Property rights in Africa’s cities: the new frontier of the urban transition - Africa in Fact

Terence Corrigan

For Africa, the 21st century promises a squarely urban future. At the turn of the millennium, according to the Africapolis database, just under a third of the continent’s population lived in towns and cities; by 2025, this had risen to 57%, and by 2040, it is projected to reach 62%.

Africa is adding tens of thousands of residents to its cities daily, each of them aspiring for the step-change in life chances that urbanisation has produced elsewhere – in Europe and North America in the 19th century, and in Asia in the 20th. 

Perhaps above all, cities are the frontier between ways of life. It is on their streets, in their densely packed settlements and tenements, and in their offices, factories and markets that not only new opportunities and modes of livelihood are created, but new societal systems and mindsets are cultivated. In Africa’s cities, for millions of people, this frontier runs through the question of property rights. 

Across the world, home ownership is the foundation of personal and intergenerational wealth. A residence is typically the most valuable asset that any individual or family will ever acquire. Not only is a home a shelter, but it is an investment; opening a door to an urban household opens a door to a new level of modernity. 

To get a sense of this, Africa in Fact reached out to Jessica Montgomery, Associate Professor of Finance at the University of Kentucky. She has conducted extensive research on property ownership across varying contexts. “In all the research that’s been done, across the world,” she says, “by and large, there are some connecting threads, even if there are variations due to cultural differences and national specificities. Owning homes and property has a significant effect on investment incentives, especially regarding the home itself. It raises the standard of living. It enhances tenure security. There is also evidence that it benefits the education children receive. Plus, it has a positive impact on local housing markets; properties are just worth more, and can be sold to new entrants.” 

For millions of Africans, this is more aspiration than reality; formally registered property is the experience of a minority on the continent. While information is scanty and uneven, a statistic used by World Bank economists is that no more than about 25% of urban land (and 10% of rural land) is formally registered and owned. 

African land and property ownership is a patchwork of systems. Many of Africa’s oldest cities were products of the colonial era and were seen as oases of European administration. Here, property in land reflected the perspectives of the respective colonial power. Such systems would embody a formal, registered title. The indigenous population generally held property under customary systems overseen by traditional leaders, a system geared toward rural populations, though as cities expanded, jurisdictions frequently overlapped.

In some places, this was further complicated by Islamic customs. And as urbanisation progressed – during and after the colonial period – an inexorable movement to the cities meant that millions of people were living without formal or enforceable rights, although their actual tenure security varied widely from one place to another, depending on social mores and community recognition. 

The consequences of this go beyond individual households’ wealth generation and tenure security. “The potential of Africa’s cities is locked up in inappropriate property systems,” says South African urban planning and local governance expert Burgert Gildenhuys. “Across the continent, irrespective of different colonial legacies, city structures and challenges are the same. This stands as testimony to the power of land markets, irrespective of centrally planned forces trying to achieve predetermined outcomes. 

“There is an economic logic,” he continues. “All actors are looking for the biggest value per square metre. So, businesses pay more and may displace residential users. It is called the land bid rent theory. People don’t like the outcome, so the state tries to manipulate it. But the irony is that we’ve ended up with the opposite, overcrowded buildings in a CBD, and cities keep on sprawling because the government subsidises transport. Abuja, Nigeria, was imagined in the 1970s as a master plan for African cities. By strictly controlling the inner-city development around 17 satellite towns (about three million people) emerged, against 1.7 million people in the ‘planned’ city.” 

In the absence of proper land markets and the ownership regime that a stable and consistent system of property rights makes possible, the future for the continent’s cities is likely to be ongoing informality, marked by exclusion and insecurity. Under such conditions, the continent’s cities will never become engines of growth and development. 

This is true even in Africa’s more exceptional jurisdictions. South Africa is in many respects the continent’s pathfinder for urban modernity. The country is almost two-thirds urbanised (a proportion that is rapidly increasing), with a long urban history and a sophisticated system of urban administration. 

