- Published on 26 February 2018
As part of the BEO’s State of Housing 2017 series, this article chronicles the first hand experiences of a number of low income families in their pursuit to rent an adequate home under New Rent (market rent). They are part of almost 1.5 million households who cannot afford to build or buy a home, or who do not enjoy the extremely low values of Old Rent (Rent control).
Renting, but Looking to Own
Ilham, a fitness instructor in Cairo, pays EGP 500 a month for a 90 m2 flat in Ard al-Liwa, to the west of Giza. She rents it from her brother in-law, who gives her a lower rent in comparison to the EGP 700 paid for flats in the same street.
Median Rents in Giza were EGP 825 in 2017, and EGP 1200 nationwide
For more see Egypt State of Rent 2017
Ilham lives together with her husband and two sons. Her basic salary is EGP 1100. Her husband who works as an accountant earns EGP 1200. Both salaries, however, hardly cover their expenses and Ilham has to work over-time giving private fitness classes, which earn her about EGP 1000 more.
She would rather buy a flat though.
“My husband and I could both get into a gam’eyya [rotating saving scheme] and pay off the EGP 80,000 [for a flat they found] over several instalments, but he says he can barely cover his old saving schemes and refuses to buy the flat”
Wafaa, a single mother of three, rents in Baragil, an area close to Imbaba, for EGP 930. She works as a cleaner and makes around EGP 3000 a month, working occasionally on Fridays and taking extra tasks in the evening. She is responsible for the rent, bills and her children’s food and medical expenses.
Her son, 18, started working since he was 14, first with a mechanic, and now in a company as an electrician where he makes enough money to cover his own expenses. While her daughter, 21, is finishing her studies at university, she recently started working part-time, also as a cleaner, to sustain her own living and educational expenses. Wafaa still needs to cover her younger son’s expenses, aged 6, but also gets EGP 1500 alimony from her ex-husband.
With all these burdens, Wafaa was able to save some money hoping to eventually buy a small plot of land where she can build a home for her family. She managed to save EGP 40,000 from an earlier gam’eyya and is starting a new one in January for another EGP 45,000. However, she cannot find land in the surrounding area for less than EGP 200,000, which is still a far stretch away, given that she will still need to come up with building costs.
In the neighbourhood of Imbaba, north east of Giza, Emad, a father of two, rents a 70 m2 apartment using what is termed as a ‘aqd maftuh (open contract), which is a long-term lease of 59 years.
“There is no way I could have afforded to buy a home” says Emad referring to when he first got married six years ago and had to move out of his family house in Mit Oqba, another Giza neighborhood that lies to the south of Imaba.
But four years ago, Emad found an unfinished flat for long-term lease for EGP 400 a month, with a 5% increase, in addition to paying around EGP 40,000 for its finishing.
“I could not even afford to pay the finishing of the flat all upfront…I fixed the flat over two years. I would get tiles leftover from someone for a discount price or get left-over cement the same way”
Flats in the same area used to cost around EGP 100,000 in 2014, he says, now it would cost almost double this amount.
“The good thing about this arrangement is that I put my money in a flat where the owner cannot tell me to leave…if this was temporary rent [short-term contract] I would pay more, around EGP 1000, and could be asked to leave any time…now even if I want to change houses I can sell my contract for the same money I paid fixing the house” Says Emad.
The rent is still too high for Emad, where it is now EGP 500 and makes up 22% of his EGP 2300 salary as a private driver. He works with his own car in the evenings which he is still paying off at EGP 1000 every month. This leaves only EGP 800 for household expenses in a family of four.
Rent-to-income ratios in Giza averaged a manageable 25% in 2017, but a very high 39% nationwide
For more see Egypt State of Rent 2017
Compromised Living Conditions Despite Cost
While Emad, Wafaa and Ilham all complain of the high costs of rent, they are also unsatisfied by the living conditions offered in renting spaces within the range they can barely afford.
Tired of her ground-floor flat in Awseem which overlooked a light shaft, Wafaa first moved to another flat in the same district, with more space and extra light, where she paid EGP 600 a month, about three times more than the original flat. However, being a divorced woman living alone with her children she the landlady interfered in her private life. Wafaa was also demanded to pay EGP 600 for water and another EGP 700 for electricity when she was ending her contract, even though she never got any official bills as the building was informally connected.
Wafaa then moved to her current flat in Baragil, where she pays EGP 930, which now swallows up 30% of her income. Despite that she is still unsatisfied. When she first moved, she took the flat on the top floor because it was very spacious (200 m2) with a big terrace. However, she asked to be moved to a lower floor in a smaller flat, because of recurring water cuts due to an unreliable water pump.
Wafaa was then made to pay EGP 1800 for a whole year of electricity bills that were left unpaid by the previous occupant, so her supply would not be cut off.
“The landlady should have paid off these bills from the deposit left by the previous tenant, but she refused, and I was worried [the company] would cut off electricity had I not paid”
The landlady then agreed to deduct that payment in instalments. But Wafaa also complains that she was made to pay EGP 4000 as a deposit for a four-year contract, but when she moved to the flat on the lower floor she was not given a contract at all.
About 7% of tenants, or 100,500 households do not have a contract
For more see Egypt State of Rent 2017
“Now the problem is that the water pump is old and the owner refuses to replace it…we (the residents) had to collect money to fix it…she also refused that each flat gets its own water pump. The building also has an unpaid water bill of EGP 8000 and the owner made each of us pay EGP 75 every month to cover it”
Security is another of Wafaa’s complaints, saying the area suffers from a lot of drug dealing.
