Will Lebanon’s new tenancy law turn Beirut into a luxury city?

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People look at fireworks as they celebrate the New Year in front of the Mohammed al-Amin mosque in the Lebanese capital Beirut on January 1, 2015. AFP/Anwar Amro

By: Ghassan Dibeh

Published Thursday, January 8, 2015

“Not the Beirut central district, which was misappropriated by speculators, nor the palaces emerging from every side, nor the newly built boulevards can restore (Lebanon’s) past and illuminate its future.”

–Henry Edde

The BBC broadcasted a series from around the world titled “My City.” The program interviewed people to talk about their cities, covering places like Stockholm, Barcelona, Rio, and many others. Most of what the interviewees said had to do with the dynamism, culture, and landmarks of their cities and their relationship with them. In Beirut’s case, however, the BBC said the city was making a luxurious and dazzling comeback*, not in the aesthetic sense, but in the sense of artificial flashiness.

This characterization embodies the transformation that continues to take place in Beirut, with the rent-seeking capital relentlessly assaulting the city, its streets, and its neighborhoods.

In effect, this did not start with the real estate giant Solidere in downtown Beirut, as the large-scale real estate development had begun earlier, during the civil war in the 1980s, with support from Arab capital. However, Solidere was the translation of the urban consequences of “the rule of money.”**

This became the preferred model for real estate development in Lebanon, combining huge capital investments and architectural luxury. The result was driving out the original residents of the city – particularly from the middle and working classes – and devastating many spaces vital for social interaction.

The late architect Henry Edde, who played a major role in planning the reconstruction of downtown Beirut before resigning in protest at what he saw as deviations from the goal, mentions in his memoirs how the creation of Solidere and its policies distorted the initial vision for the reconstruction of the Beirut city center. In Edde’s view, the initial plan was to develop the city center in such a way as to preserve its function as a living, breathing space and a sphere for social convergence, while respecting its cultural and historical landmarks, in addition to restoring the old markets in the same location.

To those who say that there was no other choice, the process of rebuilding Warsaw after World War II shows otherwise, and proves two things: First, that reconstruction is possible without the domination of rent-seeking capital or any other capital. Second: that devastated cities and their historical and cultural landmarks can indeed be rebuilt, thanks to the creativity, efforts, and hard work of their residents.

Henry Edde (as he said in his book) tried to persuade Rafik Hariri of pursuing something like this. He wrote, “I stressed the need to give the largest number of Lebanese people the opportunity to rebuild themselves the city in a way that would embody their traditions and hopes, and make the city their own.”

This is what Polish communists did when they complied with the wishes of the people of Warsaw in rebuilding the historic center of the city, in spite of the markedly different architectural ideas communists had in that period.

The new draft tenancy law proposed recently by parliament continues the onslaught by rent-seeking capital on Beirut’s neighborhoods, which had intensified since the beginning of the boom in real estate speculation in 2007. The Lebanese have been given two options under the proposed law: own property, or rent under the conditions of the 1992 law, which does not include any guarantees for permanent housing, as it sets the maximum tenancy period at three years.

This uncertainty prompts most Lebanese to seek to own property. The culture, if not obsession, of home ownership preoccupies the Lebanese mindset, in a way that surpasses even the so-called American Dream and the Ownership Society promoted by George W. Bush.

This ownership drive may appear as something healthy, whether at the individual or social level, where capitalist democracy would ensue with all segments of the people owning their assets. However, the clash with the nature of capitalism means the trend would inevitably trigger financial crises that lead to a class-based reorganization of geographical and urban spaces.

This trend in real-estate ownership was one of the main causes of the global financial crisis in 2008, when it interacted with the financial markets and financial products in the United States, and the push for consumption after 2001. This has turned the supposed ownership society to a society of consumption and speculation.

The Americans thought they had found the holy grail of capitalism, and that they could enjoy consumption, home ownership, and profits from the stock market without end. However, the collapse came quickly and led to “less ownership,” as former US Secretary of Labor Robert Reich predicted in 2004. Barack Obama himself quipped that the ownership society actually meant that “you are on your own.”

To return to Lebanon, I will deal with the fragility of the financial situation in a future article. But to assess the new tenancy law as part of the Lebanese economic model and structure, there are several factors we need to study, including: soaring land prices in Beirut; the Lebanese expats who work abroad and buy property in addition to the local wealthy class; and low wages for the middle and working class in Lebanon compared to apartment prices.

All these factors mean that the tenancy law will indeed turn Beirut into a luxury city mainly composed of neighborhoods inhabited by local and expatriated well-off segments and foreigners, straddled by slums inhabited by socially marginalized segments but who are protected by sectarian parties. In short, the new tenancy law would continue the drive to expel middle and working class people to the suburbs to join those who were driven out before them.

The new tenancy law does not take into account the fact that workers and savers have not been compensated for losing the real value of their money in the successive waves of inflation in the 1980s. Rather, the freeze on wages for more than 12 years since 1996 drove the proportion of wages to the GDP down to 25 percent, compared to around 50 percent before the war.

Ownership was not restored to old owners, wages were not restored to their previous value, and savers were not compensated for their losses in that period – some say this was a fatal blow that they never recovered from. These transformations confirm what Henry Edde said, “If economic models based on exploitation, profit, and the bottom line are chosen… Lebanon could become a paradise for rich people and hell for poor people.” We go further and say it would become hell for the middle class and workers in Lebanon, who must instead regain their position in the economy and geography of the city they fought for, and which they will not hand over for a fistful of dollars.

* Bearing in mind that architect Mona al-Hallak used those terms in the original footage in the context of criticizing the outcome of reconstruction.

** The title of a book by architect Henry Edde: “If Money Ruled...Roots At Risk of Extinction,” published by Al-Matbuat Distribution and Publishing Company.

This article is an edited translation from the Arabic Edition.

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