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Black Entrepreneurship and Informal Housing

Black Entrepreneurship and Informal Housing. South Africa. Laws Inhibiting Black Entrepreneurship. Colonial Era : Serfdom? Apartheid : Separation State monopolies. Cultural Factors Inhibiting Black Entrepreneurship. Traditional/Rural sanctions against wealth accumulation

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Black Entrepreneurship and Informal Housing

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  1. Black EntrepreneurshipandInformal Housing South Africa

  2. Laws Inhibiting Black Entrepreneurship • Colonial Era : Serfdom? • Apartheid : Separation • State monopolies

  3. Cultural Factors Inhibiting Black Entrepreneurship • Traditional/Rural sanctions against wealth accumulation • Considered “legitimate target” of theft and violence • Police raids and intimidation • For black graduates, civil service is a safer choice

  4. Seven Categories of Black Entrepreneurship • Listed Companies : “Black Chips” • Heavy ownership by unions • Formed Preemptively by white companies • Spinoffs of less profitable operations • Joint venture by industry to create a competitor

  5. Seven Categories of Black Entrepreneurship • Potential Listed companies • Often politically connected • Often Joint Ventures with foreign companies

  6. Seven Categories of Black Entrepreneurship • Portfolio Investment Trusts • Also heavily union funded • Buy companies as well as stocks

  7. Seven Categories of Black Entrepreneurship • Black Women Investors • Same as PITs, but funds raised from women • Possible rural focus : agriculture, tourism

  8. Seven Categories of Black Entrepreneurship • Medium, Small, and Micro Enterprises • 200 or fewer employees • Most formed during apartheid, to provide services to black townships • Sectors: taxi, retail, construction, garment manufacture • Only 20% are growing businesses

  9. Seven Categories of Black Entrepreneurship • Informal Sector • Often food-related • Low barriers to entry • Immigrant competitors

  10. Seven Categories of Black Entrepreneurship • “Political Entrepreneurs” • Often a partnership with foreign investors • Partner brings no business experience • Qualifications : prison time • Sectors : franchising, technical contractors • Some supported by USAID

  11. Top Down vs Bottom Up • Top Down : replace white managers, owners, directors on a “quota” basis • Problem : corruption • Problem : whites still needed for technical functions • 1994 example : 14,000 accountants (65 black accountants)

  12. Top Down vs Bottom Up • Bottom Up : government support for the informal sector • Problem : hyper-competitive environment • Problem : insufficient education to manage a larger enterprise

  13. Top Down vs Bottom Up • Editorial • “Expand the pie” • What will it take to attract foreign employers? • How can a small or medium enterprise increase its employment?

  14. EducationQuantity vs. Quality

  15. Cato ManorHistory • 1930s partitioned by Mr. Cato, who sold lots to Indians • After WW2, Indians sublet to black tenants • 1949 violence between tenants and Indians • 1950s / early 60s bulldozed, zoned for white development

  16. Cato ManorHistory • Development halted by CMRA, an organization of former Indian owners • Unoccupied until late 1980s, when squatters moved in • 1990s influx : close to city center • 1990s influx : ANC stronghold safe from Inkatha - ANC violence

  17. Pictures from Cato Manor

  18. Pictures from Cato Manor

  19. Cato Manor Development Association • Concentrated building efforts on unoccupied land • Mistrusted in squatter settlements due to corruption • CMDA would lose jobs if project complete • Embezzlement, selling lot numbers, nepotism

  20. The Taxi Wars • Taxis initially reluctant to service area • Profitable route due to short runs • Taxi service taken over by 15-20 former ANC guerillas • Extortion of residents for “protection” • Driven out by former taxi outfit and locals • All community structures destroyed

  21. Habitat for Humanity Houses in Cato Manor

  22. Suspicious Charactersin Cato Manor

  23. “In Situ” Upgrading of Informal Settlements • Applying a Brazilian model to Cape Town • Both: cities are largely formal with peripheral informal settlements • Both: technical professionals available for GIS implementation • Brazil: informal settlements built of more permanent materials

  24. Bureaucracy • Black and white councils (transition period) • City, metropolitan, and provincial governments • Duplicate political and administrative positions • Delays of 18 months to 4 years • Reluctance to adopt the “In Situ” concept

  25. Rural Zulu Housing

  26. Rural Sotho Housing

  27. Rural Government Housing

  28. Urban Informal Settlement

  29. GIS • Allows rapid updates in dynamic situations • Design access network for foot traffic • Visual demonstration for those in flood area • Existence of a “formal” plan reduces resistance by neighbors • Lot number on a plan gives feeling of security to residents

  30. Flooding in Cape Town?

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