Thankful for more clarity on land issue – concerns remain
Category The Property Market
President Cyril Ramaphosa is trying very hard to lay to rest growing fears about land expropriation. He recently reiterated that the state does not intend land grabs nor an assault on private property ownership and where land expropriation is the course decided upon, it will take place in an orderly manner. The property sector appreciates the greater degree of certainty, but concerns remain, says Jan le Roux, CE of Rebosa.
“We are really appreciative of the degree of certainty the president is offering,” starts Le Roux with reference to recent efforts by president Ramaphosa to once more address rising concerns and fears, both locally and international, about the government’s intent with their continued support for land expropriation without compensation. Fears that last week prompted even US president Donald Trump to indicate via social media that he is keeping an eye on the situation in South Africa.
Fears and uncertainty about what the government intend with land expropriation without compensation (EWC) have, despite previous similar assurances by the president, also been impacting the property sector with investors, especially foreign investors, hesitant to make big investments in property in the country, property experts say.
During the past week the president made concerted efforts to provide greater clarification on what the ANC-led government intend to happen (and NOT happen) when they call for support of expropriation of land without compensation.
START WITH STATE-OWNED LAND CLOSE TO URBAN AREAS
According to a recent article Ramaphosa wrote for London’s Financial Times (repeated in BusinessDay), he sees lack of skills and lack of access to land as the two biggest constraints to poverty reduction and shared prosperity in South Africa. Even though the country has been a democracy for 25 years, most black people in South Africa are still living in poverty and don’t own property.
Reform of the patterns of land ownership is therefore a critical issue in this country he says. Expropriation without compensation is but one element of this programme of land reform which “includes the release of well-located urban land for low-cost housing so that the poor can own property and live close to economic opportunities,” Ramaphosa wrote.
Ramaphosa said the government want to move away from the apartheid spatial planning process which placed black and coloured people in housing settlements far away from the economic centres of towns or cities where they work.
The cabinet lekgotla therefore decided a rapid release of land is necessary and this release of land will start with state-owned land close to urban areas Ramaphosa told parliament last Wednesday 22 August during the afternoon Q&A session. He said local governments need to identify suitable areas, it must be released and serviced stands made available for people to build their houses. This is also a form of land expropriation and the land doesn’t have to be bought Ramaphosa added.
SO, DOES THIS MEAN PRIVATELY OWNED LAND IS OFF THE HOOK?
No. Ramaphosa said local governments need to examine situations where there is suitable privately-owned land near urban areas that was bought purely for speculation or that is lying fallow, so that decisions could be made on an “informed basis” on how to deal with land like that.
“All that will be done in an orderly fashion in accordance with our constitution,” said Ramaphosa, adding he believe land reform could be a very positive process.
“This is no land grab; nor is it an assault on the private ownership of property. The ANC has been clear that its land reform programme should not undermine future investment in the economy or damage agricultural production and food security,” he wrote in the Times article.
As regards the current process to investigate whether amendments should be made to the constitution regarding the expropriation of property without compensation, Ramaphosa wrote the purpose of the process would be to “make explicit the conditions under which land could justifiably be expropriated without compensation”. He explained that while the current clause in the constitution does not prohibit expropriation of property without compensation, the ANC believes an amendment would provide more clarity.
The intention is to unlock the economic potential of the country’s land, wrote Ramaphosa in the Times, adding that several suggestions have been made where expropriation without compensation could be justified. “These include, for instance, unused land, derelict buildings, purely speculative land holdings, or circumstances where occupiers have strong historical rights and title holders do not occupy or use their land, such as labour tenancy, informal settlements and abandoned inner-city buildings.”
Ramaphosa gave the assurance that the governing party do not intend to erode property rights but rather intend to ensure that the property rights of all South Africans are strengthened. “SA has learnt from the experiences of other countries, both from what has worked and what has not, and will not make the same mistakes that others have made,” he wrote.
WAS IT WORTH IT MR PRESIDENT?
In conclusion, Le Roux said: “There seems to be consensus that none of what is now on the cards necessitates a change in the constitution as it can be done within in the framework of the current constitution. We therefore cannot but help to express concern as to the sequence of events which still seem to indicate that political expediency necessitated unnecessary announcements and the raising of expectations that cannot be met. The question begs: was the damage done to our international image (think of Trump), the rand, etc worth all this?”
Author: Property Professional
