ACCESSING OPPORTUNITIES THROUGH THE HOUSING MARKET Report on the Second Annual Social Impact Audit of International Housing Solutions Residential Units by Francois Viruly A/Professor
PURPOSE OF THE STUDY assess direct and indirect benefits that tenants and owners derive from housing units provided by IHS gain insight into social and economic impact and broader potential of affordable housing sector understand direct and indirect employment opportunities created during construction and occupation phase of affordable housing units ABOUT THE REPORT 500 in-depth interviews conducted among households in more than 20 developments conclusions suggest that tenants and owners continue to experience significant benefits from occupying homes delivered by IHS compared to available alternatives BENEFITSOPPORTUNITIESLEISURESOCIALHEALTH
DEMOGRAPHICS OF RESPONDENTS Non-students 83% of respondents 40-49 years 12% 50-59 years 2% 30-39 years 47% 60-69 years 1% 20-29 years 38% Students 17% of respondents 18-19 years 21% 30-39 years 5% 40-49 years 1% 20-29 years 74% White 4% Coloured 6% Indian 2% White 5% Coloured 2% Black 93% Black 88% Cohabiting 13% Married 37% Married 2% Widowed 1% Cohabiting 13% Divorced 1% Single 97% Single 49% EMOGRAPHICSNON-STUDENTSVSSTUDENTSDEMO
Million People POPULATION GROWTH & HOUSING BACKLOGS Massive urbanisation constantly adding to housing backlog, including gap section of market 2012 housing backlog: 2.1 miilion total units. Includes 610 000 gap units South Africa Workforce Housing Fund target market Gauteng population, for example, could grow by further 10 million over next three decades Insufficient supply of dwellings required for urbanised and urbanising middle class affordable housing market defined as households combined earning between R3500 and R18000 a month Government alone cannot address backlog or new demand Private sector leadership crucial but still lacking 20 15 10 5 0 2009 2015 Landau, 2008 2020 2025 2030 2035 2040 2045 POPULATIONFORECASTGAUTENGCITY REGIONPOP
REALISING GOVERNMENT S BREAKING NEW GROUND POLICY At issue: To what extent does IHS and sector enable delivery of sufficient housing units? To what extent does IHS model enable creation of wealth through home ownership? How sustainable are IHS communities? To what extent are communities grown and employment created through IHS model? To what extent is social cohesion improved and how does this impact on broader societal wellbeing and crime? HOUSING DELIVERY SOCIAL COHESION HOUSING AS AN ASSET EMPLOYMENT CREATION SUSTAINABLE HUMAN SETTLEMENTS DELIVERYSOCIALCOHESIONSUSTAINABLEHUMANS
THE DIMENSIONS OF VALUE Housing = Shelter + Economic stimulator + Asset creator Traditionally, lower end of market has only SHELTER role Affordable sector enables broadened role and wealth creation (ASSET AND ECONOMIC) by: 100% of IHS units obtain clean title deeds as compared to current rate of only about 50% for subsidized units as reported by the Department of Human Settlement According to Absa s March 2013 House Price Indices report, small houses (80m²-140m²) which are the majority of IHS units, have the highest price appreciation, with small houses at 17.5% nominal growth for year-todate 2013 This potential equity build-up and strong ownership rights should provide opportunities for obtaining funding (value) for further education, entrepreneur activity or other economic benefits to homeowners Entrepreneurship is key contributor to job growth globally. In US, it has been primary engine of job growth for past 30 years, even in recession years as shown in graph ECONOMIC ASSET VALUE SHELTER ASSET+ECONOMIC+SHELTER=VALUEASSET+ECONO
