In this week's issue, we explore Egypt&rsquo;s social housing program&mdash;its challenges, gaps in affordability, and beneficiaries.
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In a recent high-level meeting, President Abdelfattah El-Sisi <a href="https://www.osoulmisrmagazine.com/402949">ordered</a> the rapid rollout of 400,000 housing units for low and middle-income households. The president stressed the need to accelerate ongoing construction to meet his &ldquo;adequate housing for all Egyptians&rdquo; pledge. The government launched its social housing program in 2014 to build 1 million houses by 2020, but the program&rsquo;s conditions and design exclude low-income households, necessitating a revision of the current support scheme.&nbsp;
<h3 dir="ltr" style="text-align: justify;">Building continues, serving fewer</h3>
At the current <a href="https://www.dailynewsegypt.com/2024/07/15/egypt-constructs-1-5-million-housing-units-in-10-years-prime-minister/">rate</a>, the government will continue to fall short of its stated goals, even as demand for affordable housing remains high. While the Social Housing and Mortgage Finance Fund (SHMFF) estimates that <a href="https://www.shmff.gov.eg/wps/wcm/connect/a44dcda4-9f5a-4c6d-bf77-beea3523c971/%D8%AA%D9%82%D8%B1%D9%8A%D8%B1+%D8%A7%D9%84%D8%A3%D8%AF%D8%A7%D8%A1+%D8%A7%D9%84%D8%B3%D9%86%D9%88%D9%8A+%D8%B9%D8%A7%D9%85+2023.pdf?MOD=AJPERES&amp;CONVERT_TO=url&amp;CACHEID=ROOTWORKSPACE-a44dcda4-9f5a-4c6d-bf77-beea3523c971-oZiTQVT">400,000 units</a> are needed annually to satisfy demand, the 1-million units project has been&nbsp;<a href="https://www.sdg16.plus/policies/social-housing-finance-program-aims-to-provide-affordable-housing-for-low-and-middle-income-egyptians/">repeatedly extended</a>, leaving President El-Sisi&rsquo;s 2014 <a href="https://www.alarabiya.net/aswaq/realestate/2014/03/10/%D9%85%D8%B4%D8%B1%D9%88%D8%B9-%D8%A7%D9%84%D8%B3%D9%83%D9%86-%D8%A7%D9%84%D8%A3%D8%B6%D8%AE%D9%85-%D9%81%D9%8A-%D9%85%D8%B5%D8%B1-%D9%8A%D9%85%D9%87%D8%AF-%D9%84%D8%AC%D8%B0%D8%A8-30-%D9%85%D9%84%D9%8A%D8%A7%D8%B1-%D8%AF%D9%88%D9%84%D8%A7%D8%B1">pledge </a>only partially fulfilled by <a href="https://www.capmas.gov.eg/Pages/Publications.aspx?page_id=5104&amp;YearID=23415">FY2022/2023</a>.&nbsp;
<img style="display: block; margin-left: auto; margin-right: auto;" src="https://api-aps.aucegypt.edu/uploads/tinymce/1742194711imagemceclip0.png" width="405">
In fact, the government is increasingly investing less in affordable housing. In the past ten years, the government has <a href="https://marsadomran.info/en/2017/11/1218/">commodified</a> <a href="https://marsadomran.info/en/2017/11/1218/">its</a> housing supply, favoring luxury <a href="https://mhuc.gov.eg/%D9%88%D8%B2%D9%8A%D8%B1_%D8%A7%D9%84%D8%A5%D8%B3%D9%83%D8%A7%D9%86_%D9%8A%D8%B9%D9%84%D9%86_%D8%B9%D9%86_%D8%A3%D9%83%D8%A8%D8%B1_%D8%B7%D8%B1%D8%AD_%D9%84%D9%84%D9%88%D8%AD%D8%AF%D8%A7%D8%AA_%D8%A7%D9%84%D8%B3%D9%83%D9%86%D9%8A%D8%A9_%D8%A7%D9%84%D8%AC%D8%A7%D9%87%D8%B2%D8%A9_%D9%84%D9%84%D8%AA%D8%B3%D9%84%D9%8A%D9%85_%D8%A7%D9%84%D9%81%D9%88%D8%B1%D9%89_%D9%81%D9%89_15_%D9%85%D8%AF%D9%8A%D9%86%D8%A9_%D8%AC%D8%AF%D9%8A%D8%AF%D8%A9/%D8%A8%D9%8A%D8%A7%D9%86%D8%A7%D8%AA_%D8%B5%D8%AD%D9%81%D9%8A%D8%A9">developments in new cities</a> over accessibility for low-income households. At times, the Ministry of Housing has even <a href="https://www.jstor.org/stable/j.ctv2ks6zb8.15?searchText=&amp;searchUri=&amp;ab_segments=&amp;searchKey=&amp;refreqid=fastly-default%3A91c03a31d72a3911db7daa170ee26563&amp;initiator=recommender">repurposed projects</a> originally intended for low-income groups to cater to upper-middle-income earners.
<img style="display: block; margin-left: auto; margin-right: auto;" src="https://api-aps.aucegypt.edu/uploads/tinymce/1742194766imagemceclip1.png" width="405">
Furthermore, mortgage access overall remains limited in Egypt. In 2023, households earning less than EGP 2,500 accounted for a mere <a href="https://fra.gov.eg/wp-content/uploads/2024/03/Monthly-Data-_December-2023-New.pdf">0.1% of mortgage values.</a>
<img style="display: block; margin-left: auto; margin-right: auto;" src="https://api-aps.aucegypt.edu/uploads/tinymce/1742194877imagemceclip2.png" width="405">
