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Cytonn Launches Sh30bn Housing Fund

Realtor Cytonn Investments has launched Kenya’s first regulated fund seeking to raise Sh30 billion for constructing 6,000 housing units under the Affordable Housing Programme.

The real estate Collective Investment Scheme (CIS) Cytonn High Yield Fund that gives a 15 percent rate of return annually requires investors to chip in a minimum of Sh1 million each as per Capital Markets Authority regulations.

Housing PS Charles Hinga said commissioning of the Cytonn High Yield Fund proved Affordable Housing Programme was now attracting local capital with 22 local and global institutional investors planning to inject Sh2.2 trillion in affordable housing projects.

“This is proof that building low-cost houses is a bankable product. 275,000 Kenyans have expressed interest with 17,000 voluntarily saving for their dream houses that will attract a fixed seven percent interest rate for loans repayable for the next 25 years,” he said during the product launch ceremony in Nairobi.

PS Hinga said Kenyans building first homes can also benefit from a monthly Sh9,000 home relief totalling Sh108,000 annually under the Housing Ownership Savings Plan, with developers being incentivised with off-site infrastructure, fast-tracked approvals, regulatory fees waiver and free land.

Realtor Cytonn Investments has launched Kenya’s first regulated fund seeking to raise Sh30 billion for constructing 6,000 housing units under the Affordable Housing Programme.

The real estate Collective Investment Scheme (CIS) Cytonn High Yield Fund that gives a 15 percent rate of return annually requires investors to chip in a minimum of Sh1 million each as per Capital Markets Authority regulations.

Housing PS Charles Hinga said commissioning of the Cytonn High Yield Fund proved Affordable Housing Programme was now attracting local capital with 22 local and global institutional investors planning to inject Sh2.2 trillion in affordable housing projects.

“This is proof that building low-cost houses is a bankable product. 275,000 Kenyans have expressed interest with 17,000 voluntarily saving for their dream houses that will attract a fixed seven percent interest rate for loans repayable for the next 25 years,” he said during the product launch ceremony in Nairobi.

PS Hinga said Kenyans building first homes can also benefit from a monthly Sh9,000 home relief totalling Sh108,000 annually under the Housing Ownership Savings Plan, with developers being incentivised with off-site infrastructure, fast-tracked approvals, regulatory fees waiver and free land.

Cytonn Asset Managers Ltd principal officer Victor Odendo said it had raised about Sh13 billion locally in the past year via their Cytonn high yield (10.4 billion), unit trusts (Sh700 million) and a further Sh2 billion via the Cytonn Money Market Fund.

Cytonn board member James Maina called for a review of regulations to remove impediments on such investment vehicles saying Affordable Housing Programme could attract more private sector investors and developers, helping the government to achieve the Big Four-goal.

Cytonn Chief Executive Edwin Dande said construction of a seven-kilometre road linking its 1,000 acre Newtown plot to Mombasa Road will see them fast-track development of the 6,000 units.

“Before only 25 percent of CIS funds was invested in a project but CMA has exempted us allowing the deployment of up to 80 percent on any project,” he said.

Source: businessdailyafrica

The Next UK Government Must Improve Consumer Regulation in Social Housing

Whoever forms the next government must get on with the promised but much-delayed post-Grenfell reform of social housing regulation, write Mark Henderson and Valerie Oldfield

Since the Social Housing Green Paper was published in 2018, we haven’t heard much about next steps towards improving the resident-landlord relationship. And with a general election just a day away, it’s not particularly high on any party’s list of priorities. However, this issue isn’t going away and as action from within the sector accelerates, the next government must join the conversation.

The green paper asked some important questions about how to address the stigma that residents experience from living in social housing and whether residents are listened to by their social housing landlord. It was based on significant consultation events with residents up and down the country and it raised expectations among those residents that change, where it was needed, was on its way.

It is nearly a year since we all responded to the ideas put forward by the then-government, such as more proactive consumer regulation, and submitted ideas of our own, such as politicians and the media changing their own language to help tackle stigma.

