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Finding Home: Affordable Housing Crisis Leads To More Homeless Students

Third-grader Naveah Taylor bounds out of Reid Park elementary school in a pink jacket and backpack. Her favorite subject is math.

“I learned about adding fractions,” she said. “You only can add the numerator but not the denominator.”

Naveah started school in Charlotte this year. Kindergarten was in Jacksonville, Florida. First and second grade were in Atlanta. Then her parents couldn’t care for her anymore, and she and her brother Dakari came to live with her grandmother in Charlotte. He’s adjusted to second grade here and his favorite subject is science.

“I like that we go and explore stuff,” he said referring to an experiment about the densities of liquids. “Like at school the other day, we did a rainbow jar.”

Dakari and Naveah are with their grandmother now. Alohma West brought the kids to live with her in the one-bedroom apartment in west Charlotte she already shared with her son’s family. With seven people and several air mattresses, it’s a tight fit.

“We are still there on top of each other,” West said. “But it’s still better than being outside on the street.”

West’s grandkids are considered homeless under a federal law called McKinney-Vento. The classification applies to students living in a motel, car or emergency shelter. It also applies to those living in someone else’s home because they lost theirs or can’t afford their own. This qualifies Dakari and Naveah for meals, academic support and transportation from wherever they are to their home school that year.

The Department of Education reports more than 29,000 kids in North Carolina were considered homeless in the 2016-2017 school year. About three-quarters of those are living with other families because it’s too expensive to live on their own.

According to Shantiqua Neely, it’s not necessarily because people don’t have jobs. She’s the executive director at A Child’s Place, the organization helps homeless CMS students and families. She said it’s because rent is too expensive.

“Over half of our parent and caregivers that we serve are employed,” Neely said. “Things like affordable housing and lack of access to livable wages, and other factors like inter-partner violence and histories of eviction, play a big role in contributing to what we are seeing as family homelessness.”

Charlotte-Mecklenburg Schools has the largest population of homeless students in North Carolina. Last year the district has identified almost 4,600. That’s up from nearly 2,500 10 years ago.

Neely said she is paying close attention to Charlotte’s efforts to make affordable housing a priority. The city says there’s a shortage of about 24,000 affordable housing units. She said she’s excited to see big corporations pitching in.

“I’m happy that we are talking about it in Charlotte,” Neely said. “But I’m looking for the day where it starts to translates to the population that we are serving.”

The city just approved spending more than $2 million to renovate nearly 80 apartments in east Charlotte to and keep them affordable. A quarter of those units would fall in the budget of most of the families that are in Neely’s program. She said the average family she serves makes about $800 a month.

CMS found through Project LIFT, a public-private partnership focused on west side schools, that kids moved so much that it’s difficult to track their progress. 50 percent of kids transferred to other schools after one year in the program. Neely said that movement is mainly within west Charlotte schools.

“We are servicing a family at one school and then we are in a meeting talking about that family, but that family is now at another school,” Neely said. “They are going back and forth all because parents are trying to look for that stability.”

Federal law requires the district transport kids from wherever they live to their home school for the rest of the year — even if they move outside the district. McKinney-Vento specialist at CMS Sonia Jenkins said about half of the 3,800 homeless kids this year live outside of their school zone, some even moving to Rock Hill or Gastonia because it’s too expensive to stay in Mecklenburg. She said the district spends $2 million on their transportation.

West is searching for a more permanent place and wants her grandkids to have some stability after years of being on the streets and sometimes living in squalid conditions.

“They definitely need a stable environment coming from not being fed, to being abused, to living with rats,” West said. “I mean, I listen to stories now that they have been with me a while. They are opening up more and they are telling me how the rats used to sleep in bed with them and it breaks my heart.”

CMS found students considered homeless were more likely to be behind in reading skills and tend to miss school more often.

School buses are pulling up and kids file out into the parking lot of the Center of Hope Salvation Army shelter in time for dinner. Today it’s chili, cornbread and salad.

As Kimberly Washington gets her food, she tells me her 8th-grade son didn’t get to school that day.

“He actually missed it this morning,” she said. “[The school bus] was one minute early.”

Because Washington doesn’t have a car, her son stayed at the shelter. They have been living in the shelter for a little more than a month. Washington said she ended up here after bouncing around homes of her family and friends. It started when she left an abusive relationship.

For a time, she was renting a room in a house — it was expensive. Then, she lost a temp job.

Washington is about to start as a cashier at Chick-fil-A. She’s planning to start saving up so she and her son can move out of the shelter. But as she looks for places, she’s finding rent has gotten more expensive.

“The wages that are earned in Charlotte, the compensation matching the cost of living. It just simply doesn’t,” she said. “I don’t understand how even though market rates increase, how rates of pay don’t match that.”

Washington’s applied for housing assistance but like many others, has been on the waitlist for years. She said she’s not expecting to get a voucher anytime soon.

But Alohma West is proof that a voucher doesn’t make it easier to find a place. She’s been looking for a bigger place for her and the two grandkids with a voucher, which provides a little more than a $1,000 a month. She said she’s called more than 30 places and is on several waitlists.

“But the problem is everywhere you look, nobody wants to take the voucher,” West said. “I can’t just sit. I have to get out. I don’t have a car so I have to look for something on the bus line. It’s been rough.”

While dealing with all this stress, West is trying to keep life normal for her 8- and 9-year-old grandkids. They have a homework routine after school and on the weekends, she tries to take them to free activities.

Often Dakari, her grandson in second grade, said they end up doing stuff at the apartment.

“Because she do not have a car to take us anywhere,” he said. “So lately, she hasn’t had enough money to do stuff so we just do stuff at home.”

His sister Naveah added that she’s looking forward to finding another place to live that’s less crowded so she can take her Christmas present out of the box. She’s been waiting a few months to open the easy bake oven.

