Cairo Housing Revolution to create transparency in rent market
CAIRO: Large broker fees, poor quality flats and landlords who impose on one’s private space are common for Egyptians and expatriates alike. A new initiative, Cairo Housing Revolution (CHR) hopes to create a new look on the renting market in Africa’s largest city, Cairo. Through a unique, Western-style accountability, the goal is to enable potential renters to understand the property they are renting, weigh options and choose through a transparent and easy manner online, without the hassle of increasing fees for a broker to find the “perfect” flat. James Latta, one of the founders of the newly established organization, believes given the opportunity, CHR can revolutionize how renting occurs in the city. He sat down with Bikyamasr.com to discuss the future of the infant operation.
What makes Cairo Housing Revolution different from other housing sites available?
A number of things differentiate CHR from other housing websites; in fact, I hesitate to even refer to us as a “housing website,” as these signifiers constrain us to just providing housing. CHR is a combination of a housing site, a consumer advocacy project, and a social network designed to connect interested parties through a safe, transparent, and free medium. From both personal and anecdotal experience, the housing industry is an unregulated market often susceptible to unethical business practices and price inflation – our site is designed to provide a safe alternative, one which benefits not only the renter, but the landlord as well. The Internet, as a clearinghouse of free information and easy access allows us to provide this service to both the housing seeker and the housing provider – for free. As such, I would be more inclined to classify us as online housing reform initiative, versus a housing site.
In previous conversations you have talked about accountability. How will CHR develop this idea and truly create something that holds landlords accountable?
I’m glad you asked this. In a society where seeking legal redress is a long, complicated, and sometimes impermeable process (especially now), the ability of tenants and landlords to effectively resolve disputes is fraught with difficulty, and generally speaking, the contracts and the courts favor the landlord, thus engendering substantial abuse. What CHR has done is to install a “Ratings” feature into our site, whereby members are able to rate and write reviews of their landlords, which are then approved and posted for the entire community to see, as well as comment on, like any consumer advocacy site.
Our goal is, like any consumer protection site, is to promote good stewardship and expose the bad by allowing members to use this feature. Landlords that steal or abuse their tenants are reviewed poorly – and help future tenants avoid them – while the good ones are recommended. Surprisingly, most of the reviews that we have received have been either positive or relatively neutral. Our long-term goal is to create a massive archive whereby any apartment seeker can read the reviews of an apartment/landlord before signing the lease.
With prices skyrocketing in Cairo over the past two years, will CHR help bring down prices? Is this even a goal?
Next to the accountability feature, this is one of our top goals. Price inflation is very high in Cairo, and one main reason for this is that there isn’t any reliable standard by which to measure prices, as rental prices are fixed on an arbitrary amount posted by the landlord and then negotiated down. Added to this are the fees from simsars (brokers), who typically demand a month’s rent from both the apartment seeker and apartment provider upon the signing of the lease. The problem here is that the consumer isn’t able to shop around and compare set prices, as they are either looking at broker sites or on housing sites which are almost exclusively dominated by brokers, which is kind of like letting the banking sector write its own banking regulations.
There are multiple methods that Cairo Housing Revolution undertakes to reduce prices for the tenant. The first of these is that ads are searchable by district, laid out neatly, and viewers can compare prices. The second is the requirements of each individual ad; in order to post an ad, a housing provider must provide pictures and a price, as well as click a little box agreeing to “not charge apartment seekers a broker’s fee under any circumstances.” Thus, a visible product with a maximum price and without any hidden fees is presented to the consumer amongst similar ads from the same district in Cairo. The consumer/apartment seeker is naturally going to select the option at a better value for their budget. Lastly, beneath every ad is the opportunity for members to post their comments – thus, if a bogus ad is posted on our site, our members can point this out for us. It is actually surprisingly simple how it works in practice.
Contrary to some misconceptions, these features also benefit landlords as well, as it not only makes the rental process easier for them, but it increases the chance for them to find tenants as well as reduces costs by cutting out the middleman. At first, landlords were a bit hesitant to use our site, but the idea seems to be catching on for them and our feedback from them has been very positive, especially as we help them realize savings of up to 1/12th of a housing unit’s revenue by removing the middleman.
New ideas like this seem to gain steam initially, but often spin out and find the dustbin shortly after. How do you envision moving the project forward?
