The housing project has made home ownership possible for people who qualify for government assistance to obtain a bond to buy a house, but find a gap between what they can afford and what is available in the property market. The development also incorporates a rental component for lower income earners, enabling them to gain a foot on the property ladder.
The project won one of four Platinum awards from the Impumelelo Social Innovation Centre, presented in Cape Town on 1 December. The awards recognise best practice in delivering innovative solutions to South Africa's social problems.
Presenting the award, Impumelelo executive director Rhoda Kadalie, described GMSA Foundation general manager Roger Matlock, and executive director of The Home Market, Lance Del Monte, as two people who had done more for housing in South Africa than anyone else.
In line with the GMSA Foundation's approach to its projects in both housing and education, the Walmer Link project has been designed specifically to enable it to be replicated by other agencies elsewhere in the country.
Walmer Link, for which the Foundation provided seed funding and bridging finance, borders both the suburban and township areas of the suburb of Walmer. It consists of 432 for sale and 347 for rent units and is the first project in South Africa to access government's Finance Linked Individual Subsidy Programme (FLISP). Home buyers with monthly incomes of R3,500 to R15,000, access FLISP funding for the deposit needed to secure a home loan from a bank.
The for rent component uses government's Social Housing Programme (SHP) grants and subsidies to offer apartments at subsidised, income-linked rentals for those earning between R1,500 and R7,500 per month.
"There has been little uptake of the FLISP subsidy by developers, because on its own it doesn't bring selling prices to truly affordable levels. With this model, we have shown that by designing for affordability and taking advantage of cheap and well-located land as well as higher residential densities, it is possible to bring quality, affordable home ownership into reach for people who were previously under-served in the property market," Matlock said.
"The project created jobs in the construction phase, and there are employment opportunities in the ongoing management and maintenance of the for rent component. The project has also contributed to wealth creation - new home-owners now have an asset with value that can be used as security and to leverage other resources. Used wisely, this will be a springboard out of poverty for many people," he added.
Using private sector funding to initiate the project had delivered significant gearing success and unlocked public funding, Matlock said. Seed funding of R1m from the Foundation for the for sale component of Walmer Link had delivered a project valued at R129m, while R2m from the Swedish Development Cooperation Agency for conceptualising the for rent component had resulted in a project valued at R104m.