“We got to get a bigger space because there’s a baby in the house and he messes with completely everything,” she said.

West has until May to find a place with the voucher before it expires. She is searching for anywhere in the county so the children can stay in CMS schools.

Source: Wfae

NSIA fund was created to help tackle Nigeria’s infrastructure challenges –Uche Orji, MD/CEO

Uche Orji is the Managing Director/Chief Executive Officer of the Nigeria Sovereign Investment Authority (NSIA), an establishment founded in 2011 to manage the Nigeria sovereign wealth fund where the surplus income produced from Nigeria’s excess oil reserves is deposited.

He assumed duties in 2012 and has steered the establishment to the enviable position it is today.

Orji studied Chemical Engineering at the University of Port Harcourt in Nigeria’s oil capital and after graduating, he completed his mandatory year of National Youth Service at the Nigeria Industrial Development Bank (NIDB), today known as the Bank of Industry (BOI). His job here as Project Assessment Engineer was his first foray into development financing. Orji then joined Arthur Andersen (later KPMG) as an audit trainee, auditing financial services companies and working on a system implementation for Diamond Bank. He joined Diamond Bank’s Audit Group in 1993, rising to become Financial Controller.

In 1996, Orji left Nigeria for the Masters in Business Administration programme at Harvard University. In 1998, after graduating, he joined the Goldman Sachs Asset Management European Equity Team in London as an analyst, later rising to the position of portfolio manager. During this time he managed in excess of a billion pounds in assets across Europe. A move to the Goldman Sachs Technology Team saw him managing about $600 million in assets worldwide. In 2001, he joined JP Morgan in London, as a Vice President, swiftly rising to become a Managing Director at the firm. In 2006, he made his way back to New York, to the United Bank of Switzerland (UBS), where he took up a Managing Director post. Orji would spend the next six years at UBS, leading the global team of semiconductor analysts.

In this interview, he speaks about the projects being handled by NSIA.

The 2nd Niger bridge

The early work started in 2014 I believe and the main contract was signed in February by the Federal Ministry of Works. We remain the funding partner, for the main work, however, a new mechanism was introduced. It is called the Presidential Infrastructure Development Fund (PIDF), which the NSIA is managing.The PIDF alongside the NSIA are aimed at completing five major projects of importance. One of the is second Niger bridge, the second is the Abuja to Kano through Zaria highway; third one is the Lagos-Ibadan expressway, the fourth is the Mambilla power plant and then the East-West road. These five are projects covered under the PIDF.

In terms of the place we are now on the second Niger bridge, like I said the main works contract was signed and contractor was paid in advance in August, that is what is pushing us and giving us confident that from where we are, we are on track for the scheduled handover in 2022.

It is a toll bridge and a toll road, it is big project. You can already see from the size and scale of work that is on the site. The total project, the the part of it that we are responsible for, which is phase one is 11.5 km. It comprises 1.6 km water crossing, plus all these pillars you are going to see is about another 10 km and the idea as you can see it is how high the water level rises between the rainy and the dry season. When it gets to a certain point, this whole area turns into flood plain and you need to be able to elevate it for a very long stretch.

We are very comfortable with the new funding mechanism, which increases by way of support by the Federal Government but it also allow us when we get to the part of when we need private sector participation, which we are hoping fund will be raising sometime 2020 and it will not be a difficult stretch to raise that private sector portion of the funding.

So, as we see it so far, we are pleased. We have gone from early works to now main works. The commitment we have secured from the contractor is that you get to see what looks like invisible sign of the bridge; you are seeing it already, I mean a lot of work has gone on, for the slabs and the part of the bridge that is now coupling all these pillars and all tha is expected to start next year. It is a lot of progress made and it is not a cheap project, looking at it you know, so we are looking at N220 billion project for phase one. It comprises the bridge and the 11.9km road.

Economic benefits

First of all, it is an investment of the NSIA let’s start with that one. The business part of it is very simply, for us it is a toll bridge, we are going to toll it. Just from what you have seen in the traffic, and what we believe would be an additional traffic because there people want to drive but they defer. A lot of people reside here and we believe this will bring economic activities. We expect this to be tolled, we expect this to be profitable, we expect all the commercial benefits that will accrue as the bridge and road are done. It to lead to higher traffic, as a consequent, we expect that the toll revenue over 25 years of the concession will more than pay and earn the return.

Number two, you all saw the alignment. It goes round a little bit before you get to Asaba airport, it goes all the way round through the right side of the current bridge, pass the Owerri interchange heading towards Enugu interchange. It is a massive project.

Economically, the Chinese always say if you want to develop a country build good roads and they built many roads and you can see how many people it elevated out of from poverty.

With this bridge, those who found it difficult to take their goods to the market will be happy with it and transportation cost will come down.

Again, it is also a sign of physical integration. Someone was telling me a story of when there were no roads, it was so difficult back then.

So, this project will be be economically viable.

Again, from the industrial nature of this part of the country, this project is vital. I know many companies very well have moved out of here because of the inadequate infrastructure. So, the industrial concerns here will benefit from this and expect many of them to come back and restart because the skill set here is quite significant in terms of supporting those industrial concerns.

Thirdly, the preliminary traffic studies we’ve done show that the significant chunk of the traffic on this road isn’t just east and South-south, it is also from North Central, as far as people from Ogoja in Cross River north, Taraba and all that. Many of them taking their goods trying to come across here. I look at it as something that provides wide economic benefits. The initial design shows it is a project with significantly sized project, especially if you’re coming one lane coming, one lane going to three lanes going, three lanes coming.

It is massive. We are thinking about the future. When the first bridge was built, the story was that it was too much, but now it’s not enough. And that is how it ought to be with infrastructure,when you build it once you hope never need to go back to it again.

Private sector funding

There is both equity and bonds. We have the financial plan under control. There is a bond programme and we believe that by the time we go to the market to raise capital, we also raise a significant part of it alongside.

