27 July, 2006

Who Pays the Rent?

So your rent's due--what do you do? We're not talking for another month, but for a whole year! On top of that it's 30% more than it was the year before. And lets see... your salary is about the same as it was in 2000.
This is the crazy scenario that I suppose is the norm for a lot of people in the UAE. We hear about it a lot in the news. But how many people are really paying for their rent as opposed to having it provided or subsidised by their employer. My guess is it's about 50/50, those who pay and those who get it from their job. That's the topic I go into in the Rent. I think it is an issue that we need better perspective on. As bad as it is for some, it may be a story that the media is playing up.

10 comments:

marwan said...

Umm, I think a *lot* more than 50% pay for their rent. Venture out into the wilds of Deira and Bur Dubai and you'll find lots of people who don't get a sodding cent of rent allowance from their companies.

Most of the people who are hardest affected by the rent increases - the executive bachelors, low income workers and such - have no voice to communicate their situation and avoid obvious displays of discontent, to stay out of "trouble". They don't read newspapers or use internet cafes (can't afford it, you see) and most importantly, are so disillusioned by their subsistence level that they think speaking out will have no effect.

Another point to note is the existence of visa overstayers and illegals, whose often desperate need for accommodation means that they will take any lodging at any price - which is bemoaned by most bachelors, who are in turn driven out to make room for them.

BD said...

Great observation. I've never seen any surveys in the news on how many pay and how many get subsidized, but the numbers, I'm sure, can be hard to work with. For every executive bachelor and visit visa resident there are the countless construction and other low-wage earners in the labor camps. My guess is that those two categories balance each other out.

(And the question is who is paying and who is not, not the standard of accommodation which for both of the above is pretty miserable.)

So that leaves us with the rest of the population who tend to have more decent jobs. "50/50" on my part is just a guess. I'd be curious to hear from the people in the new residential communities, Greens, Springs, etc. What percentage out there are self-paying or self-owning? Any hunches?

Dubai Entrepreneur said...

bd, only Europeans/Americans and those holding very high positions (CEO, President, etc. -- regardless of ethnic background) have the luxury of subsidized accommodation. Even those are increasingly becoming a rare occasion. The vast majority of employees have to foot the bill for their rent.

So, I think your 50/50 guess is waay off the mark.

Mme Cyn said...

Thank heavens my job provides all employees with housing, especially since some have suggested they give us an allowance instead. That would have killed us financially when the prices skyrocketed last year. Still, my annual raise was less than half a percent this year(as opposed to the usual 4 or so), so we'll see how long they can afford to house us.

If I'd had to pay my own housing, I'd have left by now.

BD said...

With regard to dubai entrepreneur's comments, are you American/European?

Dubai Entrepreneur said...

bd,

No, I'm not (far from it). However, I've worked in quite a few places already (before starting my own business) and none of them provided housing.

I do have some Europeans working for us (one American and a couple Brits).. and by no means do I plan to pay for their housing (or anyone else's). That would be suicide for the company.

On the other hand, spiralint rents may send them out of Dubai. It really is just a lose-lose situation.

Tainted Female said...

Yeah, I'm with Dubai Entrapenuer. It seems the truth though, I'm not sure if it's a racial thing (though probably to some extent) but more a position and company thing. There are a couple of Asian's in my father's cirlcle that have similar positions to my father and also get subsidized housing.

It used to be for EVERYONE - like ten years ago. But then, your children's school was also paid by the company as the norm. Not anymore.

Aside from my father and a few of his falconer friends who also work for Sheikhs, I don't know ANYONE who has company paid rent these days. And I know a lot of people in a lot of different positions. Some get a certain amount added to thier salaries - but usually it's not enough to begin with, let alone to handle the increasing rents.

((By the way, I'm a Canadian who has worked a number of positions in a number of companies including management and I've never been offered subsidized housing))

blogrosh said...

Hmmm, when I lived in the UAE 6 years ago, housing allowance was extended to about say 40% of the working folks I know. The international firm I worked with whilst in Dubai, paid housing allowance for all Europeans and Brits - and to 70% of the Asians, however there was the usual disparity (read discrimination) in pay. The EU and UK folks were paid a good 20% plus - both in basic salary and benefits compared to Asians.

My dad had a housing allowance during most of his working life in Sharjah.

Often as a "native" expat - I am unable to understand where UAE especially Dubai is heading with this possibly higher quality of lifestyle, infrastructure and so on – when most often the large majority of working souls are just making ends meet pay check to pay check.

I cannot often help think, who exactly (i.e. the kind of people) is Dubai trying to attract and retain for its continued growth? Thank heavens there’s still affordable, safe & quite neighborhoods in some parts of Sharjah and most of Ajman & UAQ – which are still commutable distance to working folks in Dubai. I reckon the best option right now is to purchase a home, provided you get an affordable mortgage and a stable job.

Mme Cyn said...

"Stable job" about says it, blogrosh. How many of us are on indefinite contracts? Mine is three years renewable until they're sick of me, and no way would I buy property here (for that reason and many, many others).

Where I work, housing etc. is allocated based on your position and your family size. As a single, childless type, I get a much smaller benefit package over all than colleagues who are MwCs, but I'm happy enough with it.

Officially I work for the UAE Govt (Ministry of Ed). I thought all government expat workers got housing paid or subsidized. Am I wrong?

BD said...

In the UAE military (in Abu Dhabi) where I worked from 2000-2005 there were some including myself who got full-housing--not an allowance--we were just given a nice place to live.

There were Indian/Pakistani/Arabic teachers on staff as well and they seemed to be getting if not the same deal, then something close.

There were, however, those in lower positions mostly from other Arab countries, who got less, but it seemed more connected with their position than their nationality.

When I left, however, the trend seemed to be to cancel the employment of as many non-nationals as possible--of course, an Emiratization issue as opposed to a housing one.

To the commenter who spoke about the lack of job security:

My take is that if you have had the occasion to change jobs while in country at least two or three times--as I have--then you might feel that whether you lost one job or another, there is still some degree of security in that you could find a new job. The way the economy here is growing so, one can have some amount of confidence that they can remain employed in some fashion--depending, of course, on their field.

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