“One time the dealers got into a fight in the area and it was very scary…I thought they were going to set fire to the building… My daughter is trying to convince me to find something in 6 of October City [a Giza suburb] … she says its calmer and does not have the problems we have in the informal housing areas, but I am worried it’s too far and the children will be commuting on the highway late at night”
Similarly, Emad moved from his Awseem apartment, which he first rented when he got married and where he used to pay EGP 150 a month as opposed to his current EGP 500 rent.
His old place came with many problems. In addition to the distance, the area lacked a sewage system, relied on unsealed septic tanks, and suffered from chronic water shortages.
“The water was not good for drinking…we used to buy water in containers, cars used to pass by to collect the sewage water…. I also needed to take three different modes of transport to get to work”
Where he lives today in Mataar Imbaba, Emad says, the government made a park, a hospital and a school not very far off from where he lives. He is also much closer to work.
He is still not totally satisfied with the neighbourhood, however. Like Wafaa, he says security is an issue and complains of drug dealing in his area.
“I have two girls and I get worried letting them go to the street…despite the school being close I still send them by bus”
Ilham, on the other hand, complains that her area is crammed with buildings, with almost no light coming into her flat.
Having to share the building with only her sister and her brother in law, the bills are becoming unaffordable.
“We got an EGP 500 water bill for the building this month and we are only two flats in the building…we did not pay it…who can afford that?! We also got an EGP 180 electricity bill and EGP 25 gas bill.”
Since Ilham’s brother in-law does not want to rent out units in the building to non-family members, he keeps the other two flats closed, saved for his sons when they get married.
However, Ilham does not want to look for another place to rent. Working more than full time, she needs to rely on her sister who lives next door for babysitting as she cannot afford a nursery.
“I do not know how I would manage without my sister’s help and her husband also gives us a good price that I would not find elsewhere, because he would rather not rent to strangers”.
The Price of Living in the Center
Cairo’s suburbs have acted as an alternative for some who could not afford to buy a house in the center. However, being so distant from the center many have moved back, but into rented flats.
Ahmed, an engineer and a father of two, left the home he owns in Sheikh Zayed to rent a flat nearer the center. His children are enrolled at the school right across the street from where he lives in Haram, a two-bedroom flat close to the main street for which he pays EGP 2500.
Only a few meters away, Ahmed’s cousin owns a flat which he rents out for EGP 1250.
“It is only meters away but far less expensive” says Ahmed who explains that the narrower streets of Haram, rather than the wider streets closer to the main road, come with many unwanted qualities. According to Ahmed, the insides of Haram are far more crowded, the streets are smaller and un-paved, and the neighbourhood is occupied by many street vendors and markets.
His cousin, who lives in Qatar, bought the flat in Haram to have a place in Cairo for when he gets married. However, after his marriage got called off he decided to rent it out.
Ashraf, a student at Al-Azhar University, rents a flat in the neighbouring district of Faisal for EGP 800 a month, which he shares with two other of his colleagues. The three are from Upper Egypt’s Sohag and rented the Cairo apartment to finish their university studies in the capital.
“My father paid EGP 30,000 to fix the flat up and furnish it and my flat mates pay the 800 EGP rent since they did not share in refurbishing it … however I also pay the rent during two months of summer vacation when my flat mates are back in Sohag” says Ashraf.
The 19-year-old student says he preferred to rent in Faisal where several other relatives from Sohag also reside, rather than get a flat closer to the University in Nasr City.
Ashraf’s parents are both school teachers back in his hometown and are able to send him an additional EGP 1500-2000 as pocket money to live in Cairo and to cover his education expenses.
Buying-to-let
While Ahmed keeps his flat in Sheikh Zayed closed to possibly move back to in the future, he is buying a second flat there to rent out.
“I am now paying instalments for a flat in the Dar Masr project (An upscale government housing project), which I think could get me around EGP 4500 a month rent money once its delivered”
Meanwhile, Tarek, who works as a plumber and an independent contractor, rents out a small two-bed flat, for EGP 800 a month. Tarek had bought the state-subsidised social housing flat in the early 2000s by a loan from the Housing and Development Bank. He paid EGP 7000 upfront, followed by monthly instalments of EGP 72 over 40 years. According to estimates given to Tarek, the 6th of October flat is valued today at EGP 250,000, almost six times the EGP 40,000 valuation 15 years ago when he bought it.
Initially, Tarek was not allowed to rent it out for the first ten years after he had bought, as per the social housing regulations. While Tarek had not bought the flat for the sake of investment at first, he eventually decided to rent it out after he found it too difficult to move into an area away from the centre.
Thousands of households have so-called istidafa (hosting) contracts, that give them little if any rights. But are used as a loophole to illegally rent out government housing. For more see Egypt State of Rent 2017
“When I bought the 6 of October flat I did not have a car and I could not afford one…I would have had to pay as much as I did for the flat to get a car” Tarek says explaining why he did not move into his suburban apartment.
“Had they connected the area with a metro from the start I would have moved in” he adds.
Instead, Tarek now lives with his wife and children in a flat he had bought unfinished in 2002 for EGP 80,000, paid in two large instalments, and in addition paid another EGP 30,000 to finish it.
For more see Egypt State of Rent 2017