These five projects have a combination of a funding arrangement and the structure is very simple; we have the PIDF, NSIA, third party fund market, we will give you more details on that but for the moment we are very comfortable with what the plan is. PIDF first phase has injected $650 million for the five projects. We are expecting another $650m from PIDF, from here PIDF has invested N33 billion on the main project. The main works.

Politicizing the project

There is nothing like elections and whatever. I just know that we have funding and we are tracking the project. You heard us talk about plans to finish it in 2022. We are working and you can see things for yourselves. Piling is ongoing.

Those employed

This moment there are 820 people on direct jobs here.

NSIA funds

We have done most of the structuring. There is a lot of money we spent on project preparation. The sequencing of the fund is such that we started with PIDF. NSIA money will come, third party money will come. So, we want to make sure it is sequenced properly so you don’t want to burden the project with huge amount of cost. So, there is commitment of NSIA, there is an approval by NSIA to inject up to $300million for the entire projects not just only this one. It will be a remix for me to speak to you on each project, we are looking it in totality for the five projects.

There are three funds and three different mandates when people look at the NSIA mandate. Initially, we started with 20 per cent Stabilisation Fund; 40 per cent in Future Generation Fund; and 40 per cent in the Nigeria Infrastructure Fund, with different horizons. The Stabilisation Fund is actually short term and it’s not expected to generate a huge amount of return because is short term you couldn’t instrument. We are expected to liquidate within seven days and make any demand from the federal government. So, short-dated instrument, very liquid, is expected not to earn a huge amount of return. But in 2017, we did about six per cent return on that fund in dollars. The Future Generation Fund is really where we expect to see a lot of returns; that is about 10 years horizon, and it’s across the diversified private equity, public equity, global, local. Also we look at things like other devices like hedge fund asset, commodity investment, real estate investments, all in that fund. That fund returned 8.6 per cent last year in dollars. Now, we expect that fund to really be the engine of the NSIA in terms of generating returns because of the kind of assets invested in. So if you take private equity for example, we tend to double our money in every private equity business we make. So over a period of five, six years we are looking at another return of 15 to 20 per cent in private equity.

Other projects

In Mambila, we are still at the early stages, a lot of back and forth going on but we are very confident that this we be done.

For us, it is new unlike the second Niger bridge that has been on since 2014. There is a lot of catching up that we need to undertake before we start spending money. The East-West road is also new to us. We only just got involved in it. The one we have mobilized is the Abuja-Kano, Lagos-Ibadan, second Niger bridge. The East-West road, not yet but we will. But don’t forget it is from another ministry, the Ministry of Niger Delta. Unlike these three projects that are under the Ministry of Works. Look, we are finance people, in terms of negotiating this, we must make sure there is risk metrics for each of the contracts are properly mapped out.

Trust me, that takes time. We spend a lot on lawyers, on our own people, we actually sit down and make sure the projects are properly outlined, so we know what it takes. We also bring our own engineers on site in addition to the Ministry of Works officials, who also help us in certifying any payment. As you can tell, that is a good process that surpasses any form of audit. The general complain I hear is that we are slow and this why we are slow because we need to be very careful. At the end of the day, it is your money and we need to spend it judiciously.

That element of our work agnostic to politics because at the end of the day we are not elected we are appointed to do a certain piece of work and we make sure we do it properly.

NSIA fund status

In terms of asset contributed to the fund, so far we have asset to fund to the tune of $1.5 billion. We have had returns over the last past years, we have been profitable five years in a row but the returns are on top of what we have contributed to the government. So $1.5 billon is the actual size of the contributions to the fund. Now, there are also third party funds that we manage on behalf of various agencies of government and also on behalf of the government. There was $350 million that we manage for NBET, that mandate expired at the end of July 2018 and we returned the fund at the end of August 2018. Then, we also have $650 million which we manage as part of the Presidential Infrastructure Development Fund, again, funds that are not really part of the NSIA shareholder funds. If you look at the NHIS Shareholder fund, all together it’s roughly about $1.5 billion of contributions. Last year, we made profit of $95 million, a year before we made over $130 million of profit. So, it’s been quite accreting. In terms of the status today, we are roughly at about $1.8 billion.

NSIA-LUTH Cancer Center

The NSIA-LUTH Cancer Center is the culmination of a journey that started in January 2016 when the NSIA announced its investment strategy in healthcare which was to partner with teaching hospitals and federal medical centers in a public private partnership to develop areas of excellence in healthcare. After the announcement of the strategy, we engaged with 14 federal medical institutions across all six geopolitical zones. The first three projects out of these collaborations are ready with the NSIA-Luth Cancer center being the first, NSIA-AKTH and NSIA-FMCU diagnostic centers are next and will be ready for commissioning at the end of March 2019.

Foray into healthcare

The NSIA strategy in healthcare is to focus on areas of need within tertiary healthcare that have led to medical tourism to countries in Europe, East Asia and the Middle East. We identified these areas as Oncology, Nephrology, Cardiology and Orthopedics. In a 2012 study by the Ministry of Health, Nigerians’ spend on outbound medical tourism was reported to be about $1bn a year, with cancer management accounting for more than 40% of this spend.

In the course of our research, we discovered that of the eight facilities in the country that had radiotherapy machines installed, at the time, only two were functional. More so, the two functional machines were frequently broken down causing interruptions to patient treatment. My first-hand observation at LUTH, during which I saw hundreds of patients waiting for up to two weeks to be treated, as LUTH staff frantically tried to source parts to get their old radiotherapy machine repaired, convinced us that the NSIA had to start with oncology immediately.

