The South African Institute for Black Property Professionals (SAIBPP) is “gravely concerned” about the high costs associated with the continued hijacking of buildings in the country’s CBDs.
This act of criminality, it says, costs South Africans in many ways, one of which is the violation of “unknowing and desperate” tenants trying to find greener pastures in CBDs.
The hijackings also scare away would-be investors from the CBDs and force established businesses to move away, thereby leading to increased unemployment.
In a statement, the SAIBPP adds that these acts limit opportunities for previously disadvantaged property practitioners wanting to operate in the CBDs as funding institutions will be reluctant to provide funding towards inner city developments. Hijackings also increase decay, drug abuse, and elements of criminality in world-class cities like eThekwini, Ekurhuleni, Tshwane, and Johannesburg, among others.
“As SAIBPP, we view this act of criminality as a direct attack on the transformation agenda as it creates yet another barrier to already limited investment opportunities in inner-city property developments.”
The Institute states that its areas of contention are focused on the pillars of legislative reform, access to finance, spatial transformation and inclusive development, and property ownership and entrepreneurship.
Legislative reform
There are four issues that the SAIBPP highlights as needing attention. These include:
- Ownership
Hijackings entrench the lack of property ownership by black people in the inner cities. A review of the legislative framework is necessary as the requirements currently placed on municipalities to find alternative accommodation for people illegally occupying buildings encourage criminality and further limit the potential of black property practitioners wanting to own properties in the inner cities.
“Property hijackers abuse this legal loophole to illegally acquire buildings, and this reduces opportunities for honest, law-abiding players who are seeking ownership opportunities in the inner-city.”
This further causes vulnerable and unknowing tenants to rent from criminals who have no respect for the law. As such, the buildings are not compliant with the necessary safety, health, environment, risk and quality (SHERQ) requirements. The tenants residing in these buildings become casualties as seen in the recent unfortunate death of innocent people in Johannesburg, it says.
- Management control
The lack of property ownership means that black property practitioners are excluded from opportunities to manage properties in the inner-city, including rental administration, and asset and facilities management.
- Preferential procurement
“Our members continue to be marginalised as property development procurement opportunities continue to be taken up by a select few groupings of historically privileged players.”
- Skills development
Without ownership and management control of inner-city developments, the SAIBPP says opportunities to empower and train the next generation of black property practitioners to take over inner-city developments, will be missed.
Access to finance
No financial institution will be keen to fund a risky venture in the inner city, and so these building hijackings do not only affect SAIBPP’s members’ ability to secure funding and threaten the viability of projects but also affect the entire value chain including:
– municipalities through loss of revenue from rates and taxes
– professionals and consultants as there is no access to market opportunities
– construction companies through construction ‘mafias’
– property developers due to no stock in the inner cities.
In addition, should funding institutions decide to finance a development in the CBD, the Institution says this will attract higher interest rates on black property practitioners who are already financially stretched.
It adds: “There must be transparency in credit-granting practises and legislative interventions that compel credit grantors to be lenient to B-BBEE compliant black property practitioners once the requisite risk mitigation measures have been undertaken.”
Spatial transformation and inclusive development
The SAIBPP says building hijackings further push people out of the inner-city and force black people to live in the peripheries of the cities, hence incurring exorbitant travelling costs and time to places of work. Furthermore, a narrow focus on policies does not promote economic growth and revenue generation, at the expense of both environmental and social justice.
“Municipal by-laws pertaining to spatial planning and land development must have requirements, conditions, and procedures that require planning permissions and approvals for any land development applications to be granted contingent on meeting redistribution and social transformation criteria.
“Inner-city land use and building approvals must be subject to compliance with B-BBEE requirements and legislation to ensure the inclusion of black practitioners and black-owned businesses in the spatial planning and land development value chain.”
Property ownership and entrepreneurship
The SAIBPP notes that building hijackings not only stifle black property ownership and entrepreneurship in the CBD, but lack of security of tenure results in conflicting claims to the physical possession or control of the properties.
“One of the proposed solutions is that disposal of government property or land (particularly in the CBD) must prioritise B-BBEE participants and companies with majority black ownership, women, youth, and people with disabilities. Government, particularly municipalities, must adhere to supply chain processes specifically designed for the disposal and acquisition of property to fast-track black ownership and participation.”
Going forward
The Institute wants to see cities that work and are attractive for investment, and is willing and available to sit around the table with the municipalities to help craft a solution to this “economic and transformation sabotage”.
“We believe that a partnership and collaboration between public and private sector is necessary to find a sustainable solution to this rampant criminality, filth and unstructured business practises in our cities. Innocent people continue to perish and we call on law enforcement to act decisively against these kingpins.
“Furthermore, we call on municipalities to decisively and intentionally design programs that will see the release of their properties – buildings and land – to B-BBEE compliant black property practitioners, who will offer safe and compliant buildings to South Africans.”
This will not only lead to job creation in the CBD`s, but will also:
- Enhance the aesthetic of the inner cities
- Lead to increased work opportunities for the property sector value chain
- Generated much-needed municipal revenues
- Attract investors and more businesses willing to operate from the CBD`s.
“We are willing and available to assist authorities, particularly Municipalities, to unlock these properties – land and buildings, for economic growth.”
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