15 January, 2019
Timber construction: Finance, carbon tax and the green economy
most often seen as a luxury investment available only to the wealthy,
represents low-hanging fruit for public and private sectors invested in lessening
- and mitigating - their environmental impact.
A timber frame structure, be it a
primary residence, a holiday home, or an extension of an existing dwelling, is
a substantial investment. As such, most people, barring a fortunate few, will
need financial backing to have their timber frame dream realised. How, then,
does bonding a timber structure differ from other construction types, is a
timber structure a financially sound investment and how will this be impacted
by South Africa's impending Carbon Tax Law?
Timber construction is a traditional, yet
modern method of building sturdy structures that are both pleasing to the eye
and can play a profound role in mitigating greenhouse gas emissions. It offers
the homeowner and property developer in the know an environmentally intelligent
building option that has been tried, tested and has performed exceptionally
well over centuries.
"70% of the
developed world's population lives in timber frame houses," remarks Werner
Slabbert, Managing Director of Eco Log Homes. "This includes the USA, Canada,
Scandinavia, Europe, New Zealand, Australia and Japan," he adds.
construction brings tremendous value to all players along the value chain,
right from the forestry sector through to the homeowner. Timber homes offer incredible
design flexibility, quick construction time, excellent insulating properties, a
highly competitive strength-to-weight ratio, legitimate consideration for the
environment, and are built to last," comments Slabbert.
myriad benefits offered by timber construction are becoming better known to
both the trade and the public, there remain a few misperceptions around this
building methodology that fuel the misunderstanding that building with timber
is far less accessible than it really is. Among these is the notion that accessing
finance to build a timber frame home or structure will not be easy, if not
finance to build a timber home
According to the Institute for Timber
Construction South Africa (ITC-SA), "Major South African banks have the same
approach to financing a timber frame home as they do a brick and mortar home.
If the applicant qualifies for a bond in line with the financial institutions'
basic credit requirements and the structure is built according to all national
building standards and regulations by a qualified timber frame builder, you
will get a bond to build or buy a timber frame home."1
"Timber frame building is one of the three
building types - alongside brick and mortar, and steel frame building - that
are included under the National Building Regulations as pre-approved building
methodologies, each with its own SABS standard, and that are approved by all
concerned authorities," says Slabbert, adding, "Timber construction in South
Africa is specified for under the South African National Standard (SANS) 10082,
which governs timber frame buildings."
According to Wimpie Potgieter, Property
Asset Management Head at FNB, "FNB finances timber frame homes or timber homes
built in accordance with the National Building Regulation SANS 10082 as per any
other conventional structure built in accordance with national building regulations.
However, confirmation from a registered engineer (engineer's certificate) that
the structure is built in accordance with the code is required."
procedure for applying for a bond to build or buy a timber home or structure is
thus exactly the same as applying for the same on a brick and mortar structure.
The only exception is that an ITC-SA membership certificate, denoting the
builder's competence in the practice of timber frame construction, as well as a
registered engineer's certificate confirming that the structure has been built
to standard, will need to be provided," says Slabbert.
a timber frame home: overcoming obstacles
When it comes to
accessing finance to buy an existing timber frame home, there are a few obstacles
that can hinder the endeavour. "Timber home valuation should be as standard as evaluating
any other type of home, but given the current market share of timber
construction due to its exclusivity, it is not surprising that there is some room
for improvement," Slabbert comments. "Some of the challenges faced when having
a timber home valuated include the fact that many people do not understand the
construction method, know how to identify the attributes of a home built in
strict accordance with SANS 10082, or appreciate the difference between a
high-value timber structure versus a low-value structure, like a Wendy house,"
these challenges are easily overcome with the help of a professional body like
the ITC-SA, who can provide an inspector qualified to evaluate an existing
timber home to ascertain whether or not it has been built to standard. Further
to this, the ITC-SA can also provide a list of registered timber frame builders
and engineers that understand, and are competent in their professions in
relation to, timber frame building," Slabbert assures.
