Egypt seeks to curb housing shortage

Egypt seeks to curb housing shortage

With a population of more than 90 million Egypt’s appetite for residential units is staggering. According to ministry officials, Egypt needs between 500,000 to 600,000 homes annually, of which almost 70% should cater to the poor.

The housing ministry recently opened its doors to applicants registering for what it described as the country’s largest-ever offering of low-income housing, with more than 500,000 state-subsidized units up for grabs. This the government says seeks to curb housing shortage in the country.

But the program has limited participation by the private sector. Jean Pesme, World Bank’s manager for finance and markets in the Middle East and North Africa says that emerging-market countries that have had  success in developing affordable housing—like Mexico, Morocco and India—have made strides partly because of private-sector involvement.

Affordable-housing programs generally work better when the private sector also is involved in financing and ownership. In Morocco, the government encouraged a surge in low-cost housing construction over more than a decade through a system that integrated the private sector at all phases.

Moroccan private banks made government-guaranteed loans to people with low or irregular income. The program was financed mostly by taxes on cement manufacturers, which enjoyed a boost in sales as developers were offered state land at reduced prices. Supply grew both of much-needed homes for people with low income and the middle class while sales of luxury homes helped private businesses hit their profit margins.

“Such arrangements are complex in nature and require technical discussions in order to strike the best balance between both public and private interests,” Mr. Pesme said.Egypt is struggling to strike similar agreements with the private sector.

 

 

 

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