Following months of project development, the NSIA-LUTH Cancer center was built in a record time of nine months and at a cost of approximately US$11million. Once fully operational, this will be the largest outpatient cancer treatment centre in West Africa. Of note, the Halcyon linear accelerator installed within this Centre is only the second such machine to be installed in Africa. This PPP is executed as a Build-Operate-Transfer (BOT). The NSIA owns the center 100% today and we expect that after 10 years, the period over which we anticipate the NSIA will have recouped its investment, we shall transfer the center to LUTH. In the meantime, over the BOT period, LUTH will share 15% of the profits. We have contracted a private sector hospital operator, Healthshare of South Africa to operate the centre and facilitate skills and knowledge transfer to the LUTH Oncology Team. With this PPP structure, we will ensure that the center is maintained to the highest standards and LUTH benefits both financially as well as through training of its staff.

The center is expected to treat as many as 80 and perhaps up to 100 patients a day. It is small in the context of the needs we have in Nigeria, but it’s a start. We have progressed our engagement with LUTH and have commenced discussions to potentially invest more in other areas of the oncology service such as inpatient care and surgery. We will also give serious consideration to collaborating with LUTH on other specialties in line with our healthcare strategy and we have already secured investor interests to collaborate with the NSIA in this expanded engagement.

Next phase

We have commenced the construction of a training facility next door that will serve as a resource center, supported by Varian Medical Systems, not just for staff of the NSIA-LUTH cancer center, but for other cancer centers we plan to build in the country and for oncology professionals across Nigeria.

I want to thank President Muhammadu Buhari for encouraging us to make this investment. During our meeting with him in October to discuss our investment programme, he emphasized Agriculture, Healthcare and Infrastructure as key planks of growth. NSIA has responded to these areas of need. The NSIA is the financing and operating company that continues to drive the Presidential Fertilizer Initiative. The NSIA is the manager of the Presidential Infrastructure development fund which is currently driving the construction of Lagos Ibadan expressway, Second Niger Bridge, Abuja-Kano Expressway and the Mambila Power plant.

Source: Naija247news

German govt to invest in urban regeneration, infrastructure in Edo

Efforts to attract foreign investments and boost local capacity in Edo State as initiated by Governor Godwin Obaseki have attracted commitment from the German Government and Arctic Infrastructure (AI), an infrastructure delivery firm.

Erimona explained that during the meeting, the state government “provided overview of social and economic potential and opportunities in Edo State with specific focus on urban and infrastructural development by highlighting efforts of the State Government at improving the Ease of Doing Business in the state through the instruments of urban development among which is the establishment of a new development management institution being led by the Arctic Infrastructure (AI).”

He said skills acquisition programmes, investment platforms, and massive infrastructural renewal are some of the areas the Governor Obaseki-led administration has been targeting to attain a sustainable environment for the residents in the state.

The Consul General, Federal Republic of Germany, in Lagos, Dr. Stefan Trumann, expressed appreciation and confidence in the openness of Edo State to new ideas and investment opportunities.

Trumann noted that the Consulate was ready to partner with the state government in facilitating capacity building and exchange programmes, technical education and prospect of a trilateral relationship with some other countries.

He commended the reach out to the GIZ on energy efficiency building component of the urbanisation project in Edo State, noting that the Consulate looks forward to a successful relationship among the partners. Project Director, Arctic Infrastructure, Mr. Lookman Oshodi, whose firm is working with Edo State Government to establish a new development management agency in the state, said AI “looks forward to the collaboration between Edo State Government and the German Consulate in the areas of infrastructure investments, capacity building, and participatory urban regeneration projects.”

Source: VanguardNg

Affordable housing top challenge in region when attracting people

While the local economy is healthy there is a need to attract new people to the Grey-Bruce-Huron-Perth region to fill jobs.

That according to Executive Director of the Four County Labour Market Planning Board Gemma (JEM-ah) Mendez-Smith.

She says there are some troubling indications even though unemployment is at an all-time low.

And one obstacle is a shortage of affordable housing.

“We have a very low unemployment rate, we have a vibrant economy,” said Mendez-Smith. “We need to grow the work force and one of those ways will be inviting people to move to our region and live and work in our region. So we need to consider how we will house them and that’s a huge discussion.”

Mendez-Smith says people looking at coming to the region to take entry level jobs for minimum wage or slightly more can’t afford the housing that is currently available to them.

She adds transportation has long been considered the major obstacle to people looking at moving into our rural areas because of little or no public transportation. But that challenge has now been eclipsed by the shortage of affordable housing.

Source: Blackburnnews

German Home Buyers Look East to Dresden, Leipzig and Beyond

DRESDEN, Germany — After an evening drink at the old-fashioned wine garden overlooking the Elbe River in Dresden last summer, Stefan and Katharina Kluge decided to hop a nearby construction fence and check out a 19th-century building being converted into luxury condos.

Once inside the gutted old walls, they sat down, drank another glass of wine and stared out at the water.

“That’s the moment we fell in love with the place,” Mr. Kluge said. “That’s when we decided to buy.”

When their 1,270-square-foot, four-bedroom condo is finished this summer, the Kluge family will do what many East Germans are doing today — return to their roots.

Having earned enough money elsewhere, they are settling in to raise their children where they grew up. And they are not the only ones drawn to a part of the country that has been underpopulated for decades.

Housing prices in Germany have been on the rise for years, powered by a strong economy, low interest rates and a growing desire for homeownership. The highest prices are in western Germany, in cities like Hamburg and Munich. But these days, cities in the former East Germany like Dresden and Leipzig — which have gone through complete transformations since the country reunited nearly three decades ago — are attracting buyers, too, and prices there are soaring.

Across Germany, a standard condo, defined in Germany as a 2-bedroom, 861-square-foot apartment, has risen in price nearly 65 percent since the beginning of the decade, almost entirely driven by price increases in cities, according to IVD, a real estate association that keeps track of property prices. (Nationwide top-of-the-line single-family houses with roughly 1,600 square feet have gone up 44 percent in the same span).

