In Johannesburg, a stark divide in property fortunes has emerged. The affluent struggle to sell their homes, while the underprivileged grapple with a dire lack of affordable housing. Recent municipal evaluations and a dwindling market plague the wealthy, forcing them to accept lower offers. Meanwhile, impoverished individuals, including migrants from Zimbabwe, are pushed into squalid living conditions in abandoned buildings, as South African laws hinder eviction efforts. Andrew Kenny argues that the solution lies in revising property laws and addressing economic inequalities to bridge this stark divide.
Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.
Two worlds of property in Johannesburg
By Andrew Kenny*
There are two different property problems in Johannesburg. Some people just cannot sell their houses. Others just cannot find accommodation.
The first group is small and rich, the second large and poor. There was a terrible manifestation of the problems of the second group at the end of last month when 77 people, including 12 children, were roasted to death in a fire in a five-storey building in Albert Street in central Joburg.
I live in Cape Town near Fish Hoek but often go up to Joburg and stay with friends there. They all belong to the first group. One of them lives in a mansion in a posh walled estate just north of Midrand. His magnificent house has been on the market for years, with no takers so far, and hardly any interest. His estate agent told me that the property market up there is ‘dead’.
The ridiculously high recent municipal evaluations have helped to kill it, although it was dying anyway. Rich white people are fleeing from Joburg, some for foreign lands, some for Cape Town, and are desperate to sell their houses, accepting lower and lower offers – if they get any offers at all. Another friend is trying to sell the house in Craighall Park of her deceased father. The property’s size is just under 2,000 square metres, and the house has five bedrooms, a study, an outhouse, a double garage and a pool. The family put it on the market at R2.5 million. The only offer they have had was for R1.7 million. My tiny house in Cape Town has a property size of 420 square metres, a floor area of 73 square metres, a double garage and no pool. The council has given it a valuation of R1.8 million.
Meanwhile, as rich white people are pouring out of Joburg, poor black people are pouring in. They are not only coming from elsewhere in South Africa but from other African countries, especially Zimbabwe. They cannot find affordable accommodation anywhere. Some of them move into slums and squatter camps. Some of them move into derelict buildings in central Joburg, either abandoned by their owners or hijacked by criminals who seize them and then charge rents for desperate people to live in them. The buildings are filthy, pestilence-ridden, dirty and dangerous, often without plumbing or electricity, always lacking in safety systems. South African laws prevent the legal owners, often the local council, from evicting the criminals and trying to clean up the buildings. The building at 80 Albert Street, Marshalltown, was such a one.
The fact that Zimbabweans prefer living in these hellish conditions to returning to Zimbabwe shows you the depths of ruin that ZANU-PF under Robert Mugabe and Emmerson Mnangagwa has brought to that once prospering, well-fed and happy country.
When President Ramaphosa gives his warmest congratulations to President Mnangagwa for ‘winning’ his latest crooked election, he is doing no more than continuing the ANC’s shameful betrayal of the people of Zimbabwe, doing no more than helping the murderous ruling thugs to continue raping and pillaging the country. This causes millions of Zimbabweans to flee here, where the ANC regards them with scorn and wants to send them back to suffer more.
Many Zimbabweans died in the inferno at 80 Albert Street, and many of our local politicians are using the tragedy not to sympathise with them but to increase their xenophobic campaign against them, which they believe, probably correctly, will help them win votes in the 2024 election.
What’s to be done? There are two things: first, change the wretched laws that prevent property owners from evicting invaders; second, bring together the two worlds of the rich and the poor.
I understand that the purpose of laws such as the 1998 Act ‘To provide for the prohibition of unlawful eviction’ was to prevent labourers’ families who had been living on farms for decades from being summarily evicted. That is right and necessary. I have seen this for myself in a smallholding near Blue Hills in Midrand where a very decent, law-abiding, hard-working black family who had been living on the property for a long time was nearly kicked off it by some whites who had just moved in.
But that is quite a different matter from evicting a gang of criminals who yesterday invaded a neglected building or a piece of land set aside for development (of, say, a school, a hospital or low-cost housing).
Recently in Cape Town the courts ruled that the city was not allowed to evict invaders of just such property. In 2011, the Constitutional Court ruled that if the City of Joburg cannot provide temporary emergency accommodation for illegal occupants of a building, they cannot be evicted. So, if you go on holiday, and come back to find your house taken over by invaders, you cannot evict them unless you find alternative accommodation for them.
