “The government has completed more than one million housing options” serviced sites, upgraded dwellings and rental housing as well as Reconstruction and Development Programme houses “but there has not been an adequate collection of data, nor suitable analysis. We need better data on delivery in order to inform future policy decisions.”
Housing in a time of Aids is another area of interest. “Women dying from Aids consistently say that they want to be sure their children are housed before they die,” she says. The HFRP could provide resources to help the housing sector come up with some solutions. “Housing in South Africa is more than a housing benefit. It can be part of the country’s health policy in dealing with Aids.”
Tomlinson says the connection with the Urban Institute is a fortunate one; its international activities centre has focused, inter alia, on housing finance in transitional economies in Russia, Central and Eastern Europe. As for the USAID link, she says, “we’re not pushing American wisdom. Independence is one of our major principles.”