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In search of land and housing in the new South Africa: the case of Ethembalethu
2007
World Bank


A just-released World Bank case study outlines the difficulties poor communities face in accessing peri-urban land in South Africa that could have implications and lessons for similar communities in other countries facing spatial segregation issues. The study goes further and suggests policy and program reform aimed at improving the situation.

The study focused on one community, composed largely of laid-off farm workers, that a decade ago wanted to buy their own farm in a peri-urban area west of Johannesburg. Their dream was to establish a mixed-use settlement. They wanted to call the village Ethembalethu – “Our Hope”. About 250 families started their own association and savings scheme to make their dream a reality. By 1997, they had saved enough money -- R125,000 (about US$18,000) -- to make their first purchase offer.

Now, a decade later, the community’s dream is still not a reality. The families have faced numerous obstacles: two cancelled sale agreements, wrongful arrest, being sued in court, an out-of-court settlement for which community members were paid R250,000 (about $36, 000) to not move into the white neighborhood, and large sums of their own money spent on consultants and environmental impact studies. In an agreement with the Mogale City Municipality, where the land is located, the community now has at least a confirmed right to occupy the land. But it does not yet legally own the land, and is still trying to get permission to build on and work the land.

The peri-urban areas are formerly “rural” localities that are now directly in the path of urbanization due to the rapid expansion of South Africa’s metropolitan areas and major towns. They lie officially outside of the “urban edge”. In the land market in the peri-urban areas, the rich and the poor compete directly with each other, because both prefer to live close to where they work. The preference for some of the rich is to live in gated housing communities, created by the redevelopment of farms. The preference of the poor is to live in mixed-use settlements. They want to establish modest houses, raise their children in safety, benefit from having relatively close access to urban schools and health facilities, as well as work opportunities, while having space to venture into farming and small business activities should such opportunities arise.

The case of Ethembalethu is not unique. Millions of black South Africans live in the peri-urban areas. But even if they have the financial means, government programs, development planning and environmental regulations, and the current land and housing markets do not support realization of their aspirations to become homeowners on sites of their choice.

The case study suggests a number of areas for policy and program reform:

  • overcoming reluctance and resistance by municipalities and prospective neighbors to low-income settlements
  • making land use planning in municipalities explicitly pro-poor
  • restructuring the land market
  • realigning planning processes
  • designing a land and housing program targeted to peri-urban areas
  • reengineering program implementations
  • freeing up and building capacity
The Department of Land Affairs has agreed to spearhead the establishment of a national task force to ensure appropriate follow up as suggested in the study.

The World Bank team has been directly involved with the community through its established association since early 2005. It has participated in meetings, in the negotiation of agreements between the association and officials of the Mogale City Municipality. It has assisted the community association in its efforts and provided resource materials to the various stakeholders. It welcomed the cooperation and involvement of all stakeholders, as well as government officials and others who provided valuable input into the report. The study also gave the team an opportunity to learn from an extraordinary story and share insights.

The team strongly commended the hard work, professionalism and dedication of the various officials involved. The report notes, however, that the capacity of officials to deliver is seriously undermined, not by a lack of training or education, but by the highly complicated and fragmented framework within which they operate. The report finds bureaucracy is exhausting the capacity of communities and local governments to ensure that low-income South Africans of all backgrounds can acquire and develop land and shelter in South Africa’s peri-urban areas.

The study, at the request of Mogale City for World Bank technical assistance on the design and implementation of integrated housing and agriculture projects, is just the beginning. The team has pledged to follow this story and to update the public about subsequent developments on the South African country office website.


Executive summary

What are the difficulties the poor face in accessing peri-urban land in South Africa? To answer this question, this case study records and analyzes the experience of a community in the Muldersdrift area of Mogale City Municipality in Gauteng: the Muldersdrift Home Trust Foundation (MHTF).

