Shelter Afrique unveils a calculator to select affordable housing projects

By OTIATO GUGUYU

Pan-African mortgage lender Shelter Afrique has developed a “housing affordability calculator” to review proposals from developers offering affordable housing finance.

The calculator asks the user to enter four data points: monthly household income, distance from downtown, country of residence, and local currency or US dollar to assess affordability.

The calculator then applies baseline data and assumptions based on prevailing mortgage conditions in each country, the percentage of monthly household income spent on transport based on the distance from home to the city center and the income rate monthly household spending on transportation and housing for each income bracket.

Shelter Afrique’s head of policy, research and partnerships, Dr Muhammad Gambo, said developers currently claim to set up affordable units but set them expensive, which creates the risk of slow uptake. completed projects.

He said the housing financier will now review projects using the criteria to ensure affordability of purchase price, financing and cost of living.

Advertising

“The Housing Affordability Calculator is essential for Shelter Afrique in evaluating submitted housing project proposals, with respect to the likelihood that the proposed units will be affordable to a low-income target market in that location,” said said Dr. Gambo.

“If household affordability is not accurately assessed by public or private sector developers, there is a serious risk that effective household demand will be insufficient to buy or rent the homes produced,” he said. declared.

The Housing Affordability Calculator, which was developed in partnership with the Center for Affordable Housing Finance in Africa (CAHF), also aims to improve understanding of housing affordability from both the demand and supply side. offers in African countries.

The calculator will put pressure on developers whose price range is still very high despite claiming to build affordable homes.

It may also influence government policies regarding recipients of affordable housing tax incentives.

In Kenya, for example, the government waived stamp duty for first-time buyers and pledged to provide bulk infrastructure such as drainage and utilities. He also promised to halve corporation tax to 15% for developers who build more than 100 affordable units and to exempt value-added tax (VAT) on building inputs.

Affordable housing is a lucrative business as African governments strive to encourage private sector participation in the provision of millions of housing units.

Eleanor C. William