BEO | Evaluating Old Rent Decontrol | Lessons Learnt

Comparing previous experiences of rent control liberalisation in Egypt

Calls to deregulate Old Rent go back to the 1970s. By the early 1990s, these calls grew stronger, leading to Law 4/1996, which allowed only new contracts to be made under the mainstream Civil Code and left prices and terms to be decided by landlords. However, to the dismay of old landlords, the new law did not decontrol existing Old Rent contracts. While this was the practice with neoliberal rental developments across the globe, landlord demands for decontrol persisted, and court cases continued to be lodged.

In this study, which is part of a series dealing with the Supreme Constitutional Court’s ruling rent control of the Old Rent law, we compare previous experiences of old rent liberalisation, whether through laws that have already been applied to agricultural land, commercial units, and legal persons’ contracts, or through a number of prominent liberalisation proposals that have been put forward over the decades. This is in order to present the most important points that should be considered in the upcoming legislative amendment, and to benefit from past experiences and avoid their pitfalls.

Contents

Historical Context: Why Did It Take 40 Years?

Evaluating past experience and attempts at decontrol

Component 1: Initial Jump in Rental Values

Component 2: Transition Periods

Component 3: Annual Rent Increases

Component 4: Safeguarding Low-Income Tenants

Conclusion

Acknowledgements

Appendix 1: Table comparing enacted laws and key proposals decontrolling Old Rent

Historical Context: Why Did It Take 40 Years?

The recent constitutional court ruling on old rent comes after more than four decades of government hesitancy. Successive administrations repeatedly avoided reforming the old rent system, fearing mass displacement and social unrest. The law had long been viewed as a crucial safety net for low-income and elderly tenants, many of whom would be unable to afford market rents. However, the sharp inflation of the early 1990s left old rents entirely disconnected from market realities, deepening tensions between landlords and tenants.

In 1996, amid broader neoliberal restructuring, Minister of Housing Salah Hasaballah introduced the “New Rent” law, vowing to leave old rent contracts untouched, citing the risk of mass eviction and unrest. While Hasaballah even blamed urban deterioration on the Old Rent law, sarcastically noting that tenants paid less for rent than for garbage collection due to rent freezes under inflationary conditions, state officials hoped that the new rent law alone would resolve the housing crisis without the political cost of altering existing contracts. He argued that New Rent regulation was necessary to “cool down” the overheated housing market, especially as austerity policies were forcing the state to retreat from providing affordable housing. He linked the housing crisis to the state’s inability to directly develop and maintain housing stock due to constrained public finances, noting that the privatization of the housing sector and unregulated home prices left the state powerless to build affordable housing at scale.

The 1996 deregulation rent policy was promoted as a solution that would, within two years, dramatically expand housing supply, stabilize rent prices, and boost investment in real estate. However, reality fell short. While landlords did gain more favorable conditions for new rental contracts, the market remained skewed. Affordable housing continued to shrink, with inflation outpacing wage growth and the formal housing market increasingly catering to upper-income groups. For three quarters of the population, the informal housing sector remained the primary source of affordable shelter.

Since 1996, the rental market has operated under two parallel systems: Old Rent, which had fixed rent prices for contracts made from the 1940s to 1996 while allowing generational bequeathal, and New Rent from 1996 onwards, which leaves prices to market forces and limits terms to a few years. This duality has fueled growing frustration among landlords bound by Old Rent contracts while deepening the anxieties of tenants unable to afford deregulated market rates.

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