<h3 dir="ltr" style="text-align: justify;">A housing program for the wrong people</h3>
In addition to the dedication of fewer resources to social housing , what is available also remains inaccessible to a significant portion of the population. Informal workers must meet <a href="https://www.jstor.org/stable/j.ctv2ks6zb8.15?searchText=&amp;searchUri=&amp;ab_segments=&amp;searchKey=&amp;refreqid=fastly-default%3A91c03a31d72a3911db7daa170ee26563&amp;initiator=recommender&amp;seq=22">stringent requirements</a>, including a down payment three times higher than that required from workers in formal employment. In 2016, President Sisi <a href="https://gate.ahram.org.eg/daily/NewsQ/511363.aspx">acknowledged</a> these barriers, prompting adjustments to loan conditions and eligibility criteria. Despite the changes, only 34.2% of social housing beneficiaries in 2023 were semiformal workers, a category found in <a href="https://www.shmff.gov.eg/wps/wcm/connect/a44dcda4-9f5a-4c6d-bf77-beea3523c971/%D8%AA%D9%82%D8%B1%D9%8A%D8%B1+%D8%A7%D9%84%D8%A3%D8%AF%D8%A7%D8%A1+%D8%A7%D9%84%D8%B3%D9%86%D9%88%D9%8A+%D8%B9%D8%A7%D9%85+2023.pdf?MOD=AJPERES&amp;CONVERT_TO=url&amp;CACHEID=ROOTWORKSPACE-a44dcda4-9f5a-4c6d-bf77-beea3523c971-oZiTQVT">SHMFF reports</a> that also includes self-employed individuals, even though informal workers comprise <a href="https://www.capmas.gov.eg/Pages/Publications.aspx?page_id=5104&amp;YearID=23620">44.3%</a> of the total population.&nbsp;
Egypt&rsquo;s <a href="https://www.theigc.org/sites/default/files/2018/02/Housing-finance-January-2018.pdf">subsidy</a> structure provides <a href="https://unhabitat.org/sites/default/files/2020/09/egypt_housing_strategy.pdf">limited relief</a> for low-income households. In 2022, the government <a href="https://www.sdg16.plus/policies/social-housing-finance-program-aims-to-provide-affordable-housing-for-low-and-middle-income-egyptians/">extended</a> mortgage loan repayment terms to 30 years with a reduced 3% interest rate, with subsidies covering up to 15% of the unit price, inversely tied to income. Formally employed households in the lowest income quintile, however, must pay <a href="https://marsadomran.info/en/2018/05/1543/">double the upfront costs</a> of the top earners to be eligible for a mortgage. Dr. Abbas Al-Zafrani, professor of environmental design at the Faculty of Urban and Regional Planning at Cairo University, says &ldquo;The program benefits those with financial stability seeking secure tenure, not those actually struggling.&rdquo; <a href="https://m.manassa.news/news/20427">Budgetary constraints</a> exacerbate these shortcomings, as actual expenditures on housing subsidies consistently fall below initial allocations. For example, <a href="https://mof.gov.eg/ar/posts/finalCalculation/66e7f888ac95f800096ee0d4/%D8%A7%D9%84%D8%AD%D8%B3%D8%A7%D8%A8%20%D8%A7%D9%84%D8%AE%D8%AA%D8%A7%D9%85%D9%89%20%D9%84%D9%84%D9%88%D8%AD%D8%AF%D8%A7%D8%AA%20%D8%A7%D9%84%D8%A7%D9%82%D8%AA%D8%B5%D8%A7%D8%AF%D9%8A%D8%A9%20%D9%84%D8%B9%D8%A7%D9%85%202023%2022">EGP 4.4 billion was spent in FY 2022/2023</a> compared to a <a href="https://mof.gov.eg/ar/posts/stateGeneralBudget/627bb3136b2340000aca3b95/%D9%85%D9%88%D8%A7%D8%B2%D9%86%D8%A9%20%D8%B9%D8%A7%D9%85%D8%A9%202022%2023">proposed EGP 5 billion</a>.&nbsp;
Subsidies in Egypt&rsquo;s social housing program are misaligned, disproportionately benefiting middle-income earners. Alaa Abdelfattah, the assistant minister for local development, says &ldquo;The program targets the wrong income group and fails to serve those most in need.&rdquo;&nbsp;
<img style="display: block; margin-left: auto; margin-right: auto;" src="https://api-aps.aucegypt.edu/uploads/tinymce/1742194941imagemceclip3.png" width="405">
<h3 dir="ltr" style="text-align: justify;">A holistic path forward</h3>
