All Egyptians are taught to recognize the July 23 Revolution as the point at which social justice was finally implemented in Egypt. Literature and film produced following the revolution portraits pre-revolution Egypt as a dysfunctional society where a foreign class of rich land owners (they are usually portrayed as either Turkish or Albanian) oppressed native Egyptian farmers and laborers.

I do not claim to be a historian of the revolution, nor will I comment about the merits or demerits of the ideas that motivated the revolution. I will comment, however, on one particular aspect of the revolution that I see as completely unfair; inherited rent controlled flats.

One of the goals of the revolution was to allow poor people to acquire affordable accommodation. While the idea itself is extremely laudable, it was implemented in a completely ridiculous fashion that still has repercussions today.

The government, in its infinite wisdom, decided that the best way to provide affordable accommodations was to fix rents for flats at low prices and make sure that they are not raised. So far, so good. The idea of rent control seems fair. After all, the country was just coming out of a period of time during which the landed aristocracy was taking advantage of the common people by renting at exorbitant prices, or so we are told.

The really stupid part comes next — they made this low rent inheritable. This is the totally ridiculous part of the law. It is ridiculous from several points of view. First, what may have been an equitable price at the time the flat was rented is definitely not going to be equitable ten or twenty years down the line.

Also, if the aim of this law was social justice, the economic standing of the tenants and proprietors should have been re-evaluated on a regular basis to determine if the relationship had turned from one supporting social justice to one that supported the rich at the expense of the poor.

The consequence of this misguided law is that today we have several flats in prime real-estate markets that are tied up in this ridiculous rent controlled trap, instead of being part of the general market. Worse yet, many of the tenants of these flats now own other apartments but hold on to these ridiculously low-priced apartments because, after all, nobody would refuse a free meal.

I speak from personal experience. I own an apartment building in Heliopolis, one of the most prized real-estate markets in Egypt. However, rent paid for the apartments are in the ridiculous range of 2 to 6 Egyptian pounds per month! I would totally understand if the tenants are economically disadvantaged. On the contrary, several of the tenants own luxury cars and have apartment buildings of their own (and rent the flats to tenants at free market prices that reach up to 4000 Egyptian pounds per month).

This isn’t social justice, this is ridiculous social injustice. Are building owners being punished for taking the initiative and building accommodations for others? When Egypt began embracing free market concepts and moving away from the socialist demagogy that was ushered in by the revolution, I had great hopes that the laws would change. Unfortunately, the vested interests did not allow this to pass. While agricultural laws were modified to allow land owners to get back their land from renters, the laws for apartments were not changed.

Well to be quiet honest, they did change the laws. They stipulated that rent controlled flats could only be inherited by the next generation starting from the time at which the law was changed. So, we still have one more generation of renters who are going to take advantage of this ridiculous law.

To add insult to injury, some of the tenants actually approach me and ask for an exorbitant amount of money to leave the apartment/shop. This is thuggery at its worst. You are trying to make me pay you money because my ancestors were kind enough to rent your ancestors a flat or shop in their building?

Either the powers that be wise up and revoke this extremely unfair system or we will have to suffer through one more generation of injustice.

1 Comment

  • Egypt’s flawed socialism | Sherif Fadel Fahmy, May 28, 2011 @ 2:38 pm Reply

    […] the flawed way Egypt implemented socialism after the┬áJuly 23 Revolution. In one of my previous┬áposts, I talked about one of my pet peeves: inheritable rent controlled flats. As I mentioned in that […]

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