Cheap Housing? Really?

Dubai Municipality is planning to build low-cost housing to cater to the needs of low-income groups, particularly expatriates.

So Dubai has finally realised the requirements of its residents. Not everyone is financially well-off to live in expensive, posh areas of the city, or even moderately posh for that matter. Gulf News published this article today and I'm sure a lot of people must have given agreeable nods when they read it.

But... will the housing really be affordable? If you have a close look at the current housing situation in Dubai, especially in the overcrowded areas such as Deira and Bur Dubai, you will find that people residing in the old buildings, of which the rents have not sky rocketed as much as the newer buildings, do not vacate the apartments so easily. And that is mainly for 2 reasons:

1 -- Most older buildings have larger apartments. They are old structures, so the rent was not as high to begin with like the new buildings.

2 -- The current residents demand "key money" for vacating the apartment.

Key money could be described a mild version of extortion. The current occupants set a certain amount over which they refuse to leave if it is not paid. The would-be occupants cannot do anyting about it and the landlord is not bothered, as long as the building is fully occupied.

Just like real estate companies take over the sale of apartments in buildings, so do certain unscrupulous opportunists who will rent a few of these upcoming low cost housing. They know that when the building is ready, potential residents will run to sign up for apartments. And most will be willing to pay the key money to get in. Only then will the tenancy contract be transferred.

Business is good. And in Dubai, everything is for sale.