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In Lebanon, brokers and landlords exploit those displaced from the South

In Lebanon, brokers and landlords exploit those displaced from the South

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Politics Homeless Marginalized Groups Basic Rights

Saturday 2 December 202301:28 pm
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اللبناني والاستثمار في الأزمات... هكذا يستغل سماسرة وأصحاب عقارات مأساة النازحين

“If there aren't enough homes to accommodate the people of the South, we will find space for them in our hearts.” Last month, a number of social media users and Lebanese citizens raised this slogan in warm sincerity, support and the spirit of social solidarity. However, divisive slogans have also surfaced, the result of decades of sectarianism and partisan division among the Lebanese people, with messages including “You are not welcome in our region.” The ongoing debate as to whether Israel is the aggressor, launching attacks on the Lebanese border, or whether Hezbollah is ‘dragging the country into a war’ that it has no business fighting, is another cause for fracture within Lebanese society.

Since the Nakba of 1948, Lebanon has faced constant turmoil. Tensions flared up again this year, after October 7th. Operation Al Aqsa Storm, Hamas’s biggest attack against the Israeli occupation yet, led to a ruthless war on the besieged Gaza. The Lebanese front was not spared, as Israeli retaliation extended far beyond Gaza, reaching Lebanon's borders.

By the end of October, over 19,000 people were forcibly displaced from their homes in south Lebanon, according to the International Organization for Migration (IOM). This comes as a result of the continuous Israeli shelling of southern Lebanese villages along the border strip, including Adaisseh, Khiam, Ayta al-Shaab, since October 8.

Mohammed Shams al-Din, a researcher at International Information, shared that the number of people displaced from southern Lebanon has now soared to about 45,000. They have relocated across dozens of regions within the country, such as Tyre, Sidon, the southern suburbs of Beirut, Iqlim al-Kharrub, Sawfar, Bhamdoun, and Jbeil.

Where have these people gone? Has the state provided them with safe housing? Is their only option to stay with relatives or rent another house?

In short, the state has yet to act. Displaced Southerners have been forced to fend for themselves, succumbing to the inflated real estate market, as told by everyone we spoke with.

Rent prices in Beirut and its suburbs have soared to over three times what they were before the bombardment began. This sudden increase is attributed to real estate brokers and property owners exploiting the needs of families fleeing the flames of war, with many now demanding unaffordable prices, without negotiation or concession, and these fees do not include electricity, water, or internet. Moreover, many now insist on advances of six months rent, or, at best, three months.

Carla (pseudonym) spoke with Raseef22 about her struggle in the search for housing after being forcibly displaced from her village of Hula, due to Israeli bombing. She explains, “I spent six days making calls and negotiating with brokers from various regions in Lebanon and was shocked by the exorbitant amounts they were asking for. For one small house in Aley, they quoted me around $7,000 per month. In Saadiyat, Jiyyeh, and Shhim, the lowest rents for furnished apartments is around $800 monthly. They also impose clauses on the number of occupants allowed, not exceeding 5 or 6, along with asking for two months of rent to be paid in advance.”

Rent prices in Beirut and its suburbs are three times what they were before the war in Gaza. Brokers and landlords are exploiting the needs of families fleeing the flames of war, with many demanding unaffordable prices, with no negotiation or concession.

The unrealistic demands did not end there. After Carla asked one broker in Baabda what would happen in the event that she could return home, he retorted, “We won't refund you, not even a single lira.”

Carla left her son with relatives while she continued the search for a home where they could “live in dignity.” In Beirut’s Verdun area, Carla was offered a 30-square-meter apartment for $1,000, “and every time I'd tell them we're displaced, not tourists, it fell on deaf ears.” Finally, she settled in Rmayleh, a coastal area in the south of Beirut, in a furnished five-room apartment for $1,000 per month. She found it through a mutual friend who knew the landlord, and so commission and downpayment were waived. The only condition imposed was a cap on the number of residents (no more than 5).

For some brokers and landlords, the realities of war and displacement are regarded as a lucrative opportunity to make profit during an otherwise slow season. Rent prices have increased from anywhere between 20% and 30%, to 50% on month-to-month leases.

