Cape Town’s DA councillors, who voted last week to dispose of the city’s trophy property in Clifton for about R1bn, have erred. They should either be hanged, drawn and quartered for a financially treasonable act, or face residents’ claims for damages. The ANC sale of city land in Blouberg to Tokyo Sexwale in 2000 should not have been copied. The excuse that the money is needed for social housing or infrastructure is false because land rents can pay the costs of loans. Cities can never be willing sellers to citizens or companies because the most these pay for land is about 20 years’ rent in advance. This is often the duration of mortgage bonds. It is also the period beyond which analysts hold that a present value rental calculation does not significantly alter. But, barring acts of God and mismanagement, land does not depreciate. It is deemed to be always in an out-of-the-box condition, though the use might change — like the land being sold in Clifton. If the latest Massachusetts Ins...
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