No Housing Bubble in Rwanda
Capcon’s founding partner company, Stonecrest Financial, has been in the real estate business for over 20 years. So when Stonecrest executives went to Kigali, they noticed two things:
- The economy was growing rapidly
- There was a clear need for more (and better) housing options.
In Kigali, the good news of recent rapid economic development has been tempered by a critical housing shortage. The city’s population has grown six-fold in the last 25 years. To wit, this except from a 2015 report from Al Jazeera:
“According to a 2012 City of Kigali study, the projected population increase and inadequacy of much of the city’s current housing stock mean Kigali will require 344,000 new housing units by 2022.”
So this critical shortage represents a great, unmet need for housing, but also signals an opportunity for local business owners to address this booming market. As such, for Freeman and Stonecrest, this situation represents a perfect opportunity to apply the “capitalism with a conscience” ethic. Affordable housing is a cornerstone of economic opportunity. By investing in this market, Stonecrest could increase the housing supply to make homes more affordable to everyone, and simultaneously create opportunities for Rwandan entrepreneurs.
To make that happen, Stonecrest partnered with local resident Theo Mushinzimana to create Hillcrest Development Ltd. Hillcrest’s business model is to address the building supply chain by providing cheaper and more plentiful materials to local builders, improving the housing supply and lowering prices. Hillcrest began operations importing home building supplies and components from Dubai to capture favorable pricing and availability.
For Stonecrest, the win-win scenario represents a realization of a mission defined for a new, non-profit arm of Stonecrest called “CapCon”. The CapCon mission is to “to eradicate poverty through economically sustainable, market-based initiatives which improve the lives & livelihoods of the world’s most vulnerable populations.”
Watch this blog for further updates.