No, thanks! Practitioners respond to the economic transformation of community schemes
South Africa has over 70,000 community schemes, made up of sectional title complexes, homeowners’ associations, retirement housing schemes, share block companies, and housing cooperatives. As a significant economic sector, the government has made calls for mandatory economic transformation.
They believe emerging SMMEs should get access to opportunities through the procurement of services like gardening and security. They’ve also set their sights on transforming community scheme management so emerging black managing agents can become part of an industry worth an estimated R800 billion in assets.
With a direct impact on the real estate industry, Prop Data turned the microphone over to local practitioners to find out how they feel about the proposed changes.
Unpacking the poll results
In August 2023, Prop Data polled property practitioners to find out how they felt about the plans for the economic transformation of community schemes. The results found:
60.4% responded negatively about it.
21.3% responded neutrally about it.
18.3% responded positively about it.
Recent poll results reveal a range of opinions within community schemes regarding economic transformation. A significant 60.4% of respondents voiced concerns, while 21.3% maintained a neutral outlook, possibly reflecting a wait-and-see attitude.
The remaining 18.3% embraced the transformation with positivity, illustrating an optimistic outlook about the economic evolution within their communal structures. These results paint a dynamic picture of how community practitioners perceive and respond to the ongoing economic shifts, showcasing a mixed reaction to the government’s prospective plans.
A big impact
The proposed implementation aims to create opportunities and narrow the gap between the rich and the poor. The government sees using such a policy as a means to actively bring about change, fostering inclusivity in the community schemes sector and providing a pathway for disadvantaged communities to enter the market.
However, there are some concerns expressed with this new transformation. It may be difficult to enforce, infringe on rights of choice for those who belong to a community scheme, lead to potentially poor service and potentially be a vehicle for looting and political capture as a BEE-driven initiative.
Any property practitioners who would like to voice their concerns can do so through their representatives such as the IEASA or REBOSA.
For property practitioners amid the economic transformation of community schemes, agility is key. Stay ahead by closely monitoring shifting property values, adapting management strategies and identifying emerging investment opportunities. Embrace flexibility and proactively address challenges to position yourself for success in the evolving landscape of community schemes.