Residents of Ramaphosa informal settlement in Boksburg, Ekurhuleni, will take over houses and stands that belong to displaced foreign nationals.
The decision was taken at a ward meeting at the weekend after it was announced that more than 20 houses and over 60 stands had been allocated to foreign nationals.
The ward committee said a task team had been formed to gather further evidence .
"The task team has already started its work," said David Tjetjane, a ward committee member.
"They are gathering all the necessary evidence to prove that over 20 RDP houses were allocated to people who did not deserve them. We will challenge government to reallocate those houses to locals," he said.
Tjetjane said they would take legal action if the government refused to re-allocate the houses.
Tjetjane said the first approach would be to request the owner of the house or stand to vacate the house.
"If they refuse, we will be forced to take legal steps. If that fails, we cannot be held responsible for any action that might arise," he added.
The Ramaphosa informal settlement was one of the hardest hit areas by the xenophobic violence. More than 12 people died, four of whom were South Africans. Earlier, the community said they did not want the displaced foreigners back in their midst.
Aviva Manqa, the housing department spokesman, said according to their records, no illegal immigrant was allocated an RDP house in Reiger Park.
He, however, invited any person who had evidence to come forward.
Manqa warned people not to engage in unlawful activities.