But we couldn’t sit back and wait for the green paper to begin building the stronger, more balanced relationship between residents and social housing landlords that it promised to deliver.

Working in partnership, and with the National Housing Federation (NHF), residents and housing associations began testing the Together with Tenants plan in July this year. There are now 133 housing associations in the early adopters programme, and many more who are taking the plan forward in their own way.

In these organisations, Together with Tenants has already been a catalyst for change. We’ve seen housing associations reinvigorate their resident engagement and involvement, boards challenging themselves about how they make decisions, and residents working with their landlord to decide what the charter, part of the Together with Tenants plan, means to them.

The NHF has promised to take the learning from the early adopters and use it to inform a wider roll-out of the Together with Tenants plan later in 2020.

There is a long way to go until we can say confidently that relationships between residents and housing associations are as strong as they could be across the sector. However, we are confident that we are on the right track and as the chairs of the Tenant Advisory Panel and Housing Association Steering Group, we are proud of the role we have played in keeping this important work moving in the right direction.

What is most encouraging is that housing associations recognise there is more they can do to be accountable to residents and are prepared to work hard to get there.

However, we still think there is a gap. And that gap is stronger, more proactive consumer regulation. It was an idea that was in the Social Housing Green Paper, and one that residents and housing associations alike responded positively to.

To ultimately protect the rights and interests of residents, there needs to be an independent body that can step in and insist that things are put right when they have gone badly wrong. Being able to identify a lack of compliance with the consumer standards that doesn’t rely on what the regulator currently refers to as ‘serious detriment’ seems to be a good place to start.

There is a long way to go until we can say confidently that relationships between residents and housing associations are as strong as they could be across the sector. However, we are confident that we are on the right track and as the chairs of the Tenant Advisory Panel and Housing Association Steering Group, we are proud of the role we have played in keeping this important work moving in the right direction.

What is most encouraging is that housing associations recognise there is more they can do to be accountable to residents and are prepared to work hard to get there.

However, we still think there is a gap. And that gap is stronger, more proactive consumer regulation. It was an idea that was in the Social Housing Green Paper, and one that residents and housing associations alike responded positively to.

To ultimately protect the rights and interests of residents, there needs to be an independent body that can step in and insist that things are put right when they have gone badly wrong. Being able to identify a lack of compliance with the consumer standards that doesn’t rely on what the regulator currently refers to as ‘serious detriment’ seems to be a good place to start.

“We still think there is a gap. And that gap is stronger more proactive consumer regulation. It was an idea that was in the Social Housing Green Paper, and one that residents and housing associations alike responded positively to”

So, we are urging the next government, whoever they may be, to prioritise bringing forward the next steps on the Social Housing Green Paper, and as part of that to take action on consumer regulation.

Encouragingly, the leading parties have both made reference to this in their manifestos. Labour has committed to giving tenants a stronger say in the management of their homes and the Conservatives have promised a Social Housing White Paper.

The important questions have been asked, the case for change has been established, so now is the time to act. Working together, through the Together with Tenants initiative and strengthened consumer regulation, residents, housing associations and the next government can all be part of the change that could make a difference to the lives of social housing residents for decades to come.

Source: Insidehousing

Ghana Housing Ministry Proposes National Housing Fund to Address Housing Deficit

The Ministry of Works and Housing is currently exploring the possibility of establishing a National Housing Fund that will serve as a financing mechanism towards the provision of adequate affordable housing programme for Ghanaians.

The fund, is expected to provide a dedicated source of financing and serve as a guarantee to leverage, and also off-take private sector investment and construction of affordable housing units.

Ms Barbara Aisha Ayisi, a Deputy Minister of Works and Housing who represented the Sector Minister, Mr Samuel Atta Akyea at the opening of the 127th Board Meeting and Retreat of the Shelter Afrique, announced on Tuesday in Accra.

Shelter Afrique is the pan-African finance institution that exclusively supports the development of the housing and real estate sector in Africa.

Ms Ayisi said the Ministry was planning to push the idea of the Housing Fund through Cabinet and later before Parliament for members to discuss and adopt it so it could be established.

