Abu Dhabi to set land aside for low income housing

The Abu Dhabi agency is responsible for making the business environment as attractive as possible to foreign investors, as the capital pursues its industrial diversification programme.

Although the emirate produces 10% of the world's crude oil, and holds 5% of the world's gas reserves, a broader economic strategy has been adopted with the introduction of specialised economic zones designed specifically to entice foreign business.

With the heavy reliance on low-paid expatriate workers and upward rent pressure, residential developments for labourers are becoming an evermore important facet of their operations.

This availability of low-cost housing is an integral part of attracting international businesses to relocate to the emirate.

Engineer Khadem Sawayeh Al Muhairi, the executive director of workers services at ZonesCorp, explained: 'Setting up the labour complexes aims at providing...convenient economic accommodation for workers with limited incomes, in the industrial and construction sectors.'

Abu Dhabi investment to increase

Promoting itself as a tourism and air bridge destination, there is no shortage of investment into Abu Dhabi's economy: It is estimated that $200bn will be spent developing the city over the coming 10 years.

Even in the short term, annual GDP growth is predicted to hit 3% per annum for the coming three years.

Such growth will be carried out, in reality, by a large number of expatriate workers supporting the need for significant amounts of additional accommodation.

In fact, official estimates put the number of workers living in these cities at 400,000 (30.5% on low-incomes) by 2010, rising to up to 800,000 (33.75% on low-incomes) by the end of 2012.

The news comes just a few weeks after the Department of Planning and Economy (DPE) cautioned that the city faces a housing challenge as the demand-supply ratio in middle and lower-income remains unbalanced.

Need for affordable housing

Earlier this year, Government officials claimed that developers were concentrating too much on high-end properties, neglecting the provision of more affordable housing, and floated the idea of forcing companies to allocate 20% of their housing units to low-income families.

Some officials have suggested that the skewed range of options available is a contributing factor in escalating housing costs, which are, in turn, accelerating inflation.

Commenting on the latest move, Blair Hagkull, Managing Director of Jones Lang LaSalle said: 'The housing shortages are well recognised and nowhere is it more acute than at the lower end of the market. The Government has long recognised the importance of providing accommodation for workers in Abu Dhabi.

'The priority will be delivery and pricing as the focus in the freehold sector has been on the luxury segment: An emphasis on affordable housing will underpin success going forward.

'The recent growth is testament to the fact that no supply is available anywhere. The majority of the new and planned accommodation across the UAE is at the higher end so this is a step in the right direction.'

Much publicity has surrounded the condition of existing worker complexes with reports of overcrowding, sewerage problems and poor maintenance.

In order to tackle this problem, ZonesCorp has taken measures to regulate the quality of the accommodation and provide a good environment for residents.

The company's CEO, Engineer Jaber Hareb Al Khaili, confirmed the quality of the developments earlier this year: 'These cities will be built according to international standards and specifications and will be model residential cities with residential areas, recreational areas, restaurants, health clinics, public areas and parks, and mosques, together with all the necessary services.'