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Project that missed its target

Fri, June 29, 2018 12:58

By the Gazette Editorial Board

In 2014, the government decided to resume its role in creating housing units affordable for people of low income as well as middle class citizens. The aim was to solve the chronic housing problem that had engulfed society for decades because of the monopoly of the private sector over the housing market. The government’s absence from the housing sector had caused price hikes of various units even in regions that suffer poor public utilities and services.

Thus citizens, especially of the middle class, found what they needed in government projects such as that of Dar Misr that the Ministry of Housing started to create in the new cities. Dar Misr had an especially high appeal. It provided units with relatively big spaces at affordable prices for people of the middle class.

Parallel to this, the ministry's New Urban Communities Authority created some other subsidised social housing projects so that the poor could rent or even own a housing unit to be paid for in instalments over a longer term via the mortgage system.

It is true that the ministry continued to follow a policy of creating more stages of the project in the various governorates to meet public demand for these units especially those of Dar Misr.

The continuous rise of the price per metre of this project, however, raised public concern that it would lead to a price rise of housing units on the market in general rather than lead to the needed price balance in the housing sector.

Thus, the recent announcement of the head of the New Urban Communities Authority that the Dar Misr project would start producing luxury housing should raise public concern, for it empties the entire project of its aim of supporting people of the middle class.

In a recent statement to the press, Walid Abbas, justified this new trend in the Authority's policy by saying swimming pools and artificial lakes would be supplied to beautify the project. In other words, the ministry meant to turn a social project targeting the middle class into one offering units for wealthy people. The price of the metre proves this.

According to press reports, it would range between LE9,000 and LE10,000 per metre in this new proposed stage of the project to be created in the new cities, such as Sheikh Zayed and Sixth of October cities, rather than its original price of LE3,400-LE4,000 per metre when it was first launched in 2014.

On the one hand, this new policy and its prices would not only divert the project from its main target of serving middle class people, who have suffered much because of the ongoing economic reforms launched in November 2016, but would also contribute to a fresh price rise per metre of land and housing units created by the private sector.

Most importantly, wealthy people do not resort to state created projects to own a flat to live in. They look for more luxurious housing compounds that offer units with bigger spaces and much better facilities and are prepared to pay millions of pounds for a flat.

What is even more to be feared is the turning of the Dar Misr project into an attraction for those who would buy such units as an investment to hold till they can make a profit out of them, rather than to live in them.

Thus, this new policy would turn the Dar Misr project into a fresh complication in the housing problem rather than part of its solution.

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