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Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Codes of Good Practice on Broad-Based Black Economic Empowerment

Property Sector Charter

2. The Challenges Facing the Property Sector

 

 

(2.1) Immovable property ("property'') ownership and the complex system that has evolved around it is the foundation of wealth creation in the world today. Historically, property has been viewed as a right. In South Africa, however, black people were denied access to productive land through the Native Land Act, 27 of 1913, and subsequent discriminatory policy and legislation.

 

(2.2) Black people could not own property nor could they effectively trade in the same. In many cases land was held by the Government in trust for the various tribes, which precluded people living on tribal land from obtaining title deeds. These laws affected the ability of black people to create or accumulate wealth.

 

(2.3) Consequently, significant numbers of South Africans have never in the history of their families experienced formal property ownership and its wealth creation benefits. This has had a fundamental impact on the economic potential of South Africa and black people in particular.

 

(2.4) Despite legislative and policy interventions to eradicate these inequalities, in practice skewed patterns of ownership, participation and benefit remain.

 

(2.5) Black people continue to be significantly under-represented in the ownership of property, whilst administrative, and financial constraints restrict the ability of black people to participate in the property market.

 

(2.6) Commercially, direct property ownership is dominated by institutional investors, large private owners, collective investment schemes, property loan stocks and listed property entities, with Government being the largest commercial player. There is limited participation of black people, particularly women, in ownership and control of these entities. The ownership of commercially driven activities surrounding property, including development, management and sales, rests largely in white hands.

 

(2.7) Enterprises in the sector have inadequately addressed employment equity, with the result that the sector continues to be under-represented in terms of race and gender.

 

(2.8) There is little investment in skills development and limited commitment to workplace training.

 

(2.9) At tertiary education level, property is inadequately supported as a profession, combined with a lack of appreciation of property as a career.

 

(2.10) Preferential procurement has been implemented insufficiently with few enterprises being able to demonstrate any progress in increasing spend from targeted suppliers or implementing preferential procurement policies.

 

(2.11) The sector has not effectively addressed gender equality and black women are particularly under-represented in ownership, control, management and in professional skills in the sector.

 

(2.12) The sector does little to promote the growth of sustainable enterprises and there is almost no enterprise development support.

 

(2.13) There is a lack of investment and property development in under-resourced areas, perpetuating service inequalities, exacerbating the limited tradability of these properties and consequently the wealth and capital creation potential of properties. When investments are made especially shopping centres, local people in those areas are excluded, including those who would like to participate as tenants.

 

(2.14) There is insufficient financing available to address the skewed patterns of ownership. This situation is exacerbated by legal and administrative obstacles to property ownership.