Dubai cannot thrive if most can’t afford to live there

Requiring developers to include mixed-income housing will help ensure Dubai’s future viability.

Developers who build luxury towers will be required to also build accommodation for those on more modest incomes. Photo: Jeffrey E Biteng / The National

Most of the world’s great cities come with living costs to match. While the brightest workers, in the best-paid professions, can afford this because they command commensurate salaries, no city can prosper if teachers and fire fighters cannot also afford to live there.

This explains the good sense behind Dubai Municipality's decision, as The National reported yesterday, to set aside 20 per cent of available residential land for lower- and middle-income housing. This is a policy we have long advocated on these pages.

There are plenty of examples of cities blighted by their own success. In most London boroughs, the average house price is 10 times the average income. In places like Chelsea and Kensington, that figure is more than 30 times. London is now paying the price for its failure to ensure there is affordable housing for essential but lower-remunerated professionals such as nurses and police officers. Any city that cannot house key workers will struggle at some point.

Dubai is fortunately not yet in this position, although there have been indications it is on the same trajectory. When rents rose sharply a year ago, there was an exodus of lower-income expatriate workers to Sharjah or even Ajman. Although prices have since ebbed, it proved that many of those who work in Dubai are acutely sensitive to rises in the cost of living.

The benefits of ensuring the availability of a wide range of housing stock go well beyond attracting skilled workers to the essential professions. When people live far from their workplaces because of a shortage of affordable accommodation, the roads will become gridlocked as they commute, compelling the authorities to invest in upgrading transport infrastructure.

Dubai has to be commended for recognising these risks to its viability and cohesiveness. Normally, property developers are best left to provide what the market wants, but sometimes – as in this case – the authorities are justified in intervening to ensure a city continues to prosper by accommodating workers of every sort and in every income bracket.