MAIN IMAGE: John Jack – CEO of Galetti Corporate Real Estate
Opinion
The Constitutional Court has ruled that the 2015 sale of the Tafelberg property was unlawful, setting a precedent that could significantly change how government-owned land is sold in South Africa.
In a unanimous judgment, the Court not only set aside the sale but also ordered the City of Cape Town and the Western Cape Government to submit plans within three months outlining how affordable housing will be addressed on the site.
According to John Jack, CEO of Galetti Corporate Real Estate, the ruling marks a major shift in the disposal of public land. “The price of the asset is no longer the only consideration. The Court has made it clear that well-located public land also carries a constitutional purpose.”
Balancing obligations with development
While the government may still sell land, it must now demonstrate that affordable housing has been properly considered and that meaningful public participation has occurred before any transaction is concluded.
Although the ruling applies specifically to state-owned land, Jack says the broader property market is watching closely because it sets a precedent that could influence future public land sales across South Africa.
“The case is particularly significant in the Western Cape, home to the country’s most valuable real estate market, where land scarcity, housing demand and property values are constantly under pressure. The judgment is likely to shape how governments approach the disposal of well-located public land going forward.”
What’s next?
Looking ahead, Jack cautions that the greater risk is not the judgment itself but the government’s reluctance to dispose of surplus land. “The danger here is over-correction by the government. If they become over-cautious, then valuable land will remain underutilised,” he says, adding that there must be a clear process for disposal.
“Developers will need to learn how to structure and cross-subsidise portions of land. You cannot require affordable housing on prime public land without ensuring that the zoning supports its financial viability. The City will need to consider appropriate development rights and bulk allocations alongside these obligations to ensure such projects are economically feasible.”
When it comes to addressing concerns from neighbouring property owners, Jack notes that mixed-income communities are common in global cities such as London and New York, where social and affordable housing exists alongside some of the world’s most valuable real estate.
“The success of future developments will depend less on the principle of affordable housing and more on effective design, management, maintenance and long-term accountability,” says Jack.
“If these developments are well designed, properly integrated and professionally managed, they should not be viewed as a threat. In fact, they may prove a far better outcome than the unmanaged occupation of valuable central land,” he concludes.
