Offer well-serviced land and title deeds

It is easy to find examples of destructive interventions by government officials on the incomes and opportunities of South Africans. One such egregious example was provided by a report in Business Times, “The law is killing SA’s small mines”, September 19.

The grave damage was to the alluvial diamond mining industry concentrated in the Northern Cape, which has largely collapsed. The appeal was to the regulators to lighten their heavy hand.

My sense is that this appeal is unlikely to get this or any other industry anywhere. The thriving business of regulators is to regulate. Their interest in the outcomes of their regulation seldom extends beyond their own interest in maintaining decent jobs and favourable lifestyles. Any sense of serving some greater national or community interest seems conspicuously absent.

It might have been more promising to have appealed to local politicians. If MPs were elected by locals, the devastation of a local economy would surely be a primary reelection issue. The regulations are written at the national level, where what happens on the ground is largely ignored, given the absence of constituency representation a grave weakness of our constitutional design.

But we do have municipal government with representatives elected locally in clearly defined wards. The actions of local governments have a powerful influence on the performance of local businesses and all those who depend on them for employment and income.

The better-off and the less well-off are all in the same economic boat. They sink or swim together.

The vulnerability to local misgovernment of those who have invested their hard-earned savings in their homes is particularly acute. And obvious when comparisons of the value of similarly sized or conveniently located homes across the land are compared. Cape Town and the Western Cape provide exceptions in the form of reasonably sustained home values.

The reasons for the loss of wealth invested in homes and business property in most SA municipalities and its preservation in the few exceptional cases are obvious. Property taxes and the charges levied for services by a municipality reduce the value of real estate. Supplying the essential services the roads, protection against fire and theft, water, and the removal of

sewage and waste at a reasonable relationship to their costs adds to their value. Their absence can destroy their usefulness and market values. Local politicians who ask for your votes should be held accountable for these outcomes.

It is not the size or quality of the buildings that accounts for the distinct regional or indeed international differences in market values. What differs markedly is the value of the land underneath the buildings. It is the development potential of the land, not very similar construction costs, that explains why real estate values are so much higher in New York or London than here. And higher in Cape Town than Durban. The better the local prospects for income and employment, the higher the rents buildings can command and the higher the new buildings likely to rise on the land.

Which raises its own issues about the affordability of convenient inner-city housing as values and rents rise with it. What can be done by a growing Cape Town about this affordability other than to subsidise the rentals of a young potentially upwardly mobile middle class, the teachers and government employees who should not be regarded as among our deprived?

The better answer is to make much more land available to be built on in a full variety of ways that would be responsive to income-related demands for accommodation. More construction activity and lower than otherwise rentals would be encouraged by sympatheticto-people zonings. And by financial support for developments that can be expected to pay for themselves with subsequent taxes and user charges. And for local government to make welllocated land especially publicly owned land available to the poor on a site and service basis, with full legal title to the land that they can fully realise whenever they choose to do so.

Such opportunities would be helpful to the poor and the businesses that depend on their labour which is best conveniently located close to work.