The real estate market and the law of the jungle

Economic expert Pierre Khoury believes that the current housing and displacement crisis in Lebanon can be attributed to the fact that “the rental and real estate market is a free market, not subject to specific laws, especially after a four-year stagnation due to the local economic crisis. Some might see this as an opportunity to compensate for previous losses.”

From an ethical standpoint, this is the exploitation of a crisis, but from an economic standpoint, Khoury argues, it is expected. He explains, “the market operates selfishly, based on maximizing individual profit, and the significant spike in prices is a direct consequence of a rapid and substantial increase in demand. The market basically adheres to the law of the jungle, but the critical question that delves into the core of the crisis is: Where is the public body responsible for regulating this market?”

Before delving into the depths of the Lebanese state, engulfed by crises for many years, especially in the wake of the 2019 economic crisis, we must consider the other key player contributing to this dynamic: the brokers.

Raseef22 reached out to Abu Shadi, 52, owner of a real estate agency in Aramoun, to inquire about a home for a family that has been displaced from theirs in the south. Abu Shadi offered several houses for rent in Bchamoun, Aramoun, among other areas, but with no contract. He explained, “We rent according to the apartment's size. Apartments range from $250 to $600, and if the apartment is new, you must pay an advance of six months' rent and a security deposit of one month extra. However, as long as the situation is uncertain, we have no problem taking an advance of two months' rent and one month as insurance, or just two months' rent in advance.”

According to the broker, the monthly rent for these newer apartments, requiring these security deposits and advances, “range from $700 to $1,200, depending on their size, excluding our commission, the fee for movers, which is $20 per hour for each worker, and the cost of the vehicle, which is $200.”

After a few days, we reached back out to Abu Shadi, again in search of a reasonably priced apartment. The same furnished apartment that was listed for $200 a month a few days prior, was now $400 and unfurnished. We were offered another apartment in Choueifat for $600. After Raseef22 challenged these prices, Abu Shadi told us to “go rent elsewhere!”

There have also been instances where, well into a rental contract, the landlord increases rent under the pretext of insurance.

In an audio recording, Abu Shadi defends this, explaining, “when payment is made several months in advance, the apartment price remains the same. However, when payment is monthly, the landlord can impose additional conditions and raise the rent.” He admits, “Prices were cheaper before the Gaza war and the bombardment of southern Lebanon. When people from the south fled, prices increased, and everyone was asking for furnished apartments.”

Owners Syndicate: We are honorable in our dealings with our people from the South!

The Owners Syndicate of Lebanon issued a statement dismissing claims of landlords exploiting the displacement crisis, as “a campaign to tarnish their reputation, falling within the framework of campaigns carried out by committees defending tenants and vilify landlords to turn public opinion against them, in order to divert attention from the existing rent crisis imposed by the state.”

The Syndicate requested that the media verify the accuracy of the information it publishes regarding the rise in rent and the exploitation of displaced families from the south. It also emphasized that rent differs from one unit to the other, based on size and region, and that the cost of a furnished apartment is greater than that of an unfurnished one.

The Lebanese rental and real estate market is a free market, not subject to specific laws. In the wake of a 4-year stagnation due to the local economic crisis, some landlords see this as an opportunity to compensate for previous losses

We spoke with Sanaa Saleh after she and her family fled from their home in Ayta al-Shaab, which has not seen a peaceful day since October 7. Saleh told Raseef22 that she and her family have yet to find a house “for less than $1,500 or $2,000, and without the extra, one-month fee. Brokers ask for two or three months rent in advance. All we can do is move from one cheap hotel to the next, our fate still unknown. There is no room for negotiation; the brokers are united in their slogan: ‘If you like it, rent it; if you don't, leave’.”

Where does a Lebanese family like this one go? And where does one turn when their own country has no place for them– shelling and death on the one hand, and economic exploitation and possibility of homelessness on the other? For many, returning home, and so to danger, is the only option. Carla shared that some residents of her town, Hula, have been forced to return home after being unable to afford the high rent cost in other safer areas of Lebanon.

