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Picket fences

CAIRO: In an effort to combat the acute shortages of economy housing units, the government has launched a number of initiatives aimed at dealing with the situation. President Hosni Mubarak, Minister of Housing, Utilities and Urban Communities, Mohamed Ibrahim Suleiman and the ruling National Democratic Party (NDP) have proposed a six year plan for 2005-2011 …


CAIRO: In an effort to combat the acute shortages of economy housing units, the government has launched a number of initiatives aimed at dealing with the situation. President Hosni Mubarak, Minister of Housing, Utilities and Urban Communities, Mohamed Ibrahim Suleiman and the ruling National Democratic Party (NDP) have proposed a six year plan for 2005-2011 as a means of addressing the nationwide problem of housing shortages, which are compounded by several factors, among them the country’s population growth rate, which in the year 2005 reached 1.78 percent (while the world growth rate in 2005 is 1.14 percent).

According to the latest annual reports issued by the Egyptian Center for Housing Rights (ECHR), the primary causes of housing shortages include massive rural-urban migrations, which have led to an increase in demand for, and pressure on, low-cost housing. Moreover, the profit-making incentives to build luxury housing have overridden the advice of housing experts regarding the necessity of, and demand for, economic housing units for those with low incomes.

Contemporary housing policies have resulted in the presence of one million unoccupied apartments in Cairo, and another 800,000 in other governorates.

Egypt’s housing crisis is described as one of “dwellers without dwellings, and dwellings without dwellers, by the ECHR.

Current national housing policies are also accused of bringing about the proliferation of informal housing communities, whose populations have reached over 11,561,000.There are no accurate statistics regarding the exact number of homeless persons and “street children nationwide, but evidence suggests that these numbers may be in the tens, if not hundreds of thousands.There are further untold millions of youths, young graduates and would-be spouses in search of economically feasible apartments.

So what has the state done to address housing problems? Suleiman recently announced that “The state has built three million housing units over the last 20 years at an estimated cost of LE 57.6 billion.

The director of the Egyptian Center for Housing Rights, Manal al Tibi, however, disagrees with these statistics. “These numbers are misleading, since they combine all that was produced in both the public and private sectors, as well as by individuals declared al Tibi, adding that “in reality the state is moving away from its social responsibility of providing economic housing units to the low-income segments of society – it is trying to woo private sector contractors into gradually taking this responsibility off the state’s shoulders. Furthermore, the state has steadily been decreasing the subsidies that it provided on economic housing units – in 2001 the state subsidized such units to the tune of 55 percent. In 2005 it has decreased subsidies to around 33 percent

On the other hand, the Housing Ministry’s official spokesman, Hisham Amin, chose to refer to the glass as half full. “Who said that the state has become less involved in solving the country’s housing problems? The Ministry of Housing is directly responsible for the construction of 60,000 new housing units each year, said Amin.

“The state s budget has provided for subsidizing the land on which the new units are built, as well as nearly 50 percent of the costs of construction and the provision of water, sanitation and electricity to the new youth housing units.

“From 1996 – 2005, the Mubarak National Project for Youth has successfully completed the construction of 100,000 housing units in 13 new cities, including the Tenth of Ramadan, Sixth of October, Al Sadat, Al Shurouq, Al Obour, New Damietta, New Beni Sueif, New Assiut, New Luxor and New Cairo. The price of constructing these 100,000 units, since 1996, has cost the state’s budget well over LE 5 billion.

Another major development scheme, the Future Housing Project, which was established in 1998 under the patronage of First Lady Suzanne Mubarak, has completed the construction of more than 70,000 youth housing units – located primarily in the new industrial and satellite cities.

President Mubarak and Suleiman conducted their presidential and parliamentary campaigns, respectively, with a common six-year housing program for 2005-2011.

The unified NDP program stressed that amongst the government’s top priorities is the task of improving living standards for low income segments of society and prioritizing the needs of disadvantaged groups, specifically through a detailed housing initiative entitled the “Half a Million New Homes Project.

The project’s six-year plan aims at constructing 500,000 housing units for youth to be built by the private sector. So as to subsidize the private sectorbuilt housing units,the state will undertake the following: the provision of the land to the private sector, free of charge, on which the housing units are to built; linking these new units with public utilities networks – including water, sanitation and electricity, as well as the provision of other public services and transportation, and the supplying of all services required by private sector contractors for the purpose of constructing the youth-housing units.

Following this plan, it is expected of the private sector to construct youth housing at a rate averaging 85,000 new units each year in Cairo, in the governorate-capitals of Lower and Upper Egypt, as well as in the new cities.

Each youth housing unit is to measure 70 square meters and to cost LE 50,000 – the state’s budget is to subsidize LE 15,000 of each housing unit. The remaining LE 35,000 are to be paid in installments on the following basis: a down-payment of LE 5,000, with the remaining LE 30,000 to be paid in monthly installments over a period of 20 to 30 years.

“The Half a Million New Homes Project has not yet been put into action Amin said, adding that “it is, however, due to be launched in early 2006.

The Housing Ministry spokesman, however, had no response to the question asking why would private sector contractors undertake the building of economy and youth housing projects which are either only marginally profitable or nonprofitable? “Mubarak pledged to provide 85,000 housing units each year over the next six years – for a total of about 500,000 new units.What is really needed, however, is about 600,000 units to be built each year to adequately deal with the nationwide problem of housing shortages, said al Tibi.

On the regional level, officials from the Giza Governorate announced on Nov. 27 that the governorate had completed the construction of 2,500 youth housing units, at an expense of LE 90 million.This project is part of a larger housing initiative, with the goal of establishing a residential quarter of 15,000 by Rimayah Square. The 2,500 units are to be distributed through a public lottery from Dec. 12 -26, and well over 5,000 youths have applied for housing units via the lottery.

The construction of 2,500 youth housing units in Giza is a local governorate project. The Ministry of Housing did not partake in this construction – except for the extension of public utilities networks, said Amin.

“The government’s housing projects aim to ease the burdens of youth and young graduates through the provision of apartments at affordable prices said 35-year-old taxi driver Moataz Salah.”The government can clearly do more to help youth find economic housing, or at least keep real estate prices from skyrocketing.

“I had to wait nearly six years to find a place I could afford in Al Basateen, so that I could finally marry my fiancée. Countless number of youths are held back from marriages and numerous
engagements and would-be marriages fall apart due to the unavailability of apartments. It’s a social crisis, combining the problem of exceptionally high prices for apartments, together with the problem of a lack of economic housing, added Salah.

Topics: Investment

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