Educated Risk Investments 165 (Pty) Ltd and Others v Ekurhuleni Metropolitan Municipality and Others

An informal settlement known as Everest or Gugulethu was situated in Payneville Extension 3 near Springs, with residents living in unhealthy conditions without basic services, near a slimes dam emitting dangerous radon gas. Ekurhuleni Metropolitan Municipality owned another property, Payneville Extension 1 (63 hectares), which was an approved township with erven zoned Residential 1 under the Springs Town Planning Scheme, 1996. In February 2012, Ekurhuleni approved the further sub-division of erven to create 363 additional erven (total 1115). Ekurhuleni's plan was to permit families from Payneville Extension 3 to move to Payneville Extension 1 and erect informal dwellings on individual erven while basic water and sewage services were provided, with further development to occur incrementally as funds became available. The appellants owned properties in adjacent Strubenvale Extension 2 and objected that this plan was unlawful as informal housing was inconsistent with Residential 1 zoning and conditions attached to the township approval had not been fulfilled.

• Whether informal housing constitutes 'dwelling houses' within the meaning of the Springs Town Planning Scheme, 1996, and is therefore a permitted use in a Residential 1 zone
• Whether the sub-division approval was unlawful as being for an ulterior purpose or amounting to rezoning by stealth
• Whether occupation of erven could lawfully occur before all conditions attached to the township approval and sub-division had been fulfilled
• Whether a public hearing was required before implementing the proposal
• The proper approach to interpreting town planning schemes in light of constitutional rights to housing, dignity and a healthy environment

The appeal was dismissed with costs.

Informal housing structures constructed of materials such as wood, corrugated iron or fibreglass sheeting, designed to accommodate single families, constitute 'dwelling houses' within the meaning of town planning schemes and are therefore permitted uses in Residential 1 zones. When interpreting town planning legislation, courts must apply section 39(2) of the Constitution to promote the spirit, purport and objects of the Bill of Rights, particularly the rights to adequate housing, dignity and a healthy environment. A rigid interpretation of town planning schemes viewing them through the prism of developed societies is inappropriate in South African circumstances given the legacy of apartheid and ongoing housing challenges. The obligation to fulfill conditions attached to township establishment does not preclude a local authority from using its own property in conformity with the applicable zoning scheme before those conditions are met, provided such use does not involve steps toward disposal of individual erven to purchasers.

The court observed that town planning schemes are generally directed at medium to long-term development and rarely make express provision to accommodate incremental housing development for disadvantaged communities despite rapid urbanization. One characteristic of apartheid was chronic under-provision of housing resulting in mushrooming informal settlements still part of the urban landscape. Conventional town planning schemes generally have no provisions specifically directed at this situation or the interplay between addressing social issues and formal urban development. The court noted (obiter) that even if implementation involved some departure from the Scheme, clause 32 empowered the local authority to use property for purposes it deemed beneficial to the community, providing an alternative basis for lawfulness. This provision was appropriate given that local authorities are the primary planning authority for local planning under Schedule 4, Part B of the Constitution.

This case is significant in South African law for establishing a purposive, constitutionally-informed approach to interpreting town planning schemes, particularly in relation to informal housing. It recognizes that informal housing can constitute lawful 'dwelling houses' under conventional zoning schemes, avoiding an interpretation that would exclude the living arrangements of vast numbers of poor South Africans. The judgment demonstrates how the interpretive mandate in section 39(2) of the Constitution requires courts to construe legislation, including planning schemes, in a manner that promotes constitutional rights to housing, dignity and a healthy environment. It also affirms the authority of municipalities to exercise planning discretion to address urgent social needs, including informal settlement upgrading and incremental housing development, even where traditional planning schemes make no express provision for such interventions. The decision balances private property interests against constitutional obligations to progressively realize housing rights for disadvantaged communities.