Low-income groups need to be supported

Cherylyn has constantly been on the run. In two months she has changed address three times, more than doubled her housing budget and perfected the skill of heaving bundles of belongings, sorting cupboards and drawers and lifting bed frames. And that's all because of the recent crackdown on overcrowded villas in Dubai.

Many Dubai expatriates like her were forced out of their homes last month, after inspectors stepped up their "one villa, one family" campaign, cutting off utilities and warning landlords that they could be slapped with a Dh50,000 fine.

Only two months ago, Cherylyn and her friends moved into a Dh48,000-a-year room in a shared villa in Umm Suqueim. For fear of getting fined, the landlord later evicted them and sent them to a room in Bur Dubai. Barely a couple of weeks later, they were booted out.

"Now we're moving into a new flat that costs Dh120,000 a year. How can I afford to rent that alone when I'm earning below Dh10,000 a month?" she asks.

Dubai's rapid pace of development has attracted thousands of expatriates. Over the years, the number of foreign workers has expanded, thereby increasing the demand for accommodation, especially since many have brought their families.

The Dubai Chamber of Commerce and Industry, which has been tracking inflation in the housing sector since 2005, released a report last week detailing how far accommodation costs have gone up in three years and who are being hit the hardest.

The report said the cheapest rent in Dubai surged from an average of Dh34,582 in the third quarter 2005 to nearly Dh53,000 this year. Rents for middle-income housing rose from Dh72,947 to Dh101,000, while those for high-end accommodation increased from Dh133,715 to Dh175,000. The Dubai Chamber found that the cheapest housing units posted the highest rate of increase. This put pressure on lower-income households to look for cheaper accommodation in neighbouring emirates, enabling landlords in Dubai to increase the rents for new tenants at levels beyond the rent cap.

Adding to expats' woes is the campaign against shared villas. "The recent crackdown on sharing of housing units has driven many low-income earners to other emirates where rents are more affordable, while others have resorted to more drastic measures, like sending their families back home and getting much smaller and cheaper accommodation," the report said.

And with rents rising with everything else except salaries, the Dubai Chamber said the low-income groups face the hardest threat to survival. "While the relatively higher-income groups can resort to substitution and changes in spending patterns, [low-income residents] are left with no choice but to change their living arrangements as well."

The call of the hour is to provide more affordable housing. It is also necessary that rent cap policies be reviewed. It might serve the majority of struggling expats better if the rate-of-increase ceiling for low-cost accommodation is set lower than that for high-end apartments.

Beyond the housing issue itself, that would help manage and maintain a defendable welfare distribution structure and ensure optimal economic growth.