The sustainability of Egypt&rsquo;s social housing programs demands a shift from costly built-unit models to subsidized serviced plots, enabling families to build <a href="https://publication-cpas-egypt.com/wp-content/uploads/2024/01/Developing_Incremental_Housing_Developments-.pdf">incrementally</a>. By redirecting resources away from luxury projects into preparing land with infrastructure, the state can slash costs and use savings to subsidize plot access. Pairing this with targeted financing&mdash;low-interest microloans for construction and down payment support&mdash;would enable low-income households to build their own homes affordably.
This strategy, anchored in land access, financial inclusion, and partnerships, fosters sustainable communities, curbs informality, and ensures generational affordability.
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The Alternative Policy Solutions Project received a response from the Social Housing and Mortgage Finance Fund regarding our Adasa edition No. 94 on social housing in Egypt. The Fund requested that the article be removed from the website, a stance that contradicts our core principles of promoting the right to knowledge and providing public spaces for open discussion and diverse viewpoints. In light of this, we have decided to publish the Fund&rsquo;s response, accompanied by a brief clarification, to uphold our followers' right to engage in the ongoing conversation.
<img style="display: block; margin-left: auto; margin-right: auto;" src="https://api-aps.aucegypt.edu/uploads/tinymce/1743664888imageEvidence-Based Analysis Refuting Misconceptions in the Adasa Report-p1.jpg" alt="" width="900" height="1165">
<img style="display: block; margin-left: auto; margin-right: auto;" src="https://api-aps.aucegypt.edu/uploads/tinymce/1743664668imageEvidence-Based Analysis Refuting Misconceptions in the Adasa Report.jpg" alt="" width="900" height="1164">
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Clarification
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Inclusive Reach of the Social Housing Program
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Adasa's article mentioned that the lowest-income group, earning between EGP 1,501 and EGP 2,000, constitutes 25% of social housing beneficiaries. As the article explains, this group should be the primary beneficiary of the social housing program, and therefore, their percentage should be higher than it currently is.
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Housing Unit Production and External Challenges
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Adasa's article pointed out that the 568,729 housing units in the One Million Housing Units Project do not represent the total number of units built by the Fund, but rather the number of units completed by 2023. This figure is sourced from the <a href="https://www.capmas.gov.eg/Pages/Publications.aspx?page_id=5104&amp;YearID=23415">Housing Bulletin, p. 4</a>, issued by the Central Agency for Public Mobilization and Statistics, Egypt's leading authority on public statistics.
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Enhanced Accessibility for Informal Workers
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Adasa's article highlighted that the issue stems from the inability of informal workers to access adequate housing. The article mentions that informal workers constitute <a href="https://www.capmas.gov.eg/Pages/Publications.aspx?page_id=5104&amp;YearID=23620">44.3%</a> of the labor market, according to the annual labor force survey published by the Central Agency for Public Mobilization and Statistics. While the Social Housing and Mortgage Finance Fund's <a href="https://www.shmff.gov.eg/wps/wcm/connect/a44dcda4-9f5a-4c6d-bf77-beea3523c971/%D8%AA%D9%82%D8%B1%D9%8A%D8%B1+%D8%A7%D9%84%D8%A3%D8%AF%D8%A7%D8%A1+%D8%A7%D9%84%D8%B3%D9%86%D9%88%D9%8A+%D8%B9%D8%A7%D9%85+2023.pdf?MOD=AJPERES&amp;CONVERT_TO=url&amp;CACHEID=ROOTWORKSPACE-a44dcda4-9f5a-4c6d-bf77-beea3523c971-oZiTQVT">annual performance report</a> states that 34.2% of beneficiaries are freelance professionals, this figure encompasses a broad range of self-employed individuals, including doctors, lawyers, engineers, and artists, and is not exclusive to informal workers. Therefore, this percentage should not be used to indicate that informal workers are receiving housing.
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Uniform Financial Requirements for All Applicants
