The reprieve of 1979 ended nearly two decades of uncertainty and disruption for Alexandra residents. Based on the promises made by the government and the Alexandra Liaison Committee (ALC), it was perceived as a turning point that would inaugurate a process of major development in the township. The formulation of the Alexandra Master Plan, a blueprint for the reconstruction of the township and the implementation of some projects during the first couple of years of the ALC's tenure naturally heightened expectations. Residents looked to Reverend Sam Buti and his colleagues in the Save Alexandra Party to lead this process. These were the golden years of the ALC – they were the undisputed leaders of the township and Buti, in particular, was widely hailed as a ‘messiah’.

However, even as the township was basking in its victory there were already ominous signs on the horizon, which indicated that the path to redevelopment would be strewn with obstacles. Chief among these was the inherently limited development package offered by the government. The Master Plan was part of the government's reform policy towards urban Africans arising from the Riekert Commission. The government established the Commission in 1977, in the aftermath of the Soweto uprising, to investigate issues pertaining to the status of black labour and of the urban black population. It acknowledged that townships were in a deep crisis caused by poor local administration, financial shortfalls and influx control. Of these, the financial crisis was probably the most serious. The main sources for financing township administration and development were profits from beer and liquor sales plus levies imposed on employers. The latter levies were frozen after 1977, which resulted in a substantial drop in income from that source in the early 1980s. Furthermore, the income from the profits of traditional beer was being undermined as a result of changes in drinking habits, as increasing number of consumers showed a preference for commercial liquor and beer.

The Riekert Commission also reported a national housing shortage of 141 000 family units, which would cost about R764 million to address. Its proposed solution to the housing crisis was to privatise the provision of housing in the townships. In addition, the government made clear its intention to withdraw subsidies for housing and other services.