Housing the nation

Building upwardly mobile housing in partnership

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Cities in South Africa are slowly changing, with proximity to central business districts gaining in priority. Having quality, well-structured, and affordable housing is critical to our future, particularly as urban migration in provinces like Gauteng continues to increase.

The Gauteng Partnership Fund (GPF) was established in 2002 by the then Gauteng Department of Housing, with the mandate to resuscitate the social-housing market, focusing on rental housing in Gauteng.

This mandate has since been expanded to enable the GPF to operate across the whole affordable-housing value chain, in order to facilitate, catalyse, secure and optimise investment in affordable housing within Gauteng.

In its 17 years of existence, the Fund has achieved this through leveraging critical strategic partnerships with stakeholders and identifying and executing innovative financial investment opportunities.

“In this time, the GPF has empowered and uplifted many previously disadvantaged South Africans. We do this by providing safe and affordable housing for upwardly mobile South Africans while developing fresh talent within our organisation. Essentially, we have created a new generation of entrepreneurial property owners and landlords, people who will drive the economic future of the province, and the country, in the future,” says GPF CEO Simphiwe Dzengwa.

The GPF focuses on social housing, rental housing, student accommodation and mega projects, with four of the latter currently under way in the province.

“Gauteng has become a magnet for migration, and there is a high demand for accommodation. With this demand comes the need for bulk services, so it is also important for municipalities to work together. We don’t just look at social or rental housing, especially in light of the developments around the demand for free tertiary education. In Gauteng alone, there is a need for roughly 300 000 beds for students. We are working together with private sector developers to leverage funding to provide beds,” says Dzengwa.

“Through our processes, we are also trying to empower new entrants in the housing space through entrepreneur partnership programs to fund first-time players. We offer excellent rates, and while some projects receive 100% funding, others receive a once-off loan at minimal interest rates.”

Mega projects are human settlement projects that consist of more than 10 000 residential units. Moving away from the uncoordinated, small-scale, low-impact, sporadic and unsustainable housing developments of the past, mega projects are intended to emphasise mixed-income, high-density human settlements that promote social and economic inclusion, as well as spatial justice.

“These projects serve as both a corrective measure and as a means to redefine post-apartheid cities. RDP houses have been traditionally built away from the centres of economic activities, and in terms of transport, they are poorly connected to centres of employment. Mega projects are designed to address the challenges encountered in the first ten to fifteen years of South Africa’s democracy by closing these gaps while redefining future cities in line with the National Development Plan and the Gauteng City Region (GCR) strategy. These projects will provide new town where people will be able to live, work and play in the same space,” Dzengwa explains.

Proper research and due diligence is carried for all future developments, not just in terms of their location but also the appropriate mix of accommodation on offer.

“Our mega projects include a diverse portfolio of social housing, stand-alone units for rental or bond as well as social facilities and commercial and light industry. We are also doing the proper research into future growth nodes, looking towards the Free State, Krugersdorp and Hammanskraal. Our planning considers those arrangements, as well as opening up discussions with other entities, be it factories or other investors, to find out where their workers are accommodated,” says Dzengwa.

There are, however, some challenges that the GPF is working to overcome, particularly around bulk services and community relations.

“Misaligned planning and development often result in the municipality not having the necessary resources or bulk connectivity to accommodate these projects. We often also come across in-fighting within the communities when it comes to job opportunities. These obstacles result in delayed execution. However, proper community facilitation is helping us manage the situation better. The other problem we face is when rental unit developers struggle to get full tenancy. They then have a challenge in paying us back, but with better planning and coordination, we are helping them to manage this,” he says.

Committed to the transformation of the sector, the GPF has also funded a number of new entrants. African women who own construction companies are especially encouraged to come forward.

“We will provide them with funding and mentorship to assist in the execution of projects,” he says.

“We also recognise that we can’t just focus on bricks and mortar but also need to look at green building technologies, the inclusion of WiFi, and eco-friendly water and power solutions.”

The GPF has initiated discussions with potential funding partners such as Stanlib, the Development Bank of South Africa (DBSA), Old Mutual, Futuregrowth, the PIC and Metropolitan.

