Wednesday, July 28, 2010

Incentives and Cairo housing

On a recent trip to Cairo, I was struck by two things.

First, there were a lot of run-down apartment buildings. Emphasis on "run down" and "a lot," and interspersed throughout the city. Yes, Egypt isn't the richest country in the world, but it's still a large (read: more than 20 million) city and prevalence of poor buildings was surprising in all areas of the city.

Second, there seemed to be a preponderance of unfinished buildings. This isn't entirely uncommon in Muslim areas but, again, Cairo is a large city and, once more, there was surprising amount of (seemingly non-progressing) construction.

Things like this don't happen without reason; where there's bizarre outcomes, government nonsense isn't usually too far behind. See if you can guess for yourself the government policies that exaggerate these outcomes-- I'll put the answers below the fold.



Will Luther said...

nice find.

Steamboat Lion said...

Ah rent control; beloved of third world cities. Like Cairo. And New York!

Anonymous said...

I would guess that the first and foremost reason is that property taxes do not commence until a building is complete. Other reasons that might be applicable include controls on usage that begin upon completion, building permits not required for construction below a certain amount, and clearly defined title to property could also be a problem if others could stop construction by claiming that they also had rights to property. The last reason is more of a failure of government than an action of government. But this is what I