Project Deed For A Deed
The Apartheid spatial planning laws moved people around like they were pieces of a board game leaving a mess behind. Land reform and fixing this mess is also used as a political tool to win votes and make promises that are never kept. So how do we clean up this mess?
Most poor people disadvantaged by Apartheid still live in the same home they lived in under Apartheid, and 25 years into our Democracy still do not own their homes.
Most poor South African living in informal settlements are living on government land. It was National Party government land under Apartheid, and it is now ANC government land today. The same land, the same people.
Context & Understanding
Most people don't fully understand the problem of land in South Africa. The politicians distort the issues to suit their needs and the people involved have no real voice on the matter and no real power to change their situation.
Before we can fix any problem we need to first understand the problem and get to grips with the fundamentals of the issue, looking past all the noise and politics.
Decades Of Forced Squatting
Under Apartheid laws black land ownership only took place in peoples dreams. When Apartheid came to an end, many of the Apartheid formed settlements had been there for decades. The people were forced to live on the land but don't own it.
Generations of children were born and have grown up in these same homes. You would think under the new Democratic government we could change this. Unfortunately, the poor as the largest voting population has been kept poor deliberately, and do not own their homes today for political reasons.
The laws have been in place to solve this problem since the formation of our Democracy in 1994. However, the ANC does not want to lose control of the land and empower the poor, and in the process lose power and control of its poorer and larger voting base.
Under Permanent House Arrest
In the sub-burbs that middle-income family's call home, people can lock their doors and go on holiday, and with a degree of confidence know when they come back, their home is still their home. Worst case, a few things are stolen, but they will continue to be the legal owner of their home.
These same middle-income people can adapt and change when their life as their situation changes by selling their home and buying a new home in a new location. Relocating to be closer to work or schools is a normal family dynamic for middle-income families.
This security and flexibility provided by legal private property ownership, does not exist for the poor displaced by Apartheid. The poor could never, and today still do not own the land they live on.
If the poor Apartheid displaced people are not in their homes even for a short while, they could lose their space, and lose their home. The only proof they have that it is their space is by occupying the land creating their own personal jail.
The poor created under Apartheid were forced to live on land they did not want to live on and now can't leave or move.
Dead Land, Dead Capital
The land occupied by the poor is economically dead. It was dead land under Apartheid and is still dead land today. The people that live on it can't do anything with it because they don't legally own it, and the government can't do anything with it because of the people living on it.
A person that owns the land they live on will improve it, invest money to build, extend and look after it. Nobody will ever spend money on something they do not own, or they could lose at a moments notice.
The land the poor of South Africa lives on is by every definition living on Dead Capital. It has always been dead capital and will continue to be dead capital unless the situation is changed.
No Legacy, No Wealth Building
An average middle-income person will grow up in their parents home that they owned. One day when their parents pass on, they will inherit the home or money from the sale of the property. This is how generational wealth is built over time with each generation slowly and incrementally increasing and improving their lives.
Secure property ownership protected by law, protected by our constitution is the bedrock that all wealth is built on. The ability to pass on a legacy when you die and help build your children's future is fundamental to building a nation.
The only pathway for people out of poverty is through private property rights and incremental wealth building.
Economic and financial systems all function on a foundation of capital, and capital is the utilization of money.
If you would like to borrow money, you are utilizing the banks capital and promise to pay them back with a little bit extra. In this way, you can use the banks capital for your benefit. Additional to this promise to pay, banks need to know they can get their money back if you are not able to pay them back. The bank wants some form of security on their capital, and the most important type of security that can be used is your home.
If you have a home you own, you can borrow money against your home. This is referred to as being bankable. If you do not pay the bank back, you might lose your home as the bank sells it. If you don't have a home to offer as security, you are excluded from the financial market and are not bankable.
By the poor not owning their home's, they are excluded from accessing the modern financial markets that everybody else uses to improve their lives. They are trapped not able to move, not able to use any of the normal systems to improve their lives.
Not A Choice
This situation was not a choice. The victims of Apartheid spatial planning were forcibly moved onto the land they live on today but were not allowed to own the land and today still do not own the land. They did not choose this for themselves, they did not illegally occupy the land and are now asking for the government to just give them the land.
The people that live in Apartheid formed settlements did not choose this form themselves and are now trapped by the situation they find themselves, unable to change the situation.
