Africa housing finance operators in Cairo declaration

• Urges govts to adopt sustainable, environmentally friendly housing construction.
• Commit to affordable green housing, green financing

As adverse weather conditions, and climate-related emergencies reduce and degrade affordable housing stock across continent, members of the African Union for Housing Finance (AUHF) are seeking resilient, safe and adequate housing to improve quality of life of households and reduce environmental impact in the residential construction industry.

They called on governments at the regional, national, state or local levels to actively create an enabling environment that encourages the development of resilient and environmentally friendly cities, neighbourhoods and homes. AUHF also urge governments to enforce the shift towards adopting more sustainable and environmentally friendly housing construction, servicing and maintenance practices, especially in government buildings and other infrastructure.

Low-income communities are impacted by climate change and the environment, often finding themselves in disaster‐prone areas and in accommodation that is poorly suited to withstand climate events. At the same time, the commitment to deliver affordable housing at scale necessarily impacts on the environment – carbon emissions are significant in the building process, as well in the ongoing life of buildings.

According to African Economic Outlook (2022), five of the ten countries most affected by climate shocks in 2019 were in Africa. In 2020 and 2021, there were 131 extreme-weather, climate change-related disasters recorded in Africa. The majority of these (99) were flooded, followed by 16 storms, 14 droughts and two wildfires. As households struggle to protect themselves in the face of these shocks, their retreat from disaster-affected or prone areas contributes to increasing urbanisation, putting further pressure on cities to accommodate vulnerable and climate migrants.

The housing finance operators, who met in Cairo, Egypt at the AUHF 38th conference and yearly general meeting, made a declaration known as ‘Cairo Declaration.’ They recognised that the significant interaction of housing and the environment, regulators, as well as investors are increasingly demanding a climate responsive approach, setting standards for green construction and green buildings.

They noted that while ‘green’ impacts favourably on long-term operating costs of housing, with reduced services costs, it is often expensive, adding to the capital costs associated with delivery. “This can have an effect of placing green outside the reach of low-income consumers; or placing affordable housing delivery outside the scope of green investors and the capital they offer.”

In the declaration, they further called for the incorporation of appropriate and affordable standards for socially and environmentally sustainable housing in policy, regulatory and financial frameworks at national and local level, paying special attention to sustainable infrastructure and land management frameworks.

AUHF also wants government to demonstrate political will for green, with the provision of both financial and non-financial incentives to spur the adoption of sustainable building and infrastructure servicing solutions, as well building a new architecture for African cities and towns so that they incorporate green design principles that are at once affordable in the short and long – term, in terms of capital investment up front and long- term operations.

Besides, they urged support for the adoption of building technologies and innovation that reduce the impact of housing and services on the environment, while providing resilience to weather events and supporting affordable housing delivery at scale.

They pledged to encourage the link between green housing and green financing, with a particular reference to affordable housing in all of its diversity and facilitate discussion in this regard, as well as develop interactive platforms and mechanisms to support members through the creation of opportunities to network, share experiences and learn from one another, on adopting models that support green building, green financing and green living.

The group also plan to lead discussion among members on appropriate standards, definitions and targets that encourage members to incorporate sustainable green principles in their businesses and to track these yearly, as well as engage and lobby African governments to adopt and implement the recommendations.

The 56-member group, chaired by the Chief Executive Officer, Nigeria Mortgage Finance Company (NMRC), Mr. Kehinde Ogundimu, urged international Development Finance Institutions (DFI), other development agencies and international Non-Governmental Organisations to support the development of environmentally friendly and affordable housing, recognising the potential systemic impact of their interventions and investments.

Specifically, they encouraged the DFI community to provide affordable green finance to downstream financial institutions to enable them to pass on the affordability to low-income earners, dedicating a larger percentage of their green finance interventions to resilience rather than mitigation for cities/urban areas response to climate change.

AUHF urged support in the development of appropriate rating systems to ensure the green certification process is cost effective, relevant and affordable, particularly for affordable housing.

“Towards this, we see a need for the creation and implementation of tools to measure and verify green building and servicing practices and performance, that are particularly relevant for alternative delivery methods. This includes non-developer led, incremental housing delivery, as well as building refurbishments and conversions, as well as incorporating both mortgage and non-mortgage financing processes.

“Support and implement programmes that train affordable housing stakeholders on environmentally resilient construction and financing practices with the aim of strengthening their technical expertise in existing and emergent approaches, tools and processes that allow climate change adaptation and mitigation strategies.
“Support market studies that interrogate and quantify the key issues that relate to sustainable, affordable housing, both for ownership and rental, at all affordability levels, from incremental household-led through to developer-driven projects and including both new build and refurbishments and conversions.
“Use their voice and platforms to aise awareness of the link between housing and the environment, the important role that housing can play in mitigating the impacts of climate change, and the significance of the non-developer driven housing sector which dominates housing delivery in Africa.”