International City which provides affordable living for over 60,000 people is a fine example of planned housing for the middle income earners who are facing a housing shortage. Image Credit: Gulf News Archives

Dubai: A proposal to ensure enough affordable housing for ‘mixed-income’ people (low to middle-income) between the labour-class and luxury market is under review, a senior official said.

If made law, the proposal will not only provide more economic stability, but also reduce traffic jams, said Abdullah Rafia, acting director-general for engineering and planning, Dubai Municipality.

Many professionals working in Dubai live far — even outside Dubai — from their places of work in upmarket areas. The arrangement means there is more traffic on major commuting routes.

Though there is no shortage of labour accommodation or luxury properties in Dubai, the executive working class is facing a housing squeeze as Dubai expands in area and population, Rafia added.

The commute from lower market segments to areas where there are only major corporations and luxury homes is also putting pressure on the roads.

Dubai has seen property prices and rents rise again recently. They had peaked before dropping during the global financial slowdown in late 2008. Economic recovery followed more recently and led to higher property prices and rent.

Many middle-class workers priced out of the market moved to cheaper areas within Dubai or other emirates. By comparison, there was no significant migration in the labour or upper class brackets.

Many of the luxury projects, properties and developers employ a considerable portion of human resources in the mixed-income spectrum, who do not live in pricey areas.

To factor in population growth and its impact on traffic, housing and other issues, Dubai has been working on an Urban Plan 2020 that seeks to ensure the situation is as ideal as possible by the time 2020 rolls in.

Several government departments, including municipality, transport and land divisions, are involved in the process.

The year 2020 is also the time when Dubai will host Expo 2020, which had initially not been taken into account because the wining bid came years after the plan started taking shape in 2010.

The proposal to develop a law that will balance out luxury and affordable housing — while reducing traffic congestion — is part of the overall strategy of “building a sustainable city”, Rafia told Gulf News.

However, it is not expected to be ready by the end of 2014 as was previously reported.

“Laws take some time to mature. There is a lot of discussion about the law itself. It’s more about building a sustainable city, signalling affordable housing, but not necessarily to limit luxury housing” by any fixed formula, Rafia said.

Placing enough mixed-income units on the market is “one of the suggestions for the major developers, to provide for at least some of the people who’ll be operating the business or the [property] development itself.”

Rafia stressed the mechanism to implement the law would be “more complicated and comprehensive” than simply restricting the amount of luxury projects or forcing a minimum number of mid-market projects onto the market.

“It will be more involved than that, it will be quite a rigorous process … Now, how much that [particular housing supply] should be depends what type of project it is, how much and what kind of human resources were involved. Lots of things go into it, but what it should give us is a sustainable city.”

He added: “The city did well for labour housing. They are geographically well located, enough dwellings were built. But between the labourers and luxury housing, that’s the spectrum where more work needs to be done.”

He said projections indicate if people live and shop close to their place of work, it will reduce congestion, pollution and volatility of property market cycles.

“You’ve to make cities in a way that more people find it easy to get from work to home and back. If you do that, it has a positive impact on the city’s sustainability, environmental sustainability, economic and social sustainability.”

Rafia added: “There are many ways to do this … It takes the effort of many departments in the application of the [proposed] law. City planning is an urban department issue; we [the municipality] have already submitted the proposal. It is good to go, it has been placed in the right channel.”