She said such a fund is believed to be the key to unlocking Ghana’s prospects for affordable housing, adding that many of the successful cases in the delivery of mass affordable housing programmes had been founded on the existence of  a dedicated housing financing arrangement.

She was speaking on the theme: “Implementation of Institutional and Legal Frameworks: the Key to successful Affordable Housing Programmes”.

She explained that a national housing fund would also help in establishing a sustainable affordable housing supply system that meet the housing needs of Ghanaian workers, and not only the rich in society.

She said through the various partnership programmes, the Ministry intended to gradually close the two million housing deficit in Ghana within the next eight years, adding that the Ministry was currently doing  some redevelopment involving housing for security services and redevelopment of other areas including Nima.

The Deputy Minister expressed the concern that rapid growth and increasing urbanisation, continued to make shelter  one of the most critical challenges confronting developing countries.

She, therefore, expressed the government readiness to explore all available opportunities that would help close the huge housing gap in the country.

Mr Nghidinua Daniel, Chairperson of the Shelter Afrique Board, said the conference  was to help the Board to “touch base” with key stakeholders and partners, especially the government of Ghana, which is a founding member of the Company.

He said the issue of affordable housing was not “an issue only for the government” but for all other stakeholders, and that was why Shelter Afrique, had decided to confer with key stakeholders in housing, finance and development, including members of academia, financial institutions as well as estate developers, who were already in the housing business.

“We need research and development, we need to find an innovative ways of how to scale up housing and make it more affordable”.

He said already, the Company had invested a total of 55.6 million dollars into the housing sector in Ghana, some in technical training, some as loans for local banks to invest in the sector and some through partnerships with government in its provision of housing units.

Mr Ishmael Ashitey, the Greater Accra Regional Minister, in a speech read on his behalf, decried the issue of the lack of decent accommodation for workers of the country, saying that where there were even housing units, they were made so expensive beyond the means of the ordinary Ghanaian worker.

He said it was regrettable that estate developers only target those living abroad, foreigners and the high income bracket earners, instead of permanent salaried workers in the country.

“The houses are also priced in dollars in a cedi economy out of the reach of the average worker. This may potentially create severe inequality within the society”.

It is time we took the necessary steps to correct the current trend lest all our hope of using pension benefit and cedi to secure a mortgage or house would be a mirage”, Mr Ashitey said.

Shelter Afrique partners, 44 African Governments, the African Development Bank (AfDB) and the Africa Reinsurance Company, to build strategic partnerships and offering a host of products and related services to support the efficient delivery of affordable housing and commercial real estate.

Source: businessghana

Shelter Afrique Eyes Green Bond to Fund Affordable Housing Projects

Pan African housing development financier Shelter Afrique is betting big on green financing to fund its affordable housing projects across Africa.

“Green financing offers cheaper options to fund projects whose bottom line directly impact the environment, like the construction, and as such we are making a strategic decision to add it to our funding mix,” said Shelter Afrique Chief Executive Officer Andrew Chimphondah.Chimphondah said they would engage with their partners to access this funding for affordable housing in Africa in the coming year.“There is a market for green financing in Kenya, South Africa and Nigeria since these countries have well established capital markets.

“For instance, Kenya capital market has the capacity to support green bond not just for Kenya but also for the east Africa region. However, most capital markets across Africa need to be strengthened,” Mr Chimphondah said.Trends in AfricaKenya’s first green bond issued by Nairobi-based property developer Acorn Holdings for the construction of student housing this year raised Sh4.3 billion. Egypt is expected to make a debut in the green bond market in 2020.

South Africa issued its first municipal green bond in 2014and the second green bond in 2017. Nigeria made a debut in the green bond market in 2017.“Our research from Shelter Afrique Centre of Excellence indicates that Africa is urbanising at a very fast rate thus exacerbating the continent’s housing crisis.“Our research also indicates that the continent requires more than $1.4 trillion in funding to be able to effectively address this growing housing crisis and innovative funding options like green bonds comes in handy,” the Shelter Afrique Chief Executive Officer said.In a 2018 report, ‘Climate Investment Opportunities in Cities’, International Finance Corporation estimates a cumulative climate investment opportunity of $29.4 trillion across six key sectors in emerging market cities through 2030.The IFC report also indicates that more than half of the world’s population lives in urban areas, a number that is expected to reach 70 per cent by 2050.

