KUWAIT CITY Aug 1: Recent actions to address violations in investment housing have led to significant disruptions in Kuwait’s labor market and increased construction costs. The sources have indicated that while addressing these violations was necessary, the method of enforcement has had unintended negative consequences.

The enforcement actions have led to a rise in labor wages. Workers who previously earned around 10 dinars per day are now demanding up to 15 dinars per day. This increase is attributed to the higher costs of housing and transportation, as workers are now residing further from new residential areas like Al-Mutlaa and Al-Wafra. The removal of violations related to the use of basements and ground floors for worker accommodation has created a shortage of affordable housing for expatriate workers. This shortage has led to increased rental values for worker housing, further driving up costs.

The rising cost of worker housing is expected to contribute to higher overall construction costs. With increased wages and housing expenses, the final cost for citizens receiving new plots in areas like Al-Mutlaa and Al-Wafra is anticipated to rise. The recent fire in Al-Mangaf has intensified the need for proper organization and regulation of buildings, including residential properties. The fire has led to increased costs for storage and housing, with some small business owners experiencing rental price increases of up to 300%.

This surge in costs is likely to be passed on to consumers through higher product prices. The business owners and project managers are calling for the development of new storage areas and warehouses to mitigate the impact of increased rental prices. Immediate solutions are necessary to prevent further strain on businesses and to stabilize costs. Imposing fines on violating property owners, rather than immediate enforcement actions, might have been a more balanced approach. The authorities should expedite the construction of new housing and storage solutions to address the increased demand and prevent further price hikes.