Saturday, June 04, 2005

Housing market in Abu Dhabi :: Khaleej Times

A lengthy and useful article on facets of the way the rental market here works, especially in Abu Dhabi. It provides useful details about practices and points of view. At the same time it displays confusion over the economics. For instance, consider this wowser:
In deciding on review of rent charges periodically, the “Khalifa Committee” allows the basic economic principle of demand and supply to rule. The department has a special rent committee that meets twice a week to decide on the rent charges of housing units and apartments. As tenants and prospective tenants cry over the suffocating rents in the glaring eyes of the “Khalifa Committee”, which looks on helplessly or rather passively, voices calling for the privatisation of the Committee continue to gain popular support as a form of protest against its passive approach to the plight of the tenants.
I suppose if you took out the word "helplessly" this is purely descriptive. It is saying the Khalifa Committee is a rent control committee that has decided to be passive and allow the market to set rents. That, I would say, is probably the correct policy to adopt.

The calls for privatization suggest those voices believe the reason the Khalifa Committee is not carrying out its mandate is because as a government agency it lacks the motivation or incentives. I'm stumped, though, as to what privatizing means in the case of a rent control committee.

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