The question of property rights in South Africa

15 March 2024

Private property rights are unevenly applied in South Africa. In 1913, black South Africans were denied freehold titles across most of the country following the adoption of the Native Land Act in 1913. After the National Party rose to power in 1948, non-white South Africans saw their property rights further eroded by pernicious legislation such as the Group Areas Act of 1950, which resulted in large-scale forced removals of millions from designated “white” areas.

Many black South Africans were forcibly “resettled” in the rural “homelands’ or “reserves”, and, when allowed to be present for work purposes near “white” economic centers, had to live in peripheral townships as tenants of the municipality. Here and in the homelands, most ordinary black South Africans were denied the right of ownership.

However, even the military might of the apartheid state could not resist the wave of (officially illegal) black urbanization during the 1970s and 1980s, forming what the late John Kane-Berman described as a “silent revolution” against apartheid policies.

As apartheid became impossible to enforce, many race-based laws were repealed in the 1980s, well before the formal transition to democracy began with the unbanning of the African National Congress (ANC) and other black political organizations in 1990.

Significantly, in 1991, the National Party government of President F.W. de Klerk passed the Upgrading of Land Tenure Act. With the stroke of a legislative pen, the state transferred ownership from municipalities to the tenants who had lived in houses they built for themselves and their families for generations. While formally owners today, many of these residents still have not received their title deeds and, therefore, cannot prove their ownership status.

In the contemporary democratic era, property rights enjoy protection under section 25 of the South African Constitution. However, these provisions are under increased political pressure, with the ANC government seeking to undermine private ownership through the proposed expropriation without compensation policy. Legislation currently before the South African Parliament would grant the government extraordinary powers to confiscate fixed property for “nil” compensation under a wide range of circumstances, once again threatening to undermine private property rights in South Africa.

Since its inception in 1975, the Free Market Foundation (FMF) has remained committed to not only upholding the private property rights of existing property owners but also to extend property rights to all people in South Africa, regardless of their race or background.

As part of this commitment, in 2010, the FMF initiated the Khaya Lam project—meaning ‘Our Home’ in isiZulu—to help guarantee the property rights of municipal tenants across the country. Through the tireless efforts of the (now late) Perry Feldman and others, the first 100 title deeds were successfully transferred in 2013, a full century after the Native Land Act of 1913 was signed into law.

Since then, the Khaya Lam project has grown in scale and reach. Last year, we recorded a significant milestone of 10,000 title deeds successfully transferred to their rightful owners since the inception of the project. More than 3,000 of these were transferred in 2022 alone, and we are on track to achieve similar numbers in 2023.

The FMF could not have achieved this major milestone without the ongoing support of donors, conveyancers, municipalities, and other project partners who share our commitment to advancing private ownership in South Africa. The FMF is motivated not by a sense of charity but by our core belief in the transformative power of private ownership. There are many benefits to property rights.

Firstly, private property rights make economic sense. Consider the difference between renting and buying a property. Owners tend to invest in maintaining and improving their property, while renters have less incentive to make their property better and to invest in its future.  Without private property, economies experience the so-called tragedy of the commons. In medieval Europe, those who grazed their livestock on common land tended to let their animals roam free, since they did not bear the costs of the commons being overgrazed.

When a property is owned privately, and not collectively, a farmer has an interest in preserving his fields by not overgrazing. Instead, he might prefer to cordon off his land and rotate the grazing to allow time for the grass to grow back. Without the right to enforce the boundary of his property, the farmer’s ability to enhance his economic productivity becomes severely limited.

Many critics of private property believe that private ownership only benefits wealthy landowners. However, low-income groups are typically more vulnerable to harassment by state authorities and have fewer means to secure their properties against criminal land invaders. The Industrial Revolution saw ownership extended from the wealthy upper classes to everyone, which is what ultimately heralded the explosion in prosperity the world has seen. Ownership benefits the impoverished significantly. In addition to the economic benefits of ownership, there is also the moral aspect.

Simply put, can you be considered a fully free person without the right to own private property? The answer is “no.” Without the right to own, you exist apart from the world rather than in it. In various successful societies, when ordinary people started owning land, they became a check on government power and the power of other elites. Without assets and land, civil society is made of straw. It is for this reason that property rights are the cornerstone of the liberal tradition, but also of democracy itself.

It is these values that form the basis of the FMF’s work with the Khaya Lam project. We are driven by the belief that all South Africans—and those across the continent—deserve to have their private property rights recognized and protected, whether they live in townships or suburbs. After all, property rights are human rights.

David Ansara is the Chief Executive Officer of the Free Market Foundation.

This article was first published by The Freedom African magazine in March 2024 (Issue 1. 2024)