From pensioner to property owner: Township housing boom

Key topics:Bitprop boosts township incomes with micro-apartment rentalsChristo Wiese invests R100M to scale housing innovationStartup tackles South Africa’s massive housing shortage.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up for the BizNews channel here..By Prinesha NaidooThough once reliant on a modest state pension, 70-year-old Nonkosi Klaas now earns more than South Africa’s national median income by leasing six backyard apartments on her property.Two years ago, she partnered with a housing startup called Bitprop, which builds and manages micro-apartments at no upfront cost to landowners in South African townships — areas where apartheid-era governments forcibly relocated people of color, and which remain among the country’s poorest and most violent.“These flats are putting bread on my table,” said Klaas, a retired retail worker and mother of five in the Langa township. “I don’t borrow money from anyone anymore, and I’m paying my bills on time.”Klaas is one of more than 100 landlords in seven Cape Town townships working with Bitprop — a company founded in 2019 by Swedish entrepreneur Carl Fredrik Sammeli, and backed by high-profile investors including Klarna Bank AB co-founder Niklas Adalberth. It’s part of a small cohort of firms exploring community-driven solutions to the acute affordable housing shortage, in one of the most unequal countries in the world.President Cyril Ramaphosa indicated support for such innovations in February, saying the government was reviewing urban planning rules to make it easier to build more low-cost homes in developed areas, including in backyards.Bitprop builds mostly small studio units — about 20 square meters (215 square feet) — on homeowners’ land. It handles construction, leasing, and maintenance, and rents out the units for an average of 4,000 rand ($215) per month. Homeowners receive 15% of the rental income, and after 10 years, they gain full ownership of the apartments. .Read more:. The ups and downs of an Airbnb landlord – Wall Street Journal.Now, South African billionaire Christo Wiese plans to invest 100 million rand — matching all the capital the startup has raised to date.“We hope we can make an enormous contribution to curing the housing shortage,” said Wiese, a serial investor who steered the expansion of both Africa’s biggest clothing retailer and the continent’s largest grocer. With fresh capital from Wiese, Bitprop plans to more than double its portfolio to 1,250 units by 2027. But those targets are modest relative to the national supply backlog, as at least 3.4 million South Africans are awaiting subsidized housing, according to the Department of Human Settlements.Low-cost rentals have become increasingly scarce and informal settlements — where housing is built on vacant municipal land without permits or basic services like power, water or sewage — are proliferating. .Efforts like Bitprop’s offer a needed alternative: Structurally sound, affordable homes with clear title deeds and legal utility connections. .“I saw township property ownership as probably the most powerful mechanism to create impact at scale,” said Sammeli. The business, he added, helps families build generational wealth, improves living conditions and creates employment — especially in areas of high joblessness.Other initiatives are also working to help property owners become landlords. In Gauteng province — home to South Africa’s economic capital, Johannesburg — the local department of economic development has partnered with Indlu Living, a property management firm, to support township homeowners with loans and rental management services. Development-finance institution TUHF’s uMaStandi initiative provides loans to township-based property investors developing affordable rentals. Read more:. WeWork hits another landlord snag – The Wall Street Journal.Bitprop’s model — which channels investment into existing townships and stimulates local economies — “could go totally exponential,” said Kecia Rust, executive director of the Centre for Affordable Housing Finance in Africa. Expanding the housing stock in these areas, she added, can help ease shortages and support the development of property markets.But the approach has its critics. Backyard dwellings “solve a number of problems but also cause a number of problems,” said Hlengiwe Maila, a research fellow at the University of Pretoria. “They put a lot of strain on municipal infrastructure if they aren’t planned for properly.” Maila advocates for public-private partnerships and business incentives to help close the housing gap.‘Commercially Viable’Early on, skeptics warned that tenants wouldn’t pay rent or that gangs would disrupt construction, seize properties or even extort the company. But by hiring local builders and allowing homeowners to select their tenants, Bitprop earned the trust of the community.“It’s gone from being a sort of do-good experiment to being completely commercially viable,” Sammeli said. Investors are currently getting returns of 15.4%, he added.Wiese shares Sammeli’s belief that entrepreneurship can drive sustainable change. “I’m a businessperson and I believe everything must pay for itself,” the former chairman of Pepkor Holdings Ltd. and Shoprite Holdings Ltd. said.Wiese, who’s on track to become the biggest single investor in Bitprop, is keen to expand the company both nationally and beyond South Africa’s borders.Bitprop’s long-term trajectory remains to be seen: Most participants in the program haven’t reached the point when homeowners receive full ownership of the properties and inherit maintenance and other responsibilities. Right now, Sammeli says they’re focused on educating homeowners to prepare them for that day. .To date, the startup has helped its homeowner partners — 67% of whom are women — more than double their incomes and property values, according to Sammeli. For Klaas, the roughly 3,500 rand a month she earns in rent surpasses her 2,190-rand government pension — and places her above the national median monthly income.“I eat what I want now, and I never sleep hungry anymore,” she said. “After eight years, these flats are going to be mine — and then my life is really going to change.”.© 2025 Bloomberg L.P.

From pensioner to property owner: Township housing boom

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