Last week, the Constitutional Court said the sale by the Western Cape government of land to a private developer was illegal. The judges ruled that the state, which had sold prime land in Sea Point to a private developer for R135 million, cannot sell well-located public land to private buyers as long as there is a housing shortage. It seems that the court believes that private investment in such land is a barrier to the state's constitutional housing duties.

Justice Nonkosi Mhlantla wrote the judgement, stating the former Tafelberg School site in Sea Point should never have been sold. The court now views private ownership of this land as an obstruction to the public interest, rather than a positive economic contribution. Justice Mhlantla argued that the location of public land is the most important factor in deciding if the government is fulfilling its housing obligations under section 26 of the Constitution.

A Decade to Undo a Single Deal

This legal battle began in 2017 and took nearly a decade to finish. The applicants who challenged the sale were Sea Point residents, the activist organisation Reclaim the City, and the trustees of the Ndifuna Ukwazi Trust. These groups are advocacy organisations that claim to be dedicated to social justice, affordable housing, and dismantling the legacy of spatial apartheid.

Initially, the province sold the site to the Phyllis Jowell Jewish Day School for R135 million. The High Court found the sale unconstitutional in 2020, but the Supreme Court of Appeal reversed that in 2024. Even though the buyer eventually pulled out of the deal, the Constitutional Court decided to hear the case because of its importance to the public.

The judgement pointed out several major legal mistakes. It declared the province's land regulations unconstitutional because officials only asked for public feedback after they had already decided the land was surplus. The court called this a "sham" consultation. The province also failed to talk to the national minister of human settlements before selling. Now, both the city and province must give the High Court detailed reports on their plans for affordable housing in the city centre within three months. The province must also pay the legal costs for the advocacy groups.

Judging a Process, Not a Specific Sale

This case was not about corruption or low prices. Instead, the court focused on the fact that the city has not built enough housing on the land it already owns. The City of Cape Town argued that it is building 4 000 affordable units and planning 12 000 more in prime areas. However, the court rejected this, pointing out that these projects have been stuck for years and that plans on paper do not satisfy constitutional duties.

This ruling sets a high standard that could affect many infrastructure projects. While housing delivery is slow, the court did more than just ask for progress reports. It reached back nine years to cancel a deal that didn't actually cause the housing delays. The court argued that having a private owner on well-located land is a constitutional harm, even if the state didn't have a clear plan to use the land for housing at the time of the sale.

Viewing Investment as a Barrier

The main issue with the ruling is its basic premise: that selling an unused building to a private buyer is a constitutional violation instead of a helpful economic act. The judgement does not say the money was stolen or that the province acted in bad faith. The only "harm" identified is simply that the land was no longer owned by the state.

This creates a difficult situation for investors. They can no longer be sure that a legal purchase will remain valid if a court later decides the property should have been saved for a future housing project. After ten years and three court cases, the Tafelberg site is still empty. The only result is that the province lost R135 million, and all other unused state property is now a much bigger legal risk for buyers.