The old rent issue in Egypt remains one of the most complex real estate and social challenges due to accumulated legislation and exceptional state interventions dating back to the early 20th century. This system provided stable housing for millions of citizens, particularly low-income families. However, it has also sparked widespread controversy due to its role in freezing real estate investment and fueling disputes between landlords and tenants.

In this analytical series based on a study by researcher Ibrahim Ezz El-Din, the first article presented official statistics on the current situation—detailing the number of residential and commercial units under the old rent system, their geographical distribution, and the number of households benefiting from it. The second article examined the legal evolution of the old rent laws, from their inception to the present day, showing how a temporary measure gradually turned into a complex and entangled legal structure. This third article offers an in-depth analysis of the impact of the old rent system on both residents and property owners, from social, economic, and legal perspectives, especially as Parliament prepares to pass a new law that could radically reshape the relationship between the two parties.

Analysis of the Old Rent System and Its Impact on Residents

According to the previous data, the old rent system in Egypt presents a complexity that combines social and economic factors significantly affecting its various parties. It is considered a major advantage for the benefiting residents, as it provides housing stability at low prices. On the other hand, it is seen as a significant disadvantage for property owners, who feel that their properties do not achieve their true real estate value under this system. There is a great opportunity to resolve this crisis by finding a balanced solution that takes into account the rights of both property owners and tenants. If the Egyptian Parliament works to study this crisis thoroughly and directs the solution towards the main parties involved, while ensuring that gaps are not exploited by other parties such as investors, this paper then moves on to analyzing the old rent system in Egypt from various aspects and provides appropriate recommendations for legislative bodies.

The Role of the Old Rent System in Promoting Economic and Social Stability

The old rent system is considered one of the main factors contributing to the promotion of economic and social stability for approximately 1.6 million households benefiting from this system, as it directly provides affordable housing. Through discussions with several beneficiaries, the three main points agreed upon by residents are as follows:

1. Protecting Low-Income Families and Affordability:
   The old rent system ensures that many low- and middle-income families remain in their homes without bearing heavy financial burdens, especially with rising living costs and new rental prices. This system acts as an economic safety net for tenants, especially for middle-class and low-income individuals who cannot afford the high new rental prices and have inherited these units.

2. Security of Tenure and Community Stability:
   For tenants, the old rent system represents one of the factors contributing to adequate housing, guaranteeing security of tenure and preventing eviction through legal means. This has resulted in long-term economic security and social stability, forming local communities and strong neighborly relationships, particularly in popular neighborhoods where most old-rent properties are located.

3. Easy Access to Workplaces and Services:
   Economic and social stability often reflects in easy access to services, and for tenants of old-rent properties, their lives are often aligned with the most convenient routes to services, and their daily commutes to work follow the easiest available paths.

Weaknesses of the Old Rent System and Its Impact on Property Owners and Buildings

Despite the positive aspects of the system in enhancing stability, there are several negative points that need to be addressed. The old rent system is seen as an economic problem for property owners who feel that they are not benefiting from their properties, with the state having imposed this contract in the past. These weaknesses also reflect on the condition and maintenance of buildings, and the most significant issues are highlighted below:

1. Economic Problem for Property Owners:
   The economic crisis is manifested in the large gap between the rental value set and fixed for decades under the old rent law and the current market value. The stability of rental fees for decades has caused property owners to lose fair returns on their properties, especially with rising living costs and property prices. This situation is unfair to property owners, as they possess real estate in vital and strategic areas, but the value remains underutilized.

2. Contract Transfer by Inheritance:
   The transfer of contracts by inheritance to the children of the original tenants has created a problem for property owners, making it difficult for them to recover units that have been inherited, and the tenancy remains unchanged for decades. On the other hand, tenants see these units as not just rented properties but as investments with a down payment that equals their value when they were built. For tenants, the old rent system resembles long-term mortgages, where fixed amounts are paid over the years. The initial contract was intended to establish a long-term relationship between the tenant and their family, with the value of money changing over time. When these contracts were signed, property prices and construction costs were high, allowing real estate developers to make large profits. Therefore, tenants’ positions in the old rent system are similar to modern mortgage investors.

