A firm belief that constructive regeneration of inner city areas through housing projects can simultaneously serve to encourage the development of emerging entrepreneurs has provided the foundation for the Trust for Urban Housing Finance (TUHF) , which made its début in June 2003. So says Paul Jackson, CEO, who advises that the TUHF model will be piloted in Gauteng initially and will provide the basis of a national urban regeneration fund.

The principal sponsor being the National Housing Finance Corporation (NHFC), the TUHF was birthed through the conversion of the National Inner City Housing Upgrading Trust (ICHUT) into a development finance institution. Jointly funded and supported by the NHFC, NURCHA and SHF , TUHF has been mandated to provide short, medium-and long term finance to a range of housing entrepreneurs and collectives in inner city areas, to an estimated maximum value of R5 million per project. Emphasis will be placed on providing both finance and related development facilitation to a range of initiatives, including:

	Tenant buyouts based on collective ownership
	Small private owners
	Social housing institutions and
	Small residential landlords

“The TUHF model is based on extensive experience gained by ICHUT through the organisation’s involvement in the regeneration of Johannesburg’s inner city areas since 1994, refined after a complete evaluation of every initiative undertaken,” says Jackson. “In addition to providing project funding, we will also share our knowledge and expertise with the entrepreneurs behind the projects. For example, we will conduct feasibility studies on proposed projects, and will endeavour to transfer project management skills that will enhance the profitability of their ventures.”

This ambition will be fulfilled by the active participation of the TUHF’s diverse joint venture partners. Every effort will be made to leverage knowledge and maximise mutual opportunities, with each of the partner organisations having representation on the TUHF board.

With regard to the scope of operations, TUHF will have an initial capitalisation of R21 million at launch, R10 million of which will be from existing ICHUT funds while the balance will be provided by NHFC. TUHF currently has R109 million rand for its lending program raised through the NHFC, NURCHA and the European Union funded support program for social housing. The SHF will provide development facilitation resources to projects for capacity building, project and property management and training. In addition, TUHF has developed relationships with commercial financing institutions which have yielded “in principle” offers to further capitalize the lending program.

Confident that his organisation is well-placed to operate in red-lined areas where angels fear to tread, Jackson says that TUHF will maintain an entrepreneurial approach to both project funding and products/services offered. “We’re talking about quick and hard funding of sustainable business propositions,” he says, “not subsidies for low-income prospective home-owners. As such, we’re looking to partner people who ‘know the neighbourhood’, who have the right technical skills and network of contacts, and who have the true interests of urban regeneration at heart.”

Importantly, TUHF’s local experience has been enhanced substantially by the support given to the organisation by Shorebank, a successful end-user bank in Chicago that has pioneered an appropriate lending approach for residential and private landlords in low-income areas. “Not only does Shorebank trace its origins to the provision of loans to emerging entrepreneurs in the USA, but the company was integrally involved in TUHF’s set up phase through support from USAID,” says Jackson. “We look forward to learning much from Shorebank Advisory Services and to putting the lessons to good effect in harnessing the huge development opportunity that exists in regenerating South Africa’s inner city areas.”