Human Settlements and Urban Land Reform

This brief summarizes the findings of a recently completed HSF study on human settlements in urban areas.
Human Settlements and Urban Land Reform

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Introduction: the extent of urbanization

Land reform is often thought of as a rural and agricultural issue. However, urban land reform potentially affects many more people, especially because the urban transition is nearer completion than is generally realized. Estimates of the urbanization rate are usually based on the proportion of people classified ‘urban’ by Statistics South Africa, but this definition excludes urban populations in areas under the control of traditional authorities. In traditional areas, examination of cadastral and land use maps reveals both demarcation of urban erven and areas of dense settlement without formal demarcation of sites. In order to estimate the urban population in traditional areas, one has to use proxy measures of urbanization, such as the municipal supply of water, the regular removal of refuse, the delivery of mail to individual dwellings and the absence of agricultural activity to determine whether households are living in such areas. On this basis, the urbanization rate in traditional areas is estimated to be above 60% currently, and the urbanization rate in the country as a whole at above 80%. It would be preferable for Statistics South Africa to use a consistent definition of ‘urban’ throughout the country to improve the precision of this estimate, and to lay the foundation for a fuller understanding of urban settlements in traditional areas.

The key factors shaping the development of human settlements

Even so, the urban transition continues and the growth rate of urban areas is above the population growth rate. The rural population is not only declining as a proportion of the population as a whole. It is declining in absolute terms, which means that availability of rural land will not be the constraint on rural land reform. Instead, the constraints on rural land reform will be the speed at which policy and institutions can be developed, and the extent to which the state can support farmers financially.

Within the urban population, there was an increased concentration of people in the metropolitan municipalities between 2011 and 2016, and this trend can be expected to continue. The urban population outside the metros is growing more slowly, and in about a third of municipalities, urban populations declined in absolute terms between 2011 and 2016, as people move away from parts of the platteland and traditional areas. In terms of human settlement development then, the heat is principally on the metros and the number of households within them may increase by as much as 70% between 2011 and 2030.

Currently, this demographic pressure is made difficult to manage by very low economic growth. The potential economic growth rate (the ‘speed limit’ for the economy in the medium term) is currently less than 2% and the International Monetary Fund expects this situation to continue until at least 2023. It follows that the fiscal envelope will continue to be tight and that, in particular, the government will not be able to provide Breaking New Ground houses[1] at a rate to meet new household formation. Current production is less than a third of new household formation. The result is the lengthening of already long queues for BNG housing.

Policy response

It is therefore not surprising that Gauteng, the province under greatest pressure, is considering rapid land release for the development of serviced sites, on which households can build for themselves. This will mean incremental housing, historically resisted in urban areas outside areas under traditional authority jurisdiction. Apartheid policy ran counter to incremental housing outside traditional areas, although it had to be accommodated from the late 1970s onward. Now, incremental housing is resisted by beneficiaries (who want BNG houses) and existing urban dwellers who fear the impact of incremental housing near to them. But more incremental housing in urban areas is inevitable, with people extending and improving their dwellings over time. The only question is whether it will be orderly or disorderly. Disorderly development will lead to sub-optimal location, higher service costs down the line and unnecessary social conflict. The first thing which needs to be done is to improve the capacity for land assembly (the acquisition of land, whether from the public or private sector, on which serviced sites can be developed and connected up to bulk infrastructure). The second is to allow private developers to create the sites and services. The role of government should be to develop policy, regulate and provide financial support. No human settlements policy will succeed unless it mobilizes fully household and private sector contributions.

It should be borne in mind that government policy is to promote densification in existing urban areas to accommodate population growth. However, human settlements policy does little to incentivize and support densification, outside a limited number of ‘catalytic’ areas. Possible new initiatives include the waiving of registration fees for residential property subdivisions. The City of Johannesburg is considering a measure that will require developers of more than ten dwelling units to provide 20% of units for rental to households earning less than R 7 000 per month. Social housing (for which there is a massive unmet demand) can be provided through conversion of existing buildings. There are also measures which can improve the situation of people who are unsatisfactorily housed, such as the provision of more services, and building inspection to improve safety and protect tenants against structurally deficient housing.


One can distinguish between two approaches to land reform. The first focuses heavily on land ownership and its distribution by race. Such a model risks confontation, damage to an already fragile economy and, worst of all, disappointment, in that a change in ownership on its own will fail to produce much improvement in people’s lives. The alternative approach, and the one that the HSF advocates, is to develop policies, institutions and government financial support in order to deliver land in a form which is useful to people both in urban and rural areas. In so far as the public interest requires expropriation of private land, it should be done in terms of regulations proposed by the Valuer-General in 2017, but not yet adopted. These regulations are consistent with the specifications in Section 25 of the Constitution, which is adequate as it stands. Amendment of Section 25 is neither necessary nor sufficient to improve access to land by households most in need of it.

Charles Simkins
Head of Research

[1]Breaking New Ground (BNG) houses are successors to RDP houses, but built to higher specifications.