Source: standardmedia

Ghana Housing: Putting the Money Where our Mouths Are

For more than ten years there has been a cry that Ghana was short of housing development. A deficit in housing that was estimated 1.2 million in 2003 is now at 2 million.

According to World Population Review, World Facts Book, and other sources such as WorldMeters, the population of Ghana as of June 2019 has been estimated at 26.7 million to 30.7 million and growing, exponentially of course, at about 2.2% per year. In one year alone, 2014, the number of children born were 587,361.

A visit to Madina, one of Ghana’s most populated suburbs of the city of Accra, will demonstrate the impact of poor planning and the failure of centralized Government. In Ghana there is no health and sanitation laws enforces, and thus 15 or more people can be in one 3-bedroom house with one toilet.

In a Joyonline report of Dec.2, 2019 it was reported that “Government has released some GH¢40 million to support the efforts by the private sector in bridging the housing deficit in the country.”

This is a great step in the right direction: but does the nation’s leaders realize the impact of Housing development on an Economy? Is $8 enough when talking about Housing? Or this is a big joke?

I like the fact that the Government is counting on the private sector to bridge the gap. But lets examine the private sector. It is true that anytime Government taxpayer funds are involved in a project, Government employees seem to lack the empathy that the moneys belong to all Ghanaians, the hardworking people paying 15% to sometime 150% of the value of their clothing or imported cars. There seems to be always an abuse, a mismanagement or outright public theft that never gets investigated and punished. From the pre-Independence time, our people developed this habit that what belongs to Government belongs to Nobody.

Even in the private sector, some of us who have employed Ghanaians have found out that the typical employee does not place much value on what they perceive as “company property”. This culture must change if Ghana is to attract strategic investors, be they foreigners, Ghanaians returning home, or members of the African Diaspora coming back to settle and maybe employ 2 or 3.

Many friends have suggested that the people of Ghana voted for Nana Akufo Addo because of his perceived image of being “anti-corruption”. However many have become disappointed as in almost three years the Government of Nana Akufo Addo has demonstrated no sincere interest at all to investigate and prosecute public corruption. So how then does Ghana build an image of discipline that any major investor or even small investors can count on. This writer recollects a trip to East Legon police station reporting some disturbance at a small plaza he owns and the police not even taking any notes or records of the case! If a policeman does not take me serious, how then does he deserve to be oaid by my tax money?

Building and the Math:
Talking about Housing, one small builder on one Forum posted today a floor plan of some affordable Housing starting with a 1 bedroom and expandable to 3. I asked the price and it starts at 245,000!

That means assume 80% loans, with buyers putting down their own 20% or 49,000, the Government-backed program will help with a loan of 196,000 for say 15 years at 12.75% per annum. Using a Business Calculator, one can calculate the Principal and Interest in a fully amortized payments of 2,448 per month! Add Real Estate taxes and insurance of say 1.25% of the sales price (255) and one gets or a total of 2,702 per month.

In the Home Finance or Mortgage industry, to qualify one has to make an income of about 2 and half times, or Debt to inclme ratio of 40%, meaning an Income of 6,756 per month.

How many Ghanaians have saved 49,000 and can afford to pay 2,702 per month and have a family income of 6,756 per month? Let’s be honest! The University graduates are making 1,000 or less.

Maybe a few medical doctors or Lawyers may want to buy a 1 Bedroom self-contained house, as they call it in Ghana!

Now one may see why there is a very strong temptation for corruption in Ghana’s civil service! It will be impossible for perhaps 98% of all Governments employees, on their honest salary, to ever own a house unless they play some games. It seems in the affluent areas the homes belong to the Politicians who build them with overnight speed, from acquired unexplained sources, and a few professionals who have lived overseas for long.

