By: Jo Ferris-Davies
I am happy to report that I have settled into Johannesburg since arriving here in late September 2016 to work with Rooftops Canada on the Equal Spaces: Social Housing to End Spatial Apartheid in South Africa Project. I am working from the offices of NASHO, the National Association of Social Housing Organizations, and my main role is to help the social housing sector grow and develop.
Two weeks ago, I facilitated a meeting of staff from social housing institutions (SHIs), key sector leaders and NASHO to discuss approaches to growing the sector. Currently there are 24 SHIs managing 30,000 units across the country. NASHO’s vision is for the sector to be 170,000 units by 2030. Growing to this size will require many new SHIs given the local consensus that SHIs need 3,000 to 5,000 units for sustainability. A well-defined strategy is needed to support newly established SHIs to develop their business. And here in South Africa, social housing is a business – albeit on a non-profit basis.
Capital grants are available that cover a significant portion of the SHI’s development costs, but there are no operating subsidies. Rents must cover all operating costs and repayment of loans for capital costs in excess of the subsidies. SHIs must collect at least 98% of rents and have very little bad debt. Operating with very small margins of loss in a country where there is a culture of non-payment of rents is a huge challenge. Yet, the best SHIs here have thrived and are now very large in size with thousands of units under management.
Many of these well-established SHIs are now helping newer SHIs develop projects and establish management systems. This incubation role works but there are limits to how many formal relationships can be established at any point of time. Keep in mind that these larger SHIs also have their own complicated portfolios to manage.
The solution we discussed is to establish a “back office” approach to both management and development of new housing. Established SHIs could also take advantage of these new services if they needed them. This approach exists in Ontario where more than 40% of non-profits and co-ops are managed by either for profit or non-profit property managers which generally provide efficient and effective services. We decided to keep investigating the possibility of establishing businesses to provide modules of support so that each new SHI can choose their package of support for both management and/or development. These could be designed for handover to the new SHI when they are ready to take them on. Supporting this new system would be standardized policies and procedures, and a central management information system.
I will be accompanying this group of back office enthusiasts to Toronto in March to meet with representatives of the non-profit and co-op sector to explore what systems are being used in Canada and how they could be adapted to work in South Africa.