Free mar­ket, Free State

CityPress - - Business - VAN RENS­BURG dewald.vrens­burg@city­

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

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