Egypt: More housing for limited-income groups

Last month, the presidency announced that 250,000 social housing units were being constructed as part of the country’s social housing programme targeting limited-income groups and those deserving subsidies.

Since the launch of the programme in 2015, 600,000 such units have been built. According to May Abdel-Hamid, CEO of the Social Housing and Mortgage Finance Fund, “the initial plan of the fund was to construct 120,000 social housing units before presidential orders raised the figure to 250,000 units nationwide.”

The fund has asked governors to provide data on land suitable for the implementation of the project in each governorate, in addition to information on infrastructure. It stipulates that the land be state-owned, be located in urban areas, and be no less than 1,000 metres square in area.

A meeting between the minister of housing and the New Urban Communities Authority has been held to discuss infrastructure and the extra land to be added to the projects based upon the presidential order.

The groups targeted by the social housing programme are determined by annual cabinet decisions. The latest of these has decreed that units may be allocated to married couples whose joint income is LE5,700, with allocations also being made for single people on incomes of LE4,200 and those on the minimum wage of LE1,300.

Five per cent of units are allocated to people with special needs, and priority is given to widows and divorced women.

Building the units is regulated by the social housing law of 2014, explained Abdel-Hamid, who added that increasing the number of units would not change the procedures for applicants.

Advertisements are published to receive applications for units in certain areas, and units are only built in areas where they are needed.

The social housing programme was launched five years ago with the aim of providing the less-privileged with one million housing units. Ten advertisements were placed to help sell the units, including one that received 300,000 applications and another that received 230,000.

305,000 families have been housed in these 90 metre square apartments with the help of mortgages estimated at LE30.24 billion. Overall financial subsidies are worth LE4.9 billion.

The Social Housing and Mortgage Finance Fund is now handling 665,000 residential units, including 427,000 finished units, 193,00 units being built, and 35,000 available to contractors.

The last category cost LE270,000 per unit, each subsidised to the tune of LE100,000, Abdel-Hamid said.

The fund will be publishing advertisements for still unsold units in previous social housing projects, to be followed by others for new units at prices increased by LE100,000.

Abdel-Hamid expects the 250,000 new units will be offered through advertisements, with the units delivered within three years of publication. Prices may rise by 10 per cent if the cost of building materials increases.

The social housing programme offers housing units at subsidised prices and does not include the value of the land in the cost of the unit, said Mohamed Abu Samra, a former expert with the United National Human Settlements Programme (UN-Habitat).

“However, factoring out the value of the land is worrying because it drives officials to allocate land on the outskirts of cities, leaving high-value land for other more profitable projects,” he said.

Living on the outskirts of cities can be an added burden to people’s incomes, since extra money must be found for transportation and services concentrated in the centres of urban areas, he added.

Islam Mahmoud, who has moved into a social housing unit in the Hadayek October district, said his house was 40km away from his work. “I moved into the new house because the monthly instalments were far less than the house I was previously renting in Giza where more services were available,” he said.  

“It’s a complicated question: either you can settle for a rented house in an area with a high level of services or you can buy your own apartment with moderate mortgage payments and accept that there will be fewer services,” Mahmoud said.

In March, the World Bank announced a financial package for Egypt worth $500 million to help people to buy subsidised housing units, enhance the work of the Social Housing and Mortgage Finance Fund, and help to support policies and programmes in the social housing sector.

The Social Housing and Mortgage Finance Fund now has a total of $1.3 billion to support the housing needs of limited-income people.