Government’s Efforts at Housing:
From the Kufuor’s government, efforts at major housing development were never completed. President Mahama started and almost completed a 5,000 unit housing complex called Saglemi, for an investment of $200 million. The buildings were done possibly without local Engineers involvement and reported to lack sewage system. After almost 3 years the houses have still not been completed and commissioned for occupancy, costing the nation an estimated $15 million per year.

So how many Houses will the 40 million finance anyway? If you do the Math, that comes to 204 Homes! Bravo to the NPP Government indeed!

Folks- lets all stop the joke! Does becoming President mean a personal achievement only? Lets compare notes. Nana Akufo Addo wants to spend Ghs 50 million of the tax money Ghanaians pay to build a Cathedral to thank his God for making him become President! But it seems the main Goal amd mission his God sent him to help the poor people of Ghana is lost!

I beg ooo! I only did the Math but think 204 Homes out of a deficit of 2 million homes is an insult to the people of Ghana!

QUESTION: Why doesn’t the Minister Atta Akyea consult with his wife who he admits helps him with the numbers, to help him figure out which is better: to put a little capital money to complete the 5,000 Saglemi Homes or leave them for Mahama and the NDC to return and complete them himself?

It is time politicians thought of the people whose sweat and taxes pay them and offer all those $100,000 vehicles and luxury lifestyles. It is time the President and his family and friends who control the nation thought a little about Housing and out the money where their talk is! Financing 204 Houses per year is not enough and a better sense of seriousness is called for.

Source: modernghana

Sales Of Affordable Housing Units in Dubai Surge

Demand in segment seen to continue to outweigh larger properties

The affordable housing segment is experiencing the strongest demand in Dubai as properties priced below Dh1.5 million dominated transactions in the emirate’s real estate market during the first nine months of 2019, latest data shows.

Low-cost properties or affordable housing units’ sales registered 10.87 per cent year-on-year growth during the January-September period this year as Dubai recorded 18,858 transactions for properties worth up to Dh1.5 million, compared to 17,009 deals in the same period last year, Property Finder Group’s report says.

Analysts said sales and leasing demand for affordable units will continue to outweigh larger properties in Dubai due to a growing young population, higher percentage of bachelors and small families, and greater yields offered to investors.

Experts said a correction in prices is steadily making Dubai property more affordable to investors and end-users. Dubai realty has emerged as a mature and affordable market after shedding almost 25 per cent of its value in the past five years, they added.

“Affordable end-user housing demand is still high and is expected to continue to be the case for many years to come,” Haider Tuaima, head of real estate research at ValuStrat, told Khaleej Times. “Our research has found that current prices reached previous low levels of 2012, which in turn is prompting many households to consider and/or move to Dubai from the Northern Emirates,” he said.

Data Finder’s statistics showed that 6,888 transactions were registered in Dubai for properties valued between Dh1.5 million to Dh3 million during the first nine months of 2019, while properties valued between Dh3 million to Dh5 million recorded 2,196 transaction during the period. It further noted that 726 deals for properties valued between Dh5 million to Dh10 million and 520 transactions for properties worth more than Dh10 million.

John Stevens, managing director at Asteco Property Management, said properties in Dubai have become more affordable in the global context due to availability of ‘unlimited land’ for development compared to very saturated and restricted markets of London and Hong Kong, among others.

“Affordability is not only measured in terms of the price, but also in regards to payment terms. Developers have shifted their focus to the price and flexible payment plan due to global/regional headwinds and the general squeeze in purchasing power,” he said, adding that this trend is not expected to change in the short- to medium-term period.

Farhad Azizi, CEO of Azizi Developments, said the affordable housing segment is experiencing the strongest demand – significantly more than luxury properties.

“Expo 2020 reinforces demand for affordable units, as it solidifies Dubai’s standing as a global hub for business and tourism and sets strong fundamentals for long-term growth across a multitude of industries, including real estate,” Azizi told Khaleej Times. “This world-class event, and especially its after-effects, will result in an increased number of visitors, business relationships being formed and infrastructure investments being driven, propelling the vision of Dubai’s visionary leadership.”

