With an estimated annual population growth of 1.45 million people, over 300,000 of them in Greater Cairo alone, urbanisation is one of Egypt's major problems. Thus far, the state has taken different approaches to helping citizens, especially the underprivileged, get formal and affordable access to housing. But despite all its efforts, in recent decades Egyptians have been suffering from a chronic housing crisis. There have been contributions by the state in the form of reasonably priced housing units and land plots, together with access to the credit needed to build more units. The state has also issued legislation to try to impact the housing market, such as modifications to the mortgage law. The cabinet recently approved a draft of the new social housing law that aims to provide adequate housing to low-income and middle-income citizens. Under the law, the ministry of housing, utilities and new urban communities will offer already existing units, as well as new housing units and plots of land in new communities, to those seeking a rung on the housing ladder. It plans to build about one million housing units in Cairo and other governorates and the new cities and to allocate new land plots for the social housing programme. The ministry is considering funding the units through a mortgage finance system, determining the value of the subsidy according to the income of the beneficiary. The lower the income, the higher the value of the subsidy will be. Yehia Shawkat, a researcher at the Egyptian Initiative for Personal Rights, an NGO, said that while it was important to lay ground rules for the social housing programme, “putting them into law may make them more rigid, rather than more flexible, especially if we take into consideration different geographical needs, for example with regard to pricing, which should be cheaper in Upper Egypt than in Cairo.” Shawkat, who has written a report on the new social housing law entitled “Discrimination against the Poor and Support for Those who Don't Deserve It,” said that the new law's conditions could deprive 40 per cent of lower-income Egyptians of some LE8.7 billion of support in 2012/2013 and 2013/2014. The conditions deprived Egyptians working in the informal sector, most of them poor, from taking advantage of the units in the programme because they worked without formal contracts. In addition to the maximum income for those seeking to benefit from the law, there is also a minimum level of income, which is required to be not less than about LE 23,000. According to the study, the unit prices will vary from between LE110,000 to LE 130,000, with a down payment of 15 to 40 per cent of the total unit price and installments not exceeding 25 per cent of incomes. These conditions mean that about 90 per cent of the billions of pounds of public subsidy will be directed at higher-income households, who represent 50 per cent of Egyptians in the middle-income and above categories. About 40 per cent of Egyptians with lower incomes will be deprived of benefitting from the rental units, representing 10 per cent of the total units, since half of the middle-income group, and the entire poorer class, amounting to 30 per cent of the lowest-income group, will not be eligible to apply to acquire units for ownership or leasing. Moreover, the value of the rent, at LE225 a month, deprives nearly 10 per cent of Egyptians with lower incomes from benefitting from these units due to its high value, according to research on incomes, expenditure and consumption by the Central Agency for Public Mobilisation and Statistics (CAPMAS) in 2012/2013. This limitation means that only 10 per cent of Egyptians will be able to take advantage of the rental units. “It is also important to have a unified database for all applicants, so that allocation is transparent, as well as a database of house prices, so that applicants can compare government housing to locally available housing,” Shawkat said. He expected many families to have difficulty making repayments and said that the social housing law adopted an unrealistic definition of low-income people. His report recommends that the vast majority of the units be allocated by lease, not ownership, to ensure sustainability and security of tenure. Kareem Ibrahim, co-leader of TADAMUN: The Cairo Urban Solidarity Initiative, a campaign group, also had criticisms of the new law. “We believe the government shouldn't be involved in providing housing, as individuals are always able to build cheaper, more adequate houses that are more suitable to their needs,” he explained. It is the poor and those living in marginal urban areas who rely on social housing more than other social groups. However, the government has not been able to supply the housing needs of all citizens. It directly provides only 10 to 15 per cent of national housing needs through different housing programmes. Even with aid from the private sector, the government is not able to build more than 180,000 units annually. “Rather than issuing a new social housing law, the government should address other housing-related issues that affect the supply and quality of housing in Egyptian cities,” Ibrahim added. “The provision of land is one of the most urgent and complicated housing issues, for example,” he said. Some 17 per cent of informal houses are built on state-owned land on the margins of urban areas, all of which could be subjected to demolition by the state. Current policies for land pricing, selling mechanisms, land division, and geographical distribution in remote areas prevent many citizens from acquiring affordable land that is close to urban centres at reasonable payment prices. The state should concentrate on regulating the use of state land and provide it with basic facilities as part of a comprehensive urban planning framework for cities and villages and a population distribution strategy, one commentator said. “Since 2006, there have been more than seven million lost housing units. 25 per cent of housing units have been vacant in the Cairo governorate, along with 32 per cent in Giza and 35 per cent in Alexandria. The solution is not more housing units, but mechanisms to unlock this huge potential,” Ibrahim added. Beyond the government's role in directly providing housing units and establishing policies and regulations for the housing sector, a broader approach in dealing with new and existing urban communities, formal and informal, was needed, he said. The state should support individual and organised efforts for the production of more housing by supplying the resources needed and the infrastructure and services required to ensure that communities have adequate housing. “There should be clearer plans to provide people with services, resources and facilities, especially in poorer communities that are battling miserable living conditions, such as Ezbet Al-Hagana and Ezbet Khairallah in Cairo and many others,” Ibrahim concluded.