Compared with prices in Munich — the country’s most expensive city — Dresden’s standard condos still cost a little over a third as much, but things are changing quickly: From 2017 to 2018, the year the Kluges bought their new apartment, the value of an apartment in the city has risen 46 percent, on average.

In the 1990s, East Germany emptied out. In the decade after reunification, the area that made up eastern Germany, including East Berlin, lost close to a million inhabitants, almost all of whom went west.

The migration was so extensive that many small villages were dotted with abandoned houses and empty apartment buildings, and local officials set about knocking them down, rather than living with the blight. In 2004, roughly 60,000 apartments — one quarter of all apartments in the city — stood empty in Leipzig, according to one study.

Since then, much has changed. Cities like Dresden and Leipzig have things to attract both wayward natives, like the Kluges, and outsiders looking for nice places to live: excellent infrastructure, meticulously refurbished downtowns, shorter commutes, a less hurried pace — in short, a better quality of life.

Dresden, which grew from its lowest point of 484,646 inhabitants in 1998 to 566,484 now, attracts residents with its historic downtown, cultural scene and the Technical University of Dresden, one of the best universities in the country. At first, the city had a shortage of living space. But thousands of new units have been created, a mixture of new apartments and refurbished old ones.

Most of the foreigners who invest in Dresden buy property in the area around the Frauenkirche, a painstakingly restored Protestant church with the largest stone dome north of the Alps, according to Henry Brömme-Herrmann, a native who has been dealing in real estate for more than a decade.

“Dresden’s growth is sound,” he said. “But you do have to know where to invest.”

In much of the city, a standard two-bedroom apartment sells for slightly more than $200 a square foot, making Dresden the most expensive market in the east, apart from Berlin, where a comparable apartment would cost closer to $250 a square foot. But luxury apartments in some parts of Dresden, can exceed $600 a square foot.

Stefan Kluge grew up in Leipzig; Katharina, in Dresden. After completing their degrees in Leipzig, where they met, she moved to Myrtle Beach, S.C., to intern in an animal emergency hospital and Mr. Kluge focused on making films. In 2007, they moved to Switzerland, where Ms. Kluge earned her doctorate and where their two children were born. The family then moved to St. George, Grenada, where Ms. Kluge works as a veterinary professor and Mr. Kluge as a data scientist while they live on a 35-foot sailboat, which Mr. Kluge plans to sail across the Atlantic when they move.

They want to return because their children are at the perfect age to transfer from Grenadian to German schools.

“What I love about the East — especially Dresden — that it is still a little wild,” said Mr. Kluge, in a telephone interview. “You meet many people who live a different kind of life.”

Just 70 miles west is Dresden’s fiercest rival, Leipzig. Its real estate market is even hotter — for the first time since reunification.

After the fall of the Berlin Wall, Leipzig faced more obstacles than Dresden. The city was considered more utilitarian, and though there was more than enough living space, much of it was not up to modern standards.

When Leipzig was at its lowest in 1998, it counted 437,101 residents.

Not only are universities and colleges attracting researchers and faculties, but Porsche and BMW have opened huge factories on the outskirts. Both Amazon and DHL have overnight hubs in Leipzig.

According to a study by the city, more than three quarters of the people in Leipzig are satisfied with their quality of life — a rating many cities in other parts of the country could only dream of.

Last year, after growing by nearly 6,000 people, Leipzig counted almost 596,000 inhabitants.

“I remember this city when everything was gray. The houses were gray, the streets gray, there seemed to be a layer of soot on everything,” said Andreas Köngeter, a West German who has lived in Leipzig and been active in the real estate market since 1991.

The change, he says, came in 2003, when Leipzig won the domestic bid for the 2012 Olympic Games, which the city would ultimately lose to London. Although the campaign was unsuccessful, the media attention reintroduced the city to German audiences.

Before World War II, Leipzig was one of the most important trading cities in Germany and on track to becoming a city of one million, said Matthias Hasberg, the city’s spokesman.

“It’s why the streets are so wide, and it’s why the train station is so big,” he said.

The British Academy of Urbanism awarded Leipzig the European City of the Year award for 2018, bolstering its reputation as the new pearl of the country’s east.

Although the average price for a middle-of-the line apartment is closer to $150 a square foot, many are betting on a strong upward trend.

A carefully refurbished 1,520-square-foot, five-room apartment in a house built in 1909 in Connewitz, a left-leaning neighborhood with a history of squatters occupying houses, may fetch over $500,000, a sum that would have been unthinkable just five years ago. The unit is not the only one for sale on the block. Dozens of new condos across the street reflect the changing neighborhood.

But because of the often eclectic mix of beautiful prewar buildings (Leipzig has several examples of Bauhaus), more functional German Democratic Republic blocks and newly built post-reunification buildings, neighborhoods mostly stay mixed. Large-scale gentrification, which occurred in the Prenzlauer Berg district in what was East Berlin, is still a ways off.

Mr. Köngeter says that the boom is best documented by the cost of empty lots — the result of bombs during the war, or Communist-era houses in such poor repair that they had to be torn down after reunification. For a while, such lots had virtually no value. But recently, they have been sold for millions to investors planning to build condominiums. According to market research provided by IVD, the price for such lots has gone up 212 percent in the last five years.

“Many who say Berlin is just too expensive now come to us,” Mr. Köngeter said.

Markkleeberg and other villages south of Leipzig are also getting attention. The towns were at the edge of some of the largest open-pit coal mines in the region. When the destruction of the landscape stopped with the fall of East Germany, those living closest to the pits had won the lottery: After billions of euros of cleanup, the pits were converted into large lakes, and the lakefront land became some of the most expensive real estate in the region.

Private real estate in East Germany didn’t exist as such before 1990. Property was state-owned and virtually everyone rented or received housing from their employer.

