Reflections on the Madulammoho Housing Association
Madulammoho Housing Association was developed as an exit strategy for MES students who needed accommodation for the first time after finding jobs for them. The jump from being homeless to finding accommodation for low income earners was too great and therefore Madulammoho started to develop rental accommodation that would fit the earning potential of people accessing formal rental accommodation for the first time. Low income earners were subjected to unsuitable accommodation mainly run by slum lords in the inner city of Johannesburg. Madulammoho was able to develop well situated, clean and safe accommodation in direct competition to the slum landlords.
Social housing institutions receives a once off capital grand from the department of Human Settlements for the development of social rental accommodation. The intended purpose of this grant is to lower the loan finance needed to develop the housing stock in order to lower the rentals. Madulammoho used the social housing instrument as a catalyst to not only provide very low rentals in the Hillbrow area, but also to regenerate a previously neglected and dilapidated area in Hillbrow .
Based on demand-side affordability Madulammoho Housing Association developed a stepped approach to providing people with alternative housing options at different rentals. Households can then make housing choices according to their incomes. The ladder approach demonstrates that as people are supported and their skills improved upon, their housing options open up. However sometimes incomes might decline and they may need to seek a ‘reduced’ alternative. Madulammoho’s partnership with MES provides for social services so that households are supported in their choices.
MES runs an assessment centre where each person is assessed by a social worker and then placed accordingly within the MES / Madulammoho system. In addition, each building has a trained life coach who assesses the needs of the tenants. The life coaches serve as an important support for tenants in each building, and deal with the real life stresses (domestic violence, divorce, unfaithfulness of partners, abuse) or spiritual issues of the tenants in the buildings. Monthly reports are compiled by the life coaches so that Madulammoho and MES get a sense of how their tenants are doing.
Each building has a house manager who takes care of the day to day business of the building, including collecting rentals, listening to and dealing with tenant complaints and undertaking minor maintenance. The house manager stays in the building and is paid a salary and trained in the systems by Madulammoho.
In order to minimize costs, Madulammoho outsources as little work as possible. Cleaning and security, as well as ongoing maintenance (besides major maintenance such as rewiring or major plumbing works) are all undertaken in-house. Not only does this create jobs for some of the tenants, it also means people have a vested interest in doing a good job. Each building then has its own security and cleaning services which are all managed by Madulammoho. The security, cleaning and maintenance systems are managed centrally, and it is the hope to have a maintenance officer on site in all the buildings at some point in the future. Internalising security and maintenance services has also proved to be a significant cost saver for the company.
Our first social housing project was completed in October 2006 and consisted of all the housing product as described in our housing ladder. It had 100 shelter beds and 68 rental units which included transitional, communal and bachelor units. In 2007 we added 139 units and in 2008 another 170 units. In 2009 we developed 583 units in three different buildings. One of these projects were the BG Alexander building consisting of 400 units. In this project we included social and recreational facilities like a crèche for 160 children, an assessment centre, training and lecture halls and a soccer pitch. This is now our flagship project which does not only consist of all the housing products in our housing ladder but also include the whole social development strategy in one project. We have now expanded our model to Soweto and is currently developing another 586 units.
Implications for other implementers and for broader systems and policy development
Affordable housing for people earning less that R3500 per month is not possible without institutional subsides. There are two types of subsidies from the government to develop affordable rental housing. Both the institutional subsidy from Provincial department of human settlements and the Restructuring Capital Grant are once off capital subsidies for the development of Social rental accommodation. These subsidies enable the Social Housing Institution to lower the debt funding needed for the project and thus enable the Social Housing Institutions to lower its rent. There are however certain conditions to qualify for these subsidies. The Social housing institutions must be registered as a Social Housing Institution (SHI) with the Social Housing Regulatory Authority (SHRA), which is a very stringent process. The SHRA also monitors the performance of the SHI on a quarterly basis.
Units can only be rented to South African Citizens are earning less than R7500 p/m. Every project must have a minimum of 30% of tenants who are earning less than R3500 and their rentals must be below R750 p/m. These projects must also be in well located areas declared by the Province as restructuring Zones.