Fwjk Developments Discusses the Affordable Housing Conundrum

Fwjk Developments Discusses the Affordable Housing Conundrum

FWJK’s Managing Director, Rhys Rocke, represented the national property developer at the African Real Estate & Infrastructure Summit held in October 2018 in Sandton, Gauteng alongside fellow industry leaders Rob Wesselo, Managing Director of International Housing Solutions, Suzanne Coetzee, CFO of Cosmopolitan Projects and Harold Spies, founder and CEO of Similian Properties.

The four executives held a vigorous discussion on the state of affordable housing in South Africa.

The discussion was hosted by the well-known Neale Petersen, Founder and CEO of the Real Estate Investor Magazine, who directed tough questions to the speakers. Petersen did not waste time in asking Rocke to comment on the proposed ‘inclusionary housing’ measures set out in the City of Johannesburg Council’s provincial policy documents.

Rocke’s reply showed cautious optimism. “The COJ Council enjoys pockets of excellence and in particular the Transformation Committee, whose work towards drafting the inclusionary housing policy has been world-class. The Council has really made all stakeholders, and developers in particular, feel heard. Many of the fundamental changes proposed by property developers and town planners to the draft policy have been seriously considered by the Committee headed by Dylan Weakley. The policy amendments are now largely supported by property developers and we should see a shift towards more affordable housing being created by the private sector.”

Rocke added, “The key to unlocking the affordable housing conundrum could be found by introducing measures to promote development in high-value land areas. Providing affordable housing in the likes of Sandton, Cape Town CBD and Umhlanga Rocks would demonstrate that solutions can be found.” Rocke emphasised the importance of creative thinking by both policy makers and developers. “Policy makers need to think outside the box when incentivising developers.” Such ideas could include “increased land rights, rates holidays, reduced infrastructure contributions and general administrative support in speeding up plan approval processes.”

Developers also need to be creative with both the design and financial models of inclusionary housing. South Africans have been accustomed to living in larger spaces, but this is an unsustainable luxury, according to Rocke. The innovative MD explained his thinking and gave the example of how most New Yorkers live in one-window apartments. “Having two windows is something to boast about,” said Rocke.

The discussion then turned to the challenge of making affordable housing more attractive to investors, and Rocke explained the FWJK Co-Development at Cost Methodology. Historically the property development sector has had high barriers to entry, but this methodology gives smaller investors a seat at the table and exposure to the risk and reward.

He continued, “The key to attracting private investors is to ensure that there is enough meat on the bone. While it is ultimately the Government’s responsibility to provide housing for previously disadvantaged people in South Africa, the private sector has the skills and agility to assist the country’s leaders with spending taxpayer money in the right places.”

Source: Crown Publications

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