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

Codes of Good Practice on Broad-Based Black Economic Empowerment

Amended Property Sector Code

2. The Challenges Facing the Property Sector
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2.1Immovable 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.

 

2.2Black 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.

 

2.3Consequently, 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.

 

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

 

2.5Black 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.

 

2.6Commercially, direct property ownership is dominated by institutional investors, large private owners, collective investment schemes, and listed property entities, with Government being the largest commercial player.

 

2.7The ownership of commercially driven activities surrounding property, including development, management and sales, rests largely in white hands. There is insufficient financing available to address the skewed patterns of ownership. This situation is exacerbated by legal and administrative obstacles to property ownership.

 

2.8There is limited participation of Black people, particularly women, in control that have authority and have power to influence the strategic & operational direction of the businesses in the property industry.

 

2.9Enterprises in the sector have not adequately addressed employment equity, with the result that the sector continues to be under-represented in terms of race and gender.

 

2.10There is limited investment and commitment in skills development and workplace training.

 

2.11At tertiary education level, property is inadequately supported as a profession, combined with a lack of appreciation of property as a career.

 

2.12 There has been some reasonable efforts by some companies to implement preferential procurement whilst some enterprises have not been able to demonstrate any progress in increasing spend on targeted suppliers or implementing appropriate preferential procurement policies.

 

2.13The sector has only recorded limited progress in the growth of sustainable enterprises through enterprise development support.

 

2.14There has been some reasonable efforts in investing in property development in under-resourced areas, with effort to address service inequalities and improve tradability of properties and consequently the wealth and capital creation potential of those properties. The investment must be defined broader than just development of retail shopping centres, and the aim is to allow the local community member to be the targeted beneficiaries of that development impacting ownership, control, management, employment equity and skill development; and

 

2.15When investments are made especially shopping centres, local people in those areas are sometimes excluded, including those who would like to participate as tenants.