Inner-city property owners slam Expropriation Act for hijacked buildings as a farce

President Cyril Ramaphosa and the Department of Human Settlements (DHS) earlier this week called for the Expropriation Act to be used to take control of abandoned and hijacked buildings in South Africa's inner cities, with the goal of transforming them into affordable housing. 

However, private owners who have been battling for years to get their buildings back from criminal syndicates, have slammed back saying government should rather be assisting them to get their buildings back to restore the inner cities.

Speaking to the team at Independent Media Property, they say they feel stuck between the government wanting to expropriate buildings and the criminal hijacking syndicates. Either way they feel that they will lose their buildings.

"If the government feels they are able to rid buildings of hijackers, how come then is it so difficult for rightful owners to do so with all legal means?" asked one of the owners.

While the Expropriation Act could be used on the many government-owned buildings that have been left derelict or hijacked, this could also be extended to derelict and hijacked privately owned properties, abandoned by their legal owners, or owned by so-called "slumlords", or that have been hijacked by crime syndicates.

However, some property owners assert that while there are known slumlords, they are not but that they are instead victims of hijacking syndicates.

Hijacking of buildings is big business throughout South Africa, with both privately and government-owned buildings taken over by criminal syndicates.

It is estimated these criminal syndicates have hijacked about 5000 government and privately owned buildings throughout the country and that they run the buildings as cash businesses raking in billions of rands a month, none of which is taxed.

They allegedly do no maintenance but take rentals from occupants diverting the money away from the owners. Owners are unable to gain access and keep up the buildings but are forced to pay rates and taxes to keep the buildings running. This means "that hijackers enjoy the buildings with zero costs to themselves and get the income".

These syndicates operate in inner city areas of Johannesburg, Pretoria, Durban, Gqeberha, East London, some areas in Cape Town, among others. Johannesburg CBD for instance has 1,100 buildings hijacked and numerous buildings have been hijacked in the Durban CBD and also on the Esplanade.

Owners say they have been fighting for years to legally reclaim their properties while facing intimidation and consistent death threats from criminal groups and now facing government initiatives aimed at repurposing the hijacked structures.

They believe that should these buildings be expropriated the problem will not be solved.

"All it will result in is that hijackers will then stay with impunity in government-owned buildings, evident from the buildings which government currently owns and has allowed to become derelict and hijacked."

They believe this to be true because, in terms of the PIE Act that prevent illegal evictions, the government/municipality is obliged to find alternative accommodation for the hijackers, but has consistently apparently told these property owners there is no such alternative accommodation available.

Hijacked buildings have a number of negative impacts on communities: they lead to increased crime, decreased property values and a decline in the quality of life for residents. They also have the risk of potential loss of life as they can be a fire hazard, often lacking basic safety features and can be a breeding ground for disease as the lack of sanitation and running water can lead to the spread of waterborne diseases such as cholera and typhoid. 

Earlier this week members of the executive council (MECs) for Human Settlements, metropolitan mayors and members of the mayoral committees (MMCs) were urged to take advantage of the Expropriation Act to take over abandoned and hijacked inner-city buildings and repurpose them for affordable housing.

Addressing her first meeting with MECs (MINMEC) held in the City of Cape Town on Tuesday, Thembi Simelane, the Minister of the Department of Human Settlements (DHS), said as government leaders they have a constitutional obligation to redress the pre-1994 spatial plan.

“We must redress spatial inequalities caused by separatist planning of apartheid development and colonialism. This is an ugly legacy we have inherited, a legacy we cannot afford to pass on to the next generation,” Simelane said.

Sihle Zikalala, the Deputy Minister of Public Works and Infrastructure (DPWI), also said hijacked buildings, particularly in the Johannesburg CBD, should be expropriated without compensation.

While they were referring to government-owned hijacked buildings, this apparently could also extend to privately owned ones where the owner has abandoned the building or is in hiding, despite many of these owners being in hiding because they fear for their lives and are being extorted and intimidated by the hijacking syndicates.

Zikalala said reclaiming abandoned and hijacked buildings is crucial for restoring, for instance, the Johannesburg CBD to its former glory. “These types of buildings are hijacked, and others are vandalised. They pose a significant risk to the public. We cannot continue paying for buildings that are a danger to citizens. Therefore, these properties should be expropriated without compensation.”

Meanwhile some owners assert this action would in fact not enhance the CBD but only make it worse. Instead of expropriating privately owned buildings the government should use the numerous facilities such as policing and the legal system, which it has available to it, to restore these buildings to the rightful owners, they told the team at Independent Media Property.

"This ploy of trying to expropriate these buildings in fact will leave hijackers there and never eradicate the problem of hijacked buildings and only exacerbate the problem leading to more buildings getting hijacked. Instead of restoring the CBD, it will only deteriorate more," one owner told the team at Independent Media's Property Hub.

Meanwhile as the government pushes for a "spatial plan reflective of a democratic South Africa," the Human Settlements sector has approved a Medium-Term Development Plan (MTDP) for 2024-2029, aiming to deliver 237,000 housing units and 100,000 affordable housing units among other.

The MINMEC also unanimously agreed that collaboration is at the centre of the successful implementation of the human settlement programmes and that at least 70% of the budget should be used towards the implementation of the MTDP.

Simelane  pleaded and called on provinces not to start new projects but to finish those which are already being implemented. In doing this, she emphasised that spheres of government must keep the community informed.

She acknowledged that informing individuals who have been on the National Housing Needs Register (NHNR) for a while, might not take kindly on a direction to prioritise and finish old projects, ultimately freezing on new projects. 

“Due to budget constraints, tough decisions must be made. We must do more with less. We will move swiftly to unblock stalled projects to deliver more houses. Social facilitation is key to ensure communities work with us to deliver on what we have committed,” Simelane said. 

Professor François Viruly, an associate professor and director of the Urban Real Estate Research Unit(URERI) in the University of Cape Town(UCT) told this publication that the property sector relies on the strength of municipalities to prosper and it is hence critical that municipalities should receive the necessary funding for infrastructure expenditure.   

He said the state has delivered the white paper on human settlements. “It is critical that the department of Human Settlements is appropriately funded. This should include the expenditure on infrastructure required for the sector to grow. The property sector is showing subdued growth with households finding it difficult to afford new homes . It is important that the budget should consider higher values for the trigger at what transfer duties are payable,” Viruly said. 

In its previous budget vote, DHS made an undertaking to prioritise projects that were blocked, thus denying qualifying beneficiaries access to housing. The department said it availed funds for this special project. “Out of the 3 445 projects that were reported by provinces as blocked, we have managed to unblock and complete 3 150 of those projects.” 

Prior to meeting with MECs, Simelane visited the Conradie Park Integrated Development Project. Conradie Park is a catalytic residential project that caters for mixed-income residents. It includes open market, grant-funded social housing, and First Home Finance units. It is expected to yield 3 500 residential units of which 1 715 of them will be allocated to the Social Housing Programme and First Home Finance.

Earlier this year, DHS Ministerial spokesperson Tsekiso Machike told Independent Media Property that in an endeavour to increase the housing stock, crowding in private sector investment and improving accessibility to affordable housing opportunities, the Department in collaboration with social housing institutions (private sector), the sector delivered 3 066 social housing units for the 2023/24 financial year.

He said that again, the Department has joined efforts with the Infrastructure Fund to create a portfolio of blended finance social housing projects to mobilise private sector participation in the sector. “The NHFC continues to lead our efforts in waging the battle against unaffordable housing – especially for the gap market through its First Home Finance offering.” 

Independent Media Property