Social housing: Better homes in Egypt

Safeya Mounir , Friday 16 Feb 2018

Social housing and more quality residences have been the focus of government efforts in housing over the past four years, with special attention paid to shantytowns

Al Asmarat
Tahya Misr housing project in Al Asmarat district, in Cairo's suburb of Mokattam , where new housing has been built for people previously stuck in the city's most dangerous slums. (Photo: Reuters)

With 1.7 million housing units built and sold by the government over the past four years, the social housing sector is witnessing an unprecedented boom. The units, accommodating a wide spectrum of society, will be complemented by another 55,000 units that are currently being prepared for sale.

The Ministry of Housing, Utilities and Urban Development has “changed the concept of social housing”, said ministry spokesman Hani Younis. While during the rule of former president Hosni Mubarak, social housing units measured some 60 square metres, now units are 90 square metres in size, comprising three bedrooms and a living area and are sold fully finished, he said.

Younis explained to Al-Ahram Weekly that these units were sold via a mortgage system, in which owners pay a down payment and then installments. “The down payment is LE11,000, with monthly installments ranging between LE400 and LE900 for up to 20 years,” Younis said.

Founder of a major engineering consultancy firm Hussein Sabour believes that social housing has been absent from the state’s priorities in recent decades. “Although the units built in the past four years are not enough, the situation now is far better than it was,” he said.

However, he warned that the state’s interest in providing adequate social housing units would cost it huge amounts of money every year.

There have been 845 giant housing projects since 2014. A quarter of a million units have been provided to middle- and lower-income classes of society and shantytowns in particular have seen an impressive improvement. Some 280,000 units are now under construction across Egypt.

About half of the 550,000 units slated for the lower-income strata have been finished, and projects aimed to house the middle classes, such as “Egypt’s Housing” and “Egypt’s Home”, have been announced.

The “Egypt’s Housing” scheme is scheduled to include 100,000 residential units, 41,000 of which are currently being built. Due to the demand, an additional 28,000 units are in the pipeline.

The middle-class housing in the “Egypt’s Home” scheme will comprise 95,000 units across Egypt, 5,088 of which have been finished.

Housing expert Mohamed Abdel-Aal believes that “during Mubarak’s rule the state sided with the rich. Limited-income families were provided with poor-quality housing units. Unlike today, Mubarak’s government didn’t care about creating communities complete with services and job opportunities.”

In October 2017, the Central Bank of Egypt (CBE) decided to double the funds allocated to mortgage funding from LE10 billion for limited- and middle-income classes due to the increasing demand.

It had launched an initiative for mortgage financing in 2014 to grant LE10 billion in loans to the banks at low interest rates for 20 years so that the banks can then offer the loans to the limited- and middle-income classes. The CBE is to bear up to LE1 million of the interest charged.

Egypt needs to build 300,000 units annually to accommodate new families, and 254,000 units should be provided to bridge the gap created in the past five years.

Besides offering 90-square-metre apartments on 20-year installments through the mortgage system, the CBE’s initiative also allows for several other housing schemes.

There is the option of renting for those whose income is less than LE1,500, and the CBE is also offering 20,000 apartments through the professional syndicates to their members. Other units have been designed for those who have reached the age of 55 and make more than LE5,000 monthly.

“The private sector alone could not have afforded to construct all the units the state has built during the past few years. The state has benefited from its ability to obtain financing,” head of the Real Estate Investment Division at the CBE, Mamdouh Badreddin, said.

Badreddin said the private sector should play more of a role in providing social housing through the state offering land to the private sector. He stressed that the state should not dictate prices or profit margins. “Prices will be determined according to supply and demand,” he added.

The division has asked the Ministry of Housing to provide it with land at low prices to build social housing units. However, according to Khaled Abbas, housing minister assistant for technical affairs, no developers have stepped in to buy land to build social housing units in exchange for plots for investment projects.

According to government statistics, there are now 850,000 shantytown residents in Egypt. There are 351 unsafe housing areas, a third of which are located in Greater Cairo.

The minister of housing earlier stated that projects to develop the shantytowns required the building of 185,000 residential units, of which 22,000 have been completed, 87,000 are being built, and 76,000 are in the pipeline.

The 2017/18 plan includes developing 123 unsafe areas to serve 300,000 people at the cost of LE5.25 billion.

The Long Live Egypt (Tahya Misr) Fund is working on a three-phase strategy to eliminate the shantytowns. The first phase is developing 351 unsafe areas during 2018. The second phase is a medium-term plan that aims to renovate the infrastructure of all urban areas.

Tahya Misr is a fund that collects donations that go towards development projects, mostly of a social nature.

About 37 to 40 per cent of Egypt’s urban areas are not planned. Within the next 10 years, these will be developed, the government has said. The shantytowns will be developed and renovated at a cost of LE14 billion.

The third phase is a long-term strategy that aims at eliminating the causes that have lead to the creation of the shantytowns.

More recently Alexandria’s informal housing area of Gheit Al-Enab has been developed and Cairo’s Dweiqa residents moved to Asmarat.

Over a period of 18 months, Gheit Al-Enab, classified as a dangerous area, was renovated upon the initiative and under the supervision of the Northern Military Area without cost to the state.

The district comprises 17 buildings containing 1,632 units of 92 square metres and accommodating more than 8,000 of the area’s residents. There is also a mosque, a hospital with 175 beds, a technical training centre that includes 17 workshops and six education halls, 58 stores, a market, a children’s park and a centre for those with special needs.

The city of Tahya Misr is the biggest residential project executed by the government to rehouse informal housing residents. The city is located in Mansheyet Nasr in Greater Cairo, the country’s biggest shantytown. The project comprises three phases, called Asmarat 1, 2 and 3.

Asmarat 1 is built on 65 feddans of land and includes 6,258 units at a cost of LE850 million, excluding the price of the land. It was funded by the Cairo governorate and the Shantytowns Development Fund.

The second phase houses 4,722 residential units and is built on 61 feddans, the land being jointly owned with the Armed Forces. It was funded by the Long Live Egypt Fund at a cost of LE700 million.

Currently in the works is Asmarat 3, being built on 62 feddans of land and to include 7,440 units at an estimated cost of LE950 million and comprising a high school for industrial education, sports areas, parks, a market and a parking lot.

* This story was first published in Al-Ahram Weekly 

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