The Extent ofAffirmative Action in the Real Estate industry within the Western Cape. By Alan B Phillips This thesis is submitted in fulfillment ofthe requirements for the degree Magister Technologiae (Human Resource Management) in the Faculty ofManagement at the Cape Technikon Supervisor: Prof. AD Slabbert September 2003 Declaration I hereby declare that the contents of this thesis represents my own work. This thesis, or any part of this document, has not been previously submitted for academic evaluation towards any qualification. The views, oplllions and conclusions expressed and contained herein belong to those of the author. These views, opinions and conclusions therefore do not necessarily reflect those of the Cape Technikon or any ofthe Cape Technikon's staff. Signature: . 11 Dedication I dedicate this thesis to: • My loving wife, Heather Colleen, for her sterling support and understanding throughout this study. Also for the back rubs and litres oforange juice during the typing ofthis document. • My sons, Geoffrey and Morgan, for their patience and for always asking ifthey could assist in any way. • My Lord and Saviour Jesus Christ in Whom all things are possible. For all that I have is not my own but came from Him. iii Acknowledgements This academic work would not have been possible without the encouragement and assistance of the following persons. I am deeply indebted to them and I want to thank: • My supervisor, Prof. AD Slabbert, who gave me much needed support and guidance but mostly because he believed in me. • Lynette Slabbert who, on many occasions, enquired about my progress and my sanity. • Rolf Proske, for friendly servIce and for being available with the necessary research materials and resources. • My research assistant, Heather PhilIips, for collating documents and assisting with the focus group and survey. • My mother, Elizabeth Phillips, for correcting grammatical errors during the course ofthe study. • My son, Geoffrey, for collating documents and tallying research figures. • Lester Ribbonaar, for the technical and computer support. • Nigel Davids, for printing services. • Norman and the MeW family, who were always interested III my progress. • Rawson Properties, for the use of their facilities • The Cape Technikon, as the whole process started there. iv Sumnlary The extent ofaffirmative action in the real estate industry, within the Western Cape. By Alan Bevan Phillips Supervisors Prof. AD Slabbert Faculty Management Degree Magister Technologiae Human Resource Management South Africa is a country that encompasses numerous population groups and cultures. The country has been embroiled in controversy since the beginning ofthe 20th century, notably for its human rights violations and abuse of the majority of its people; namely Blacks, Coloureds and Indians. The ruling parties since its inception as the Union of South Africa in 1910, until the demise of the National Party government in 1994, has ensured bias to the White minority population group. This favouritism was brought about politically and legislatively to protect Whites, reserve jobs and ensure segregation for the various population groups that were considered unequal, as it favoured Whites only. The country's first democratic elections in 1994 brought about a change ofpolitical will that warranted appropriate action, in order to address the imbalances of the past, for all those who were historically, previously disadvantaged. Programmes of affirmative action were required to redress these imbalances and provide necessary opportunities. The vast v majority of South Africans, namely Blacks, therefore needed employment, housing and recreational facilities as previously they were not afforded many prospects. The researcher wanted to establish the state of the Black residential property market in the Western Cape, including the prospects for Black estate agents. Accordingly, an understanding ofthe political background of the last century was required. In order to implement Affirmative Action programmes in the real estate industry, a basic understanding of Affirmative Action was essential. The tasks and duties ofestate agents had to be clarified and the position ofthe real estate industry with regards to the various population groups in the Western Cape was also deemed crucial. The researcher accordingly designed a questionnaire in order to conduct a survey to test public perceptions and attitudes. The researcher also concluded interviews with executives and principals representing the real estate industry. A focus group was utilised to discuss the results of the survey and they provided the researcher with qualitative data. The researcher combined