Billions of rand in new property development in South Africa is being held up or is at risk of being scuppered by various legislative delays or bureaucratic legislation – a situation the South African Property Owners Association (Sapoa) believes needs to be urgently addressed.
Billions of rand in new property development in South Africa is being held up or is at risk of being scuppered by various legislative delays or bureaucratic legislation – a situation the South African Property Owners Association (Sapoa) believes needs to be urgently addressed.
Sapoa chief executive officer Neil Gopal and the association’s President Estienne de Klerk briefed media on the issue at a lunch in Johannesburg this week.
Gopal said the country could not afford such delays, especially with pressing unemployment and lacklustre economic growth.
“We have voiced concerns about development bottlenecks before, which are often caused by legislative delays, ill considered legislation or those which have unintended consequences.
“This, together with an increasing complex regulatory environment, is restricting the growth of the commercial property sector in the country,” said Gopal.
He said two pieces of legislation that have recently been raised by Sapoa were section 60 of the Spatial Planning and Land Use Management Act of 2013 (SPLUMA) and the out-of-date Subdivision of Agricultural Land Act (SALA) of 1970 (Act No. 70 of 1970).
He explained that they raised concerns around SPLUMA with the Minister of Rural Development and Land Affairs, Gugile Nkwinti.
Sapoa sent a letter to the ministry in which they asked the minister to use the discretion given to him in terms of section 60 (2) (d) of the Act, which, if used, will remove some of the financial, economic and social effects that are currently being experienced by the commercial property sector in terms of development of properties, creation of jobs and poverty alleviation.
Essentially, SPLUMA replaces the Development Facilitation Act of 1995 (DFA). However, property development applications, appeals and other matters brought before municipalities and provincial appeals tribunals have been affected as a result of the transition to the new legislation. Section 60 of SPLUMA allows the Minister discretion to permit applications and appeals under the old DFA to continue under to new Act, he said.
“If the Minister does not use his discretionary powers in terms of this section of the Act, it could mean the many new property development applications would have to be launched again. This is unnecessary bureaucracy.”
Gopal said failure by the Minister to exercise the discretion referred to above, has a significant and negative impact on commercial property development.
In its letter to the Minister, Sapoa cited a sample of major property projects to highlight the prejudice the commercial property sector faced as a result of the disjuncture between the old and new legislation. The impact on job creation and potential rates payable to local authorities is significant.
Sapoa chief executive officer Neil Gopal said they have voiced concerns about development bottlenecks before, which are often caused by legislative delays, ill considered legislation or those which have unintended consequences.
The three mentioned projects alone totalled more than R12 billion. Sapoa said the three projects were not the only developments that would be affected by the failure to discharge the provisions of section 60 of SPLUMA.
Many projects nationwide could be affected, which could literally hold up developments worth billions of rand more, according to Gopal.
With regards to the dated Subdivision of Agricultural Land Act (SALA) of 1970 (Act No. 70 of 1970) legislation, Gopal said it was making it very difficult for agricultural land to be rezoned for commercial development.
“In fact, this piece of legislation was meant to have been repealed in 1997.
“It went through the repeal legislative process and was assented to by the acting president in 1998, but amazingly appears not to have been proclaimed for implementation by the President in the Government Gazette - this means that the Act of 1970 is still applicable and in force,” he explained.
In the interim, he said the government has published the Preservation and Development of Agricultural Land Policy.
While this policy has similarities to SALA, the land reform process is also set to impact on the policy. Sapoa awaits the outcome of the consultation process on the policy.
Gopal said the commercial property sector and related construction industry makes a significant contribution to the South African economy.
The sector’s role should not be underestimated and would be a key contributor to the country’s National Development Plan goals.
“We will be releasing a report on the economic contribution of the commercial property sector to the country’s GDP during the upcoming Sapoa Convention in Cape Town, which takes place from 10 to 12 June,” he added.
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