Affordable housing is both a social necessity and a key driver for successful economic growth. Volume house building creates jobs, provides financial inclusion for workers and residents, as well as being a ‘fiscal tap’ that can help economies from overheating or going into recession. This is a message that our Altair Chair, Derek Joseph, has been reiterating for a number of years whilst others favoured microfinance as the way forward for developing economies, particularly in Africa.
Now the message is being listened to and a number of supranational bodies and African governments have approached Altair to help develop a network of affordable housing agencies. This new venture has been badged ‘Altair Africa’ and is led by Derek with the involvement of Olu Olanrewaju on secondment from London & Quadrant and, representing the team in Nairobi, Femi Adewole, currently Acting MD at Shelter Afrique.
Altair Africa already has four contracts in place. The first two is for new developments in Rwanda to kickstart their affordable housing programmes. The third is to assist in setting up a government funding and regulating agency utilising Community Land Trusts in Nigeria. The fourth is to evaluate and help with the development of projects in Malawi, Uganda, Kenya and Zimbabwe. More new projects are expected to follow as Altair Africa’s involvement and expertise becomes better known.
The Rwanda projects are typical of what Altair Africa is aiming to achieve and many will see reflections of the UK experience in some of the elements. Key to understanding is that governments have few resources to support affordable housing with subsidies and the mortgage market is rarely accessible for those with middle or lower incomes. Economies often suffer from high rates of price inflation, high costs of borrowing and high levels of currency depreciation.
Rwanda Project 1
A proposed development of 2,500 units on land in Kigali, the capital city. The project is to be funded by an infrastructure fund, a government bank and the government pensions authority. The site has been acquired with the assistance of the local authority. The concern is the funding of the project through sales including 800 affordable homes.
Altair Africa is proposing the sales programme is phased and offers purchase options including rent to buy and other flexible tenures. The affordable will be for rental through a long term company financed by low start index linked bonds.
Rwanda Project 2
The establishment of a ‘new town’ within the Kigali City boundaries. Developing over 10,000 new homes, a shopping mall, hotel, commercial centre, leisure facilities plus schools, hospital and a transport hub. The ambitious project is part-funded by IFC, part of the World Bank, Rwandan government agencies and a construction consortium mainly from Malaysia and China. The housing requirement includes around 30% affordable housing principally for sale.
Altair Africa is suggesting a funding model similar to ‘help to buy’ for the first phase of affordable housing and both rent to buy and pure rental for later phases. Many of the commercial units to be sold on an instalment basis to obviate the difficulty of accessing lending. To manage the ‘new town’ a local agency that includes both professionals and residents able to collect and account for estate expenditure.
Both the Rwanda projects are ready to move towards the delivery stage with Project 1 awaiting site start and Project 2 submitting the masterplan shortly. These projects are designed to be templates for the future of affordable housing, particularly in Sub Saharan Africa.
STOP PRESS! Yesterday Altair Africa have been awarded a contract with the Nigerian Government to help them develop a business plan to set up a regulator and investment vehicle to encourage affordable housing development in Nigeria.
The project will be led by Olu and Derek (with plenty of support from the wider team!) and will be kicking off in a couple of weeks, to be carried out over the next three months.