CHR launched in August, and has exploded far beyond our expectations in terms of membership, traffic, and postings. At present, we are in discussions with several academic institutions, embassies, and foreign companies have started approaching us to see how we can help them with their housing concerns. In this day and age, with organizations and companies tightening their fiscal belts, a lot of them are reevaluating their present housing budget, and trying to trim it down. CHR is free for them to use, quicker and more transparent, and the rent tends to be much lower – I’ve seen the same property on our site go for sometimes go for a third more in rent on other websites, with the additional cost of a broker’s fee, usually 8.33% more (1 month’s rent). On brokerage sites, the prices are even higher.
Initially, we had thought that CHR would run as a non-profit, something small and easily-manageable, but with the explosion in growth that we have experienced, it has become too much to manage as such, so we have decided to transform it into a market-driven enterprise, with revenue derived from web-based advertising. By divorcing ourselves from having a vested involvement in housing prices, we can focus exclusively on working to create a transparent forum benefitting the consumer, enabled through advertising revenue. Therefore, we have a pro-consumer website powered by the input of the consumer which will lower costs for all, open up the market to transparency, and sustained by advertising revenue – the opportunity for us to grow in our service to the community are tremendous.
How has the concept been met in your conversations?
The vast majority of people have been very receptive of CHR, as they understand that it is a long-needed solution to the housing problems in Cairo, and that we have put a lot of work into getting this thing up and running. Most people who take the time to see what we are doing recognize that it is designed to benefit them and support us for that reason or because they like to see initiative.
Where we have met resistance is from the simsars/real estate agents. CHR allows simsars to post ads, as we realize that many landlords are unable to take the time and find the energy to find tenants, often an exhausting process. So long as the real estate agents abide by our rules (pictures, maximum price, no fees for the tenant, etc.) then they are welcome to use our site to promote properties, as many of them have done successfully. Unfortunately, some of the less scrupulous ones, those bent on extracting exorbitant fees at overpriced properties from tenants, haven’t taken kindly to CHR, as it threatens their business. We have received threats and I personally have been subjected to several nasty attacks on various online forums. The last thing that a crooked real estate agent wants to see is an initiative designed to bring transparency and accountability to the market, as corruption and price manipulation cannot coexist with a transparent market.
These attacks against us within various online communities were the only substantial threat we faced, as it is easy to smear an organization or individual from behind the anonymity of a username, and trying to explain the socio-economic benefits and reform initiatives of something as complex as CHR while dodging the mud and refuse of disguised real estate agents is far from an easy task. In most cases, we would explain who we are and what our initiative is focused on, and then leave the blog, listserv, etc.
This seems to have been the most effective response, as it gave us the opportunity to explain some of the more important components of our reform initiative while simultaneously contrasting this with an exposure to some of the worst elements of the housing industry in Cairo – in most cases backfiring against those slandering us. It wasn’t pleasant from a personal standpoint, given the nature of many of the attacks, but in the end we know that we are working towards something positive and change/reform will always encounter resistance.
At any rate, there is nothing those simsars can do, and my advice to them is to either clean up their act and get with the times, or find a new line of work.
Is Egypt ready for something like this?
Absolutely. People in Egypt are tired of corruption sapping the fruits of their labor – just like the Tunisian grocer whose self-immolation ignited the Arab Spring. Foreigners are tired of getting overcharged because of their nationality, while Egyptians are fed up with being turned away because of theirs. With a look at the current state of the political system in Egypt, waiting for reform to happen from the government is like lying on your back in the Sahara with your mouth open waiting for the rain to quench your thirst – you’re going to remain parched for a long time. The beauty of the Internet is that reform is possible at each and every one of our fingertips, and is powered by our own initiative and freedom of thought. CHR is just one small particle pushing forward with this giant wave whose high-water mark is as high as our hopes and positive energy can push it.
Moving forward, what is the future of CHR?
Due to the success of Cairo Housing Revolution, we have started setting up similar sites elsewhere in the region, all under the aegis of Jasmine Housing Revolution. As long as we have the support and energy of people in this region and beyond, we’ll keep moving forward. Our long-term goal is to eventually have wide-spread, positive impact on the housing market in Cairo and beyond, as well as to inspire other people to tackle similar societal problems suffocating the human potential of these communities