Affordable housing for sustainable cities
The EIB has invested in International Housing Solutions 2, a fund that will invest in building 7 000 high-quality affordable housing units in cities in Namibia and Botswana. Current housing shortages in these countries have led to high prices, forcing people to live in inferior dwellings often at a considerable distance from their workplace and with significant negative consequences on their health and wellbeing. Providing more affordable housing will help to meet basic needs for adequate housing, in particular for key workers such as teachers, nurses and civil servants, and make cities more inclusive.
Affordable housing investments also have the potential to make cities and communities more sustainable. As well as enabling people to live near their place of work, the fund will include investments in housing with higher energy and water efficiency standards. The energy saving for the housing units supported by the fund is estimated at 1.27 MWh per year per housing unit. This could save households in Namibia as much as EUR 136 a year in energy costs, or 2.5% of GDP per capita, contributing also to the mitigation of climate change.
Scarcity of equity finance for housing construction projects is widely recognised by stakeholders such as banks, developers and public authorities as being an important constraint impeding residential property construction, and a major impediment to meeting the strong demand for better housing in these countries. In addition, while commercial developers in these countries are mostly focused on the high-income segment of the market, there is a lack of experience with affordable housing. International Housing Solutions is bringing the expertise it has gained through affordable housing investments in South Africa to other African countries, and this is expected to help establish local markets for more affordable housing developments.