Why Informal Areas

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The emergence of informal Cairo and current challenges for urban development

Egypt’s cities are growing fast and will continue to grow. With an annual national population growth rate of 2.2–3% over the past decades, Egypt has approximately 1 million new citizens to house every 8 months. Population growth combined with rural to urban migration cause staggering rates of population increase of almost 4% annually in Egypt’s urban centres.

By 2008, Cairo, Egypt’s capital has a population of an estimated 18 million people. The city has been deeply transformed by global dynamics of urbanisation which have increased its population by more than six times in the last 60 years.

In the context of population growth and urbanisation, urban townships often develop independently of formal planning processes, driven by informal market forces rather than by governmental or municipal housing schemes. Between the 1970s and 1990s, an estimated 80% of new housing units in Greater Cairo were built in informal areas. At the end of the 1990s informal areas represented about 53% of the built residential surface of Greater Cairo and hosted 62% of its inhabitants. According to official government figures from 2002, Greater Cairo has 34 km² of informal areas that house 2.1 million (about 1/7th of the population). GIS-based mapping conducted by PDP’s GIS Unit found that in 2000, in fact 133 km² of the Greater Cairo area are covered by informal settlements, housing almost 8 million people, or 50% of Cairo’s population. In 2006, informal areas occupied 160 km2 and hosted 9.5 million inhabitants.

Since Egypt’s independence in 1952, one of the most pressing urban problems has been a chronic housing shortage. The housing crisis is a result of population pressure, poverty, and migration to urban settlements. At the same time, it is the result of rent control laws from Egypt’s socialist era. In an effort to control the exploding cost of rented flats and to win political support among the urban poor, President Abdul Nasser released a number of laws that prohibited rent increases for tenants. High inflation rates made it uneconomical for house owners to rent their flats. Furthermore, the law made it almost impossible for a landlord to end a contract. What was meant to support Egypt’s urban poor, soon turned out to be the trigger of a serious housing crisis in the 1970s, as, instead of renting their flats out, house owners left them untenanted in order to keep them for their children’s generation. This situation continues for many rented apartments, as to this day legal changes only apply for released and newly rented-out property.

The rent control laws generated tremendous economic and social problems. Unplanned and unregulated settlements sprang up. It is estimated that between 1973 and 1983, a period of rapid inflation with the initiation of the open-door economic policy, 60–80% of all new housing constructions took place in the informal sector. In response to housing shortages, a non-official land market developed that still flourishes today. Private landholders or private companies and investors in possession of large agricultural fields sell these previously cultivated areas, subdivided into smaller plots (60-10m²). These plots are then sold to private owners/builders or middlemen.

Informal areas in general have very little infrastructure, and services such as schools, hospitals, and other government bodies are very poorly funded.

The Egyptian government rather than capitalising on the investment capacities of low- and middle-income families, and on the added value to the newly urbanised land, it has been reluctant in guiding this rapid informal building process through the provision of serviced sites. Instead, it has issued a series of decrees aimed at increasing the fines and penalties for illegal construction on agricultural land.

In order to address these pressures, in 1993 the Egyptian government created a National Fund for Urban Upgrading. This fund, however, focused mainly on big infrastructural projects such as roads and bridges, which often bypassed informal areas to the advantage of richer neighbourhoods. Moreover, the government, in an attempt to attract new financing for urban development, has tried to involve other international cooperation actors in the upgrading effort.

European Union German Cooperation GIZ Ministry of Urban Renewal and Informal Settlements