Six Egyptian rights and housing research organizations warned that a proposed government law to end long-standing rent control agreements could trigger a new housing crisis and disrupt the real estate market, particularly in greater Cairo.
In a joint statement issued today, the six groups warned that a simultaneous liberalization of “old rent” contracts, as proposed by the draft law currently before parliament, would increase the risk of monopolistic practices in the housing market.
According to them, this would drive up demand far beyond available supply, leading to a steep rise in prices, similar to what occurred recently during waves of refugee arrivals.
The groups warned that a large number of tenants would likely be unable to secure alternative housing.
To mitigate such risks, the groups proposed four measures they said would fairly balance both housing and property rights. These include allowing rent increases based on a government rent index, preserving existing tenancy for eligible households, providing housing subsidies for low-income renters, and overhauling both old and new rental systems.
Phased approach
The organizations urged the government to reject full liberalization of rent contracts, stressing that the foundation of any new law should be the continuity of existing leases. They cited a 2002 Constitutional Court ruling affirming this principle and emphasized that a large segment of tenants have acquired legal standing beyond standard rental arrangements—such as long-term usufruct rights—by paying key money or investing in unfinished units at their own expense.
Under the proposal, landlords could reclaim one unit for personal use if they or their first-degree relatives are adults and own no other home. Tenants would be entitled to compensation of 10% of the property's tax-assessed value, with a transitional period of one month per year of residence.
Additional conditions for ending tenancy included verified ownership of alternative housing or farmland exceeding set limits. Contracts for units found to be closed or unused for nine months a year, or intermittently over three years, or sublet to others, could be terminated within six months of the law's enactment.
Legal, market-based rent hikes
The groups also urged that any rent increases follow a legal formula independent of market rates. They recommended a government rent index based on property tax assessments and applied by neighborhood.
Rents would begin at 60% of the index and rise 10 percentage points annually over five years. After that, the index would adjust yearly based on official wage growth data.
To prevent displacement, the statement called for a government subsidy program, managed by the Social Housing Fund, to support low- and middle-income renters. Aid would cover rent costs above 20% of a household's income, with priority for current old-rent tenants. Eligibility would be reassessed every five years.
Broader reform needed
The groups stressed the importance of reforming Egypt's wider rental framework, not just old contracts. They argued the 1948 Civil Code governing new rentals was outdated and left tenants vulnerable to abrupt eviction or unfair terms.
They proposed minimum five-year lease terms, with limited landlord reclamation rights, and compensation for tenants if leases were cut short. To activate idle housing stock—estimated at 12 million vacant units—they also recommended tax exemptions for affordable rentals and creating mediation bodies for landlord-tenant disputes.
The signatories included the Egyptian Commission for Rights and Freedoms, Diwan Alomran, the Human and the City for Social Research, the Egyptian Initiative for Personal Rights, the Built Environment Observatory, and lawyer Mohamed Abdel Azim's office.
Last Tuesday, a joint parliamentary committee approved government-proposed changes to the old rent law, which MP Diaa El-Din Dawood called a “ticking time bomb.”
The heads of the Engineers and Doctors Syndicates previously warned of the social consequences of the government’s proposed amendments to the old rent law, which would terminate lease agreements five years after the law takes effect. They warned the move could potentially lead to a “social explosion” threatening the stability of millions of citizens.
Earlier in May, lawyer and women’s rights advocate Intisar Al-Saeed told Al Manassa that the reforms could disproportionately harm women and escalate housing insecurity. “The draft law pits landlords against tenants and risks disrupting social cohesion,” she said.
The Supreme Constitutional Court had ruled in November that fixed rents under the 1981 law were unconstitutional, urging legislative reforms to rebalance landlord-tenant relations.
In October 2023, President Abdel Fattah El-Sisi called for the need to update the old rent law, citing the existence of two million vacant and unused units as a consequence of the outdated legislation.