Local authority requirements
According to Jacques Cronje of Jacques
Cronje Timber Design, "The timber frame building system in South Africa [...] is
recognised by the National Home Builders Registration Council (NHBRC), lending
institutions, insurers and local authorities."2
"With timber construction and the local
authorities, it's business as usual as compared with any other construction
type. In this case, a homeowner will need to ensure that the plan for the build
specifies SANS 10082. Local authorities across South Africa will approve and
pass a timber frame home, but they must of course be shown to be compliant with
the necessary regulations," comments Slabbert.
"The only situation where one might
lawfully experience any resistance regarding building a timber home would be in
the case of a housing estate, where there may be an architectural committee in
place to dictate construction design and materials. This is usually done in an
effort to maintain the overall aesthetics of the estate," says Slabbert,
adding, "Likewise, when considering building a timber home, it's also important
to have a similar approach and consider how the structure will fit in with its
environment; a log home in the city centre, for example, will not only look out
of place, but the return on investment over time may be quite limited, given
the contextual misfit."
tax bill, big business & the green economy
Carbon Tax Bill, which is yet to be promulgated, was "‘designed to provide a
price signal to producers and consumers of carbon intensive products, creating
an incentive to invest in cleaner technology and reduce emissions.'"3
industries may be feeling a measure of discomfort from the pressure of the
impending Carbon Tax Law, which now looks to come into play by early 2018, this
is an opportunity for these sectors to innovate and take confident,
environmentally lighter steps towards a more sustainable future," says Slabbert.
"The Bill signals South Africa's approach to honouring its Kyoto commitment
and, once in full swing, will usher in renewed and enhanced engagement with the
green economy. Industry will not only have to adapt how it operates, but it
will have to explore new avenues in mitigating its carbon emissions," he points
"Timber construction, most often
seen as a luxury investment available only to the wealthy, represents
low-hanging fruit for public and private sectors invested in lessening - and
mitigating - their environmental impact; timber-built staff housing and public
buildings are just two such examples of how big business and government could
offset their greenhouse gas emissions - and resultant carbon tax burdens - through
essential infrastructure. This makes timber building not only financially viable,
but a financially imperative enquiry for both the public and private sectors,"
"The impending Carbon Tax Law
represents a necessary impetus for the shift in attitude towards a greener
approach to doing business and is poised to make a significant impact on the
local green economy. Consumers and the trade will become ever better informed -
and make better choices - about their impact on the environment and as such,
the timber construction and supply industries, from plantations and sawmilling
to construction and carpentry, are well-positioned to be leveraged to, quite
literally, build greener homes, businesses and public buildings. The potential
opportunities for job creation, globally transferrable skills development and
profitable off-shoot micro-enterprises are innumerable. Not least, a healthier
green economy will see an upswing in international investors, who will look
more favourably upon a nation interested in taking care of its environment -
and people. And this is just the beginning," Slabbert notes.
"While there still exist a few
misconceptions around the viability of financing timber construction, these
will slowly but surely be eroded through education, awareness, and, most
notably, through legislation that will make a turn to greener construction
methods not only a viable prospect, but an essential aspect of sustainable
business, government and lifestyle practices that respect South Africa's
commitment to lowering its greenhouse gas emissions," Slabbert says,
concluding, "At a challenging and critical moment in South Africa's economic
and political trajectory, the time is ripe to do right; by the economy, the
environment and ordinary South Africans. Never before has it been quite so economically
attractive to do the right thing."
1. 5 Myths about Timber
Construction. Institute for Timber
Construction South Africa (ITC-SA). www.itc-sa.org/5-myths-timber-construction/
Posted: 17 September 2015. Accessed: 25 September 2017.
2. Timber Homes. Jacques Cronje Timber Design. www.timberdesign.co.za/timber-homes/
Accessed: 25 September 2017.
3. Kings, Sipho. Carbon tax:
Saving the world on the cheap. www.mg.co.za/article/2016-11-16-00-carbon-tax-saving-the-world-on-the-cheap
Posted: 16 November 2016. Accessed: 25 September 2017.