The Biggest Land Owner
The single largest landowner in South Africa today by a very large margin is the Government. The single biggest beneficiary of the land policies of Apartheid was the South African government.
All land reform proposed by the government is about taking land from private citizens, mostly farmers. If we combined all privately owned farmland, it would not make up even a fraction of the land that is owned by the government and is not being used.
The ANC government uses the land issue as a political tool, telling the people there is a shortage of land when this is not true. A large amount of government-owned land today sits empty doing nothing.
The ANC government uses the land as an issue to stay in power and to stay in control of the people that are looking to them to fix the situation.
Land And Title
To own land, you require something called a Title Deed that states who the owner of a piece of land is and is registered at the Deeds Office. Only if a Title Deed is registered with the Deeds Office does it count, without this it's just an ordinary piece of paper.
Back when our new democracy was still very young, a law was passed allowing for government to give people the Title Deeds to the land they live on. In other words, transferring Title from the government to the people.
This law was created for the express purpose of giving Title Deeds to the people and addressing this exact problem. So everything is in place, there is nothing legally stopping South Africans from getting Title to the land they live on and changing their lives.
There is no need to change any laws or amend the constitution, everything is in place to rectify the wrongs of Apartheid spatial planning.
Normalising Home Ownership
If one of the major differences between different race groups under Apartheid was homeownership, then the answer is simple. To convert all council/government-owned land occupied during Apartheid spatial planning, to full ownership in the form of freehold title with no limitations to the people that currently live there.
This simple concept was presented as an idea by Leon Louw, a founding member of the Free Market Foundation. A non-profit organisation that promotes human rights, Democracy and a free and open society.
What About Land Invasions
Many might be weary about programs that involved the handing out of Title Deeds. Such a process could be viewed as incentivising illegal land invasions. There are however a few facts and processes that make this something that should not be a concern or something to hold people back from participating.
We are only talking about state-owned land, private property is unaffected. Additionally, the local municipality would need to consent to any Title Deed transfers. This allows for control around the process.
Patriot Democracy only promotes the Title Deeds transfer of municipal land occupied before 1994 and the end of Apartheid. This would negate any issues around Title Deed transfers acting as an incentive for illegal land invasions and focus on the real victims of Apartheid.
We would assume the ANC government would jump at the chance of helping the people and make the processing of handing out Title Deeds a priority.
The ANC has made many promises to do so, often around election time, but the number of Title Deeds handed out is insulting, with a small amount being processed and completed in the decades following the end of Apartheid.
Instead, the ANC has deliberately sabotaged all land reform processes in an effort to drive their Socialist agenda and the removal of all private property rights.
The ANC government wants to maintain control and power over the people and expand their power and control over the private sector of the economy.
Khaya Lam (My Home) Land Reform Project
The good news is that we don't need government, because if you have the money anyone can make an application to have the Title Deeds transferred and people can get their land. All that stands in most peoples way is the money and the fact that they just don't know because it has not been widely publicised.
Into the breach civil society has stepped in with the Free Market Foundation (FMF) creating the Khaya Lam Land Reform project, where donations are used to transfer Title Deeds and make poor people homeowners of their own homes.
The Heart Of Land Reform
We don't know how many homes we are dealing with in South Africa. The FMF estimates we may be dealing with approximately 5 to 7 million homes and this equates to approximately R1 Trillion Rand's of dead capital, impacting approximately 30% of the population.
Put another way, we talking about the poorest and most economically disadvantaged 30% of South Africa.
The Khaya Lam Project has been very successful, with thousands of homes transferred. They have proven it can be done, with or without governments support and is a worthy cause to support.
If we had to give 30% of South African's their own homes that should have been theirs from the start and injected that currently dead capital into the economy of this country, this country would be a different place in a very short time.
Victim Less Land Reform
The government was the biggest beneficiary of Apartheid land seizure, and today the government is still the largest landowner in South Africa. All the land we are talking about here where 30% of the population lives today is government-owned land and homes the people have lived in most of their lives.
If we had to give them the Title Deeds to their homes, there is nobody that is a victim, there is no need for any expropriation, and no compensation needs to be paid.
There are only benefits to this form of land reform. Dead land is unlocked, and the entire economy and country benefits. There are no victims, nobody is going to run to court to try to stop a transfer from taking place, and we help the poorest 30% of South Africa.
