Big Ben in the Real LA-LA Land
I have just made a flying visit to Dubai, UAE, where it seems that conspicuous expenditure and ostentatious displays are a way of life. However, not everything is quite as it seems.
Dubai is the place in the UAE that everyone hears about. You can go skiing on snow in the desert in a man-made resort. It has something like one third of the world’s tower cranes on construction sites. And why build on sand when you build an island made of sand to build on? And it goes on: Everything is bigger, better and more modern in Dubai than anywhere else.
What most people don’t realize is that all this has been built on trade, not oil wealth. Most of the oil in the region belongs to Abu Dhabi, the senior partner in the United Arab Emirates federation.
Beneath the surface, the Dubai economy is beginning to show cracks. Burj Dubai will be the tallest building in the world, but my sources tell me the builders have not been paid for six months and have stopped work. Traffic congestion is down, but this more likely is because 30,000 car-driving ex-pats have been laid off and sent home, rather than as a result of any pro-active traffic management.
Everything is given a positive spin and a recent daily paper trumpeted the “achievement” of reducing construction-related accidents. I wonder if the fact that property companies have halved their staff and put many projects on hold is the real reason for this.
A year ago, I was being encouraged to buy property in the region, with prices doubling in a year. Now the picture is not so good. Uniquely in the world, mortgage rates in the UAE went up as lenders tried to cover the costs of mortgage defaults from the remaining lenders. Property prices have fallen by 25%, and the ex-pats (and about 80% population is ex-pat) are between a rock and a hard place.
If you lose your job, your work permit lapses, and you have 30 days to get out. Many properties sold to ex-pats were offered with “residency” status, meaning that purchasers could take advantage of the UAE’s zero tax regime. Now that the going has got tough, it seems this is not as secure as it appeared, and people literally have to abandon homes and leave when their jobs fold.
The parking regime is interesting. The city operates about 55,000 street spaces, about the same as LA, I believe. These are metered with pay-and-display, but the charge is applied only in the morning and afternoon, with a three-hour break in the middle of the day. This probably was relevant 20 years ago, when people took a midday break to escape the heat of the day. But I am not so sure that it has relevance in a modern air-conditioned city.
I understand that, throughout the city, a lot of off-street parking is free, and so street-parking charges have been held down, with an hour’s parking costing around 25 cents. Parking fines are $25 to $50 depending on circumstances; this is one of the highest payment-to-fine ratios I know of. In some places, the private sector has moved in with off-street lots costing from $2.50 to about $6 an hour.
The picture is further complicated by the shopping malls that either do not understand that free air-conditioned parking attracts local workers to the detriment of their customers or charge the higher end of the private sector charges but refunds it all if the visitor spends about $25 in the mall. How do you deal with that, Professor Shoup?
The city realizes that the parking regime and their policies need revisiting, and are beginning to move forward to develop new ideas. It will be interesting to see how the combination of economic conditions, the completion of the new metro system and the revitalized parking regime affects how the city develops and works.
One more thing: There is a new parking phenomenon at Dubai Airport. Apparently there are so many ex-pats losing their jobs in the UAE that it is causing a new problem, the abandoned car. In a country where bouncing a check puts you in jail previously well paid ex-pats who lose their jobs and can’t meet mortgage payments, pay for the car, school fees or other bills simply drive the Merc to the airport, park it with the keys in and go home. One airport staff member reported that in one day 24 high value cars were abandoned this way.
Traffic Engineering 101
Meanwhile, back home in snowbound Britain, Manchester has dropped its proposals for congestion charging following a 70% rejection in a local referendum, and is now reportedly looking at the workplace parking levy option being pursued by Nottingham.
The whole idea of these powers is to reduce city centre traffic congestion by taxing free workplace parking places.
Way back in the stone age, we knew that in a dense, congested city road network, if you reduced the number of trips going to the city centre, then other trips simply took advantage of the reduction in congestion to re-route, and the net effect in the city centre was minimal.
One of the founding fathers of transportation, John Wardrop, explained this in principle as early as 1962, but it seems that traffic engineering 101 is no longer taught here in the UK, and so cities will continue to pursue bad ideas because they do not understand what they are doing.
Peter Guest is PT’s correspondent on all things European and Middle East. He can be reached at