Affordable staff accommodation in Dubai has become an increasingly challenging issue for businesses operating in the emirate. With the rental market experiencing an unprecedented boom, many companies are struggling to find housing that is both affordable and suitable for their needs. This lack of affordability extends beyond just rental costs, with utility bills also have increased significantly due to higher electricity tariffs and government fees.
This article will look at some options available for affordable staff accommodation in Dubai at present, before outlining what can be done to address this crucial issue in coming years.
Double rent charges
One of the biggest problems facing companies looking to provide accommodation in Dubai is the impact of double rent charges on employees who already own a home or occupy one furnished by their employer. Emiratis who are entitled to freehold ownership under the UAE constitution must pay rent of 25% of their salary. Expatriates on a long-term contract, as well as those working in Free Zones, are exempt from this charge.
As far as landlords are concerned, they will typically charge one month's rent as a service fee and also require two months' rent to be paid during the period from when a tenant is handed over until his handover date. In other words, if a company has chosen the option of furnishing staff housing themselves and placing employees there before moving them into rented accommodation, twice the normal amount of money will have been spent. This is not only costly but may damage relationships between and workers who resent being placed in staff accommodation in this way.
Many companies are now only providing housing to upper-level managers and specialist employees who they anticipate will leave the country within two years, choosing instead to hold on to their capital for more urgent purposes. This not only makes sense in terms of preserving company cash but also reflects the fact that most employers simply cannot compete with private landlords or homeowners when it comes to salary levels.
The UAE's rental market is well known throughout the world, so anyone looking for the property should not be surprised at the high costs involved. However, many business leaders remain unaware of exactly how much control landlords have over their tenants because of regulations imposed by Dubai Municipality which give them power over everything from house design to furniture specifications.
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