Rural – Urban Explosion and Yemen’s Housing Crisis [Archives:2008/1141/Business & Economy]

March 27 2008

By: Yemen Times Staff
Yemen is an overwhelmingly rural country where 70 percent of the people still reside in rural areas. However, significant population growth and the migration from rural areas to urban centers is putting tremendous stress on Yemen's cities, where demand for services, employment, and primarily housing has caused a housing crisis, pushing the prices of real estate and rents through the roof. In this report we investigate the causes of the phenomenon as well as what the government is doing to improve the situation.

Economic Hardships

Perhaps the prime factor in motivating people to migrate from rural areas to urban centers is the search for employment. Historically, almost all of Yemen's rural residents were dependent on agriculture to sustain their livelihoods, however, the decreasing economic returns of agriculture – with the exception of qat cultivation – has pushed many to seek other sources of income. The prime factor in decreasing the economic returns of agriculture is due to the increased costs of water and irrigation, in addition to market forces, for example importing wheat from the international market during the last two decades seemed economically viable from buying homegrown wheat, therefore forcing the local farmer to compete with large scale producers, forcing this farmer to buy wheat from the urban center instead from selling his surplus there.

Furthermore, the population growth has also decreased the economic returns of agriculture per capita, thereby reducing the prospects of younger members of the family to find economic opportunity in urban centers. Therefore we find significant numbers of young migrant men who left their villages and migrated to the cities in search of employment.

Migrant Youth

Large numbers of male youth migrants leave their villages and families behind every year in search of economic opportunity in the nearest urban center, the prime employer for this youth is the construction sector, giving them daily wages ranging between 3 – 5 dollars per day. This very little wage is barely enough to cover food expenses, mind you rental. Therefore, several youth tend to rent an apartment where four or five share a room. However, the majority of youth complain that many landlords refuse to accommodate the youth due to the risks accompanying including non-payment of rents, neighbors complaints of theft, burglary, and noise which usually accompany youth residents.

Even full-time migrant university students have been affected by the same issues, where the limited university housing facilities force many to find housing and accommodation outside, finding themselves forced to pay double the actual cost of housing within the university, especially given the high inflation and the accompanying continued increase in rent costs.

Instable rent prices

The trend continues across the sector to reach other segments of the society including working class professionals and dual income families, where the unregulated accommodation market makes tenets vulnerable to the mood swings of landlords and house owners who continue to raise the cost of rent regularly due to the high demand on accommodation. There are many cases documenting where tenants with limited income find themselves having to move from one location to another several times a year, a relocation process costing them time and money.

The population growth, the influx of migrants, in addition to the limited availability of housing are the three prime factors that contribute to the increasing costs of rent. However, a fourth factor might as well be relevant which is the home owner's costs and investment in real estate, especially since the prices of real estate continue to increase, home owners feel that they should receive a steady percentage of return on the value of their property.

Costs of construction and real estate

Furthermore, another factor contributing to the problem is the increasing costs of real estate and construction, which resemble a truly fundamental issue concerning expanding investments in real estate. Even for many government employees who get awarded land to construct their homes, they find themselves unable to raise the funds needed for construction in the light of the increasing prices of steel, cement, and other construction materials.

Therefore, only a minority of people who have the resources to expand their real estate property can do so, on the expense of the majority which is unable to own its independent real estate and therefore graduate from having to suffer the wrath of rents and renting.

Government Strategy

The government of Yemen is aware of the problem, as it is evident through the increasing pressures on urban infrastructure such as power, water, and sewage systems. The continued increases in urban population has had its effect on government planning, and demanded serious forward thinking policies from the part of the government in order to accommodate the increases in population.

Another strategy is to improve infrastructure services at rural areas in order to reduce the momentum of migration, with a hope that access to transportation through constructing feeder roads, and the availability of energy will help entrepreneurship and enterprising in rural areas, resulting in diversifying the rural economy away from agriculture, as an attempt to deal with the root cause of migration from rural areas to urban centers.