Economic Dimensions [Archives:1998/36/Business & Economy]
By Mohammed Hatem Al-Qadhi
Assistant Managing Editor.
There are many reasons behind the increase in house and shop rents. First of all, the price-hike shocks people are witnessing now and then under the pretext of the economic reform program sponsored by the World Bank is the most important reason. Landlords start asking for a higher rents as soon as price of foodstuff and other materials go up.
Another reason is that due to the constant deterioration of the Yemeni economy and accordingly the fall of the value of the Yemeni rial, a good number of people leave their villages with the hope of getting better job opportunities in the cities. This immigration congests our cities, particularly Sanaa, and thus the rent of houses and shops witness a free ascendance. It is also because Sanaa has become a destination of a good number of foreign and Arab people. There are also many new houses being built.
This is because some businessmen are running after a quick profit investment. One such way is investing money in banks. Thus, the capital of some well-to-do has turned unproductive. This leaves no room for doubt that we are facing a very big housing problem.
Third part of this plight is very peculiar. Many people are envious of the rent their neighbor is receiving: “You get such and such money for your house and I should get the same”, regardless of size, condition, etc. Also some landlords receive offers for the use of their property for commercial purposes such as language institutes, companies, computer centers, etc. It is a good chance for them to make money, isn’t it? So, then the landlord thinks how he can get rid of his existing tenant. It can only be through asking for a higher rent.
Rent increase ration
In fact, the rent increase has no specific proportion. It is up to the landlord to define it. The rise could reach 50%; it could accelerate upto 100% or even 200%. This really happens especially when leasing shops. And it is because of shops that most of the problems between tenants and landlords take place. A person might rent his shop for one or two years. When the time is over, he asks for a double rent or simply “evacuate my shop in two days time”? The tenant has lost a lot of money in decorating and repairing the shop; he has now made some good steps in business and gained a few customers. So, how can he leave the shop; where to go?
Of course, the tenant refuses to quit. The landlord brings the police to close the shop and the tenant does the same to open it. A case might be filed in court. The more one pays, the easier and quicker he wins. Sometimes the case remains in the court for months or even years. Sometimes violence and gun-firing might be the final choice to finish off such problems and disputes.
In some other cases, tenants accept the rent regardless of how much it is. I have known that the rent of a one-door shop on Hadda street is now $1000 per a month. Is this possible? The tenant knows how to compensate; he easily raises the prices of his goods and thus gets a good profit. So it is only the poor who suffer.
There are many criteria defining the rent of houses. Location is very important in the capital Sanaa. We find that houses located in the political zone and Hadda, which are new and therefore cleaner are very expensive, whereas those in the sub suburbs of the capital, which are older, are thus a lot cheaper.
We find that the procedures of renting a shop or a house is mainly conducted at real-estate offices. And the two sides have to abide what is in the contract. It can also be done through a ‘go-between’ where no contracts are signed. It is because of the latter that most of the renting problems occur. However, even contracts can be violated for the landlord, as I mentioned previously, resorts to force and ignores the contract. So, if the tenant is not courageous enough to withstand the landlord’s arrogance, he will find himself out on the street. But is it necessary that we should be always violent and bloody to keep our dignity untarnished?
Will the government address the renting problem promptly?