A problem for young families who were raised in eastern Germany, is that their parents can’t help them with down payment or financing, the way many do in the west, Mr. Kluge said in a telephone conversation, because their parents were never able to buy property or otherwise amass wealth.

So the couple had to finance the nearly $700,000 price themselves.

Although their unit is not yet finished, the family has spent a lot of time thinking about how to style their apartment, how to make best use of the light and of the two windows facing the Elbe, where Mr. Kluge hopes to be able to sail a dinghy. (He plans to keep his big sailboat on the Baltic Sea, roughly four and a half hours by road from Leipzig.)

“In all the places we’ve lived we realize, what really counts is not so much the house itself, but where it is,” Mr. Kluge said.

Source: Nytimes

5 Years of Modi: Is Indian Real Estate’s ‘House’ in Order?

Like it or lump it, but Modi’s victory in 2014 ushered a new era in Indian real estate – starkly marked by his vision to set the ‘house’ in order and alter the scarred face of an unorganised sector beset by unscrupulous activities. He tightened the Centre’s grip on real estate – previously the largest dump-yard for black money hoarders – and introduced big-bang schemes to benefit consumers.

From major policy overhauls to amendments in old Acts, from a decisive impetus to infrastructure development, and from the arguably Utopian 100 Smart Cities and Housing for All by 2022, one thing is clear – the Modi government set the stage for Indian real estate to flourish in the long-term.

The measures he took to achieve this did have short-term negative impacts, but nobody can argue that this is a case where short-term pain is necessary for the sake of long-term gain. That said, the on-ground implementation for most of these initiatives is far from what could have been achieved even in just five years.

Let’s examine the five major initiatives Modi undertook for the real estate sector – current state, positive or negative impact, and the most significant numbers:

Triple-policy Impact – DeMo, RERA & GST

This policy ‘trishul’ brought about a paradigm shift in the way Indian real estate does business and laid the groundwork for improved transparency and efficiency in the sector. However, while end-user and investor confidence were rekindled for real estate, it did not exactly set the industry on fire with renewed interest.

Despite the Centre’s aim to enforce RERA across states, it still falls far short of the intended deployment targets – both quantitatively and qualitatively. Even today, many states have not yet notified their RERA rules, while in other states, buyers are justifiably outraged about the dilution of rules that have been notified.

The sector braved the fallout of GST and DeMo but was hit hard in the short-term. A flat 12% GST on under-construction homes remained a huge burden until April 1 2019 – the fag end of the Modi government’s current term – finally brings some relief in what could, rightly or wrongly, be construed as last-ditch electoral damage control.

Infrastructure – Extending India’s Lifeline

Well aware of its direct positive impact on the country’s economy, the Modi government took a multi-modal approach towards the development of infrastructure in the last five years.

In its maiden budget, it set up NICA (National Industrial Corridor Authority) which is tasked with executing 5 industrial corridor projects, each passing through various industrial clusters, towns and cities. On the completion of this undertaking, we will see some very convincing real estate growth the hinterlands which will be connected by these corridors. Apart from industrial real estate and the natural spin-off demand for housing around industries, this initiative will also boost the demand for logistics and warehousing.

Again, however, the ‘real’ impact will be seen only over the long-term. Apart from the fact that these are massive, time-intensive undertakings, there are issues like land litigations, farmer consent and compensation, etc. to contend with.

The pace of NICA’s development will be slow at best. As it is, 369 infrastructure projects of the total 1,420 under implementation are faced with cost overruns, and another 366 are significantly delayed.

Amending Key Acts

To unearth black money, the Modi government amended the Benami Transactions (Prohibition) Act 2016 under which authorities can seize properties held in other people’s or fictitious names.

After passing the Insolvency and Bankruptcy Code (2016), the government further ironed out some wrinkles in it in 2018 – it recognized homebuyers as financial creditors with a status equal to that of banks and institutional creditors when it comes to recovering dues from bankrupt real estate firms.

However, exactly how the resolution mechanism for claiming dues works for homebuyers is still a grey area – will they be treated as secured creditors or unsecured ones? Secured creditors obviously hold priority status when it comes to recovering payments.

Affordable Homes: Lots of Buzz, Not Enough Honey

Ever since the Modi government came to power and proclaimed the thereafter much-touted ‘Housing to All by 2022′ vision, the term ‘affordable housing’ became the new buzzword. This segment was accorded infrastructure status, and the government stated its intention to provide one crore houses under PMAY in urban areas between 2015 and 2022.

This was not just hot air and came with multiple sops to actually induce action in the budget homes segment which certainly aroused interest among both buyers and developers. The previously avoided ‘affordable’ suddenly became respectable and even attained a patriotic tint which developers were quick to capitalize on.

The term ‘affordable’ has historically been the second-most misused term in Indian real estate after ‘luxury’. This dynamic took on a whole new dimension after the Housing for All by 2022 mission was announced and backed by various incentives to buyers and developers.

The way developers interpreted ‘affordable’ in the past was by in terms of compromised quality, inferior locations and the most basic amenities. RERA, wherever it has been deployed, has put an end to this interpretation to some extent – but then, RERA is neither a nation-wide phenomenon nor a uniform one when it comes to specific states’ versions of it.

In any case, progress under PMAY has been slow and as of now, we’re not looking at realistic completion of the targeted number of homes. As per MoHA, out of the total 79 lakh homes sanctioned under PMAY as on March 2019, only around 39% have either been completed or occupied. The gap is a little too big to ignore.

Smart Initiatives: Lacking Intelligent Deployment

Initiatives like 100 Smart Cities, AMRUT, HRIDAY, Make in India etc. have undoubtedly induced new vigour into the Indian real estate market, with direct or indirect impacts. The Modi government has put in ceaseless efforts to improve India’s position on the Ease of Doing business rankings. This has had positive implications for the commercial sector, which obviously also boosts residential real estate demand.