This is absurd and ruinous for property rights. The law should be changed and simplified so that you could evict any unlawful occupier who had lived on your property for less than a year, without being obliged to help him in any way. I’m not sure about ‘less than a year’ but I’m sure a reasonable period could be decided upon.
But what about the homeless? Well, this would help them since it would strengthen property rights and encourage more private individuals and local councils to develop property for renting, including low-cost renting. It would reduce homelessness.
The second step, bringing together the two worlds of the rich and the poor, is a bigger one but a complementary one, and also requires the changing of laws or the scrapping of laws. When there is massive inequality, a massive gap between the rich and the poor, this is always caused by bad government.
I don’t believe South Africa, as is often claimed, is the most unequal society on Earth but it is certainly very unequal. The inequality has been caused by laws, first the horrid laws of apartheid and then the horrid laws of the ANC. There was dramatic improvement in South Africa simply by scrapping the worst apartheid laws, such as the Pass Laws, job reservation, group areas and population registration.
There could be another dramatic improvement simply by scrapping the ANC’s laws that prevent the poor from entering the economy and that have increased to catastrophic levels our unemployment, cited over and over again as the primary reason for our poverty and inequality. The reason people are forced to live in shacks or in hijacked buildings is because they have not got jobs and so cannot afford decent accommodation. So scrap the laws that stop them getting jobs.
Scrap the job-destroying labour laws and the job-destroying minimum wage and the iniquitous bargaining councils that prevent the poor from entering the formal economy. The labour laws are so restrictive and so dangerous for employers that only the rich can afford to give anyone jobs. The same is true of the minimum wage. Under the bargaining councils, in every sector of the economy the rich, powerful fat cats of big business and the big trade unions come together and fix labour conditions for everybody else in the sector.
Under Section 32 of the Labour Relations Act, this rich cartel can then order the Minister of Labour – order not advise – to impose these conditions on everybody else in the sector. Poor businessmen, which usually means black businessmen, cannot afford these conditions and so cannot start businesses and employ people, and cannot provide goods cheaply enough for poor people to afford.
Without these wicked laws, a small black businessman could start up a little factory in a township making warm clothing and bedding, employing people at R3,000 a month so that they could earn enough to feed their families, and making jerseys and blankets that poor people could afford. These laws stop that. He is not allowed to pay R3,000 a month. So his factory goes bust. His potential worker loses the job, and goes hungry and homeless. And there are no goods cheap enough for poor people to buy. We must get rid of these damnable laws.
Impoverish the majority
We must also get rid of all laws of racial preferment, which includes BEE, employment equity, affirmative action, transformation and cadre deployment. All these laws do is impoverish the majority of poor black people while enriching a tiny elite of ANC cronies.
Look around the world to see the obvious truth of what I am saying – or rather of what I am repeating, that other better, more original minds than mine have said. I believe North Korea is even more unequal than South Africa. There Kim Jong Un and his high caste cronies live in the capital in sumptuous luxury, rich beyond belief, while in the countryside ordinary people starve and die. This is entirely because of the laws of Communist North Korea, which prevent ordinary people from entering the cities and prevent any sort of free trade or free enterprise. In South Korea, the people are free to trade and do business as they please; the result is a prosperous country with quite low inequality.
The most spectacular free enterprise the world has ever seen happened in Communist China. It resulted in the most spectacular eradication of poverty the world has ever seen. It was caused not by any action from the communist government but by studied inaction. In the 1980s the great Deng Xiaoping transformed the Chinese economy simply by withdrawing all government interference from certain sectors and allowing the farmers to farm as they wished and the workers and businessmen to work as they wished.
No stupid labour laws, or minimum wages, or preferment except on merit. The Chinese economy soared and is now the second biggest in the world. Unfortunately, the Communist Party clung to political power and ran an enormous and highly incompetent state sector, which explains the present economic problems of China.
The model for SA
But there’s the model for South Africa: the ANC must scrap its poverty-making laws and just leave the economy alone for all people, black and white to trade and do business as they please. Then we shall see our economy grow and unemployment shrink and people get proper accommodation.
If the ANC carries on as it has been doing for the last 29 years, the economy will collapse further, unemployment will grow, homelessness will spread, and another inferno will burn people to death in a crumbling, rat-infested building in one of our disintegrating cities.
- The decline of Johannesburg: Why Africa’s richest city is crumbling
- Premium – RW Johnson: Sans gold, Joburg a world-class city NOT, facing inevitable decline
- Explosion rocks Johannesburg CBD: One fatality, over 40 injured as investigations underway
*Andrew Kenny is a writer, an engineer and a classical liberal.
This article was first published by Daily Friend and is republished with permission