“With the emirate retaining a large number of visitors and jobs being created, the event boosts demand. The affordable segment benefits from this the most, as new residents tend to prefer value-for-money units as their initial homes,” he said.

Affordable units supply

Stevens of Asteco said there is enough stock coming to the market, but whether it will meet affordable the housing requirement is a different question.

Referring to the Dubai Statistics Centre’s Labour Force Survey in 2014-15, he said approximately two-thirds of people earn less than Dh5,000 per month.

“This means that a large population is not eligible for a mortgage because it requires a Dh15,000 minimum salary. This segment cannot buy off-plan units also as most developers require a minimum income of Dh10,000,” he said.

Stevens said that while many residents have been able to upgrade to larger and/or better units due to increased supply and declining rates, a significant number of people still live in shared units as the current ‘affordable housing’ is inaccessible to them.

“The number of affordable properties is expected to rise amid considering present and future supply that will intensify competition among the developers,” Stevens said.

Azizi said there is ample supply in the market and developers are sure to meet investor interest – some better than others.

“Units need to be the right types and sizes, situated in prime locations, have the desired amenities and have the right connectivity and accessibility to major business, leisure and retail hubs. Those whose developments meet these criteria will thrive and see a substantial increase in sales,” he said.

Tuaima of ValuStrat said some developers are meeting demand for affordable housing units by building smaller and more practical residential spaces, as well as offering easy payment plans.

“Our research has shown that new-build average prices per square foot are still relatively high when compared to older ready counterparts,” he said.

Data Finder’s statistics also showed that established communities saw higher demand for ready units, with Business Bay ranking highest at 1,036 sales in the secondary market. Other popular communities were Dubai Marina (942), International City (939), Jumeirah Village Circle (783) and Al Furjan (677).

“There are many units set to be completed which fall within the affordable category, therefore when they become available in the market, we should expect to see sales activity in the secondary market continue to increase over the next year,” said Lynnette Abad, director of data and research at Property Finder.

Source: khaleejtimes

Millions of Americans Search for Affordable Housing

The nation’s booming economy has caused housing prices to soar.

Despite relatively low interest rates, the price of a home is too high for many potential home buyers and low-cost rental units are in short supply in many communities. That’s left many Americans calling for greater access to affordable housing.

Experts say for housing to be affordable it should cost no more than 30 percent of net income.

In Charlotte, North Carolina, the city is adding residents faster than homes. One study said in 2 017 alone the area had 27,000 fewer affordable housing units than it needed.

Richard Buttimer, of the University of North Carolina Charlotte, has led a study of the problem in the queen city.

“There’s a lot of things that are causing this you can’t just point to one single thing and say this is the magic bullet, if we solve this we solve the entire problem,” said Buttimer.

But there are private and public efforts to solve it. In California, with one of highest costs of living in the country, tech giants Apple, Facebook and Google have all pledged millions to make housing affordable. California’s governor even signed a bill to impose statewide caps on rent increases, but critics say it’s counterproductive.

“Nobody in their right mind is going to deploy millions of dollars in capital to build housing when they’re going to be subject to price controls in a 15-year period,” said Daniel Yukelson with the Apartment Association of Greater Los Angeles.

Former President Jimmy Carter has dedicated countless hours and endless amounts of energy to building homes for the non-profit habitat for humanity. He says the charity’s principles can be used to improve access to housing.

“That is to let people build their own homes to reduce price and then to let families to build their own homes and be responsible for them,” Mr. Carter said.

Source: week.com

Ramsey County Uses Tax-Forfeited Property for Affordable Housing

Ramsey County, partnering with cities and nonprofits, is using some tax-forfeited properties to create affordable homes and apartments for lower-income families.

This fall, the county sold three tax-forfeited vacant lots in St. Paul neighborhoods for 25% of the market value to St. Paul’s Housing and Redevelopment Authority, which, in turn, is working with Twin Cities Habitat for Humanity to build new homes.