In theory, the ambitious 100 Smart Cities program aims to transform the selected cities’ real estate markets, but it has definitely not unfolded as planned. Rather than the larger cities – which, due to their larger municipal wealth, would logically have been expected to be the forerunners – it was some of the smaller cities selected under the Smart Cities program which actually showed the most progress.

Just 6% of the total estimated INR 2.03 lakh crore allocated for the development of Smart Cities have actually been released in 3 years.

Residential Real Estate – Still Under ‘House’ Arrest after 5 Years?

While the commercial and retail real estate sectors definitely assumed a steep upward trajectory after various reformatory changes, the numbers indicate that the doors are still largely locked on the Indian housing sector. This is perhaps not surprising since this segment had historically attracted the bulk of black money in the Indian real estate system.

Nevertheless, we have seen progress. Housing loan interest rates have declined by 16% in 5 years – from nearly 10.3% in 2014 to 8.85% in 2018. The BSE realty index also saw a 25% jump in the same period.

New unit supply and housing sales decline:  Back in the ‘heyday’ of the Indian residential sector, builders launched whatever they wanted, wherever they wanted to launch it. Today, we have a massive demand-supply mismatch, and the realization that supply must follow ‘real’ demand came a little late to give the Modi government much room to save the day.

Due to the relatively newly-adopted cautious approach by developers, the top 7 cities saw the supply of new housing units reduce by 64% in the last five years – from 5.45 lakh units in 2014 to 1.95 lakh units in 2018. Housing sales were also slow, dropping by 28% during the same period – from 3.43 lakh units in 2014 to 2.48 units last year.

  • Affordable is the New Black: Following the Modi government’s push for affordable housing, this segment has grabbed the attention of even the leading developers of the country. As per ANAROCK data, the share of new affordable housing supply (homes priced below INR 40 lakh) has been increasing from 2015 onwards. Post-2017, its share dominated the overall supply in the residential market.
Also, the number of affordable units launched across the top 7 cities was nearly 77,590 units in 2018, rising by 18% against 2017.  If we break it down further, nearly 25% of the total units in the affordable category are priced below INR 20 lakh. This share has increased by 17% in 2014 to 25% in 2018.
  • Property sizes shrink to fit into ‘affordable’ tag: Compact homes have become the new normal in the expensive metros, and builders are not shying away from offering such housing regardless of their market orientation in previous years. The average property sizes in the top 7 cities shrunk by 17% in 5 years; from 1,390 sq. ft. in 2014 to 1,100 sq. ft. in 2018.
  • Property prices see a ‘time correction’: Property prices in the primary markets have seen more of a ‘time correction’ rather than a price correction, with average prices across top 7 cities seeing a meagre 7% increase in the 5 years. Considering inflation (assuming 7% a year) all cities will have seen negative price trends in the last 5 years.
Tough Road Ahead Post the Polls
While the current government’s intention to set Indian real estate’s house in order warrants accolades, much more is needed going forward. Amidst new trends emerging in residential real estate, the last five years have seen the sector held to ransom by multiple issues including stalled or delayed projects, a massive pile-up of unsold stock across cities (despite the housing shortage), property prices that remain unaffordable for the largest part of the population, and the ongoing credit squeeze on developers.

GST rate cuts and budget sops will not cure these ills – the immediate need is for a much broader strategy. Whichever government is in power post the upcoming elections, it inherits the task of unchaining the sector from its woes. Some of the tasks ahead:

  • Creating uniform taxation between under construction and ready-to-move-in properties.
  • Reducing developers’ dependence on costly external funding sources like private equity by proactively easing lending norms and further boosting consumer confidence to helpadvance sales increase.
  • Unfettering stalled or delayed projects – a syndrome that has severely diminished buyers’ faith in under-construction properties. Measures must be taken to ensure that such projects are either completed or their buyers fully reimbursed their stuck money so that they can focus on other housing options.
  • RERA implementation across all major states cannot remain on paper. It must leave the bureaucratic discussion tables and become an on-ground reality.

Source: Indiainfoline

March is traditionally a strong month for Australia’s housing market, but not in 2019

For what is traditionally a seasonally strong month for Australia’s housing market, March isn’t proving to be all that strong in 2019.

Clearance rates still remain well below the levels of a year ago while prices in Australia’s largest cities are continuing to fall at decent clip, according to latest data.

According to CoreLogic, Australia’s preliminary combined capital city clearance rate rose to 56.1% last week, up from the initial estimate of 52.2% reported seven days earlier.

The lift came despite more homes going under hammer, lifting to 1,894 from 1,196 in the prior week.

Of those auctions held, CoreLogic received results from 1,416, equating to a reporting rate of 74.8%. That was above the 73.4% level seen seven days earlier.

Of those results received, 797 homes sold prior to, during or after auction. 619 failed to sell, including 108 that never actually made it to market.

While the national clearance rate currently sits well above the record lows struck late last year, the 56.1% level still remains well short of the 66% level seen a year ago when a far larger 3,316 homes went under the hammer.

Across the individual capitals, Sydney, at 63.1%, recorded the highest preliminary clearance rate across the country, followed by Canberra at 55.4% and Melbourne at 53.7%.

While that was an improvement on the levels of a week earlier, all three cities still recorded a lower preliminary rate than the final rate registered in the same corresponding week a year ago.

Elsewhere, preliminary clearance rates also improved in Perth and Brisbane compared to a week earlier although Adelaide, at 54.8%, was marginally weaker than the 55.3% level recorded seven days earlier.

Given the national preliminary clearance rate and reporting rates, the final clearance rate for the week is likely to be revised down to the low 50% region when released by CoreLogic on Thursday.

In the prior week, the preliminary national estimate was revised down from 52.2% to a final reading of 47.8%.