3. Degradation of Buildings, Poor Maintenance, and Vandalism:
   The stability of rental values has led to the deterioration of buildings in some cases, due to the owner’s failure to maintain public services, which cost them more than the return on investment. At the same time, some tenants do not take care of the unit’s internal maintenance, which negatively impacts the overall condition of the building. In some cases, property owners deliberately attempt to accelerate the collapse of their buildings to sell the land, which is valued at millions of pounds, by carrying out intentional acts of vandalism, such as digging inside the building or demolishing parts of it, or using materials like “dixpan” to disintegrate cement without making noise.

Potential Threats and Political and Commercial Impacts on Resolving the Crisis

Despite the harm the system may cause to property owners, there are potential threats that may arise due to future developments in this file. These threats are directly related to the possibility that the resolution of this issue could benefit another party other than the parties involved in the conflict. The current situation of Egyptian government policies, urban development policies, and the direction towards profiting from real estate projects raises many questions. There is no doubt that the issue of old rents in Egypt requires legislative intervention that aims to regulate the relationship between the landlord and tenant, ensuring both economic and social justice.

Legislation:
The court has obliged the Egyptian Parliament to amend the old rent system before the end of the current legislative session in June 2025. However, the timeframe is very short, which could lead to insufficient studies to ensure a fair and balanced law. There are concerns that the views of those affected by the law, such as property owners and tenants, may be ignored, leading to unsustainable or unjust legislation. If the law is not issued by the specified date, according to the court ruling, the relationship between the landlord and tenant will automatically be freed, which could lead to radical changes in the rental market.

Forced Eviction and Resorting to Informal Housing:
In the event of freeing the relationship between the landlord and tenant, whether due to the Parliament’s failure to legislate before the end of the current session or releasing the relationship after several years without sufficient guarantees, there is a clear threat to the lives of thousands of families living in these buildings, as they are exposed to forced eviction, which has recently become a common government policy for urban development processes. Consequently, this leads to a larger threat of dismantling the social fabric of neighborhoods, especially in a real estate market dominated by speculators and large investment companies.
This situation may lead to disproportionately high rents that many families cannot afford, pushing low-income groups out of the opportunities for adequate housing. As a result, this could lead to a rise in informal housing, which the government has not yet managed to control or regulate despite the expansion of new urban settlements.

The State’s Public Policy and Judicial Direction:
Although the issue of old rents has been ongoing for decades, and although the constitutional court ruled on the unconstitutionality of fixing rents under the old rent system (Law No. 136 of 1981), this issue has been pending for about 26 years without any action taken. However, the court’s ruling came immediately after a year of the President’s directive to resolve the issue, followed by the Egyptian Parliament’s urgent move to draft a new law regarding old rents. This reflects the general policy of the state, which is now solely managed by the President, as reflected in the statements of the head of the housing committee in the Egyptian Parliament, indicating that the work is ongoing according to the President’s directives. This raises the question of the independence of these authorities and the potential political influence in making decisions related to community issues.

Benefiting a Third Party from the Issue:
Recent developments in the real estate market show a significant shift in the ownership of old properties, with real estate investment companies and government bodies emerging as major forces seeking to acquire these properties and re-market them at higher prices. This shift reflects a new approach to asset management, focused on financial profit at the expense of social aspects and tenants’ rights.
The Ismailia Company represents a model for businessmen controlling valuable architectural heritage, as it acquired around 15,000 square meters of buildings with architectural value in Downtown Cairo, including about 25 prominent buildings. On the other hand, the Misr Real Estate Assets Management Company, a subsidiary of Misr Insurance Holding, recovered about 9,000 square meters of properties in Downtown Cairo, which were subject to the old rent law, and aims to re-market these units after agreeing with the former tenants on a share of future profits.
In this context, the New Urban Communities Authority emerges as a major real estate investor and a governmental arm seeking profit from housing projects. The Egyptian government facilitates its acquisition of lands and homes through eminent domain law. After amending the authority’s law in 2018, it was granted the power to expropriate entire neighborhoods, marking a fundamental shift in its scope of intervention. This raises a potential threat to old rent properties, as they may become a direct target of the authority after resolving the legal issues surrounding them, leading to widespread acquisition of these properties.

While real estate investment companies target heritage properties in Downtown Cairo by purchasing buildings and negotiating with residents for evacuation in exchange for modest compensation, the authority adopts a more comprehensive approach based on expropriating entire neighborhoods, re-planning them, and offering them at prices similar to those in the private sector. The authority also relies on economic policies focused on maximizing financial returns, such as selling units to Egyptians abroad in US dollars, which raises concerns about the social impact of these policies, particularly regarding resource distribution fairness and housing opportunities.

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