Amid the gold rush of Egypt’s currently booming real estate market, it is often to easy to lose sight of the larger picture; who do Egypt’s new developments serve, and what role does the real estate boom play within a larger development plan? A focus on urban policy alongside investment and development has perhaps been lacking in the past, but a number of initiatives have recently arisen to attempt to fill the gap.
10Tooba is one such initiative; an organization established by a group of urban researchers, with a particular focus on equitability in housing and urban policy. Invest-Gate speaks to Yahia Shawkat, one of the founders of the organization, about their work, urban development, and the vision for Egypt moving forward.
When was 10Tooba established, and by whom?
10Tooba was established by three partners; Omneya Khalil, Ahmed Zaazaa, and myself. We established it in 2014. Each of us are architects by training, but we have all worked within frameworks that can be described as more social. Omneya has a master’s degree in anthropology and is currently completing her PhD. Ahmed Zaazaa worked on the planning and engagement process in a number of projects, most notably the Maspero Triangle project. I have been more focused on the policies and legislations related to housing.
What was the purpose of establishing the organization?
Very simply, we wanted to work on all issues related to social justice and housing. Over the past period, we analyzed the housing budget for example, to monitor which housing sectors are being spent on and the geographical distribution of poverty. We discovered that in the Nile Delta area and in Upper Egypt, each citizen’s share of spending on housing is significantly lower than the national average. We discovered that there is a huge discrepancy between spending on existing cities (i.e. cities and villages) and spending on new cities, which are inhabited by less than 2% of the population in Egypt.
We also issued an index for urban deprivation, and ordered the governorates according to the level of deprivation in each. We’re also trying to change the tendency towards referring to the term “slums”, which is a very loose term that nonetheless describes any building that is built informally. However, this isn’t enough to define deprivation; there are people who live in formal housing settlements but who do not have water or sanitation. Others may live in buildings that are at risk of collapse but were nonetheless built in official neighbourhoods.
What are your projections for Egypt’s urban development over the next 10 years?
I believe that the urban policies that exist today are the same ones that existed over the past 40 years, which have directed a very large part of public spending on establishing these new cities in the desert. These new cities are not built on realistic social or economic bases. They use up capital and are founded on the basis of the land or real estate that is sold there, which is not a sufficient basis for urban development.
When they were established in the late 1970s, it was on the basis that they would redirect the population growth from the Nile Delta, specifically on agricultural lands, to desert lands that could be built on without infringing on agricultural land. However, in reality, over the past 40 years, the rate of urbanization of the new cities was approximately 4,000 acres per year at most. Meanwhile, the rate of building on agricultural lands during the same period is approximately 16,000 acres per year. This is a huge rate, and it means that not only did building on agricultural lands continue, it increased, which indicated that this policy failed. And it failed for many reasons, which we outlined in a new study entitled “Myths and Facts of Urban Planning in Egypt”.
We provide alternatives to these policies, and we work on relaying these alternatives to the highest levels of authority to allow them to look at it.
What are the alternatives?
The alternative is that the urban policy needs to be completely changed, from being a policy aimed towards investment and the commodification of lands and housing, to a comprehensive social policy that studies the disadvantages of the current policy and reconsiders the method of offering lands. We need to offer lands at different sizes than those currently on offer, and to different segments, namely the lower-income segments, in methods that are suitable to the ways that they build and inhabit.
One solution is that there are many governorates that have desert space on both banks of the Nile, that are close to the urban areas. This space should be developed through much smaller cities that are built according to the same trends as the surrounding housing. In rural areas, people built incrementally, while the new cities do not allow for this. The lands are sold upon the precondition that they be built up within a certain timeframe. These conditions need to be changed in order to commensurate with people’s needs.
There also needs to be incentives for very small developers who might build one building or a small number of buildings, rather than acquire 100 or 1,000 acres to build.
Moreover, the level of spending on new cities needs to decrease and be redirected to existing urban area. We discovered that the majority of governorates in Egypt are not as dense as we perceive. The issue is not the population or density; the issue is the management of the population density. If we look at traffic density; yes, there are cars, and they have increased perhaps threefold or fourfold over the past 15 years, but in reality, it is a question of managing the traffic that is necessary, and not that people need to move elsewhere. Or, for example, different policies should be adopted that do not favor cars over public transportation.
