RDP Housing and the PreEmptive Clause A rights

RDP Housing and the Pre-Emptive Clause A rights perspective A discussion paper presented at the Free Market Foundation’s Conference on Land Expropriation without Compensation

! The RDP Plan

Introduction – the RDP Plan • • • An integrated plan People driven process Promote peace and security Nation building Integrated process Democratisation of South Africa Hogan Lovells | 3

Land Reform and Housing • Land Reform those who need but cannot afford those who had it but was taken away • Housing building low cost housing renovating existing buildings Hogan Lovells | 4

What went wrong? • • mismanagement of funds shoddy workmanship far from amenities Maintenance of the houses backlog to issuing of title deeds informal sales corruption in the Department of Housing Hogan Lovells | 5

The ecosystem solution • Social solution RDP House Individual entrepreneurship School subsidy for children Skills Development / Work Programme Hogan Lovells | 6

Solutions • Economists Solution Hogan Lovells | 7

Solutions • Engineering Solution Hogan Lovells | 8

Solutions • Finance - Pension Based Housing Loan Hogan Lovells | 9

Solutions • Governments Solution Housing Amendment Act 4 of 2001 Effective 1 February 2002 S 10 A and S 10 B of the Housing Act 107 of 1997 Hogan Lovells| 10

Section 10 A – Returns and Exchange Provision • may not sell or alienate the dwelling for a period of 8 years from the date on which the property was acquired, unless it is first offered to the relevant provincial housing department • endorse its records and applicant goes back onto the waiting list • provincial department will be deemed to be the owners • no purchase price is payable Hogan Lovells| 11

Section 10 A – Problems • Houses are still being sold • Sales are cash sales at less than the market value • No action taken against sellers or buyers Hogan Lovells| 12

Section 10 B – Impact on Estate • successor’s in title or by creditors must first offer to the provincial housing department at the same value of the housing subsidy • grant exemptions to these provisions Hogan Lovells| 13

Section 10 B – Problems • It is not an asset in one’s estate • It must be returned if an owner dies within the 8 years BUT at the same value of the subsidy. So heirs become homeless? • It can be sold in execution by a judgement creditor but only to the department of housing at the same value of the subsidy • If you divorce within 8 years, one party of that marriage is homeless as it does not form part of the joint estate. Hogan Lovells| 14

A legal perspective

Constitution S 9 – Equality S 10 – Dignity S 25 – Property S 26 – Housing Hogan Lovells| 16

A case study Endumeni Civic Association & others v Endumeni Local Municipality & others, February 2018 - applicants were a civic association assisting the poor with applications for RDP housing - The respondent manifested every single fault in the system – corruption, arbitrary allocation of houses, no clear procedures, lack of knowledge of government officials, lack of transparency Hogan Lovells| 17

Judgement Endumeni Civic Association & others v Endumeni Local Municipality & others, February 2018 - Implementation of RDP housing inherently violating the rights of applicants rights in terms S 1, S 9, S 10, S 25, S 26, S 33, S 41 and S 195 - It is unconstitutional and violates the rule of law - Violation of the Promotion of Administrative Justice Hogan Lovells| 18

Conclusion

Social Engineering? If 4 out of 10 people have retained their house then at least for 60% of the applicants, housing was not the need. Did RDP include the people in the plan formulating and decision making process? Hogan Lovells| 20

Empowerment and Transformation Sale of houses are indicative of a need for economic participation The pre-emptive clause created the illegal activity The poor remain poor Hogan Lovells| 21

Changing the narrative 1. Remove the pre-emptive clause – it serves no purpose. 2. Title all RDP houses - To owners who are occupiers - To owners who are landlords - To occupiers who have purchased the RDP house Hogan Lovells| 22

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