Habitat has two years to build homes on the property on Woodbridge Street, Jenks and Fuller avenues and sell them to families making less than 80% of the median household income.

The county has sold tax-forfeited properties at a discount to create more affordable housing about 50 times since 2013, selling real estate valued at more than $1.5 million for a little less than $400,000.

“Ramsey County commissioners just get it when it comes to affordable housing,” said Mike Nelson, Habitat’s director of land development, noting that Ramsey is the only metro county collaborating with the charity in this way. “We’ve talked to [other] counties and they are not interested.”

Ramsey County has collaborated with the cities of St. Paul, Roseville, Mounds View and White Bear Lake as well as a handful of housing nonprofits to turn those vacant lots and sometime dilapidated structures into new homes.

County commissioners first agreed to the discounted sales in 2013, when the city of North St. Paul approached them looking to buy a forfeited lot so construction trades students could build an affordable home on it.

While most tax-forfeited properties go up for auction with proceeds going into a specific maintenance fund, under state statute, the county can sell it directly to another government entity for affordable housing, said Ramsey County Auditor Chris Samuel.

That’s why cities’ Housing and Redevelopment Authorities (HRAs) are key partners that either develop the properties or sell the land to Habitat and other nonprofits, including the East Side Neighborhood Development Co. and the Greater Frogtown Community Development Corp.

There have been about 50 owner-occupied, affordable single-family homes built or rehabbed since the program started.

In 2017, the county expanded the program to multifamily rentals, and a 60-unit affordable apartment complex was built on formerly tax-forfeited land in Mounds View.

“There is a recognition that there is a need for affordable homeownership and affordable rentals,” Samuel said. “There is a place for both and we need to support both.”

The county initially toyed with the idea of simply giving some of the tax-forfeited properties to nonprofits but didn’t want charities to stockpile properties. Charging 25% ensures they “have some money in the game,” Samuel said.

The nonprofits, working through city HRAs, must present a specific development plan and complete that plan within two years. The county also places income restrictions on who can buy or rent the finished homes.

Nelson said the property discount helps Habitat stretch its dollars and create more affordable housing. This program has also helped them to sprinkle affordable homes throughout the city.

“We are going to be building a house in Cathedral Hill,” Nelson said. “Quite frankly, we’ve never done a home in that neighborhood.”

Source: startribune

Three Common Real Estate Mistakes Physicians Make

Real estate is the second highest expense behind payroll for most healthcare practices. The benefits of capitalizing during lease negotiations can include a healthy raise through increased profitability, reduced debt, a nicer office and more. On the contrary, if negotiations are not handled properly, the results can be decreased profitability; resulting in the need to produce tens to hundreds of thousands of additional dollars just to pay the same bills that should have cost dramatically less.

While there are many key concepts and strategies you should always do prior to and during any lease or purchase negotiation, there are an equal or greater number of mistakes you should avoid. Having represented thousands of healthcare professionals over the last decade, we have gathered some of the most common mistakes healthcare professionals make during lease and purchase negotiations with the goal of helping others avoid the same mistakes. Here are three of the most common mistakes:

#1: BELIEVING THE LANDLORD OR SELLER WILL SIMPLY OFFER THEIR BEST TERMS.

Landlords and sellers are in business to make money. They are no more likely to voluntarily reduce lease rates or give up any extra money through concessions as you would be to voluntarily reduce your reimbursement from an insurance company or cut your patient fees if you didn’t have to. While it sounds pleasant to hear a landlord talk about giving a ‘fair deal’ or ‘reasonable price’, your odds of getting either are bleak without truly understanding the market, entering the negotiation process with multiple other options and having the needed guidance to capitalize. Trusting a landlord or seller without the help of professional representation will most likely result in the forfeiture of tens to hundreds of thousands of dollars that could have stayed in your checking account. Case and point: if you were about to sell your home and a fair price was $400,000… but your agent told you a buyer would pay $500,000… what would you list or sell it for? The “fair” price of $400,000… or the most you could get for it? Exactly. You would sell it for the most you could. Your landlord will treat you the same way. They will charge you the highest they can while giving you the least they can get away with.