Despite the improvement in clearance rates in early 2019, that has not helped to stabilise home prices which have continued to fall.

Based on settled sales received, daily data from CoreLogic showed prices in Sydney and Melbourne fell by 0.3% last week, outpacing declines of 0.2% in Brisbane and 0.1% in Adelaide. Perth prices were stable compared to a week earlier.

Those weekly declines extended the price falls in Sydney and Melbourne since the start of the month to 0.6% and 0.5% respectively. Prices have also fallen 0.2% in Brisbane and Adelaide since the end of February. Mirroring the weekly result, prices in Perth have been flat so far in March.

While prices in Sydney and Melbourne have now been falling for well over a year, the recent scale of declines in both cities is noteworthy given March is traditionally the seasonally strongest month for home prices in Australia.

Even with far fewer new properties being listed, prices are continuing to ease lower, reflecting the impact of tighter lending standards, uncertainty ahead of the federal election and expectations that prices will continue to fall in the period ahead.

The lift in auction clearance rates suggests that along with reduced volumes, price expectations among vendors may have also been adjusted lower, contributing to more properties clearing than what was the case late last year.

Source: Businessinsider

Affordable Housing Segment: These two regions are topping the chart – What homebuyers, real estate investors should know

The National Capital Region (NCR) and the Mumbai Metropolitan Regions (MMR) lead the affordable housing segment in terms of launches and sales across seven cities in the country, a CII-Anarock report said on Sunday. NCR and MMR account for 55 per cent share of total six lakh affordable housing units launched across the top seven cities in the country and NCR saw the maximum supply, said the report.

Of the total 3.98 lakh units sold in the price category of under Rs 40 lakh, NCR and MMR contributed 57 per cent of the total sales. The other cities where the survey was conducted were Bengaluru, Chennai, Hyderabad, Kolkata and Pune.Commenting on the report, Anuj Puri, Chairman, Anarock Property Consultants said: “The anticipated 8-10 per cent annual growth of this segment is luring investors.”

“Data further suggests that out of the total 15.3 lakh units launched across the top 7 cities between 2014 to 2018, affordable housing contributed about 6 lakh units – 39 per cent of the overall supply,” he said. Homes have already been sanctioned under the Pradhan Mantri Awas Yojana (PMAY), but the pace of development needs to pick up, said the report.

According to the survey, some of the key deterrents for speedier affordable housing development are scarcity of land, illegal settlements and slums and limited private sector participation despite several fiscal and statutory benefits to attract private players.

Source: Zeebiz

National Assembly passes new housing law, to impose over 200% of personal income tax on low income earner

The National Assembly has passed a new law, the National Housing Fund (Establishment) Act 2018. The key provisions of the Bill include the following:

  • Mandatory 2.5% contribution of monthly income by employees earning minimum wage and above in public and private sectors
  • 2.5% of income by self employed individuals
  • 2.5% on cement, locally produced or imported
  • Employers are to deduct and remit the contributions monthly
  • Penalty for non compliance of up to N100 million for corporates and N10m for individuals
  • Sanctions include cancellation of operating licence of banks, insurance companies and PFAs for violations
  • Withdrawal by contributoirs who have attained the age of 60 years or 35 years of service to be at interest rate of 2% per annum
  • The Fund and any refund of contributions are exempted from payment of taxes

10 reasons why the proposed law is a bad idea:

  1. The contribution is regressive as it taxes the poor more than the rich. For instance, minimum wage earners will pay about 250% of their personal income tax (PAYE) to the NHF monthly
  2. Making all employers liable to deduct and remit the contributions monthly (without a threshold) will worsen the ease of doing business and Nigeria’s paying taxes ranking
  3. Cost of borrowing will increase as banks are required to invest a minimum of 10% of their profits at 1% above current deposit rates
  4. Increasing the tax burden without addressing other fundamental issues like land regulation, REITS framework etc is not consistent with the 2017 National Tax Policy
  5. Imposition of the 2.5% levy on cement is a tax on property development which will make housing even less affordable
  6. The 12 years statute of limitation is too long, this increases the risk to employers and encourages laxity on the part of government
  7. The penalty regime is draconian, excessive and not commensurate with the violations
  8. The requirement for PFAs to invest pension funds in the scheme means less returns for pension contributors which will erode value for pensioners
  9. The return of 2% per annum for contributors withdrawing after attaining 60 years of age or 35 years of service is far below inflation rate and grossly insufficient to compensate for time value of money
  10. The exemption from tax clause is badly worded, it means refunds are exempt but contributions are taxable

The National Housing Fund (NHF) was established by the NHF Act of 1992 to facilitate the mobilisation of funds for the provision of affordable housing for Nigerians. Unfortunately, 27 years after, affordable housing for Nigerians remains a dream.

While the proposed law may be well intentioned, availability of funds will not of itself address the myriad of challenges facing the housing sector which centre mostly on policy and regulations. Nigeria should therefore adopt a holistic approach to the issue of which affordable financing is only a component.

The fact that there is no marked progress to show for the 27 years of establishing the NHF is proof that Nigeria’s housing problem cannot be solved by simply throwing more money at the problem.

Source: Pwc Nigeria

‘Many trapped’ as building collapses in Ibadan

A two-storey building has collapsed in the Bode area of Ibadan, capital of Oyo state, leaving many of its occupants trapped.

A resident disclosed this to TheCable late Friday, saying the incident happened around 5:50pm.

Sympathisers are currently at the scene, making efforts to rescue victims before the arrival of government officials.

Men of the fire service who arrived the scene were said to be helpless as they have no equipment to rescue victims.

Some of the victims reportedly called friends and relatives via telephone.

Bode is after Molete bridge in one of the largest cities in West Africa.

The incident comes exactly 48 hours after a three-storey building collapsed in the Ita-Faaji area of Lagos Island, killing at least 12 persons, including nine children

Source: Cablenews

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