Discrimination against the poor and support for the undeserving: EIPR analysis of the new conditions for the Social Housing Programme

Press Release

10 April 2014

The Egyptian Initiative for Personal Rights issued the first in a series of short studies on the public housing programmes. The study analyses the new conditions for the allocation of subsidized housing units from the Ministry of Housing’s Social Housing Programme (SHP), which is also known as the million-unit project. These conditions also form part of a new social housing law, ratified last March.

The analysis concludes that that the conditions may deny 40 percent of Egyptians—all of them from the poorest segments —access to some LE8.1 billion in public subsidies and investments as allocated in the state budgets of 2012/2013 and 2013/2014. The conditions also denies almost two-thirds of Egyptians working in the informal sector—most of them poor—access to housing units under the project because they work without formal employment contracts.

Based on previous housing projects, as much as 90 percent of the housing units in the project may be allocated as ownership units via mortgages. As such, some 50 percent of Egyptians will not benefit from the units, as they will not be able to meet the minimum income threshold for a mortgage. According to official press releases, the minimum monthly installment will be LE 480 per month, thus requiring a family income of LE23,000 a year, which according to the Central Agency for Public Mobilization and Statistics’ (CAPMAS) 2012/2013 Household Income, Expenditure and Consumption Survey are families in the middle income bracket.

As for rental units, which may constitute only 10 percent of all units, 40 percent of lower income Egyptians will be ineligible. 30 percent of lower income Egyptians, earn less than the minimum LE23,000 needed to buy a unit and more than the maximum income to rent a unit, set at LE18,000.

In addition, the rental price—LE225 monthly—means that nearly 10 percent of low-income Egyptians—the poorest—cannot take advantage of these units because the rent would be too high.

The study concludes with several recommendations on redirecting subsidies and investments to the poor, including; a new legal definition of low income families, designating the vast majority of units as rental units, the establishment of a more realistic and fair framework to identify and confirm income and guarantees for the sustainability and security of tenure of the housing units.

To read the full analysis: Click here