A decade ago, the members of this community, composed largely of laid-off farm workers, wanted to buy their own farm in a peri-urban area west of Johannesburg to establish a mixed-use settlement. The name of the village would be Ethembalethu – “Our Hope”. Beginning with about 250 families – each of which saved and contributed R50 per year, later increased to R100 per month – the association aimed to acquire sufficient land in the area to build its own homes.

By the end of 1997, the association was incorporated as a “section 21” (not-for-profit company): the MHTF. It had saved about R125,000 and made its first purchase offer. Now, a decade later, the community’s dream has still not become reality. This follows numerous obstacles, including two canceled sale agreements, wrongful arrest, being sued in court, an out-of-court settlement for which community members were paid R250,000 to not move into the white neighborhood, and large sums of their own money spent on consultants and environmental impact studies. While the community now has at least a confirmed right to eventually occupy the land in terms of an agreement with Mogale City Municipality, it does not yet legally own the land, and is still trying to get permission to build on and work the land.

The peri-urban areas are formerly “rural” localities that are now, due to the rapid expansion of South Africa’s metros and major towns, directly in the path of urbanization. They lie officially outside of the “urban edge”. In the land market in the peri-urban areas, the rich and the poor compete directly with each other, because both prefer to live close to where they work. The preference of the rich is to live in gated housing communities, created by the redevelopment of farms. The preference of the poor is to live in mixed-use settlements, where they can establish modest houses, raise their children in safety, benefit from having relatively close access to urban schools and health facilities, as well as work opportunities, while having space to venture into farming and small business activities should such opportunities arise.

Millions of black1 South Africans live in the peri-urban areas. However, even if they have the financial means to realize their aspirations, as the Ethembalethu community has, government programs, development planning and environmental requirements, and the current land and housing markets do not allow them realize their aspirations.

The methodology followed in compiling this case study since early 2005 has been one of direct involvement with the MHTF. We have participated in project task team meetings, as well as in processes such as the negotiation of agreements between the MHTF and officials of the Mogale City Municipality. We have assisted MHTF in its efforts and provided resource materials to the various stakeholders. We have been impressed by the professionalism and dedication of the various officials involved. This report should in no way be seen as an indictment of their hard work. It makes quite a different point: the capacity of these officials to deliver is seriously undermined, not by a lack of training or education, but by the highly complicated and fragmented framework within which they operate. Bureaucracy is exhausting the capacity of communities and local governments to ensure that low-income South Africans of all backgrounds can acquire and develop land and shelter in South Africa’s peri-urban areas.

Based on this case study, we suggest the following areas for policy and program reform:

  1. Overcoming reluctance and resistance by municipalities and prospective neighbors to low-income settlements
  2. Making land use planning in municipalities explicitly pro-poor
  3. Restructuring the land market
  4. Realigning planning processes
  5. Designing a land and housing program targeted to peri-urban areas
  6. Reengineering program implementations
  7. Freeing up and building capacity.
Below, we briefly discuss each area of intervention, highlighting key issues and consequences that arise from such shortcomings. We also make recommendations and identify the main actors who should be responsible for implementing the suggested policies. The various stakeholders now need to discuss these recommendations.

  1. Overcoming reluctance and resistance. Municipalities can be reluctant to provide land and housing to low-income groups because of fears of non-payment of services; loss of income foregone from “high-end” land use, and the unaffordably high costs of complying with municipalities’ interpretations of the standard for basic services, as defined in the Constitution. Wealthier residents, most of whom are white, are reluctant to see low-income settlements in their neighborhood, because of the effect on real estate prices and fears of crime and environmental degradation. We recommend that a special task force initiates an advocacy and public education campaign to allay these fears. It would do this by stressing the benefits of undoing the geography of apartheid, combating the culture of non-payments, demonstrating the revenue potential of low-income settlements and providing better guidance for the interpretation of constitutional rights to basic services. This task force would presumably be led by the Presidency, which is the coordinating agency for the National Spatial Development Perspective.


