SAHRC Seeks Interdict Against Cape Town Land Sales Over Housing

• The South African Human Rights Commission has sought a Western Cape High Court interdict to stop the sale of 49 City of Cape Town properties.
• The SAHRC alleges the City failed to consider affordable housing needs and used outdated public participation processes for the property auction.
• Mayor Geordin Hill-Lewis stated the City will oppose the application, denying promises of affordable housing conditions and citing potential "reputational and fiscal damage" from postponement.
• The City claims compliance with the Municipal Finance Management Act and Municipal Asset Transfer Regulations, stating relevant departments were consulted.
• Although the auction occurred on February 26, the sales are not final, pending due diligence and approval by the City's Immovable Property Adjudication Committee.

Municipally owned land is not merely a financial asset to be lightly disposed of.

The South African Human Rights Commission (SAHRC) has initiated legal proceedings against the City of Cape Town, seeking an interdict from the Western Cape High Court. This action aims to halt any further progress in the sale and transfer of 49 municipal-owned properties that were put up for auction earlier this year. The SAHRC's primary contention is that the City failed to adequately consider the critical need for affordable and social housing when it decided to dispose of these assets.

The commission is requesting the court to declare the City's decisions regarding these property sales as unconstitutional, unlawful, irrational, or invalid. Should the court agree, the SAHRC seeks to have these decisions set aside and the matter referred back to the City for a fresh review. Mayor Geordin Hill-Lewis has publicly stated that the City intends to oppose the SAHRC's application, simultaneously accusing the commission of engaging in "electioneering."

SAHRC Commissioner Philile Ntuli detailed the commission's concerns in an affidavit filed on October 5. The SAHRC first became aware of the planned auction in January and immediately raised alarms regarding the absence of enforceable conditions that would mandate the inclusion of affordable or social housing in the sale agreements. A significant point of contention also revolved around the public participation processes, which the commission deemed outdated for most of the properties, citing one instance where public input dated back 16 years to 2010.

Following their initial awareness, the SAHRC formally requested information from the City on January 29. This request sought details about the properties, the legal justification for their sale, and any assessments conducted on the potential impact on housing and spatial planning. The City responded on February 12, asserting its compliance with the Municipal Finance Management Act and the Municipal Asset Transfer Regulations. It also indicated that relevant line departments, including human settlements, had been consulted and none had expressed a desire to retain any of the properties for municipal use. However, the SAHRC found this reply insufficient, noting it "did not adequately address" their concerns and that one of the two web links provided by the City was non-functional.

An online meeting between SAHRC representatives and Mayor Hill-Lewis took place on February 20. During this discussion, the Mayor reportedly conveyed that the City "envisaged that the land would ultimately be utilised for housing development" and that while the City lacked the funds for affordable housing, the private sector possessed the necessary resources. Crucially, the affidavit states that the Mayor also clarified that "no formal conditions of sale would be attached to the auction requiring the land to be used for affordable housing or any specific housing development."

The SAHRC subsequently requested a postponement of the auction on February 22. Two days later, on February 24, Mayor Hill-Lewis declined this request in a letter, citing potential "reputational and fiscal damage" to the City. He further denied having promised that the land would be used for affordable housing, arguing that buyers would "logically only erect and then offer accommodation which is affordable to persons who are resident (or aspire to be resident) in those areas." The Mayor also contended that imposing conditions of sale would negatively impact market enthusiasm. The auction proceeded as scheduled on February 26, despite earlier unsuccessful attempts to block the release of the properties, including a Western Cape High Court dismissal of such efforts on February 24, as reported by TimesLIVE.

Despite the auction's completion, the sales of the 49 properties are not yet final. In April, Speaker Felicity Purchase informed the commission that due diligence on the properties remained incomplete, and no specific timeline for completion could be provided. Final approval for each sale rests with the City's Immovable Property Adjudication Committee, with only three high-value sales—the Good Hope Centre, the "truck stop" property in Epping, and a property in Century City—requiring a final vote by the council. Speaker Purchase declined to present the SAHRC's concerns to the council, stating that the commission had not participated during the public consultation period.

The SAHRC emphasizes the importance of halting all transfers, arguing that once properties are transferred, a "review may be rendered ineffective." The commission asserts that "Municipally owned land is not merely a financial asset to be lightly disposed of," underscoring a broader principle regarding public assets. The SAHRC has indicated that it would consider withdrawing the case if the City can demonstrate that it complied with its obligations throughout the process. This legal challenge highlights the ongoing tension between municipal revenue generation through asset disposal and the constitutional imperative to address pressing social needs like affordable housing.

Lawyers advising municipalities or developers on public land transactions should closely monitor this case, as it could establish new precedents regarding the constitutional obligations for considering affordable housing and robust public participation when disposing of public assets. Non-compliance could lead to significant legal challenges and the invalidation of sale decisions.

Source: Original reporting via TimesLIVE