Free market, Free State
The Free State township of Tumahole is becoming a laboratory for what is being punted as an alternative to redistributive land reform – and it uses a neglected piece of late-apartheid law ( see box). up the R1 850 themselves to get their titles.
The project presses several political buttons.
For the FMF, it represents a model for land reform without redistribution from private white hands, or the attendant costs.
Instead, it could see municipal land – and ultimately traditional communal land – in South Africa converted into private property. FMF director Eustace Davie jokes that they will “get to traditional land” after they complete the conversion of the unknown millions of municipal leaseholds in South Africa.
For the Parys farming community, it is a way to mend their historically fraught relationship with the people living on and around their farms, Feldman points out. Khaya Lam is inspired by Peruvian economist Hernando de Soto’s influential and controversial “dead capital” theory.
This revolves around the economic potential of informal housing in South America, including Peru.
He led projects similar to FMF’s Khaya Lam initiative to give title deeds to dwellers in informal settlements.
The idea was that an explosion of economic activity would ensue once these properties entered the financial system as collateral for loans.
However, the evidence for these projects having a major effect of that nature has remained slim, but its proponents have found various other virtues in the approach.
According to Mpondo, the most common reason people come to her is not to transact with their properties, but to ensure their children’s inheritances.
Some can leverage their houses for student loans, home improvements or business funding, she told City Press.
The approximately 17 000 erven in Tumahole that could be transferred amount to “R2 billion” in dead capital, according to a recent article by Davie.
This assumes an average property value of about R120 000 being realised through a sale or debt.
According to Du Toit, a vacant Tumahole plot sells for about R4 000, but the developed part of the township has a varied property market with minimal RDP-type houses situated near large and elaborate ones.
Records at the Bloemfontein Deeds Office indicate that properties in Tumahole have been selling for up to R420 000 for 311m2 since 2013, but mostly under R100 000 for properties between 240m2 and 530m2.
A property that was seemingly transferred in the first tranche of Khaya Lam titles is currently on sale at a value of R25 000.
MY HOME Maria Modise (82) is one of the Tumahole residents who received a title deed