The New Urban Communities Authority (NUCA) approved the decision to add fourth and fifth floors in the plots of land includes villas and residential buildings in new cities on 24 May 2016.
The decision stated that an additional floor is allowed to be built in the new cities for the buildings and villas whose utilities and services accommodate the increase, so as not to affect the facilities.
After the debate on the decision to increase a floor for buildings of the new cities and the refusal of the parliamentarians to it, the Ministry of Housing suspended it. However, Minister of Housing Mostafa Madbouly said that the ministry’s decision to increase additional floors of the new cities will be applied soon to those who apply for it and that it will not be applied to violating buildings.
The minister added that a new contract will be made to the owner of the land wishing to build additional floors. This would requires a licence for the new floor, in return paying 25% of the square metre price, which would be done by calculating the average between the old and current price of the land.
Madbouly noted that the ministry has received many requests from citizens in the new cities, during the last period, demanding the legalisation of building a full floor on the total area of the building.
Some investors and real estate developers demanded such decision to provide more housing units in the real estate market, which is not saturated with housing units, where demand is still more than the volume of supply actually, especially in new cities. This is in addition to hikes in land prices, according to Ashraf Dowidar, CEO ARDIC for Real Estate Development.
Dowidar told Daily News Egypt that the decision is in favour of real estate investment companies as it represents an additional income for companies, which can be used to meet the recent price increases. This resulted after the decision to liberalise the exchange rate, without charging these increases on customers, Dowidar stated.
Dowidar noted that his company preferred not to make use of such decision and add additional floors.
“We are very keen to adhere to our commitments to work hard to achieve the satisfaction of our customers by providing the highest level of quality and wellbeing in the projects. We are proud of and are keen on them, and this is by abiding by our commitments to our customers and win their satisfaction, which is more important than the profit gain that can be achieved from behind implementing that decision,” Dowidar added.
“We cannot deny how much profit the decision will make as it may reach EGP 400m, but we decided to keep the buildings as they are five floors in order to preserve the architectural style of Zizinia El Mostakbal compound. It is also important for us to maintain the share of owners in the land as stipulated in the contract.”
Abdallah Hassan, senior property consultant at Coldwell Banker Commercial, agreed with Dowidar that real estate companies will make use of such a decision to build new floors and units in the same building with a lower cost than the floors below.
Hassan added that the government will also make use of such a decision from gathering money from providing licences and permits for building new floors, as well as reducing the phenomenon of violating building, especially the owner of the property to reconcile with the government agencies in exchange for payment of those bodies.
Hassan pointed out that the decision regulates the process and limits the violations.
Meanwhile, Ashraf Diaa, the managing director of ERA West Associates noted that the decision said the decision is not in line with the strategic vision of the population expansion in the new cities. He explained that the decision did not result from an urban thought more than to reduce the violations that spread in Egypt recently.
He said that adding new floors to buildings will cover the sun and prevent ventilation, while the cities of Shorouk and Al Mostakbal are empty and have affordable lands.
“I am afraid that increasing the number of floors will result in an excessive population density,” he said.