Thursday, 21 July 2016

Why is your day in Cairo so hard — and what can we do about it?

** This is part one of a five-part series in which Enterprise sponsor SODIC will share its view on how business and government can work together to save Cairo — doing good for more than 20 mn people and making a reasonable profit at the same time.

Cairo is a tough city to love. It takes from us, on average, four hours of our lives each day commuting to and from work and getting errands done. For those not fortunate enough to live in a gated community, public space is often a rented plastic chair on a bridge or a blanket in the middle of a roundabout. The implications for human health and happiness of a life spent in Cairo are well-known and reasonably well-documented.

It wasn’t always this way: Our grandparents and parents tell us stories of a time when they could walk to university, ride a bus (and find a seat) and have access to public space that was maintained and pleasant to use. Cairo was referred to as the Paris of the East.

What happened? We grew and changed — and Cairo didn’t adapt. Citizens from across the nation migrated to Cairo like never before, and the capital city grew at alarming, unprecedented rates.

Today, Cairo is at a crossroads. Turn right, and we can rebuild one of the world’s most iconic cities. Or keep left on our current course and continue to grow far below our potential.

It doesn’t need to be that way. Change — real, meaningful change in the lives of mns of people, from Enterprise readers to the most marginalised resident of the so-called ashwa’iyyat — is still within our grasp. Apocalyptic scenarios lie before us, but they need not become our reality. Government, business and the financial community hold three magic keys to unlock a different future.

This is the first in a five-part series about how each of the actors in our city can play a role in remaking the capital — but only if we speak with each other and agree to shed yesterday’s baggage and preconceptions.

How we got here

Like so much of what ails our nation’s economy today, it’s easy to look back and blame the mishaps of Gamal Abdel Nasser. And there’s a grain of truth in that: Nasser’s redistribution of agricultural land — essentially giving each rural family a feddan of land to till — set off a population boom that would eventually drive waves of migration to Cairo. The rise of remittances under the Anwar Sadat administration in the 1970s saw as much as 80% of new housing stock created in informal areas as the nation’s policy framework failed to adapt and provide formal housing. The results were predictable: The rise of “informal settlements,” as the academics prefer to call the ashwa’iyyat, where the development of a rental economy saw them absorb almost two-fifths of all private investment in real estate and construction by the beginning of this century, according to research by noted scholar David Sims.

As the capital city grew ever more congested, urban planners in the 1980s decreed a development plan that still holds sway today.

Cairo, they said, would become an urban core surrounded by satellite cities — the Calendar Cities, as many of us call them: Six October, Ten Ramadan, Fifteen May, as well as New Cairo, Obour and Badr, among others. Informal neighborhoods would be moved out to these satellite cities, as would select traditional industries. New highways would cut congestion.

The idea failed in its execution: Our Egypt grew at a rate of 4% per year throughout most of the intervening years, and while Greater Cairo Area’s land mass has grown perhaps four times since 1980, the eight new cities in Greater Cairo have absorbed only 3-27% of their target population.

The policies that led us to where we stand today have not been subject to review. In fact, the New Urban Communities Authority (NUCA), the state institution whose mandate is in part to plan for the capital city’s urban growth, is still operating from largely the same playbook. It’s not because of ill intentions, it’s simply that NUCA does not have a mandate to control the policy and economic levers necessarily to impose a solution.

The result is the city we drive every day: A band of low-density suburban development infilled by ashwa’iyyat, punctuated by as many as 80 gated communities — ever-thickening rings of informal housing that are choking the urban core that is still home to 85% of Cairenes.

What does a solution look like?

Urban planners know that bedroom communities are an idea whose time is passed in favor of solutions based around integrated mixed-use communities. The rationale is simple, as anyone who contemplated moving to New Cairo in the 1990s or early 2000s knows: People want to live in close proximity to work, entertainment, schools — the essentials of life outside the home.

But if the idea of bedroom communities is dead, Egyptian industry and government alike are unaware in ways that the informal economy is not. And if the formal sectors of the economy don’t wake up to this soon, the consequences will be irreparable for us all.

Yet there are solutions, in emerging and developed markets alike. Financial structures common in developed markets (such as secondary markets for mortgages) could be useful some day, but the first step is counterintuitively simple and contrary to common wisdom. At the same time, other emerging markets offer examples of how housing policies can change for the better when we move from a quantitative approach (“Let’s build hundreds of thousands of homes”) to a qualitative one (“Let’s promote the construction of homes in neighborhoods in which people will want to live and work.”)

The challenge of city-making is that it’s an exercise whose planks are simultaneously sociological, economic and physical. Here at home, we dwell on the physical as if it alone could be a cure-all — ignoring, in the process, the examples of how policy levers that put the business community to work have outsized impacts. In short, what do we need?

  1. To understand that the booming informal housing market is, in many ways, in charge of development in Cairo. Any solution needs to start here.
  2. The government needs to lead: We need a new, data-led approach to policymaking informed by the reality on the ground.
  3. The private sector has to be welcomed as part of the solution. Developers need to be part of a conversation about a new development model for the Greater Cairo Area to the banks, who could be mobilizing private capital to support development.
  4. All of the stakeholders have to come together for a real conversation about a vision for Cairo in 2050 that will densify desert communities, de-densify informal neighborhoods, reimagine the suburbs and ensure Cairo’s urban center remains core to the capital city.

Watch this space in the weeks ahead for our thoughts on each of these points.

** SODIC is a leading Egyptian real estate developer. Headquartered in Cairo and listed on the Egyptian stock exchange, SODIC brings to the market award-winning large scale developments, meeting Egypt’s ever growing need for high quality housing, commercial and retail spaces.

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