Land reform urgently needed in urban areas

BY EUSTACE DAVIE and MARTIN VAN STADEN

In 1991, the Apartheid government admitted its gravest violation of human rights: denying black South Africans ownership of land. How did it do this? It passed the Upgrading of Land Tenure Rights Act, “ULTRA” for short. ULTRA’s objective was to upgrade lesser forms of tenure in townships to full ownership and to incorporate the registration of these upgraded rights in the formal deeds registry system.

It established a mechanism whereby the new owners of an estimated 5 million properties could submit documents proving their ownership and have that fact documented in the deeds registry. At the same time, government repealed the Natives Land Act of 1913. In one fell swoop, it abolished the Act that had prohibited black South Africans for 78 years from owning property in over 80% of South Africa and performed a mass transfer of ownership of all properties in formalised and surveyed townships.

ULTRA also provided, at the same time, that upon completion of further surveys and establishment of formal townships, the same rules would apply. Yet, despite ULTRA and the repeal of the Natives Land Act, many black South Africans remain tenants on their own property. The reason for this is simple: The owners of these urban township plots were not told about their upgraded tenure.

ULTRA was passed and filed away, like a mere formality. Some municipalities took notice, but the mass of townships remain unupgraded. Deeds offices were either uninformed or neglected to document the massive shift in ownership from the State to the people. Those who live on the properties concerned are, by law, true and full owners, but this fact has not been recorded in any registry nor do they possess title deeds. This makes their ownership almost useless and places them under virtual house arrest.

They cannot sell or let their properties without producing proof of ownership and so are compelled to stay where they are. The choices of parents wanting to move closer to their children and families wishing to take up job opportunities elsewhere are severely limited by not being in possession of that important document – a title deed to their property. They also cannot borrow against their property. Most worrying is that a future government may repeal ULTRA after which it becomes an open question as to whether township inhabitants retain the ownership previously granted to them but not recorded on a plot-by-plot basis.

These problems would be avoided if their ownership was recorded and their title deeds transferred to them on an expedited basis. The Free Market Foundation’s Khaya Lam (My Home) Land Reform Project, with the support of generous donors and cooperation from some municipalities, is chipping away at this task. It sees not only to having ownership rights recorded but also the registration of transfers and the presentation to owners of the title deeds to their properties.

Titles presented and transfers in progress currently total 5,100. The estimated total number of properties is 5 million. The essence of the property rights story as far as black South Africans are concerned can thus be reduced to:

  1. They were denied the right to own property in land for 78 years (between 1913 and 1991).
  2. An estimated 5 million households were given ownership of the houses they occupied, but they were not informed of their rights.
  3. Those who have title deeds to properties have had full secure property rights protection for 27 years (between 1991 and the 2018 announcement of expropriation without compensation).
  4. The removal of secure property rights by the proposed constitutional change will once again return black South Africans to the insecurity they had during the Apartheid years.

The urban township continues to exist today in much the same form as during Apartheid. Municipalities own the land upon which townships and the inhabitants are unable to legally sell, let or mortgage the property they occupy. They cannot regard “their” properties in the same way as other South Africans do in the suburbs.

This deprivation of ownership leads directly to a lack of investment in these properties by inhabitants and the absence of a property market. If we wish to see townships become middle-class suburbs, ownership must be extended to the deprived millions; not threatened under a regime of expropriation.

The socialist experiment of state ownership – or state “custodianship” – has clearly failed and produced bland, poor and unappealing areas where the government does not care to maintain the plots and homes it officially owns. Only private owners have the incentive to put time and effort into and develop their own property. It is unthinkable that, for some, “land reform” in South Africa seems to mean more of what we had during Apartheid, and not the extension and strengthening of property rights for the poor and vulnerable.

If government is serious about land reform, it must shelve its plans to amend the Constitution and start doing what the Constitution obligates it to do: Secure the tenure of those who have insecure tenure because of past racial discrimination. Land reform is meaningless if there is an absence of private property rights.

Eustace Davie is a director and Martin van Staden a legal researcher at the Free Market Foundation