IMPACT OF HOUSEHOLD TRANSPORT SPEND 10.1 6 Source: OECD % OF INCOME SPENT ON TRANSPORTATION 3.3 4.3 11.6 4.6 21 Legacy of historic planning means continued economic discrimination in terms of transport spend IHS affordable housing model ensures better location in terms of access to transport, enabling greater disposable income and ability to save/invest in property 7.4 4.4 2.8 13.8 10.1 5.5 PERCENTAGEOFBUDGETSPENTONTRANSPORTINAF
REASONS FOR MOVING TO DEVELOPMENT Main reason for moving here Landau, 2008 Percent Yes Better job prospects 22 4% Better access to place of work 108 22% Nicer environment 78 16% Closer to schools 50 10% Safer environment 75 15% Better access to recr facilities, parks green 12 2% Cheaper than previous accommodation 40 8% More expensive but better than previous 28 6% Better opportunities/access to develop my knowledge and skills 25 5% Better access to public transport systems 4 1% Better access to hospitals and health care 0 0% Better access to public infrastructure such as water and electricity 3 1% Other 55 11% BETTERJOBPROSPECTSBETTERACCESSTOWORKSAF
WORK COMMUTE TIME AND MODE OF TRANSPORT USED BY NON-STUDENTS Up to 90 mins 7% 30-60 mins 32% > 90 Don't know mins 4% 1% < 15 mins 17% 15-30 mins 37% Train 1% Motorbike/ scooter 1% Other 1% Car 55% Walk 6% Taxi 26% Bus 10% WORKCOMMUTETIMEANDMODEOFTRANSPORTUS
LOCATION ASPECTS OF DEVELOPMENT ACCORDING TO NON-STUDENTS Pleasant area to live Safety and security of the area Proximity to public transport Proximity to work Proximity to hospitals/clinics Proximity to police Proximity to family and friends Proximity to religious buildings Proximity to recreational facilities Proximity to schools Proximity to tertiary education institutions 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Very dissatisfied Dissatisfied Indifferent Satisfied Very satisfied 100% PLEASANTAREASAFETYANDSECURITYPROXIMITYT
WELFARE RATINGS ABOUT DEVELOPMENT ACROSS ALL RESPONDENTS I'm willing to help improve my neighbourhood I feel safe living here I feel like I belong to this neighbourhood Staying here is good value for money There is a close community here There is a criminal element here We look out for one another I regularly stop to talk to people I know my neighbours My children are happier here We have a forum to address community issues 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Strongly disagree Disagree Neither Agree Strongly agree N/A 100% IMPROVEMYNEIGHBOURHOODSAFELIVINGBELONG
LIKELIHOOD OF RECOMMENDING THE DEVELOPMENT Unlikely 9% Very unlikely 8% Neither 22% Likely 20% Very likely 41% * About 61% likely to recommend development Households willing to play active role in improving social environment Clear sense of belonging Improved social cohesion possible LIKELIHOODOFRECOMMENDINGTHEDEVELOPMEN
TOTAL WELFARE IMPROVEMENT ACROSS ALL RESPONDENTS Leisure time Social life Health Access to education Employment opportunities Quality of life for your children Access to recreational facilities Salary 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Much worse Worse No change Better Much better Only 3% of respondents indicated quality of life had worsened to some degree, while majority 72% felt things had improved to some degree 100% TOTALWELFAREIMPROVEMENTACROSSALLRESPON
EMPLOYMENT CREATION Construction Employment Direct Indirect Total Full time/per annum 18 500 27 750 46 250 Operating Expenditure 5 312 Total 51 562 Employment Creation per Unit Skilled Unskilled Indirect Multiplier Total (incl Multiplier ) Employment (per unit) 13 weeks ( *) 1.04 1.44 2.48 5.62 Operating Expenditure (per R/million/rental turnover/per 5.00 annum) Construction/development (man hours equivalent to jobs) 46 250 Operational Rental (man hours equivalent to 5 300 in perpetuity over 10- year life of fund 53 000 Total 99 250 * Employment Creation will vary depending on typology of housing EMPLOYMENTCREATIONCONSTRUCTIONDEVELOP
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