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Urbanisation needs re-thinking: El Burai

More than 2.5 billion people will be added to the global urban population within the next three decades, that poses enormous challenges to public policy makers in order to make the cities sustainable at a time when technology is disrupting the existing urban lifestyle on one hand and the growing number of slums poses environmental challenges, on the other hand, experts said at a latest conference on urban habitat.

“A third of the urban population is estimated to live in slums and informal settlements, often without access to proper housing, infrastructure or services. In Africa, it is closer to 60 or 70 per cent. The proportion is declining in some countries, but absolute numbers continue to rise,” said a latest United Nations report on habitat.

“Formal figures show the urban share of global poverty rising, while the share and absolute number of those in rural poverty declines.”

Unable to afford the formal land or rental market, many urban residents have no option but to live in these unauthorised settlements, often lacking legal property rights, the benefits of citizenship, access to credit, insurance, the rule of law and even the vote, the report said.

Mahmoud El Burai, Chief Executive Officer of Dubai Real Estate Institute (DREI), said, “What is a city without the people? The people should be at the heart of all urban development. It’s about people and their lives and livelihood. Therefore, we now need to think – or unthink or re-think how we can develop cities and make them sustainable – both economically and environmentally.

“With 2.2 billion of the world’s approximately 7.5 billon people living with less than US$2 a day and a third of the global urban population living in slums, we need to think differently and perhaps unthink, or rethink our work.

“With the enormous challenges due to increasing urban population and the pressure on infrastructure and environment as well as the technological disruption that is happening, we need to unthink the traditional way of thinking and become more creative and innovative in our thinking.

“These pressures and technological disruptions will widen the gap among the urban population. That’s why Dubai Government has stressed on public happiness – so that the changes and the growth could be inclusive.”

Since 1990, the world has seen an increased gathering of its population in urban areas. This trend is not new, but relentless and has been marked by a remarkable increase in the absolute numbers of urban dwellers—from a yearly average of 57 million between 1990-2000 to 77 million between 2010-2015. In 1990, 43 per cent (2.3 billion) of the world’s population lived in urban areas; by 2015, this had grown to 54 per cent (4 billion).

The increase in urban population has not been evenly spread throughout the world. Different regions have seen their urban populations grow more quickly, or less quickly, although virtually no region of the world can report a decrease in urbanisation.

Asia has by far the highest number of people living in urban areas, followed by Europe, Africa and Latin America. The fact that 2.11 billion people in Asia live in urban areas is no longer a development scourge as once feared. Being 48 per cent urbanized and home to 53 per cent of the world’s urban population, Asia has become a global powerhouse, generating close to 33 per cent of world output in 2010.

“More than 2.5 million people will be added to the existing global urban population, which is about 55 per cent of the global population. Every week, the world is adding a city of 2-3 million population,” Christine Auclair, Project Leader, World Urban Campaign at UN-HABITAT (United Nations), told delegates at a conference on Urban Thinkers Campus in Dubai recently.

“By 2020, more than 60 per cent of the global population will be living in cities and this will grow to 75 per cent in 30 years. This transformation and the rapid technological changes poses a huge challenge for all of us and we should manage these changes carefully to ensure the growth remains inclusive.”

The world is entering a new ‘Youniverse’ where young minds will reshape and redirect the course of the society and economy as technological disruptions are going to pose enormous challenge to mankind – 60 per cent of which will live in urban environment.

“We are in the middle of a technological revolution. The world is moving fast from today to tomorrow as we can see and feel the future now,” Osman Sultan, Chief Executive Officer of Emirates Integrated Telecommunications Company (Du). “Being connected has become a basic human right. Get connected,” was his message to delegates attending a three-day Urban Thinkers Campus conference hosted by Dubai Land Department at Meydan Hotel on Monday.

“Do we realise how much digital contents and videos we receive and consume every day? In every 60 seconds, 150 million emails are sent out, 2.78 million videos are uploaded and 2.4 million Google searches are conducted across the globe,” he said.

In 2016, there were 512 cities with at least 1 million inhabitants globally. By 2030, a projected 662 cities will have at least 1 million residents.

In 2016, an estimated 54.5 per cent of the world’s population lived in urban settlements. By 2030, urban areas are projected to house 60 per cent of people globally and one in every three people will live in cities with at least half a million inhabitants. Understanding the key trends in urbanisation likely to unfold over the coming years is crucial to the implementation of the 2030 Agenda for Sustainable Development and for efforts to forge a new framework of urban development.

“By 2020, there will be 7 million drones criss-crossing the United States and by 2030, around 50 per cent of all jobs will be replaced by robots, which will make half of the workers jobless. On top of that, with increased average life span human beings now live longer. [In terms of longevity] 100 is the new 60, Do you realise the pressure on urban habitat?” he says.

In order to re-design our life and urban habitat, Osman says a new world order is being re-shaped by digital start-up companies.

“The world’s largest taxi company, Uber, does not own a single taxi while the world’s largest accommodation provider – Airbnb – does not own a single accommodation. Similarly, Facebook the world’s largest media does not create contents as Skype – the world’s largest voice service channel doesn’t own any telecom operator. These are all technology companies and they are creating convenience for the people,” he says.

“Most traditional corporations used to have 75 years average life, while the average life of new companies is less than 15 years – all these changes reflect a new business model.

“Similarly, when we talk about the urban environment and smart cities of the future, we need to think how technology will change the way we live and work. We are moving from centralized to a more decentralized environment while at the same time, shifting from unshared certainties to shared uncertainties.”

