Egypt has spent billions of public funds over the last four decades on a housing policy that never reached its target beneficiaries, a paper issued by the Egyptian Initiative for Personal Rights (EIPR) revealed on Tuesday.
Recent studies by EIPR have proved that Egypt’s housing policies — including the national housing project known as “Iskan Mubarak” and the current Social Housing Project “Million Units Project” — ended up mostly benefiting those in middle and higher income brackets rather than the poor.
More than LE24 billion in public funds and billions more in private funds was spent on “Iskan Mubarak” and over LE9 billion to date on the “Million Units Project” since 2012.
The government has launched several projects in the last few years promising to solve the housing problem in Egypt.
The Social Housing Project (SHP) was launched by the Ministry of Housing in 2012, promising to provide a million units for young and low income families between 2012 and 2017.
Another project, also called the Million Units Project (MUP), but unrelated to SHP, was launched by the Army Corps of Engineers in cooperation with an Emirati developer, Arabtec, and announced by President Abdel Fattah al-Sisi in March. It has promised to provide one million units for low-income families between 2015 and 2020.
A third project is the Central Bank Initiative (CBI), a joint initiative by the Ministry of Housing, Guarantee and Subsidy Fund (GSF) and World Bank Affordable Mortgage Program. Based on this project, the Central Bank of Egypt (CBE) has agreed to provide lower interest rates for 10,000 subsidized units.
An expert group meeting was recently held by the Ministry of Housing to discuss a new housing policy for Egypt on May 22 this year. Among the attendees were officials from the ministry, UN habitat, domestic and foreign experts and representatives from civil society organizations.
One of the key recommendations, which EIPR presented at the meeting, is overseeing and controlling the real estate market, in order to bridge the gap between the cost of housing and incomes. While the government is already spending billions of pounds on subsidized housing projects, it has also been enforcing policies that have increased the gap between prices and incomes, outstripping its own subsidies. Thus, an independent body is needed to govern the real estate market, recommends EIPR.
Other suggestions include the re-directing of housing subsidies so that they are truly pro-poor, through redefining the legal definition of “low income” families to only include the extremely poor and the poor. Additionally, project units should be allocated through rent and not mortgages, and a government body created to oversee the enforcement of housing policies. This body would also coordinate between the various groups involved and monitor access to state funds.
Furthermore, EIPR suggests restructuring subsidized housing programs to better respond to the different housing needs of families, such as rural/urban differences as well as geographical and cultural variations. Such programs must also target families who have access to inadequate housing, whether due to structural problems, overcrowding, tenure illegality or lack of infrastructure.
The budget for the 2014/2015 Financial Year highlights the failure of the government’s housing policy, which does not support the right of the poor to pursue adequate housing, EIPR asserts.
EIPR is an independent rights organization, which has been operating since 2002, focusing on issues of civil liberties, economic and social rights.