Fatima Ghazala from Kafr Rumman was able to successfully move with her family, her husband and her three-year-old son, to Zgharta. Ghazala shared, “My son is young, and while our town was not shelled, we could hear the sounds of bombing. We decided to temporarily move to this house in Karm Saddeh, for $400 per month. The landlord was cooperative and very respectful in his dealings with us, furnishing the house and handing it over to us without charging any commission.”

Meanwhile, Batoul Mansour, a pharmacist from the southern village of Haddatha, told us how her relatives were displaced from the south to Hazmieh, near Beirut, where they “rented a small house for $50 per day.”

Reem Mughniyeh, a young Beirut resident, has also been affected – though not by displacement, but rather by its knock-on effects on rent prices. She tells Raseef22, “Since the start of October, I've been searching Beirut's neighborhoods for a place to stay, from Hamra to Verdun, Ras Beirut, and the Corniche Mazraa to Burj Abi Haidar. Prices range from $1,000-1,500 for a one-bedroom apartment without services, and over $1,500 for two bedrooms.” According to Mughniyeh, the crisis not only highlights high prices, but also the lack of available housing. “Everything is occupied now… and brokers are demanding a commission, along with six months rent in advance.”

As for the rental contracts, everything is done verbally. There are no written agreements or contracts to be signed.

Mount Lebanon: Safe but unaffordable

After Walid Jumblatt, former leader of the Progressive Socialist Party, announced opening Mount Lebanon to accommodate the displaced, the city of Aley has witnessed an influx of refugees seeking to rent houses.

We contacted a broker in the Aley district, where rent for a house in Sawfar has risen to $1,000 per month. In Dawhet Aramoun, rent is now $650 per month, often asking for an advance of three months, and in Bchamoun, rent prices are $500 per month, with many landlords requesting six months rent in advance.

As with the first broker we spoke to, this one also refused to answer when asked about the major increase in rent prices. a broker in Beirut calmly responded via WhatsApp that “it is impossible to find a two-bedroom furnished apartment for less than $1,500. To be frank, I could maybe find you a studio apartment or a dorm room.”

Another broker told us that his agency could find us a rental anywhere in Lebanon, but that “leases are annual, and not monthly” with rent starting at $500 per month for unfurnished apartments, and require a six-month advance. Adding that property prices have soared, as “the apartment that was worth $600 per month before the war in Gaza is now asking for $1,200. During troubling times like these, landlords raise prices, which is a major problem. They do as they please.”

Just like July 2006

We are witnessing the exploitation of the internal displacement crisis, similar to that after the July 2006 War when people fled southern Lebanon to the mountains to escape the intense Israeli bombardment. 17 years ago, rent prices increased, and the cost of food tripled. Those unable to afford rent sought shelter in school classrooms and in shopping mall parking lots.

This same exploitation was witnessed during the July 2006 War when the people were fleeing South Lebanon to safer mountainous areas. The exploitation by landlords we see today is the same we saw 17 years ago when house rents tripled and quadrupled

Rent prices today are significantly higher than rent prices in the wake of the 2006 war, while salaries and employee wages have declined substantially.

According to Pierre Khoury, Lebanon “had money” in 2006, “we weren't drowning in crisis as we are now. Even when rent in Mount Lebanon reached $3,000, some were able to afford it. But today, Lebanese can afford much less.”

Another distinct difference between 2006 and today, is that the road to Syria was open and Lebanese were able to temporarily relocate to Damascus.

Rent before October 7

Before the Israeli war on Gaza, rent for homes between 90 and 120 square meters ranged from $250 to $800 per month, depending on the area, specifications, and space. Today, these prices have quadrupled, according to one of the brokers we reached out to.

This broker offered us properties of different prices depending on the area, but without a signed contract, using the excuse that this is a temporary lease, and requested an advance payment of two months, in addition to a security extra deposit.

In Khaldah, Kafaaat and Chiya, rent prices increased from $350 to $700. The broker refused to discuss this.

