Egyptian housing crisis exacerbated by government policies

Egypt's president has cracked down on building residential homes on agricultural land. The dilemma is posing a catch-22 for Egypt's poor and middle-class, who cannot afford living in new government-subsidized housing communities. 

First Look

In the home he shared with 11 relatives, Mohammed Abd al-Hamid had no room to start a family. But since he put up a house on a nearby field in 2016, he has paid $4,500 in fines for building on agricultural land.

"There was no alternative," said Mr. Abd al-Hamid who works for a Cairo security company, standing in front of his pink-painted house in the Nile Delta. "Am I supposed to rent an apartment in Cairo? I can't afford that."

Egypt's population of nearly 100 million is growing rapidly and about 38 million live in unplanned communities.

In the turmoil after the 2011 Arab Spring, the number of unlicensed buildings sky-rocketed. Now authorities are cracking down on residents who build on farmland, but are providing few alternatives for those who need cheap houses.

People who build on agricultural land now face up to five years in prison and a fine of up to 5 million Egyptian pounds ($280,000). Before the law was revised in January, the top fine was 50,000 pounds ($2,800) and the prison term wasn't specified.

Authorities say they want to end unlicensed building on farmland, reduce overcrowding, and provide homes for the poor, but analysts say many new government housing projects are too expensive and have poor services.

As a result, large numbers of new homes are unoccupied, while people still build on farmland in areas where housing demand is high.

"This shows you it's a distorted housing market and price incentives and accessibility have not worked out,” said Michele Dunne, director of the Middle East Program at the Carnegie Endowment for International Peace, a think-tank.

Under President Abdel Fattah al-Sisi, the military has been seeking ways to tighten control over the population, she said.

"And one of these ways seems to be controlling real estate development and channeling people toward the communities the government is building rather than communities that sprout out organically in places where people want to live."

The military owns 51 percent of a firm that is developing a new capital east of Cairo.

Government penalizes without offering alternatives

Since the 2011 revolution, nearly 85,000 acres of farmland have been lost to illegal construction, according to data from the ministry of agriculture.

That's a 40 percent average annual increase compared to before 2011, according to a Reuters calculation based on data going back to 1983.

Of those 85,000 acres, 28,000 have been cleared of buildings, but most is not being farmed, the ministry said.

On Monday, the government started a campaign to demolish unlicensed buildings from 19,000 acres of farmland.

"Look at the size of the encroachments on agricultural land," Mr. Sisi said in September.

"If it continues at this rate ... then we will have unplanned growth that requires spending on health care that's not available, clean water that's not available, roads and electricity networks that are not available. That can't be."

The Nile Delta, one of the most densely populated parts of the country, is also one of the hardest hit by unlicensed construction on farmland.

"Where else should we build?" said Sahar Fathi Ayed, Abd al-Hamid's sister, who has built a house on the family's fields in the village of Ikyad Dijwi.

"Our children got older and wanted to get married and there are no rental apartments here," she said.

Lack of housing is no excuse for building on farmland, said Hamed Abd al-Dayem, spokesman for the ministry of agriculture.

In an effort to tackle its growing housing needs, Egypt has launched a series of housing projects and is developing 42 new cities, but many are underoccupied.

New Cairo, Sheikh Zayed, and Shorouk have occupancy rates of 65, 50, and 55 percent respectively, according to Leilani Farha, United Nations special rapporteur on housing.

One of the more established new cities, 6th of October, has an occupancy rate of 75 percent, she said. People in some new cities have limited access to schools, clinics, emergency services, transport, and food, she said.

"There also appears to be a lack of income mix within housing estates and a tendency towards gated communities for upper income housing," Ms. Farha wrote in a statement following a visit to Egypt last month.

The government does have a social housing program for low and middle-income families, she said, but only 2.2 percent of all social housing benefits Egyptians with the lowest incomes.

Jamal al-Sayed, who left farming when fuel for his tractors became too expensive, sees no alternative to building on his farmland.

"I built a house for my son so he could get married," said Mr. Sayed who now works in a bakery. "There's a lack of housing in our town. So I built on the land that I own."

Homes in the town are small and people are forced to build when their families expand. He has paid 60,000 Egyptian pounds ($3,000) in fines since he built the house in 2013.

Residential land tends to be expensive, said Kevin Graham, the Oxford Business Group's editorial manager in Egypt. "Developers pick up this land but end up often building very high-cost homes rather than affordable homes," he said.

Stricter punishment for building on farmland is part of the government's effort to boost revenue through taxation, he said.

"But in order for it to really be a solution, other options must be made available to those driven to build outside of the formal system," he said.

Egypt is the world's top wheat importer and authorities want to end building on farmland and grow more at home. The government is also trying to reclaim areas in the desert for agricultural use, said General Mohamed Helmy Abd el-Hamed Rashwan, executive manager of the General Authority for Rehabilitation Projects and Agricultural Development at the Ministry of Agriculture.

"It can't be right that while we're trying to cultivate the desert we are losing beautiful Egyptian farmland," he said. "Agricultural land is a red line."

This story was reported by Reuters. Additional reporting by Nadine Awadalla.