Issue No. 602
Features
Previous issue
Site map
|
|
5 - 11 September 2002 Issue No. 602 Features |
Current issue Previous issue Site map | |
| Published in Cairo by AL-AHRAM established in 1875 | Recommend this page | ||
Old rents, new hardships
A law for kicking out tenants or one that would bring justice to all? Dena Rashed investigates a bill proposed to modernise the "old rents" system
A few decades ago it was easy to move from one apartment to another; apartments for rent at affordable prices were widely available. Today, however, the "for rent" sign has all but disappeared. Landlords argue that since rents were fixed in the 1960s, renting to tenants is no longer economically viable.
In 1962, as part of a series of populist policies, Egypt passed a law that fixed rents with the aim of ensuring that housing was affordable for a wide section of the population as well as to address a growing housing crisis in urban centres -- a crisis owing in large part to extensive rural migration.
And so, spacious apartments in Cairo's upper class district of Zamalek continue to be rented out for paltry sums, in many cases not exceeding LE50 per month. Meanwhile in low income areas, where the law has kept rents on some units as low as LE1 per month, landlords complain that they have been unable to maintain or upgrade their properties. Hence, many buildings are without basic services such as running water, and every earthquake brings down a number of such buildings in its wake.
For years the news of a draft law prepared by the People's Assembly Housing Committee that would address these and other drawbacks of the current "old rents" law has circulated, but it has never been formally introduced to parliament. The draft law, a copy of which was obtained by Al-Ahram Weekly, stipulates increasing rents on dwellings that were built from the beginning of the century until the year 1996.
Article 14 of the bill stipulates immediate rent increases on the basis of the year the construction of the building was completed. For example, rents are to increase by 10 per cent for units in buildings completed before 1 January 1944, while the increase in rent for flats in buildings completed between 9 September 1977 and December 1996 is three per cent. Rents on all units are then to increase annually by 10 per cent for five consecutive years, after which the market is supposed to take over. Legislators argue that "adjusting" these rents will result in the increased availability of apartments for rent.
But while the inhabitants of many upper- class neighbourhoods may be able to afford to pay higher rents, a large section of the housing that would be affected by the law is located in low-income districts such as Boulaq Abul-Ela.
Lining the alleys of Boulaq Abul-Ela are dilapidated three- and four-storey buildings made up of small one- and two-room flats. Here rents range between LE2 and LE10 per room. And Cairo is brim-full of similar alleys -- vital housing areas for the city's poor.
At one of the alley's coffee shops, the Weekly met hajj Saieh Kenawi who has resided in Boulaq for decades and owns two rooms that he does not rent out. "Why bother when I will only be getting LE2 per month for them," Kenawi asked. And yet, he is not enthusiastic about the draft law either. "I don't believe that even with a new law regulating rents that there will be a real increase in the number of units available for rent," he opined. "In Boulaq, we rent to our relatives. A building will be made up of rooms rented to various nuclear families all belonging to one extended family. I would not be able to go to my uncle and ask him to pay more when I know he cannot."
Umm Fathi has been living in Boulaq for more than 50 years and does not think much of the proposed law either. "Although the rents are very low, I don't think that a new law regulating the value of the rents of the old buildings would make much difference. People would be unable to abide by it," she told the Weekly. Her neighbour, amm Said, found it absurd to be discussing increased rents while some houses in the area lack running water.
"Such a law would ultimately cause a revolution in Egypt," Milad Hanna, urban planning expert and the head of the People's Assembly Housing Committee in the 1980s told the Weekly. "This law cannot be passed nowadays," he added, explaining that the idea of introducing such legislation goes back to the time when he headed the assembly's housing committee. "It was never passed because of the feared consequences," he explained.
But then, how you perceive the draft law would depend on not only your class, but also your role in the landlord-tenant relationship.
Landlords have repeatedly expressed frustration at the status quo. As one property owner told the Weekly, while LE4 per flat was a lot in the 1940s, today it just about buys a Big Mac.
The same holds true for those who own more modern buildings. Sherif Sobhy is the son of a landlord of a five-storey building constructed in the 1970s. "It is unfair for me to wait for the death of one of the tenants to get our flats back. Tenants are unwilling to leave the flats," he said. Sobhy also emphasises that some tenants either own other flats or have another rented flat -- in many cases locking up and leaving uninhabited a cheaply rented flat. "I think it is also unfair that someone would stay in your own building against your wishes. That's why I am looking forward to a new law." Sobhy's family collects LE500 per month in rents from the building -- a sum that Sherif views as negligible when the value of the flats, located in the middle- class neighbourhood of Dokki, is taken into consideration.
For rented flats like those owned by Sobhy, the draft law proposes an immediate fourfold increase to be followed by an annual increase of 10 per cent for five years. Although Sobhy would like to see much higher rents on the units, he concedes that the increases would be a considerable improvement on the current situation.
But Ahmed Nour, a real-estate lawyer, points out that he deals with "many cases concerning rental units in which the rent is as low as LE4 and the tenant is either unable or unwilling to pay." Nour is adamant, however, that if the law is passed as it is, it would be unfair to some, and if not passed at all, the situation would continue to be unfair to others. "You cannot expect a government employee who makes LE200 or LE250 per month to pay much rent. Further, if the value of the rent increases annually, the salary of that same employee does not increase at all to the same extent," he added, concluding that it is difficult to envisage that people would really be able to pay the new rents.
And while the social viability of the laws remains an issue of contention, low rents continue to be identified as a primary reason behind the lack of regular maintenance for old buildings. And hence the current revival of another draft law that aims at changing the existing "unions of owners" to "unions of residents". This draft law calls for the creation of an association of residents in each building that would be responsible for managing the regular maintenance of the building. The legislation would apply to buildings which comprise more than five residential units and are occupied by more than five persons. It also states that the residents must place a deposit of five per cent of a housing unit's value -- a sum certain to be out of reach for many tenants -- in a fund that would be used to cover the costs of the building maintenance.
However, even this law is languishing in the corridors of the People's Assembly and in the meantime for both landlord and tenant, the relationship remains problematic.
|
 |
|
|||||||||||||||||
| ARCHIVES Letter from the Editor Editorial Board Subscription Advertise! |
WEEKLY ONLINE: www.ahram.org.eg/weekly Updated every Saturday at 11.00 GMT, 2pm local time weeklyweb@ahram.org.eg |
 Al-Ahram Organisation |
