As the Egyptian government struggles to tackle the country’s affordable housing shortage, a number of officials and developers have put forth solutions to existing problems, reported Daily News Egypt.

A shortage in affordable houses has triggered the construction of 500,000 units in violation of current laws, whereby they have constructed without permits over the past three years, according to the Ministry of Housing, Utilities, and Urban Communities.

In efforts to tackle the problem, the Central Bank of Egypt previously announced a mortgage finance plan to allocate EGP 10 bn to housing projects for low-income citizens, and the money were provided to banks through deposits that will be repaid over 20 years at a low interest rate. Applicants for the mortgage loans in turn repay them at a 7% annual interest rate.

However, developers have challenged the initiative, claiming it supports potential homebuyers but does not provide developers with options to construct affordable housing, according to Amgad Hassanein, Chief Projects Officer at Capital Group Properties.

He also stated that, by amending the current mortgage law, the real estate markets will double in size in less than a year.

The Mortgage Fund received 400,000 applicants for real estate financing, while only 52,000 applications were approved, Abdel Hamid added.

Moreover, a total of 14 banks have provided EGP 4.1 bn to finance low- and middle-income housing by the end of October, Abdel Hamid said, noting that 17 banks has initially signed agreements with the Mortgage Finance Fund, but only 14 banks were finally selected.

The Mortgage Finance Fund previously received $125 mn from the World Bank as part of a $500 mn total funding package, according to the Fund’s head, Mai Abdel Hamid.

Even though the mortgage market grew 30% in size during the first quarter of 2016, demand still far outstrips supply, in addition to ongoing problems with registration, according to the head of the Egyptian Financial Supervisory Authority, Sherif Samy.