SA Affordable Housing January - February 2019 // Issue: 74 - Page 14

FEATURES Innovative solutions to financing the sector Affordable housing is becoming increasingly unaffordable but changes in how we finance the sector may just be the breath of fresh air that is desperately needed. By Warren Robertson The loan book currently comprises 33 037 residential units, 598 buildings and about 350 entrepreneurs assisted. T he shape of finance in the affordable housing sector is welcoming a few new developments and other (older) but increasingly successful methods that are set to change the landscape of how the sector will be financed in future. Traditionally affordable housing has been largely financed through partnerships with government where subsidies are awarded to construction companies to develop housing for the lower income brackets. These homes are then often distributed free or supplied at a discount to people based on their needs. 12 JANUARY - FEBRUARY 2019 A basic government subsidy – Finance Linked Individual Subsidy Programme or FLISP – is also available for those in the gap market looking to buy their first homes, but the reality is it does not do enough to address the real cost of housing in South Africa, and is only available in limited circumstances and as such does not reach as wide a market as it intended. In July this year government sought to rectify the problem with the FLISP by expanding the qualification See more on page 14