Most people would agree that racial discrimination characterised apartheid. However, with all the confusing political rhetoric heard nowadays, the true methodology used by the apartheid government to oppress the majority of South Africans is often misunderstood.

So how did the apartheid government succeed in creating several generations of poor black South Africans? The answer is simple: by restricting their property rights.

As Leon Louw said recently on The Renegade Report on CliffCentral, “The worst thing about apartheid … was the economics of it.” According to the Liberal Party parliamentarian, Edgar Brookes, co-writing with JB MacAulay in 1958, “[the economic life of] the African is almost entirely in the hands of officials … possessed of very wide discretion.”

The inability of black individuals to engage freely in the market played a major role.

Since 1994, various schemes have been devised by the democratic government to ‘solve’ poverty, but none of them have really broached the source of the issue, insecure and uncertain property rights. One scheme was the Reconstruction and Development Programme’s (RDP) housing project.

RDP properties are allocated to previously disadvantaged individuals – clearly, a better alternative to unhygienic shacks. However, beneficiaries do not immediately become the full owners of such properties. Included in RDP agreements, there are ‘pre-emptive clauses’, which often prohibit beneficiaries from selling or letting the property for several years, or provide that there may be only one residence on the property.

Many claim that these conditions are in place for good reason; for example, to ensure that the beneficiaries do not immediately sell the house for the money. But a rationale such as this is indicative of the patronising mindset at the heart of paternal statism. Other home owners are able to sell, let, or sub-let their property – why not the poor? What matters here, is that we cannot call the RDP entitlement of the beneficiary “ownership”, because a central feature of ownership is the ability to sell or let your property, or build on it as many dwellings as you desire.

A consequence of this lack of full ownership is that it does not encourage investment in the upkeep and development of the property. It also means that the property, besides simply providing a roof over the beneficiary’s head, does not help to alleviate actual poverty.

Many RDP house beneficiaries have decided, in contravention of the law, to use ‘their’ properties as income generating resources anyway. They are letting them out to other desperate families while they go elsewhere , say, to where they can find employment. Being unable to legally sell the property to pursue employment opportunities in other cities, forces them to do so illegally. And because it is illegal, they ‘sell’ the home at a much lower value than its true worth.

In 2012, Johannesburg metro official, Bubu Xuba, spoke with Corruption Watch and told them that beneficiaries have to remain in their allocated houses for at least eight years, and then, if they wished to sell, first preference had to be given to the State. If they try to sell before the period has elapsed or give preference to someone besides the State, it “can be regarded as fraud and the beneficiary can be charged with committing a criminal act.”

Only when dealing with the government, can a harmless action such as deciding to sell your house put you in jail.

Furthermore, the allocation process itself is not transparent and has led to reports of corruption. Some municipal officials have accepted bribes from applicants low on the allocation list (whose applications, as reported in 2012, went back as far as 1996) to be moved to the top.

Clearly, this is not how ‘transformation’ should occur. Poor, mostly black South Africans are still being subjected to the discretionary whim of the executive government and are still being denied property rights under our Constitution. Nothing less than full ownership and transparent government, being the antithesis of apartheid, can lead to empowerment for the poor.

Author Martin van Staden is Students for Liberty’s Academic Programmes Director for Southern Africa. The views expressed in the article are the author’s and are not necessarily shared by the members of the Free Market Foundation.