This is misleading. Policy in the pre-democratic era created enormous urban sprawl to segregate communities. There was also official resistance to the permanence of Africans in the cities; outside particular pockets, Africans were prohibited from owning landed property into the 1980s. Housing was rented from municipalities on the understanding that residents would ultimately return to their ethnic reserves. Aside from state policy, there was a steady flow of migration, leading to the growth of informal settlements. 

The hangover of this is that millions of South Africans lack formal property rights, even to homes their families have lived in for generations. Information on this is sketchy, but Lightstone, a real estate consultancy, has estimated that for each titled property in the country, there are 2.5 without one. And according to the country’s Ministry of Human Settlements, by early 2026, some 1.2 million state-supplied houses had not been formally transferred to the owners. 

Those without formal titles lack full legal protection for their holdings. This excludes them from access to the formal financial system. GG Alcock, doyen of South Africa’s informal economy, has noted that some 90% of the country’s homes are built without formal credit. It also makes their occupants vulnerable in property disputes. 

Khaya Lam is an initiative of the Johannesbrig think tank the Free Market Foundation. Translated as “Our Home”, Khaya Lam is a programme that aims to grant title to the long-term occupants of homes in South Africa’s townships. It uses donor sponsorships to assist municipalities in transferring title to beneficiaries. 

Established in 2014, Khaya Lam has since facilitated the issuance of 23,000 title deeds, which it estimates were worth R3.5 billion. Many of the beneficiaries had lived in these houses for decades – the oldest was 102. For Khaya Lam head Terry Markman the visible sense of elation evident when title deeds are received is the defining feature of the programme: “It was so emotional when an elderly lady says, ‘Now I can die, and my children will get the property.’” 

To make this happen, Khaya Lam needs to form a partnership with a municipality where property is currently registered. This can be difficult, as many are dysfunctional, disinterested or simply suspicious of any outside approach. Should a municipality express interest, the next step is a memorandum of understanding that sets the parameters for the working relationship. This, too, can take a long time. Success might depend on a committed and cooperative official who can shepherd the project even in a very challenged municipality, though this also raises the problem of continuity in the event of his or her departure. 

In a sense, that represents the simple part. Khaya Lam’s representatives agreed that there is no such thing as a “simple” transfer. The houses it seeks to transfer are municipal property, to which there is a paper trail to the lawful beneficiary. In reality, the original occupants may be deceased, and the property is now occupied by a new generation. There may be disputes between potential heirs over ownership. And in numerous instances, the house itself has been informally sold. Each case throws up its own set of legal and administrative complications. 

It is not uncommon to find that the accepted boundaries of properties (or the structures themselves) do not conform to the formal demarcation, requiring the area to be surveyed again. In some places, traditional authority encroaches on settlements, effectively making titling impossible for some properties. 

And then there are the legal practical intricacies that attend the transfer. The system is essentially designed with transactions in a mature property market in mind, conducted by people who understand it. As eagerly as people who have been denied it embrace taking ownership, they are entering an often unfamiliar system. 

This is particularly the case when property is passed on after the death of the original owner. Montgomery, who studied Khaya Lam as part of her academic work, notes: “People don’t always understand the process of legal transfer in the Deeds Registry. It’s expensive and complicated; it seems that some people get this confused with making changes at the municipal office. The question is, how do we make this system accessible to everyone?” 

Indeed, for all the hard work Khaya Lam has done, there are no illusions among its team about the extent of what remains to be done. “There is no single problem to be addressed,” says Markman, “there is a whole system of issues. Obviously, with more money, we could put more teams into more municipalities. But it’s a huge job; I estimate that there are 500,000 to 1.2 million properties that need to be titled. And then there are informal settlements.” 

Informal settlements present a different order of complexity. They typically exist without even the limited legal recognition – such as legally proclaimed townships or surveyed stands – that makes Khaya Lam’s titling possible. 

