The United Arab Emirates (UAE) was for a long time one of the poorest countries in the world. By the 1960s, the discovery of oil had totally transformed the economic and social patterns of the country. Oil revenue has given the country one of the highest incomes per capita in the world. With such huge oil wealth, the government has adopted different welfare programmes aimed to improve the living conditions of UAE citizens. The low-cost housing programme is one of these welfare programmes whereby the government finances the building finished housing units and allocated them free for those in need. Between 1973 and 1992, the standard of the low-cost house changed dramatically. The built-up area has increased four times while the construction cost has multiplied by 10. The cost of a typical low-cost house in 1994was Dh 450,900 ($121,800). This research aims to study the implications of the free low-cost housing programme on the housing conditions of the low-cost housing occupants and those would-be occupants. It aims also to examine whether the free low-cost housing programme meets with what the target group want the government to provide.

The free low-cost housing programme has many drawbacks. The free low-cost housing provision, particularly the improved low-cost housing, has resulted in high demand relative to supply, enabling only a few to access housing services. Moreover, it has provided large improvements for those who are actually in no need of government support and those who only require partial support. It has also resulted in a waste of resources of both the allocatees and government, causing deterioration of the low-cost housing stock and part of the existing housing stock, and providing no sustainable source of funds. The free low-cost housing programme does not match the housing preference of the target group. Housing provision based on the target group’s housing preferences would result in providing more support for a greater number of citizens, changing their role from being passive recipients to active participants and the government’s role from being one of control over all housing processes to that of being one actor among many, providing a sustainable source of funds and encouraging people to improve their own housing resources. However, housing provisions following the target group’s housing preferences may not gain official support.