About Egypt

Overview of Cooperative Housing in Egypt

Cooperative housing in Egypt has a long history, rooted in the broader cooperative movement that began over 100 years ago. Today, the movement spans five sectors—consumer, agriculture, fishery, housing, and production—with 18,000 democratic cooperatives serving 25 million citizens.

Early History and Development

The concept of housing cooperatives emerged in the 1930s to address the need for adequate housing. Early efforts were driven by individuals, with modest state backing. By 1952, Egypt saw its first housing cooperative in Cairo—Al Shamshargy—soon followed by others across key cities.

After the 1952 revolution, state involvement increased. The public sector, including housing cooperatives, played a major role in housing development. The General Authority for Building and Housing Cooperatives (GAHBC) was created in 1954 to support co-ops with financing through savings and low-interest loans.

Legislative Foundations and Structural Reforms

Originally governed under the Consumptive Cooperative Law of 1975, housing co-ops gained independence with Law No. 14 in 1981. This law established the legal and institutional framework for primary, joint, and apex cooperative associations.

In the 1970s and 1980s, economic liberalization led to increased private development, reducing the public sector’s role. Still, the state continued supporting co-ops—evident in a 1991–92 loan injection of EGP 1.2 billion. Between 1995–2006, the number of co-ops rose from 1,660 to nearly 2,000.

Urbanization and Housing Challenges

Egypt is highly urbanized, with rapid population growth in cities like Cairo and Alexandria. Informal settlements have become widespread, housing 7 million people across 400 areas. Much of Cairo’s construction occurs outside formal frameworks, often through informal savings cooperatives.

Despite a housing shortage, Egypt has 2 million vacant units. Most people cannot afford to buy or repay loans, especially with 40% living below the poverty line. Co-op leaders identify three core obstacles: land prices, rising building material costs, and unrealistic subsidized loan criteria.

State Control and the Push for Reform

Over recent decades, the cooperative movement has struggled with reduced state support and tighter control from administrative agencies. These agencies can still dissolve co-ops or obstruct their activities, stalling growth and modernization.

Co-op leaders are advocating for a unified cooperative law to replace the fragmented sector-based system. A draft law submitted to parliament aims to ensure autonomy, coherence, and alignment with international cooperative principles.

Strategic Goals and Employment Impact

The General Cooperative Union (GCU) has outlined a vision for modernization in its strategy document, aiming for expanded employment and a stronger housing sector by 2020. President Mubarak’s 2008 centennial speech reaffirmed the state’s commitment to cooperatives as one of three economic pillars.

From 2005–2011, the government pledged to build 500,000 units in collaboration with private and cooperative sectors, with co-ops committing to 50,000 units.

Key Features of Housing Cooperatives

• Urban-focused and owner-occupied.
• Members buy shares for occupancy; resale restrictions apply for the first 10 years.
• Mostly targeted at middle-income earners; only 25% from low-income backgrounds.
• Formed by people with shared professions (e.g., teachers, engineers).
• Operate under Ministry of Housing oversight.
• Responsibilities include project development, member savings collection, land procurement, and securing loans.

One notable example is the 1978 slum upgrade for 100,000 members, funded by the US Housing Foundation.

Financial Incentives and Exemptions

Housing co-ops benefit from:

• Tax and fee exemptions on profits, deposits, customs, imports, and licenses.
• Discounts on state-owned land (25–50%).
• State-backed loans via presidential resolutions.
• Legal protections classifying projects as public funds.

Legal Framework and Oversight

Law No. 14 (1981) defines co-ops as democratic entities tasked with providing housing and services. The Ministry of Housing supervises compliance, conducts audits, and monitors governance.

Organizational Structure

Egypt’s cooperative housing sector is organized in four tiers:

1. 2,320 primary cooperatives
2. 4 Joint Associations for project execution and finance
3. 13 Federal Associations providing land, materials, and technical expertise
4. The Federation of Cooperative Housing (FCH) as the apex body

FCH manages policy advocacy, education, legal support, research, and international engagement. In 2008, the sector’s turnover exceeded EGP 1 billion, with member investments totaling EGP 17 billion.

Additional Initiatives

Egyptian co-ops also manage 129 tourist resorts on the Mediterranean coast, demonstrating their role beyond housing provision.

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