Yet “informal” is not necessarily equivalent to “slum”. It denotes, rather, a state of existing outside planned communities. Individual structures may be well-constructed and represent considerable brick-by-brick investment, to the point that Alcock estimates the value of South Africa’s untitled properties at a staggering R3 trillion. Gildenhuys concurs: “People spend huge sums in building in informal areas without proper security. This is seen as a social good, to exist among others in a community.” 

For Alcock, a starting point is understanding the social context, which bedevils titling. “Homes are frequently viewed as belonging to a family,” he says, echoing a dynamic identifiable across the continent, “They are owned across generations, so how do you decide who gets the title deed?” 

And while he is familiar with Khaya Lam’s good work, he is sceptical of the capacity to roll it out at scale. “Most homes owned outside the formal system will never get a title deed. It’s too complicated,” he argues. Besides, as his work has shown, the informal economy is intrinsic to the livelihoods of millions, irrespective of state dictates. So, when the post-1994 government provided small “RDP” houses, they came with restrictions on extending, renting, or selling, none of which prevented precisely those things from happening. The demands of the formal system have limited purchase. 

Alcock makes a conceptual distinction between ownership and title, the former a social idea, the latter a legal one. For this reason, he has been involved in developing a system called E-DEED. This is an attempt to bridge the gap between the exclusion fostered by the lack of a formal title and the difficulties of providing one. E-Deed uses satellite imagery and AI tools to assess property value based on building materials and upgrades over time. The idea is that E-Deed would provide banks with a reliable, acceptable measure of value they can accept as collateral. 

The existing variable system of property rights means that some urban inhabitants would be perpetually subject to inferior security. As powerful as a social convention may be, it has its limits as a legal mechanism. “My experience is that people understand the legal protections that ownership confers – it’s not just about the social aspect,” Montgomery says. “Legal rights are enforceable if someone tries to take your property. Social conventions are not quite as robust.” 

Indeed, sustaining a properly consistent regime of property rights is a precondition for a stable land market, without which cities in South Africa and across the continent have no future. As urban planning consultant Prof Stephen Berrisford succinctly phrases it: “Urban economies that are not built on a stable land market are themselves unstable.” 

What is to be done? Clearly, a proper, formal title is a worthy goal, one to be pursued – although not one that is immediately attainable. Bodies like Khaya Lam would help, but they are unlikely to be forthcoming on the scale necessary. And for the informal market, the existing legal prescriptions simply make this a non-starter. 

The key here is to integrate societal mores into property protections. Alcock suggests that the concept of a family home needs to be formally recognised. He also envisages upgrading informal tenure arrangements to something legally binding, but short of formal title, perhaps along the lines of the Mozambican DUAT (Direito de Uso e Aproveitamento da Terra), a long-term, renewable legal right to use a piece of land. This, he thinks, may be possible for South Africa’s administrative systems to handle. At the very least, this could operate as a waystation towards full formalisation at some point. 

Gildenhuys similarly argues for a recognition and conjunction of formal and traditional systems that regulate landholding. Each is a reality, and each is necessary. “This is the challenge: How do we get traditional systems to integrate with the market?” The country’s local governance system currently excludes traditional leadership, although they exercise significant influence in urban centres. Areas under traditional control are often not properly mapped, which raises its own set of complications. “Maybe,” he suggests, “a first step would be to bring traditional leaders in?” 

For the moment, though, South Africa and the broader continent face an urbanisation process that is perhaps better described as an urbanisation crisis. “We recognise urbanisation, but we don’t understand it properly,” observes Gildenhuys. The continent has yet to come up with a proper answer. Failure to do so will condemn millions to chronic insecurity and truncated life chances, preventing African cities from becoming the engines of development the future demands. 

Terence Corrigan is Projects and Publications Manager at the Institute of Race Relations (IRR).

https://africainfact.com/property-rights-in-africas-cities-the-new-frontier-of-the-urban-transition/