On smart cities, he says, the shift is going to be from vertical to horizontal. “Dubai, as a great example, is shifting from a city of smart applications to a smart city – by connecting all the government services under one shared platform – so that all smart services are available on a single platform,” he said.

“We are moving from human-to-human world to an environment where things will happen among machine-to-machine (M2M). Machines will process enormous data as we are entering a world that would be dominated by the Internet of Everything and big data.

“The question is what do you do with the data? This is what will determine how smart your city life would be. Data provides us information that then offers knowledge that creates wisdom. While we shift towards smart city, one should also need to look at inclusive growth. That’s why Dubai Government launched the happiness initiative, to reduce the digital divide and ensure all stakeholders are happy.”

The cities of the future will have to create smart solutions to people’s lives. “And that’s why, everything needs to evolve around the people – You and that’s why we will have a ‘Youniverse’,” he concluded.

The abundance of slums and informal settlements is a major threat to sustainability.

Tarek El Sheikh, Head of Mission at Regional Office for Gulf States-UNHABITAT, says, “As much as 20 per cent of the world’s population lives in unsafe conditions. This needs to change.”

Peter Louis, said the future of the urban world will be dominated by young people.

“The future is going to be young. The vast majority of the new urban population will be under 30.

“These young men and women don’t want to be told what to do, rather they want to do things in their own ways.”

However, future urban growth needs to be sustainable as well, he says.

“In Manhattan, more than half of the apartments remain empty for 10 months of the year – on an average, while New York City has one of the highest homeless population in America. The abundance of homeless people living in the same city with so many empty homes doesn’t make sense at all and that’s why inclusive growth and sustainability is so critical for all of us.

However, public-private sector partnership as well as engagement of communities in policy formation is crucial in addressing these issues, according to Rose Molokane, WUC Chair.

“The cities need partnerships with government policymakers, private sectors, financial institutions and the communities,” she said.

“Cities are for all those who lives in it – including those who live in the slums.”


Dubai Real Estate Institute

The establishment of the Dubai Real Estate Institute (DREI) as the education arm of Dubai Land Department was a crucial move by Dubai Government in order to establish best practice in the industry.

It not only helped clean up the mess in the real estate market created by the global financial crisis in 2008-09, but also played a crucial role in ensuring the industry best practices across the sector.

Although the announcement of freehold property was made in 2002, the law to legalise foreign freehold ownership was officially passed in 2006 and the Real Estate Regulatory Agency (RERA) was created in 2007.

The establishment of DREI followed a few years later, and it has since trained over 50,000 professionals. Today, no one is authorised to engage in the process of selling and purchasing properties without holding a certified license.

“Dubai’s property market is well regulated and we are very happy with the current sets of regulations,” El Burai commented. “Having said that, we are not sitting on our laurels; we are continuously challenging ourselves to generate and implement new and innovative ideas that will improve the regulatory environment and help investors.”

A recent Dubai Land Department (DLD) report shows that 55 new developers entered the market as per the Developers Registration, with the launch of 134 new projects worth over Dh100 billion, and the completion of a further 62 projects in 2016.

The data also reveals that in 2016, DLD recorded over 410,000 lease contracts from different groups across Dubai.

DLD issued 695 brokerage licenses over the course of 2016. Of these, 272 brokerage companies were involved in the sale and leasing activities, while 223 brokerage companies were involved in real estate rental activities. The number of brokers has increased to 5,933 over the past year, and that 2,285 brokers’ offices were active in 2016.

While the RERA regulates the market, DREI helps train professionals to improve the business practice and promote international best practice in the industry to help attract foreign investment by creating a clean, transparent and accountable business environment.

Mahmoud El Burai has played a very significant role in cleaning up the sector and making it the best real estate market in the Middle East.


Affordable Housing

Since the outset of the property boom 15 years ago, developers have been racing against each other to provide luxury amenities.

Dubai has built a reputation for developing ultra-luxury homes, some of which are sold at more US$25 million a piece!

In the process, affordable housing was somewhat left out of the overall development programme, but the government is now making great efforts to encourage developers to invest in affordable homes.

A report by Ernst and Young in 2013, had said, unless MENA’s public and private sector leaders change their strategies, the growing crisis of affordable housing will become a major long-term problem that leads to widespread social dissatisfaction.

“Affordable housing has always been part of Gulf nations’ housing policy statements. ‘A good home for every citizen’ has been part of the national social contracts and until roughly fifteen years ago that was a promise governments could keep. In the last decade and a half, however, governments have been falling behind: the systems in place, which used to be effective, cannot keep up with growing and diversifying economies and the long-predicted boom in urban population,” it said.

There is an increasingly marked imbalance between rising wealth creation, on the one hand, and delivery of new homes and desirable living environment on the other.

In the face of this pressure, the housing systems these nations put in place until 1990 are not keeping pace. Bahrain’s waiting list of nationals for affordable housing runs to more than 50,000 families. In Kuwait, the list is 95,000 long, and growing at 6,000 names a year.

El Burai added, “We want to encourage developers to invest in affordable homes, as well as green and sustainable projects, so that we can achieve social and economic sustainability as we move forward.”

Dubai’s real estate market is witnessing a shift in expatriate housing preferences towards more affordable areas, especially for those no longer able to afford apartments in the city’s central districts. To answer the demand, this year developers have launched new projects offering a total of 19,500 homes, of which an estimated 22 per cent are affordable for the middle-income bracket.