Opinionista Ivo Vegter 21 November 2012

Privatise the Western Cape’s shacks

More of the Western Cape’s poor live in shacks than anywhere else in the country, said the census, and ANC types are outraged. The response by the governing DA highlights a critical problem: land ownership.

Ivo Vegter

Ivo Vegter is a columnist and the author of Extreme Environment, a book on environmental exaggeration and how it harms emerging economies. He writes on this and many other matters, from the perspective of individual liberty and free markets.

The ANC, which rules everywhere except in Western Cape, is very upset about this annoying fact. So upset, that its youth wing has been threatening to undermine the provincial government by stoking popular protests. Without wishing to accuse anyone, such protests would be indistinguishable from the supposedly spontaneous kind that recently escalated into violent riots in a number of Western Cape farming communities. 

Meanwhile, the recently released Census 2011 is pouring data of variable quality onto journalists’ desks; numbers that this one has scarcely even begun to digest. However, critics of the Democratic Alliance, which runs the Western Cape, have latched onto one number that (unlike all the others) appears to prove a point about the inadequacy of the province’s government.

The point? That the DA constitutes a bunch of white supremacists that despises the poor and relegates them to squatter slums. Alternatively, that the DA is failing in its mandate to provide adequate services to the poor. Alternatively, that the DA’s prescriptions for economic development and poverty relief are failing miserably. But mostly just that they’re unreconstructed segregationist thugs if they’re white and subservient Uncle Toms if they’re black.

Of course, the rest of the numbers prove nothing of the sort, which suggests that the real reason for the griping is the inability of ANC cronies to get rich stealing public money intended to help the poor get a hand up out of poverty.

In particular, the census largely confirms the comprehensive statement the DA issued on 30 August 2012 to debunk opposition attacks, one of which takes the form of a poorly researched, poorly argued and poorly written diatribe issued by the ANC Youth League.

According to Business Day, 99% of Western Cape households have access to running water, 91% have access to refuse removal, and 97% have sanitation. This greatly exceeds national averages of 91%, 62% and 69%, respectively. Electricity provision, too, is on a par with Johannesburg, and higher than the rest of the country.

Comparisons with ANC-run provinces aren’t exactly flattering. In Eastern Cape, 22% of households have no access to running water, even outside their yard, compared to 1% in Western Cape. In Kwazulu-Natal and Limpopo, this runs to 14%, compared to a national average of 9%.

Of course, such comparisons aren’t exactly fair. For example, in Eastern Cape, the number of households that have electric light is only 75%, which is the lowest of all the provinces, and appears to compare unfavourably with Western Cape, which at 93% is in the lead. As galling as it is to be fair to the ANC in light of its vitriolic attacks whenever it sets its sights on the DA’s governance, one has to observe that the Eastern Cape number increased from 32% in 1996, while the Western Cape already boasted 85% by then. So, Eastern Cape’s improvement over 15 years is spectacular, even if conditions are still lagging the wealthier provinces.

Still, what the DA argues in its statement is true: “The 2012 Universal Household Access to Basic Services report, compiled by the Department of Co-operative Governance and Traditional Affairs, showed the City of Cape Town to be the best performing metropole in South Africa in every service delivery metric, delivering more to its poor residents than any other city in the country.”

Except for shacks.

The census found that 14% of Western Cape’s households occupy informal dwellings, compared to a 13.6% national average.

Acknowledging this problem during the presentation of the census results, Western Cape premier, DA leader Helen Zille, noted that the province’s population growth has been high, in part due to high levels of migration from other provinces. (Cue ANCYL heckling: “They’re not refugees!”) 

Her claim is correct. Total population growth in Western Cape between 1996 and 2011 was 47%, even higher than the number of 30% that Zille uses. This is second only to Gauteng, which recorded a massive 61% increase in population over the 15 years in question, compared to national population growth of 28% over the same period. 

A crude comparison of provincial population changes relative to the national average, weighted by provincial population but unadjusted for differences in provincial fertility rates, suggests that the reason Zille offers is also valid. The excess Western Cape population growth, as with Gauteng, indeed appears to be due to migration. The biggest losing provinces are Eastern Cape, followed by Kwazulu-Natal.

So, there appears to be merit in Zille’s defence that in providing formal housing, the Western Cape government was facing not just a legacy of shack-dwellers, but also rapidly rising population numbers.

However, in answering the charge that shacks remain a problem, Zille raised a far more important point.

She says that the Department of Public Works owns much of the land that ought to be available to her province (or the City of Cape Town) for housing development. A comprehensive register of state-owned land remains a pipe dream, but the department in question does control all state-owned land that isn’t explicitly owned by municipalities, provincial governments, or other national departments. In a recent presentation about its immovable assets, it reports that almost half of the property parcels it owns in major towns and cities stand vacant.

According to Zille, her government’s requests to Public Works to release this land for purposes of housing development have, to date, fallen on deaf ears.

She could go further with her critique, however. This would neatly differentiate her party’s economic policy from the national policy of state welfare. She could make the case that such land, as well as other state-owned land, ought to be “nationalised”, in the sense that ownership be transferred to “the people”, as the Freedom Charter demands.

When private individuals are able to own their land outright, they have an incentive to develop it. By contrast, if it remains state-owned, they cannot benefit from the capital at their disposal. Even when limited ownership transfers do take place under government programmes such as the RDP housing project, the onerous restrictions on selling or renting out such properties make them essentially useless as capital.

As I have pointed out before, the inability to own a house free and clear means that occupants of government or low-cost housing are essentially serfs living in feudal vassalage.

They can’t move to where work or higher wages can be found, because they will lose their homes. They can’t put their dwellings up as collateral for loans to invest in businesses, because banks cannot accept property they cannot sell in case of default. If shacks are built on land the tenants or their landlords do not own, private owners do not benefit from making long-term capital improvements. Shack owners will inevitably find greater returns for their limited income investing in business ventures, movable assets, education, or even clothing and food.

An acquaintance of mine who has much experience buying, renovating and selling residential and commercial properties once tried to help one of his employees – who had all the necessary skills – to build a decent house for himself and his family. He was astonished at the difficulty of obtaining the necessary title deeds and permissions for an inexpensive house in the so-called townships. Why, when there is such a dearth of housing, is it so hard for the poor to own property and build houses?

Granted, for the DA to make a bold political case to grant occupants of informal or low-cost housing free-hold title deeds to state-owned land is harder than fulminating energetically about petty-fascist, nanny-state ideals. But if poverty alleviation is the goal, this single policy could set a groundbreaking example of the power of private property and free markets for the rest of the country.

Even the otherwise prosperous Western Cape, which prides itself on being well-governed by an opposition party, appears to have a problem with how many of its people live in shacks. 

Privatise state-owned land. Let the people own the land on which their dwellings – however humble – are built. I’ll bet that a surprising number of the unsightly, crime-ridden and unhealthy shackland settlements will, without needing any further government intervention or expense, turn into thriving communities living in decent houses. DM


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