#2: DETERMINING MARKET VALUE BY ASKING WHAT YOUR NEIGHBORS ARE PAYING.

Several years ago, we were reviewing the lease terms of a doctor who had been in a building for 20 years. In looking at his lease, he was paying $30 per SF, and had not received any free rent or tenant improvement allowance in his last negotiation. When we posed the question: “Do you believe $30 per SF with no concessions is a good deal?”, his response was: “I believe so.” “Why, we asked?” His response: “There are four other healthcare practices on this floor. We all know each other and talk about our leases. We are all paying $30 per SF and the landlord has told all of us they don’t give free rent or tenant improvement allowances.” Our response: “I understand the logic behind that approach… but what if I told you we just did a lease with a brand-new tenant on the first floor at $21 per SF ($1,800 per month in savings if it were your lease rate), while also obtaining 3 months of free rent and over $100,000 in tenant improvement allowance!” The bottom line is that landlord got away with convincing five different practices the market was far higher than it really was and that they didn’t deserve any concessions. Imagine finding out that you have been overpaying by $1,800 per month for the last 5 to 10 years and forfeiting money that could have completely renovated your space? This scenario happens every day to uneducated tenants who consult with other uneducated tenants and compare terms that were the result of having no posture, no knowledge of the market and not applying leverage through representation.

#3: NOT KNOWING MARKET AVAILABILITY AND COMPS.

The foundation of a successful negotiation starts with understanding what your other viable options are, how they compare to each other and how to execute on them. When dealing with landlords or sellers, many healthcare providers try to bluff their way into and through negotiations. A savvy landlord or seller can often read a bluff from a mile away. Here is the problem with this approach: it communicates you are too busy, you don’t know who to hire and you don’t know what you could achieve.  Trying to wing it in these scenarios will not work! This approach typically results in less respect from a landlord and the exact opposite results you were hoping for. Also, overly aggressive offers or unrealistic requests can compound the problem, as can emotional responses to the conflict inherent in most high-dollar negotiations. If you are going to be successful in your next negotiation, understanding market availability and comps is the first place to start. You can hire representation to do this for you, or you can invest dozens of hours yourself into the process.

These are just a sample of the more common mistakes you should seek to avoid when looking at your real estate decisions. Unfortunately, there are several more you need to avoid.

Don’t be taken advantage of during your next purchase or lease negotiation. There is too much on the line. Losing tens to hundreds of thousands of dollars affects your income and can also impact the quality of care you provide. Hire professional representation to level the playing field, start the transaction at the proper time, know the market and top available options and negotiate with multiple owners. If you do these things you are very likely to capitalize on your second highest expense.

Rwanda Launches Construction of Affordable Housing Units for Average Income earners

Rwanda has launched the construction of 2,000 affordable housing units for average income earners, as part of the government’s efforts to address affordable housing “crisis” in urban areas in the country.

Access to affordable housing in urban areas of Rwanda most especially in the capital Kigali is quite challenging for low income earners, said Rwandan minister of infrastructure Claver Gatete at the launch of 2,000 affordable housing units in Nyamirambo sector, Nyarugenge district in Kigali.

“With the construction of these affordable housing units, we expect average income earners in Kigali to easily find an affordable and decent accommodation at an affordable price,” said Gatete.

Gatete also said that the housing units will be constructed with environmentally friendly building materials, which will be produced locally.

The targeted home owners are those within the income bracket of between 220 U.S. dollars per month and 771 U.S. dollars per month, according to developers.

The units will sit on a 30-hectare piece of land between Nyamirambo and Rebero sector in Kigali and the entire project will cost over 50 million U.S. dollars and will easily accommodate about 10,000 residents, according to them.

According to last year’s Housing Market study conducted by research institute International Growth Center in Kigali, about 700,00 new housing units are needed by 2028, where 70 percent of them lay in affordable housing category.

Source: xinhuane

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