#BizFinFocus: Neighbourhood watch of a different kind

Success Marota is a bit of an alchemist. While not a wizard, the chartered accountant [CA(SA)] and registered auditor is a whiz at what he does As chief financial officer of the Johannesburg Social Housing Company (Joshco), he works in a pressurised domain: delivering housing to the city's residents who ordinarily would struggle to buy or rent a decent home.
Success Marota, CFO: Joshco
Under his watch, Joshco has achieved a clean audit for the third year in a row. That there are municipal entities demonstrating sound financial leadership comes as welcome relief in an otherwise disappointing set of financial results.

“Joshco has created a culture that subscribes to honesty and ethical behaviour,” says Marota, explaining what underpins the municipal entity’s track record of clean audits. “The board holds management accountable in terms of service delivery imperatives. Our audit committee also ensures that management continuously improves the control environment.”

Filling the housing gap

The City of Johannesburg established Joshco in 2004 to provide affordable social housing to families who would otherwise be unable to afford a home. Thirteen years later, it is still changing lives.

Essentially, it is attempting to fill the housing gap for South African citizens earning between R3,500 and R7,500 – too much to qualify for free RDP housing, yet too little to qualify for a bond.

The municipal entity describes its mandate as ‘building neighbourhoods’. Marota unpacks the bricks and mortar of what this means for those people fortunate enough to benefit from the organisation’s numerous projects all over Johannesburg.

“Joshco has the capacity to develop projects that yield up to 688 affordable housing units, among them Golden Highway and Fleurhof Junction. These households are integrated into the community in which the project is situated.”

The Golden Highway – Devland social housing project is situated south west of Johannesburg between Southgate Mall and Eldorado Park. The project consists of two- and three-storey walk-up blocks.

Fleurhof Junction is also a mixed-income housing development alongside transit nodes. Located a short distance from the Johannesburg Central Business District, the project provides mixed use business centre sites, crèches, recreational spaces as well as school sites to create a fully serviced and integrated community environment.

Demand for affordable housing remains high

While Joshco generally works on numerous projects at any given time, the demand for housing in Johannesburg is much higher than the supply.

Since being established, Joshco has developed more than 4,300 rental housing units and established homes for more than 19,478 people and is helping to regenerate Johannesburg’s inner city.

“Cost efficiencies and stakeholder management are really important in running an affordable housing business due to the lower margins but the business is sustainable,” says Marota.

Joscho’s innovative approach goes beyond building and buying properties for conversion into affordable housing. Quality workmanship and ongoing affordability are crucial.

“Over the years we have scrutinised the maintenance costs on our properties, and have adopted face-brick for all our greenfields projects to minimise costs of maintenance such as painting,” says Marota. “We also build energy-efficient projects incorporating heat pumps and rooftop gardens.”

Whichever way we look at the ongoing challenge to supply affordable quality housing, teamwork is essential; both to meet occupancy targets and to come up with creative methods to strengthen rental collection among a population where many are cash-strapped rather than tardy in their financial responsibilities.

BizFin Focus is a Bizcommunity special report covering all aspects of finance, whether its the Budget Speech, fintech or investments, you'll find it here.
BizFin Focus 2018 - Attract more interest

Find out how to invest in your company's presence on the biggest multi-industry B2B news website in Africa and attract more interest from 328,000 decision-maker audiences across 18 industry sectors...

Issued by Bizcommunity.com 25 Jan 2018

Get a daily news update via WhatsApp or sign up to our newsletters.