From public to private development

Urban design

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The Mubarak Housing Project and Future Housing Project: Government housing projects in Egypt 

Both The Mubarak Housing Project and the Future Housing Project in Egypt were implemented using the principle of ‘Eltakaful El- Egtemaie’, an indigenous cultural value in which resources are mobilised from capable groups to support disadvantaged groups.  

Started in 1996 and completed in December 2000, the Mubarak Youth Housing Project comprises 70,000 units distributed in 15 Egyptians cities. With a maximum density of 120 persons per acre and a height of five floors, the designs allow for ample green areas, parking spaces and social services, and cost 2.75 billion EGP (0.5 billion USD). Soft loans of 15,000 EGP (2,730 USD) per unit payable over 40 years at five per cent interest rate were offered by the government, with the main beneficiaries of the project being the youth. Indeed, young people have particular affordability problems when it come to purchasing a house; earnings are lower for those who have recently entered the labour market and all have had less time to save for the down-payment.  

The Future Housing Project launched in March 1998 planned to build 70,000 units in three phases over six years. The first phase of 15,000 units was completed by 2001, with the private sector meeting 50 per cent of the cost and the government the remainder. Soft loans were also offered: 14,000 EGP (2,550 USD) per unit, payable over 40 years, at an interest rate of five per cent.  

Ethiopia’s Integrated Housing Development Programme (IHDP) 

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Facing considerable current and future housing shortages the Ethiopian government has embarked on an ambitious affordable housing programme aimed at low- and middle-income households: The Integrated Housing Development Programme (IHDP).The programme aims to construct 400,000housing units, create 200,000 jobs, promote the development of 10,000 micro- and small enterprises and enhance the capacity of the construction sector.  

Led by the Ministry of Works and Urban Development, IHDP projects involve the construction of condominium housing and associated infrastructure on ‘brown field’ sites, predominately in the capital Addis Ababa. The condominium typology allows for high densities that are required on such urban land as well as reduces the per-unit cost of infrastructure provision. There are a mix of unit sizes to accommodate different income levels and household needs: studio units, and one-,two- three-bedroom units. Condominium units are allocated to informal settlement dwellers through a public lottery system, which has proven to be significantly oversubscribed due to the high demand for the units. Housing finance for households is provided by the Central Bank of Ethiopia. From 2010 onwards, the IHDP has shifted its focus away from peripheral brownfield sites to developing condominium housing in inner-city informal settlements that are beyond repair and require upgrading.  

The IHDP has been successful in stimulating the economy, improving the living conditions of thousands of Ethiopians, and improving the functioning of the rental housing market.  

There remain, however, challenges that need to be addressed. Affordability remains a major challenge, especially for women headed households, many of whom cannot afford the down-payment to secure housing finance. In inner-city locations consultation and compensation processes need improvement to avoid forced evictions and improve transparency.  

There are also significant opportunities to improve the design and construction of the condominium buildings to make them more attuned to local cultural practices as well as to improve their environmental sustainability.  

In light of Ethiopia’s previously uncoordinated and inefficient housing sector, the Integrated Housing Development Programme is emerging as a successful tool for affordable housing delivery at a large scale. Importantly, the programme is not only a housing programme but also a wealth generation programme for low-income households. Its success lies in its integrated nature, understanding housing as part of an integrated social, economic, and political system, which has the opportunity to greatly improve the living conditions and economic capacity of all sectors of society.  

Ethiopia’s experience demonstrates the importance of political will and institutional capacity to address affordable housing. The country’s housing sector is a pertinent example that ‘enabling markets’ has proven simply inadequate in stimulating the production of affordable housing. Governments must take a leading role in directing urban planning and housing development if affordable housing is to be achieved at scale, contribute to economic growth and reach low-income households.  

Public-Private partnership: Egypt’s Orascom Housing Communities

In 2006, Orascom Group, one of Egypt’s largest business concerns, established Orascom Housing Communities (OHC). The rationale was to build affordable housing in Egyptian cities under a government programme that subsidised raw land in new towns to developers and investors on the condition that they build an agreed number of units for lower-income households on the land.  

Orascom’s flagship programme is Haram City.It consists of 50,000 units to be built between 2006 and 2013 on 8.4 million m2 of land in ‘October 6’ City, 20 kilometres west of Cairo. The target group is households with monthly incomes below the median (EGP 2,500, USD 438). In the first phase, house sizes varied between 38 to 63 m2 and units were offered on a lease/purchase basis over 10 to 15 years on favourable financial terms. To reduce construction costs, OHC uses load-bearing walls and a compact housing typology of four units per two-floor block that is well suited to desert climate conditions. Government subsidies for lower-income families (up to 15 per cent of the cost of the house) are offered as front-end lump sums, reducing down-payments in order to facilitate access for young families. On top of this, OHC is setting up a microfinance scheme to help lower-income families make up the required down-payment.  

A special scheme can assist residents who run into financial difficulties and are unable to pay mortgage instalments. To pre-empt on these problems, households can first move into smaller units that are affordable to them and can change to less expensive rental units if difficulties persist. As part of the project, OHC builds supporting community facilities, including schools, a hospital, commercial areas, a cinema complex, sporting clubs, and day-care centres, which are to be managed in cooperation with the  

Egyptian government and/or non-governmental organisations. On top of this comprehensive approach to housing development for low-income households, Orascom emphasises sustainability, women and youth. Wastewater is collected and recycled to irrigate landscaped areas and the central open space as well as other smaller ‘green’ areas, sports fields and playgrounds.  

In addition, OHC has partnered with the Social Fund or Development, purchasing goods from Fund sponsored small entrepreneurs, and has opened up three youth training centres. OHC has also set up the ‘El Amal’ centre to provide a safe haven for street children, and a centre for women’s skills development, both operated by charitable organisations. While initial results appear positive, Haram City is a relatively new development and therefore the long-term effects remain to be seen. Continued monitoring of the affordability and accessibility of such housing developments for the low-income sectors is vitally important. Nevertheless, the project demonstrates the opportunities of public-private partnership to deliver land, housing and infrastructure at scale.  

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