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In its response, the Fund stated that it adheres to the principle of uniform financial requirements from all applicants. The Adasa article argued that while equal financial requirements may seem fair, they do not achieve the intended justice. Applying the same financial criteria to both low-income individuals and high-net-worth individuals diminishes the former&rsquo;s chances of securing adequate housing and is inconsistent with the principles of affirmative action and justice.
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Affordable Mortgage Structures
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Contrary to the Fund's response, housing costs should not exceed 30% of income, as recommended by the <a href="https://unhabitat.org/11-1-adequate-housing?utm">United Nations Human Settlements Programme</a> (UN-Habitat). This finding is also supported by research from the <a href="https://www.jchs.harvard.edu/sites/default/files/media/imp/Harvard_JCHS_Herbert_Hermann_McCue_measuring_housing_affordability.pdf">Joint Center for Housing Studies at Harvard University</a>. Therefore, allocating 40% of household income to settle mortgage payments exceeds the thresholds set by international research organizations.
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Comprehensive Subsidy Support
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Regarding subsidy support, the Adasa article was based on available information, including a <a href="https://publicadministration.un.org/unpsa/Portals/0/UNPSA_Submitted_Docs/2019/70e05bf3-5504-4505-97ae-257701ab28ba/Oct%202019%20AUHF%20conference_27112019_111246_ee15aea7-9ab7-41b9-9d1b-32977746a5ec.pdf?ver=2019-11-27-111246-867">statement from the Fund's CEO</a> and a report from <a href="https://www.sdg16.plus/ar/policies/%d9%8a%d9%87%d8%af%d9%81-%d8%a8%d8%b1%d9%86%d8%a7%d9%85%d8%ac-%d8%aa%d9%85%d9%88%d9%8a%d9%84-%d8%a7%d9%84%d8%a5%d8%b3%d9%83%d8%a7%d9%86-%d8%a7%d9%84%d8%a7%d8%ac%d8%aa%d9%85%d8%a7%d8%b9%d9%8a-%d8%a5/">the Inequality Solutions Platform</a>. According to these sources, the direct cash subsidy amounts to 15%, along with a reduction in the interest rate to 3%.
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Equitable Cost Distribution
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There is no contradiction between the Fund's response and the Adasa article, which noted that the value of the subsidy is inversely related to income, in line with the principle discussed in point 4 above.&nbsp;
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Prioritization of Vulnerable Groups
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The Fund's response regarding mortgage beneficiaries is based solely on the figures cited in its report and the loans it provides, while the Adasa article draws on multiple references and reports. Specifically, it referenced the monthly performance report for non-banking financial activities issued by the Financial Regulatory Authority to provide a more comprehensive view of mortgage financing availability. According to the report, households with incomes below EGP 2,500 accounted for no more than 0.1% of the value of total mortgage loans.
* In conclusion, we would like to express our respect and appreciation for the efforts of the Social Housing Fund and Mortgage Finance Fund. Our intention to propose additional measures to enhance the impact of public policies in no way undermines this appreciation or the significance of the work already done. Ultimately, we all share a common goal: the public good.
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<div style="text-align: justify;">"Adasa" is a weekly policy digest by Alternative Policy Solutions. "Adasa" provides an analysis of a select number of policy developments and their effect on inclusive development and socioeconomic change.</div>

عدسة

Adasa

الإسكان

Housing

السياسات الاقتصادية

Economic Policies

التنمية الشاملة

Inclusive Development

الإسكان الاجتماعي في مصر... التحديات والفجوات في القدرة على تحمل التكاليف 

Social Housing in Egypt: Challenges and Gaps in Affordability

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