Halflings are generally viewed with suspicion and distrust on Nereth. Most humans and even dwarves are highly prejudiced against anyone who looks small enough to be a halfling. They are banned from inns, shops, churches and other main buildings, although there are a few humans and dwarves who do not accept the prejudice and run special inns and shops colloquially known as “Smallies” which allow halflings service.
Most city living halflings live out on the street as they are rarely allowed to rent rooms or stay in inns. They work in some of the worst jobs for the worst pay in the worst conditions, as their employers can often get away with such treatment. However, it is important to note that there are nowhere near the numbers of halflings moving to cities as dwarves. Most halfling communities live deep in the forests closest to the Haze.
In fact, this proximity to the Haze is one of the reasons for the suspicion placed on them. Whilst it may have started as a rumour, it is now generally accepted as fact that Halflings have never been attacked by Dreamlings, either across the Haze or via their dreams. There is a fair amount of evidence to back this up when considering their happiness to live so close to Dreamling areas and city Halflings lack of any kind of mental defense. No-one knows why Halflings are so safe, and they have never divulged their secret. This has caused a mixture of jealousy and hatred which has stuck with halflings for decades.