The crisis did not start in a day, nor is it an isolated issue; it is cumulative and stems from the existing housing crisis and the gradual increase in costs since the 2019 economic collapse of Lebanon.

Since early 2022, homeowners and landlords are no longer willing to accept payment in Lebanese Lira, even though, as stated by Housing Monitor, “The owner does not have the right to refuse the Lebanese currency, according to Article 192 of the Code of Money and Credit, which stipulates the obligation to accept the Lebanese currency. Those who refuse to accept payment in Lebanese pounds are subject to penalties outlined in Article 319 of the Penal Code: imprisonment from 6 months to 3 years and a fine ranging from 500 thousand to 2 million Lebanese pounds.”

Between January 2018 and February 2022, rent prices have increased by 59% according to the Central Administration of Statistics (CAS), Lebanon’s official statistics office.

At a time when everything was on the decline –wages across industries decreased, banks collapsed and people lost their savings, health and education security– the only thing that rose was the cost of living and rent. This wholly unequal equation can only be described as total exploitation and depletion of the citizen.

Khoury believes that the state should propose a specific emergency and housing plan, “rather than pitting the landlord against the tenant, no matter how greedy the landlord is. It is up to the public institution to regulate this situation, be the mediator, and allocate public funds to secure its citizens.”

However, the Lebanese government is drowning in debt exceeding $100 billion, according to the Finance Ministry. The country is also still reeling from the Beirut Port explosion of August 4, 2020, and has yet to distribute compensation to those affected by the explosion. With no effective banking sector and no solution to the economic crisis, how will the state manage this wave of displacement?

Lebanon is drowning in debt exceeding $100 billion, according to the Finance Ministry. The country is also still reeling from the Beirut Port explosion of 2020. With no solution to the economic crisis, how will it manage this wave of displacement?

A timid emergency plan

In addition to the state's collapse, the people of Lebanon have also lost security. Despite close to two months of shelling on the southern front, which has led to the killing of over 70 people and the displacement of thousands of others, the interim Lebanese government has failed to prepare an emergency plan for its citizens in the event of a war on Lebanon.

The government has agreed on an emergency plan, from a pre-existing template inspired by the July 2006 war, under the management of Disaster Risk Management Unit and several other official committees.

The plan addresses the repercussions of a war with Israel, and the potential forced displacement of a million Lebanese people. It focuses on the need for collective shelters to accommodate 20% of the displaced (about 200,000 people) and highlights the strain on the healthcare sector while securing humanitarian aid. The plan groups displaced people into three categories: those in shelters, those relocated into other private homes, and those hosting. It also considers how to navigate maritime and aerial blockades.

According to the Housing Monitor, 85% of the income of households in Beirut goes towards rental and residential costs. In the most vulnerable neighborhoods, this figure can reach up to 100%.

No housing and no supervision

For decades, the Lebanese state has treated housing as a commodity rather than a social necessity, while abandoning its role in establishing fair housing policies, or developing a national strategy to guarantee housing rights during times of crises.

According to the Housing Monitor, 85% of the income of households in Beirut goes towards rental and residential costs. In the most vulnerable neighborhoods, this figure can reach up to 100%.

In the eyes of brokers and landlords, the crisis on the southern front has become a lucrative opportunity for earning fresh dollars. In the absence of government regulations, exploitation is widespread.

The Housing Monitor proposed legislation that imposes a fine on every housing contract concluded in fresh dollars, and a law imposing a tax on vacant apartments. It also proposes linking rents to an inflation index or to the minimum wage or average income in both the public and private sectors, estimated in Lebanese pounds. This measure ensures both landlords and tenants are protected.

The Housing Monitor also suggests that the Lebanese central bank, Banque du Liban, should be the official authority for the exchange rate. Any proposal for a different exchange rate would shift the exchange rate risk to the tenants. If the landlord refuses to accept rent in Lebanese pounds, the amount can be deposited with a notary public, accompanied by a certificate of the official exchange rate on the payment date to preserve rights. A complaint can also be filed with the public prosecutor, although the provisions of this law do not explicitly mention housing as a commodity, while other housing and real estate-related policies deal with housing from a commercial perspective.

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