Let The People Fix Apartheid
The Free Mark Foundation's Khaya Lam project is great and they desire your support. However, they can't do it all on their own. If we going to fix the damage caused by Apartheid we need a system that allows the people of South Africa to all participate in land reform.
We need a system that allows ordinary South Africans to use their talents to help transfer as many Title Deeds as possible and as fast as possible.
The Funding Obstetrical
The single biggest obstetrical is the fact that the transfer of Title Deeds costs money and time of skilled people to process to give people Title to their homes.
We need a process and funding model where every year money is made available to fund a system where the people of South Africa can process and transfer Title Deeds, legally and timely without the need for government to do the work.
We need a system where any of the many law firms in South Africa today can take part by making land reform part of their business, with the large law firms feasibly able to create a dedicated full-time department.
The result would be privatising land reform, creating jobs and industry around land reform. Empowering the people of South Africa to fix the wrongs of Apartheid themselves.
The Khaya Lam project estimates that they can get a Title Deed transferred for R2,600. This value excludes a lot of people donating their time to investigate and coordinate. We estimate that R5,000 is a more realistic number if everyone's effort and time were taken into consideration. If the people involved are willing to donate their time this number can be reduced.
The Deeds Office
When homes are transferred, and new bonds are registered, they are registered at the Deeds Office. Looking only at publically available data we can see that transfers and bond registrations are reported quarterly and depending on the year and quarter we can see there are roughly 30,000 to 50,000 bonds registered and a total of 50,000 - 70,000 transfers recorded.
The numbers are then broken down into 5 value ranges for reporting on different market segments of less than R400,000, R400,000 to R800,000, R800,000 to R1.5M, R1.5M to R3M, and then lastly greater than R3M.
Deed For A Deed
What if we fund land reform through property transfers? There is already some taxes and fees attached to property transfers, and we would prefer to not negatively impact poor lower market segments. In this way, the people that have benefited the most from private property ownership can help those that have not.
Of all the ranges the most resilient is the R1.5m-R3 and R3M and above. What if we ask the middle to upper income to help fund land reform through a small land reform donation. To start, we don't think a percentage would be a good idea as this could have negative consequences on large transactions that business operates in and could affect employment.
We recommend starting with a flat R5,000 fee for every One Million Rand of property value transferred, starting with properties transfers of more than R1.5M and capped at R3 Million. This would translate to an R1.5 million rand transfer paying R5,000 land reform fees and R2 million transfer paying R10,000 land reform fees, and anything over R3 million paying R15,000 land reform fees.
This would equate to only 0.003% to 0.005% of the total transfer value, and we estimate could conservatively generate R275 Million to R350 Million per year.
The funds generated would not go to the government as a tax but back into the economy, as normal people and businesses would be able to use these funds to transfer Title Deeds by claiming compensation for work done.
In this way, a property sale of over R1.5 million would fund the transfer of one previously disadvantaged persons home, and a R3 Million property transfer would fund 3 Title Deeds.
Let The People Give
Taking it a step further, if a transfer is under the R1.5 million threshold, we should not stop South Africans from being able to participate. So on any property transfer regardless of size, a person should be able to voluntarily pay the R5000 land reform donation feed.
In this way, we do not exclude any South African from participating in working towards the nations shared goals and fixing the legacy of Apartheid.
The Land Reform Economy
We would then look to formalise the process by creating a Land Reform Property Title Transfer process. This process would be the same as a normal transfer, but with a few additional rules and requirements. For it to be a Land Reform Property Transfer the land must be state-owned, and the land needed to be occupied and settled on before 1994.
As money gets collected, it would be made available for people to make land reform property transfers and as part of the property transfer process, the people or companies involved would be paid a set fee.
So when the transfer process is complete, the lawyers, companies or people that did the investigation and processed the paperwork will get paid. In this way, we create an economy around land reform.
We can already see examples where an economy is created around a funding process, with the most similar example being the Road Accident Fund. In this way, people and companies are incentivised to find and help beneficiaries and will get paid for their efforts.
Deed for a Deed creates a system, whereby poor struggling South Africans, previously excluded by Apartheid can take charge of their own life. By Actively seeking out people that can help them transfer their property into their name and take ownership of their own home.
The people of South Africa do not need to wait for the government to save them from their troubles. People that can participate and help with land reform today with the processes path forward already existing.
Moving South Africa forward, together as one country where the people fix the wrongs of Apartheid, together.