“We have a proven track record and the support of the provincial government. Also, to our advantage, we have had clean audits for the last ten years. Our administrative practices stand up to scrutiny, and we account to our partners periodically and offer constant engagement. We also link up investors and facilitate interaction between them. We are working to create funding arrangements that excite people and bring interest to our organisation,” Dzengwa says.

Dzengwa completed his Bachelor of Arts in Political Science and Sociology and his Honours in Political Science at the University of the Western Cape. In 1994 he was awarded a scholarship to study in the USA where he completed his MPA in Public Administration at the Florida Atlantic University.

He graduated with an MBA in 2004 from Rhodes University and has extensive experience in public financial management. Prior to joining the GPF in November 2018, he was the Executive Director: Municipal Finance, Trade and Investments at the South African Local Government Association (Salga).

He has occupied key roles at various institutions including being CEO at Innovate Eastern Cape, Project Management Specialist at Eastern Cape Provincial Treasury, CEO at Hluma Development Investment Agency, Program Manager at the DBSA Development Fund, Head of Research and Product Development at ABSA and Chief Director at the Department of Provincial and Local Government.

Dzengwa’s international experience includes a stint at the National Black Caucus of State Legislators in Washington DC and City of Lauderhill Finance Department in Florida.

“I grew up in East London and was an avid sportsman, interested in youth politics. I was raised alongside my two siblings and come from a relatively poor background. My mother was a nurse, and my dad had passed away. I’ve been fortunate enough have done a number of things, and my time in the US proved especially educational as I worked alongside several organisations to repeal legislation, including Texas legislation that branded Nelson Mandela as a terrorist,” he says.

“During my time at Salga I was very involved with municipal policy and finance matters, spending most of the time working with colleagues in Treasury, and I spent many days in parliament talking through prospective budgets, irregular expenditure and understanding the challenges faced by local government.”

As CEO, Dzengwa is responsible for the overall management of the entity, ensuring that it continues to perform while mobilising human, financial and technical resources to capacitate the GPF to deliver on its mandate.

“I also want to position the GPF as the partner of choice for all players in the province and make sure that we collaborate with other state entities. There must be well-aligned planning and delivery when it comes to human settlement projects; we can’t have housing but no electricity or water,” he says.

Dzengwa has accumulated numerous certificates from educational institutions to provide valuable insights into crucial aspects of his work, including development finance and property development.

“When it comes to education, I believe that you must constantly sharpen the saw. I also rely on the network I have built around me over the span of my career. I have interacted with many senior executives and leaders, as well as academics and politicians. I have also built a network in the private sector, and I use that network to bounce ideas around and move out of my comfort zone. I believe that there is always something to learn. I am also very interested in international trends, and currently I am very excited by the prospects of AI,” he says.

“I also think that having kids grounds you in reality. Especially when you think you’re a big shot at work, you get home, and they immediately bring you back down to earth. You’re not the boss or the CEO, and they will engage with you, freely with no inhibition. They want their time with you, and they remind you that you are still a human being. Success is difficult without a family and their compassion and understanding.”

Dzengwa believes that in South Africa, it can sometimes be taboo for a young executive to have ambitions, and this attitude could have a devastating effect on our youth.

“We need to teach our young people about leaving a legacy of good performance. We have laid the foundations, but let them have the ambition to make SA a better place. My resolve has always been driven by the idea of building the country up. It’s not about the salaries or perks but what we are building for our kids,” he says.

“My philosophy is to keep learning. Learning by doing is better than book learning. I keep studying new ideas, but I don’t think you can ever understand things from theory alone. I am currently busy with my PhD, I have been to many different places, and I have all this knowledge, and I want to one day lecture so that I can plough back my experiences to build the next generation.”

In the future, Dzengwa hopes to sharpen the GPF’s capacity to deliver, taking the organisation from being a financier to a full-scale development agency.

“We need to mobilise, get more funding and grow Gauteng. We want to be a turnkey developer, leveraging finances independently from the state to execute on our mandate. We also want to be a reliable partner to other entities so that we can jointly enhance the projects they plan to deliver,” he concludes. 

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