Kenya will be the first country to benefit from an initiative by stakeholders in the housing sector in Africa to make critical data available to developers, financiers and the public.
Through the Open Access Initiative, data on the cost of construction, time taken to complete projects and specific challenges in the housing sector will be made public across the continent.
The initiative which will cover the continent is being piloted in Kenya.
The Open Access Initiative is led by the Center for Affordable Housing Finance in Africa (CAHF), Financial Sector Deepening (FSD) Africa Investments, Financial Sector Deepening (FSD) Kenya and Reall and International Housing Solutions (IHS).
Together, these market facilitators have formed the Affordable Housing Investment Alliance (AHIA) which, in turn, will pilot the Open Access Initiative.
The anticipation is that this data will guide affordable housing investors on profitable units, underserved areas, and how to address challenges and returns on investment.
Ultimately, this information should save investors time and money.
Smart investment decisions
The initiative comes months after the Center for Affordable Housing Finance (CAHF) and the African Union for Housing Finance (AHF) highlighted in a report the lack of good data that should inform investors in the sector. As such, investing in the sector is risky and expensive.
This new initiative will then be the torch in these troubled waters for investors.
According to the vision of this initiative, the plan is to have affordable housing practitioners – developers, financiers and investors – share data and delivery experiences in a central repository.
This repository will then become the comprehensive database of all affordable housing investments in Africa, with Kenya being the pioneer.
“Sharing data and information between parties and collaborating in advocacy and engagement processes will leverage individual parties’ efforts to achieve economies of scale in improving the enabling environment for affordable housing says the alliance vision board.
The alliance notes that although data is fundamental to the investment decision, there is little good quality, targeted data.
“Investors and developers all point to the difficulty of accessing data that paints an accurate picture of the affordable housing investment opportunity and its risks,” the alliance said.
Data is limited in composition and associated costs, clarity of process followed when setting up development (including steps, time and costs) – blockages that arise, impact on affordability , people details, target market and their accessibility.
Additionally, the data does not include other financial pressures, housing needs, investment performance – whether it is a worthwhile business or not – and how improvements can be made. .
The solution to this problem as the document proposes is to make this information public. The Open Access Initiative’s approach, according to the document, asserts that when money is invested in a development, it should have a dual purpose – to achieve the immediate development outcome (housing units) and to support the development of the wider market.
“In order to achieve the latter, the sharing of data and information related to the investment experience becomes a condition of investment. During the investment, this data and information will be collected and then developed into useful products to be shared in the public domain,” the document states.
Results will be produced at different levels, some will target participating developers, other development finance institutions (DFIs) and the general public. To amplify the use of available information, AHIA will produce a wide range of outputs, such as project fact sheets, investment fact sheets, action briefs and case studies, as well as a data dashboard.
“It is expected that these results will help actors in the housing value chain to support investments aimed at overcoming the blockages they face and to develop tools, frameworks and basic research to help both the investee and other market players to address the challenges they face in delivering affordable housing.”
Additionally, the output will showcase the activities of market players engaged in affordable housing, demonstrating their focused attention to opportunities and risks and encouraging increased investment in the affordable housing sector, given the clear attention to risks. of delivery and the identification of niche market opportunities. made possible through this effort.
“The Open Access Initiative is about market development. The intention is to build and support a more competitive environment in which a range of market players see (and can act on) investment opportunities while raising the bar for quality and long-term sustainability.” , indicates the alliance in the document.
“Ultimately, this can contribute to an overall saving of the costs of the actual product and the time required to complete its delivery, to the benefit of the original data sharer, the investor and the market as a whole,” adds he.
In a nutshell, according to the alliance, the Open Access Initiative asserts that industry players should not compete on how to access information but on how it is used to optimize resources.