this secondary qualitative data with primary quantitative data in order to develop a model which would assist the industry and prospective Black estate agents. The author believes that this model would be able to substantially benefit all the stakeholders in the real estate industry. Furthermore, the researcher is of the opinion that if this model and the recommendations are implemented, the residential market for the Western Cape would evolve naturally and Black estate agents would be in demand. vi Table of contents Title page I Declaration II Dedication ill Acknowledgements IV Summary V List ofGraphs Xll1 Chapter One Formulation ofthe research problen; and objectives 1 1.1 Introduction 1 1.2 Clarification ofbasic terms and concepts. 2 1.2.1 Affirmative action 2 1.2.2 Apartheid 2 1.2.3 "black people" 2 1.2.4 Board 3 1.2.5 Western Cape 3 1.2.6 Estate agent 3 1.2.7 Immovable property 3 1.2.8 Institute 3 1.2.9 Management 4 1.2.10 Mandate 4 1.2.11 Real estate industry 4 1.2.12 Sole mandate 4 1.3 Statement ofthe research problem 5 1.4 Background and Theoretical overview 5 1.5 Research question 7 vii 1.6 The study objectives 8 1.7 Research design and methodology 8 1.7.1 The data collection 9 1.7.2 Focus group 9 1.8 Delineation ofthe study 9 1.9 Results 10 LlO The significance ofthe study 10 1.11 Expected outcomes ofthe study 11 Chapter Two Literature Review 12 2.1 Introduction 12 2.2 The political review from 1910 to the present 13 2.2.1 Racial discrimination - the legal framework 13 2.2.2 The prelude to the formation ofthe African National Congress CANc) 14 2.2.3 World War I, German South West Africa and Afrikaner rebellion 17 2.2.4 The formation and growth of the National Party 18 2.2.5 Conflict and a growing racial divide in the gold mining industry 20 2.2.6 National and Labour Parties win election 22 2.2.7 The Great Depression and coalition politi,~s 23 2.2.8 World War II and the Liberal·Nationalist Confrontation 26 2.2.9 The 1948 election and Apartheid 28 2.2.10 Apartheid and legislation 29 2.2.11 Legislation: separate and unequal 30 viii 2.2.12 Legislation and security 32 2.2.13 Black Resistance and the rise ofthe ANC 32 2.2.14 Sharpeville 34 2.2.15 Commonwealth withdrawal and the Republic 35 2.2.16 Apartheid in the 1960s and 1970s 36 2.2.17 The rise ofBlack Consciousness 38 2.2.18 Soweto 1976 38 2.2.19 Apartheid and the inequalities revealed 39 2.2.20 Divisions and splits within the National Party 40 2.2.21 Demographics 41 2.2.22 Reform, conflict and sanctions 43 2.2.23 DismantlingApartheid 46 2.2.24 Elections and a new democracy 48 2.2.25 Truth and reconciliation 49 2.2.26 The value ofthe TRC 52 2.2.27 The Reconstruction and development program (RDP) 53 2.2.28 Beyond the twentieth century 58 ~2.3 Affirmative action 59 '-. ----- ' 2.3.1 The ideal ofAffirmative Action (AA) 59 2.3.2 Affirmative Action in the United States 61 2.3.3 Affirmative Action in Malaysia 70 2.3.4 Affirmative Action in the European Union (EU) 75 2.3.5 Affirmative Action in South Africa 77 2.3.5.1 The platform to white Affirmative Action 78 2.3.5.2 Apartheid and Affirmative Action 80 2.3.5.3 Democracy and Affirmative Action 83 2.4 Real Estate Industry 89 2.4.1 History ofGroup Areas 89 2.4.2 Types ofGroup Areas 91 2.4.3 The present 92 ix 2.4.4 The estate agent 92 2.4.5 The traits, attributes and skills ofan estate agent 94 2.4.6 The tasks ofthe estate agent 103 2.5 Conclusion 103 Chapter Three Research Methodology 105 3.1 Introduction: what is research? 105 3.2 Types ofresearch 106 3.3 Qualitive vs Quantative Resparch 107 3.3.1 Is qualitative research critical and valid? 109 3.4 Research tools 110 3.4.1 Questionnaires 110 3.4.2 Personal interviews 113 3.4.3 Focus groups 115 3.4.4 Bar graphs and histograms 117 3.5 The methods employed as regards this survey 117 3.6 Conclusion 119 Interview 120 Questionnaire 122 Chapter Four Analysis ofresults 124 4.1 Introduction. 124 4.1.1 The respondents 124 4.2 Quantitative analysis: Survey 126 4.3 Quantitative analysis: interviews 154 x 4.4 The focus group 183 4.4.1 The procedure 184 4.4.2 The focus group's outcomes 185 4.5 Conclusion 192 Chapter Five Discussion and recommendations 193 5.1 Introduction 193 5.2 Evaluation 194 5.3 Discussion ofthe survey 195 5.4 Discussion ofthe factors 203 5.4.1 The Population 203 5.4.2 Property market 205 5.4.3 Affirmative action 206 5.5 Model 207 5.5.1 Education 210 5.5.2 Incentives 211 5.5.3 Communication 213 5.5.4 Promotion ofcivic pride 214 5.5.5 Sponsorships 215 5.6 Conclusion 218 Chapter Six Conclusion 219 6.1 Introduction 219 6.2 Conclusion 220 xi Bibliography 222 Appendix A 235 xii List of Graphs Graph 1 Upmarket property ownership is seen as belonging only to Whites.