The housing of low‐income groups in Greater Cairo has always been difficult. However, the general shortage in housing supply is contrasting with the low occupancy rate of newly constructed public housing units. In contrast, despite their bad living conditions, informal settlements have a high occupancy rate. In order to analyse the reasons behind this contradiction, the paper compares four neighbourhoods ranging from formal and semi‐informal to informal housing production and including one rehabilitation project. The livelihood conditions in each settlement are unravelled with the concept of modes of economic integration from Polanyi. For this purpose, semi‐structured interviews were conducted and analysed with correspondence analysis. The findings indicate a preference among low‐income groups for informal settlements because of three reasons: the advantages of geographical location, the nature of social networks and the strength of private redistribution systems, thus enabling an easier access to means of existence. The results and recommendations are further discussed in the paper.