IBN has been writing articles on landownership since 2003. It is a subject which keeps on coming up. Previously it was always an approach to limit foreign land ownership. This however never got anywhere, as there are very few records in the Deeds Office on foreigners and of course many contribute significantly to the economy, let’s mention foreign car manufacturers who own factories as an example.

The Cape York building in Johannesburg after it caught fire on July 05, 2017. (Photo by Gallo Images / Beeld / Wikus de Wet) Source: Business Insider South Africa

So this is always a populist card and very obviously the ANC needs votes, many of which could lost to the EFF on the left. But there are also many black professionals and business people believe the economy is still controlled by the white minority.

As colonisation is difficult to rectify some 360 years later, the focus shift today more towards a re-distribution, giving people an asset which they can either utilize for generate an income (farming) or against which they can loan money for starting a business or perhaps also for education of their children.

So from that point of view this debate is very relevant, it must take place among all South Africans so that at the end there is clarity for any investor, foreign or local, black-white or Indian. So where do we start?

The ANC fully intends to change the South African Constitution to speed up land reform and make expropriation without compensation easier.

Here are predictions according to Business Insider on what the government will likely target first, with or without compensation.

Urban land owned by state companies such as Transnet and Eskom.

Plots of land owned by state-owned enterprises (SOEs) in cities like Cape Town, especially those that are partially undeveloped, could make for some quick expropriation wins, says Ruth Hall of the Institute for Poverty, Land and Agrarian Studies (PLAAS) at the University of the Western Cape.

“Well-located land in cities will be crucial, and there is a lot of that owned by parastatals.”

According to Susan Booysen, director of research at the Mapungubwe Institute for Strategic Reflection (Mistra), Eskom’s Megawatt Park headquarters, with its large open tracts and underused sports fields on the fashionable northern fringes of Johannesburg, is a good example. “It is centrally located, close to business opportunities and transport, just the kind of place people have been agitating for.”

And SOEs – especially ones as dependent on government debt as Eskom – are unlikely to fight back quite as hard as some private landowners, making for land that can be successfully and finally seized ahead of 2019 elections.

Abandoned, hijacked, and unmaintained buildings in the city centres.

In almost every city centre, the demand for cheap housing is acute and just about every city features abandoned and sometimes downright dangerous buildings only nominally still in private ownership.

Expropriating such buildings make for lots of useful numbers: high potential property values, high number of people who can be housed, large amounts of floor space.

Land hosting – and adjoining – current informal settlements.

“Expropriation is a mechanism for breaking [a] deadlock,” says Hall. “Whether or not you compensate is a different matter.”

And deadlock is the situation on land under and around some current informal settlements, where the title-holders have abandoned any pretence to control the land, but are hanging on to it because there is some small hope of cash down the line.

That hope dwindles fast after a change to the Constitution and a firm promise by the government to expropriate land without paying anything for it – and could make owners willing, even eager, to take whatever they are offered.

Abandoned mines and mine dumps.

According to Boysen, unused mining land is very likely to be in the expropriation mix. Especially if there is a prospect of reopening a mine, and so resurrecting jobs and broader economic opportunity.

Expropriating shuttered mines would be a warning to companies who wish to keep “care and maintenance” shafts on their balance sheets. It would also make a strong political statement.

Smallholdings, especially abandoned or unused but agriculturally-promising ones.

Politically, there is a need, to expropriate land that can be farmed. Yet the ANC seems genuinely keen to not disrupt food production or the economy, and there are more voters in peri-urban areas than rural ones.

This, says Booysen, all suggest that unused or underused smallholdings on urban fringes will draw the eyes of expropriators.The fact that such land is better suited to subsistence-level agriculture, because of proximity to markets and services, is a bonus.

Portions of farms long worked, for their own gain, by tenant-workers.

KwaZulu-Natal and Mpumalanga in particular feature farms where generations of tenant-workers have worked some of the land for their own account, says Hall.

That is one area where the government may face an early confrontation with private owners, but also an area where compensation is likely to be carefully considered, with factors such as the value of the land, debt to banks, and provenance of the land coming into play.

One of the biggest questions remains, if the government is able to administer such a task. It has build well over 1 million houses for the poor during the past 20 years, but mostly not transferred ownership to them. Quite a number of farms have been purchased and given to new owners, but then again, no further funding nor training was offered, so failure was inevitable.

Many properties have debt owing to banks or municipalities or to Eskom. What is going to happen to those amounts? We are still a long way away from any expropriation, if there will be any at all.

 

This article is based on a Business Insider article written by Phillip de Wet. The original article can be found by clicking on the following link  https://www.businessinsider.co.za/land-expropriation-will-start-with-urban-and-per-urban-land-soes-and-small-holdings-2018-8

By Nadene van der Mescht and Dirk Meissner