Property & Wealth

Public/private partnerships answer to land reform?

Christo Wiese – transformation trough ownership
Khaya Lam.jpg

Effective public/private partnerships in land reform might just head off the radical land grabs, a recent initiative proved.

It all dates back to September 2015 when City of Cape Town Mayor Patricia de Lille signed an agreement with the Free Market Foundation (FMF) to cooperate on the Khaya Lam (or ‘my Home’) project, aimed at securing title deeds to property for formerly disadvantaged or disempowered individuals or communities.

It was agreed in principle that the FMF would make a donation towards the legal costs of transfer, to be sponsored by billionaire founder of the Shoprite Checkers Ackermans Pepkor group of companies, Dr Christo Wiese.

In essence it is based on an FMF plan to assist government (in this case the City of Cape Town) to expedite the land reform process without the need to resort to expropriation.

The FMF estimated that between five and seven million black South Africans live on council owned urban land that can legally be transferred to them. In the process it would inject billions of rands in value into the economy – giving security of tenure to a big slice of deserving people who over the years have born the brunt of the apartheid system.

In effect, they would achieve the triple results of redressing the wrongs of the past by transferring ownership (and massive wealth), boost the economy and save the local government the continuous costs of maintenance and repair. 

It is some years now that the FMF has been championing the cause of empowering the previously disadvantaged majority of South Africans to share in the country’s wealth through orderly land distribution.

This resulted in the Khaya Lam land reform project, one of the FMF’s flagship initiatives specifically aimed at transformation through land ownership.

FMF argues that government should focus on the many millions of dwellings and plots, mostly in urban areas, owned by local governments and on the people who occupy these properties.

This concept implies that the government need not embark on massively expensive projects to build more RDP houses while the same outcome can be achieved by utilising the massive inventory already at its disposal. It will be a much more constructive and cost effective land reform project, avoiding the controversial and legally hazardous expropriation route.

Sociopolitical benefits

The sociopolitical gains even outweigh the tangible economic rewards to those who benefit from this alternative approach – considering the goodwill generated by converting council owned properties to privately held freehold title deeds.

From being lifetime tenants, each new landowner is endowed with an asset, which can generate wealth and income – empowering millions of citizens to become businesspeople and landlords.  

The FMF further points out that one can expand the concept considerably, taking note of the fact that the Department of Land Affairs and Works is, according to the Deeds Registry, a substantial landowner of largely unused land, in both the rural and urban areas.

This legacy of the complex state-land hierarchy was inherited from the apartheid system in 1994. While many areas of state land are demarcated for specific functions, there are also thousands of hectares that are not specifically earmarked.

Removing inhibitive elements

While the government did well with substantial housing via its RDP programme post-’94, ownership rights on those properties are often limited by prohibiting the beneficiaries from selling their homes for a specific period of time.

According to research by the FMF this has led to a phenomenon whereby as much as 80% of RDP houses are occupied by people who bought them, albeit illegally, from the initial beneficiaries!

This restriction also drastically reduces the value of the ‘asset’ and does not succeed in unleashing the full economic value of freehold land.

What the Khaya Lam initiative envisages, is the transfer of full and free - not limited - ownership.

The FMF argues that the government should treat all black South Africans in exactly the same way, being free to buy and sell their assets when and if desired.

News24 reported on the joyous moment when single mother Bukiwe Joki received the title deed to her Nomzamo home from Cape Town Mayor Patricia de Lille last week – one of a hundred people who received title deeds to their council-owned rental houses near the Strand in the Western Cape.

A single mother, she shares the home with one of her sons, his wife and their children. After 20 years of renting she is a homeowner at last.

This landmark initiative was indirectly made possible by Dr Wiese’s sponsorship of the transfer costs. A further two batches of 100 title deeds elsewhere in the country are to follow in what he believes is an initiative that is paving the way for many citizens to be owners of their part of South Africa.

He is quoted as saying: “I hope this initiative will be one of the revolutions that our country needs.”

by Eve van Basten

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