  2. Making land use planning pro-poor. The main problem faced by groups like MHTF is the almost complete lack of land available to low-income groups to combine housing needs and agricultural activities. One factor is that the so-called “Urban Edge” policy zones land as purely urban or purely agricultural, disallowing for a transition zone of mixed land use typically found in peri-urban areas elsewhere in the world, but almost entirely absent in South Africa. This policy should be reviewed and municipalities encouraged, as part of their Integrated Development Plans (IDPs), to designate and acquire land for peri-urban, mixed-use settlements. This would allow poor people to combine agriculture and housing near their working places. The task force, with guidance from DPLG, should develop IDP models and guidelines to guide municipalities in this.


  3. Restructuring the land market. The key problems are the unavailability of small parcels in the peri-urban land market, and the lack of incentives to dispose of under-used land. The reasons for this can be found in the difficulties in subdividing land and the regressive regime of land taxation in municipalities such as Mogale City. To address these issues, government should finally implement the 1998 repeal of the Subdivision of Agricultural Land Act (1970) (Subdivision Act) and, led by the Department of Provincial and Local Government (DPLG), develop guidelines for municipal property rates, which, at a minimum, should avoid the reinstatement of the highly regressive rates of 1939.


  4. Unifying planning processes. At present, two parallel processes are required to plan and implement housing development: Township Development and Environmental Impact Assessment (EIA). This wasteful duplication stifles the capacity of all actors and constrains the ability of poor people to acquire and develop land. There is considerable lack of clarity on how communities must go about establishing a township. In addition, the EIA involves too many steps, which leads to a lengthy process and discourages decision-making by officials. Merging these different legal procedures for all projects involving land and housing development in peri-urban areas into a single process is highly desirable, and would streamline and decentralize the approval of the EIA process.


  5. Designing a program for peri-urban areas. Currently, there is no program for mixed land use and housing for poor people who want to engage in “multiple livelihoods”. And the standards set for infrastructure and housing are often inappropriate. Constitutional guarantees for basic service delivery are interpreted to imply overly expensive infrastructure, which pushes low-income housing projects to remote locations, where land is cheap, to bring total costs down. Moreover, poor people are not able to use housing subsidies to build their own houses. Our recommendations include developing an integrated program that helps poor people acquire land, housing, and agricultural and other business support and finance. This would allow more affordable standards to promote mixed-use settlements in locations closer to work and commerce, and simplify housing standards, while including an option for subsidized own-construction of houses by the poor.


  6. Reengineering program implementations. Under the current setup, no single agency bears overall responsibility for the planning of land development and use. This uncertainty leads to lengthy and frustrating processes of land acquisition and development by municipalities and prospective beneficiaries. Decision-making is too centralized, which, for example, leaves the expertise of the organization’s lower levels underused. In addition, money flows into sectoral and program “silos”, making planning and financing an integrated village community an almost impossible task for municipalities and the poor. The intergovernmental relations unit of DPLG, together with the task force mentioned above, should clarify roles and responsibilities of different departments and levels of government and decentralize decision-making to the local level, following the subsidiarity2 principle. We also recommend that the National Treasury provide incentives for agencies to unify financing and access requirements.


  7. Freeing up and building capacity. The main constraint on building capacity seems to be the complexity of requirements. The uncertainty created by this complexity reduces the willingness and ability of officials to take action. In addition, there is a specific lack of legal and implementation capacity among public-sector lawyers and project managers. Inadequate involvement of non-governmental organizations (NGOs) and other private-sector providers to support community groups and municipalities further aggravates the capacity constraint. The development of clear guidelines and manuals is, therefore, urgently required. We also recommend that DPLG, with support from the South African Management Development Institute (SAMDI) and other relevant departments, design and implement capacity-building programs for public-sector lawyers and program managers. Municipalities should outsource more support functions to NGOs and other providers, and focus on monitoring activities. Finally, beneficiaries should get project preparation grants large enough to hire NGO and other expert support.
Footnotes:
  1. The term “black” in this case study refers to South Africans who are African, Indian or Colored (mixed race).
  2. The principle of devolving decisions to the lowest practical level.

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