SA is in a critical stage of economic renewal

THE POTENTIAL that land holds to unlock the future of the individuals who own it – whether outright or as a form of bonded security – is perhaps the only aspect that we can all unequivocally agree on in the present fraught debate on land expropriation.

Away from the political debate and economic philosophising, the estate agency industry, already under pressure to develop more black agents, now must face this new, seemingly overwhelming obstacle to their very livelihoods after the ANC’s recent decision to formally propose an amendment to the Constitution.

While commentators and analysts are confident that this is unlikely to take place immediately, there is a more imminent legislative threat to the industry on our horizon.

The industry employs more than 50 000 estate agents in South Africa (excluding administration and support staff). With his appointment as South Africa’s fifth president in our new democracy, Cyril Ramaphosa brought with him renewed confidence in the country’s economy and room for meaningful growth in this sector, particularly in creating a significant number of new jobs for young, talented and enthusiastic prospective black estate agents.

But this is unlikely to happen now. Compounding potential expropriation and the pre-existing squeeze the industry already faces, the Property Practitioners’ Bill that is currently under consideration by the Human Settlements’ Committee in Parliament is likely to quash any remaining hope of this realisation.

The current Estate Agency Affairs Board (EAAB) is responsible for maintaining a certain standard in the regulation of the business of estate agents and issuing Fidelity Fund certificates required to carry out the activities of an estate agent. Its vision is of a transformed, professional and well-regulated real estate sector.

But this is a flailing organisation that has not reached any of its transformation targets, and has been unable to stop thousands of individuals passing themselves off as estate agents. While some industrious and well-intentioned staffers certainly do good work, the EAAB is an over-resourced, grossly under-performing organisation in need of an overhaul.

And in our current economic climate with headlines screaming of job losses, we need focused and decisive delivery on transformation endeavours. We don’t need more summits for jobs, we need more support for the existing structures and industry efforts in place if we’re to enjoy any realisation of the promises that have been made to us.

Simply replacing the board – as the recommendation in the bill states – with a new, more costly body, and increasing its jurisdiction expecting it to regulate many more thousands of people is no guarantee of a better outcome for the industry, consumers and society at large.

We will simply be replacing a dysfunctional body that is already managed, partfunded and overseen by the government with a new body that is managed, partfunded, and overseen by the government, and imposed upon vitally unstable foundations. The focus should rather be on moving the industry forward towards more equitable representation and meaningful involvement, and not funding even more expensive mistakes.

More of the same?

At best, this is a recipe for more of the same and, at worst, the speedy destruction of the industry’s nascent potential.

Prudent management is critical if the industry is to achieve its transformation targets and sustainably transform. It costs approximately R100 000 over the year required to train and equip a young black intern to confidently run his or her own practice.

The sorts of skills transferred over a year-long internship include the establishment and management of a business through a business and marketing plan; analysis of the legislative and contractual environment and requirements; and ethical conduct. These practical competencies are central to the operations of an estate agent – and more broadly for any entrepreneur aspiring to grow both their own opportunities, and those in our wider economy.

Based on conservative estimates, a trimmed down and re-focused industry body could save a potential R40 to R50 million annually – a considerable sum, certainly much better spent on programmes aimed at the developing opportunities for unemployed young people – and could translate into an additional 500 qualified young black estate agents every year.

Estate agencies across the country, large and small, are eager to invest in growing the next generation of estate agents, but fundamentally require the confidence that an enabling environment in which these transformative endeavours can flourish will be cultivated, not destroyed.

At this critical stage of our vital economic renewal, the government should be creating a business environment in which employment opportunities can flourish. With an increasing national unemployment rate of 27.2 percent in the second quarter, and one in every three people between 15 to 34 years without a job in the first quarter, it is clear that this crisis requires more than continued padding of statutory bodies.

Truly sustainable, meaningful and transformed economic participation of young black entrepreneurs can only be properly achieved if the industry is allowed the space to fully, freely and confidently grow, and this must start with the legislative framework guiding the industry’s realities.