Iraqi refugees spill into Jordan, driving up prices

Before the Iraq war started, Bashir Al-Zubi had plans to graduate from the ranks of renter to Jordanian homeowner.

However, housing prices have soared since the war ignited in the spring of 2003, and thousands of Iraqis fled to Jordan. An apartment that would have cost Mr. Zubi $42,000 before the war now costs closer to $70,000. But the increases have affected not just the real estate market, but the daily cost of living as well.

"Everything in Jordan is expensive because of the Iraqis," says Mohamed Arafha, a Jordanian barber. "Groceries, apartments, haircuts, everything."

It's a phenomenon Jordan has witnessed nearly every decade since Palestinian refugees poured over the border in 1948, when the state of Israel was created. Each time, the wave of refugees – coming from almost every Middle Eastern conflict – drives up the cost of living, forcing many Jordanians to postpone plans for home ownership and marriage.

"People come to us as a haven," says Yusuf Mansur, an economist and CEO of the Jordanian economic analysis firm the Envision Consulting Group, citing Jordan's relative stability. "It's crisis after crisis that drives the [Jordanian] economy."

While inflation has affected all aspects of life in Jordan, it's been most pronounced in the real estate market.

For Waleed Abu Ragheb, a 25-year-old Jordanian fabric vendor, that has other ramifications. Like other Arabs, Jordanians live in their family home until they're ready to get married. But in order to do so, a man must have his own home. An apartment that would have cost $140 per month in 2003 now goes for $210. With a monthly salary of $420, Mr. Ragheb says it'll be another two years before he can afford an apartment.

"The Iraqi people had a strong effect on the economy," says Ragheb, who, like many Jordanians, perceives the Iraqi refugees as wealthier on average than their hosts.

"The impression of many Jordanians is that the Iraqis here are all wealthy ... and that they are the cause of the inflation and the rising cost of prices in Jordan," says Robert Breen, who heads the United Nations High Commissioner for Refugees program for refugees in Jordan.

The refugees' effect on real estate prices has made Jordanians reluctant to sell for fear of missing the next price boom – a tendency that further increases prices.

"If you sold before 1948 and saw the prices double, or triple, or quadruple, or quintuple when the Palestinians came, you regretted it," says Mr. Mansur, who recently helped a friend calculate the value of his land assets after the surge in prices. His friend, an office manager making $500 a month, had over $120 million in land assets.

With real estate speculation one of the most popular investments in Jordan – a country with few natural resources and limited industry – refugees are snapping up parcels offered by Jordanians like Mansur's friend, who sells off a parcel or two when he needs money. Buying a plot of land provides refugees with a safe way to invest their money until they can return home.

Despite the stereotype of Iraqis as wealthy investors and land speculators, there is a substantial number of poor Iraqis who live on the fringes of Jordanian society. Many Iraqis stay in Jordan after their visas or residency permits expire and maintain low profiles to avoid getting deported to Iraq.

"The [Iraqi] population here ... is not easy to define. Those that are here illegally maintain a very shadowy existence," explains Mr. Breen. The UNHCR has officially given refugee status to 700 Iraqis and another 20,000 Iraqis are seeking asylum through UNHCR, but there are no official records on how many Iraqis have entered Jordan – let alone remained there – since 2003.

Two Iraqi brothers who wished to remain anonymous say they are desperate to leave Jordan. Though they have legal residence permits, they've been unable to attain work permits. They work illegally in a hair salon to support six unemployed family members who also fled to Jordan. They fear being deported to Iraq, and have limited access to basic services, such as healthcare.

"If you have money there's no problem, but if you don't have money [the hospital] won't help you," says one brother. But the brothers – Shiites who fled Iraq in 2003 when a group of Sunni insurgents threatened their lives – are afraid they'll be killed if they return to Iraq.

Even as Jordanians complain about the upper-class Iraqis, there appears to be growing denial that many poor Iraqi refugees, like the two brothers, live in difficult circumstances. A Jordanian government official speaking on condition of anonymity said, "We have to welcome [Iraqis] and they are always welcome. We always provide whatever services they need."