What are the main structural issues facing Cairo?
In our deprivation index [for Cairo], the highest indicator on the index was the lack of safety, which was measured by the rate of informal housing and the rate of the population living in informal housing. Approximately 46% of the population of Cairo live without legal tenure, so the first thing we have to look at is these informal areas in Cairo and why they were established. Why did they develop [on agricultural land], even though there is a lot of desert land in Cairo where they could have been developed?
Many people place the blame on urban migration to Cairo, which may have been true in the ‘80s, but now growth in Cairo is largely restricted to the growth of the population within Cairo. We also have major issues with the way Cairo is administered; Greater Cairo is made up of three main cities, which are Cairo, Giza, and Shubra al-Khaima, each of which is in a different governorate, even though they are enmeshed and share many services. There were many attempts to restructure the administration of Cairo, which I believe is essential. Now we have five new cities around Cairo; what is the vision for administering such a large urban mass?
What are your observations regarding the Cairo and Egypt 2052 urban development plans?
Both were designed in a top-down manner on the official level, without any social involvement of the people whom these plans are meant to be serving. If we look at the Cairo 2052 plan, it is primarily an investment plan rather than an economic or social one. The projects that we see today, the latest of which was the suggestion of moving the graves outside of Cairo and reusing that land for investment purposes, which indicates that the plan is already underway. This plan is looking to marginalize the low-income segments and move them outside of central areas, while commodifying the lands and neighborhoods in which they live. This moreover directly contradicts the plans to alleviate the population density inside Cairo, as this would in actuality increase the urban density of the capital.
As for the Egypt 2052 plans, they are all based on the idea that Egyptians currently live on 7% of the land in Egypt, and that this will be expanded eventually to 50%. We showed, with numbers, that we actually live on less than 5%, while all previous plans that have aimed to expand urbanization in the desert have failed to do so at its targeted rates. Moreover, the real indicator should be the standard of living and services, rather than expansion.
Do you think this might negatively affect investment over the next 10 years or so?
The real estate market has become the center of hopes that far outreach that which it can achieve, which has created an imbalanced market, and has caused the private sector’s practices to be imbalanced and unsustainable. For example, some companies have bought lands years ago with the purpose of reselling it much later on for profit. Why sell so much land which will be developed over 10 or 20 years? This makes for new cities with very low population densities, which affects the efficiency of providing services there.
Meanwhile, the market is built on speculation, and we have seen the various bubbles burst over the past decades. Both the state and developers need to work on building a more balanced market, which means prices shouldn’t increase in leaps as they do. In turn, rather than relying on short-term profitability, the market should decrease risks and rely on lower but sustainable profit margins.
Some investors believe that previous policies that allowed lands to be sold for less in return for building social housing were more beneficial. What is your opinion?
I believe we need a comprehensive policy change. All the incentives that investors receive must be looked at. Additionally, it’s not simply a question of how much the investor bought the land for, but rather how much they go on to sell for, and the issue with our real estate market currently is that it has become a regional market, and not a national one, and as such purchasing power is defined on that scale. On the other hand, the formal private sector in Egypt is responsible for creating only 18% of the existing units, while 10% are provided by the public sector, and the rest is built by the informal sector. WIthin that 18% in the private sector, there is an even smaller segment catering to upscale luxury housing. And this is due to both the private sector and the government, where the latter is the largest incentivizer through land sales.
What is your opinion of the role played by the New Urban Communities Authority (NUCA)? Some have deemed that it plays the role of an investor rather than a regulator?
NUCA has always played the role of an investor, but instead of just being a land investor, it is now investing in real estate as well. In certain ways, this is not a problem, but on the other side, the problem with NUCA is not its relation to investors so much as it is its relation to the ministry. It shouldn’t fall under the Ministry of Housing because the latter’s role is to designate the housing policy and balance it out. It should act as a regulator for NUCA, rather than NUCA be part of it, because this is a conflict of interests. As it stands, the current status quo whereby 45% of Egyptians cannot afford to rent or buy decent housing is disastrous.
Are there any practical applications of your research?
We’ve been around for two years, but we’ve just started to work on projects that we can implement practically, but we plan to start in 2017. One such project being conducted with German aid is to develop strategic plans for low-income districts in Cairo.