SDI Invests in Income-Generating Community Resource Centres: The case of 302 Albert Road

04 May 2018

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By Merhawi Okbaselasie, SDI Secretariat

In this fast-changing environment, NGOs are becoming particularly concerned about financial sustainability, and SDI is no exception. The challenge is how to become financially sustainable without drifting from SDI’s core mission of realising inclusive and resilient cities that improve the lives of the urban poor. SDI achieves this core mission through investing in the urban poor’s self-organising and by supporting them in exploring alternatives to evictions. This includes land tenure, access to basic services, and housing solutions. There are many successes that attest to the effectiveness of SDI’s bottom-up approach to urban development.

However, for SDI to continue to fulfil its mission and to ensure the sustained effectiveness of its network, some level of financial self-sufficiency is vital. The SDI Secretariat has long recognized this challenge and has been making some strides in diversifying the income sources of the network. Efforts include broadening strategies to attract donor finance (e.g. individuals of high-net worth, challenge funds, and impact investments), generating funds from the general public through campaigns and direct marketing (e.g. challenge funds, crowd funding), as well as generating revenue through market-based opportunities linked to SDI’s core work. One such effort is the recent development of the property at 302 Albert Road into a ‘commercial hub’ and ‘community resource centre’.

SDI, through its investment arm Inqolobane Trust, has recently acquired an old commercial property situated at 302 Albert Road in Woodstock, Cape Town. A well-located, diverse and vibrant area close to the Cape Town CBD, Woodstock is one of the oldest working-class residential areas in Cape Town. Unlike many other neighbourhoods, residents in Woodstock managed to avoid the brutal forced evictions of the Apartheid era. However, over the last two decades as the city has grown, Woodstock has increasingly been subject to a process of gentrification with poorer communities facing more surreptitious forms of evictions.

The premises at 302 Albert were in dire need of maintenance and upgrading. SDI adopted a ‘’light touch’’ approach and invested in upgrading and restoring the heritage qualities of the old Victorian building (built between 1900 and 1905), and refurbishing industrial structures at the rear of the property. The efforts also included expanding and renovating the existing central courtyard to create a communal space with seating and greenery. The design interventions were approved by the Western Cape Heritage Resource Authority.

302 Albert is designed to function as both a ‘commercial hub’ and a ‘social hub’. Because Albert Road functions as a high street, commercial activities are located on the ground floor ensuring accessibility and visual connection to street level commercial activities. There are two 70 square metre retail shops: a jewelry shop and an art gallery along Albert Road, with an open plan studio above the two shops housing the SDI Secretariat’s new office. Accessed via a paved access way and an internal courtyard, the rear of the property houses a ground floor workshop and a restaurant, with a large open plan studio above the restaurant. This studio will soon become a hub for SDI’s Know Your City TV (KYC)  programme.

As mentioned above, the objectives of the 302 Albert development are both commercial and social. The first objective is to generate financial returns to contribute to the financial sustainability of SDI. To this end, the SDI Secretariat invested in upgrading and branding of the centre to position 302 as a landmark along the Albert Road corridor. These efforts significantly improved the quality and appeal of the ground-floor rental spaces and helped the centre function as a ‘commercial hub’.

302 is expected to generate an annual income that, in year one, will translate into an 8.5% gross yield. The upgrading efforts also included investment in grid connected rooftop solar PV and water tanks to harvest rainwater. The energy generated from solar is expected to reduce the total annual electricity costs of the centre by about 20%.

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The second and equally important objective is to create a social space with two key functions: Firstly, the space will function as a hub for SDI’s Know Your City (KYC) programme. The emphasis will be on youth development through the KYC TV programme which provides training to youth from informal settlements in photography, media, storytelling, and film production. Secondly, the space will become a space for dialogue for communities and civil society organisations in the area to engage on critical issues affecting the urban poor, particularly forced evictions, which is at the centre of SDI’s core mission.

SDI’s main focus will continue to be the support of the urban poor in fighting evictions and accessing land tenure, basic services, and housing opportunities. Because of the nature of its work SDI will always require donor financing. However, the efforts made at developing 302 Albert using its own reserves highlight that SDI is serious about diversifying its funding sources and ensuring long term survival and effectiveness of its network. The challenge now is to scale up the successes achieved at 302 Albert across the SDI network. The idea is that these community resource centres – with emphasis on youth development – will be anchored around the Know Your City programme throughout the network,  delivering on both social and developmental outcomes and generating financial returns for the SDI network.