Posters advertising apartments for rent can be seen all around Beirut, especially in its most urban areas. (Article Photos: Jal El Dilati)

Why do Beirut’s apartments remain empty?

In June, I started my miserable journey of apartment hunting in Beirut. I needed to leave my studio in Hamra and move somewhere close to my new workplace in Sin El Fil.

My ambition to find an affordable rental in Badaro, Mar Mikhael, Gemmayze, Achrafieh, Geitaoui, or Furn El Chebbak—all just a few minutes away from my workplace—quickly turned into desperation.

“The studio is 24m2 located in the heart of Gemmayze and for the great price of $550 a month excluding the generator bill,” said one landlord on my search.

“I have a studio in Akkawi Street for $300 a month excluding the generator fee but you have to pay me 4 months in advance,” shared another.

A third showed me a studio near Sassine Square for $350, “but you have to sign a one-year contract and pay a deposit.”

These are just some of the things landlords told me during my search. Unsurprisingly, after three weeks of searching, I ended up back in Hamra, where rent prices are slightly more tailored for students.

But with this many empty units around the city, my unsuccessful journey for affordable housing didn’t make sense at first. Beirut is a ghost town full of empty flats, something you notice most easily when you look up while driving.

Why I ended up back in the same studio only starts to make sense when you delve into the history of Beirut’s real-estate sector, riddled with gentrification, generously absurd laws, the absence of rent regulations, and a crisis-driven rent rate confusion.

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Vacant apartments are visible no matter where you go in Beirut.

A Beirut for the rich, left twice

The chasm between rent prices and the purchasing power of citizens has become bigger than ever.

There is a common notion that the real-estate industry in Lebanon started crumbling with the start of the Syrian war in 2011. The war is believed to have garnered fear of potential regional instability and therefore discouraged mostly foreign buyers in investing in Lebanese real estate.

This notion is also accompanied by claims that the period extending from the end of the Lebanese civil war in the early 1990s until 2010 witnessed an era of noteworthy real estate boom.

During the latter period, financial incentives like a new rent law, lifting rent regulations, easing complex tax procedures, and providing housing loans in an alarming amount made it difficult to not invest in Lebanese real estate.

This trail of thought ignores—willingly or unwillingly—the thousands of people during that period who battled against a vicious wave of gentrification and lost, ultimately displaced from their homes.

Companies and landlords saw potential in Mar Mikhael, Gemmayze, and Achrafieh to transform those cities to rich areas where people from higher social classes live and party.

Several low-income people who had historically lived in these places suddenly found themselves being displaced from their own homes in favor of bourgeois families and wealthy investors.

Years later, the same people who moved in left their homes after those places became uncomfortable loud nightlife hotspots. Residents relocated once again, leaving behind them empty apartments.

The new apartments not only utterly abolished the original residents’ right to adequate housing and shelter, but also redesigned the historical nature of those cities into districts where shelter comes second to for-profit assets.


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Between the old and new rent laws

Instead of channeling their efforts to preserve the right to housing for those displaced, the Central Bank and Parliaments directed all their work into producing neoliberal lucrative property laws that made foreign investment easier.

Parliament announced a new rent law (law number 159) in 1992 that removed rent control and subjugated new tenants to three-year contracts, after which the homeowner can force them with eviction or burden them with higher rents that he deems suitable according to the free real estate market.

The law not only affected new tenants but also people renting as per the old rent law as well. This group (who took up to around 200,000 apartments) was faced with exceedingly worsening living conditions in their homes, as landlords were incapable of maintaining buildings because they did not acquire enough capital from their tenants.

As those groups moved or were evicted over the years, housing vacancy rates in Beirut increased.

In 2014, the Lebanese Parliament declared a 9-year “grace period” that applies to tenants who are still subject to the old rent law. After that period, the landlord would be free to evict them if they fail to pay the new rent that they deem reasonable according to the current market price.

Ironically, Parliament at the time also passed a law that subjugated old tenants to 6 years of increasing rent where it gradually goes up by 15 percent each year. This law never saw the light of day.

Tens of thousands of people will be forced to leave their homes in May 2023 and find somewhere else to stay. Most of them will probably relocate outside the city and many of them will face a bleak fate regarding housing.

Mrs. Safa, an old landlord who leases an apartment in Baajour Street in Bourj Al Barajneh according to the old rent law, is not too understanding of her tenants’ tough situation.

“You tell me, does it make sense that a family is paying LBP 600,000 for a whole apartment while others are paying 1,000 in fresh dollars for an apartment of the same size somewhere else?” She told Beirut Today. “Enough is enough. May cannot come soon enough.”

It is difficult not to understand her frustration when the most salient thing that the Lebanese government ever did to protect the right to housing (which is vested in the International Covenant on Economic, Social, and Cultural Rights that Lebanon ratified in 1992) was creating the Public Corporation of Housing that aimed to “secure housing to Lebanese citizens” by giving out low interest loans.

The Corporation stopped giving loans in 2019 with the start of the economic collapse. It was supposed to resume its loan distribution in June of this year. Yet, there have been no reports of that happening until now.

This still does not adequately explain why I could not find an affordable apartment in Beirut.

Apartments as investments

According to a Beirut Urban Lab report conducted by Dr. Mona Fawaz and Abir Zaatari, the vacancy rate in Beirut stood at 23 percent in 2019. The highest vacancy rate—predictably—reached 56 percent in areas surrounding Solidere in Downtown Beirut. 

This did not even include furnished apartments or apartments that get occupied every once in a while or seasonally, such as summer vacation homes for example.

Although there are no more up-to-date numbers, the vacancy rate is predicted to have substantially increased in the past three years as the country crumbled into its worst economic collapse ever, struggled against the COVID-19 pandemic, and witnessed an explosion in August 2020 that wiped out a considerable chunk of the areas facing the port.

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Some destroyed buildings in Gemmayze are still being reconstructed.

Amidst the complete absence of rent control in a free market, thousands of tenants found themselves unable to pay “fresh dollar” rents which were suddenly imposed on them by landlords.

The result was mass evictions that raised the vacancy rates in the city even more. Some landlords try to illogically justify their prices by claiming that the prices have actually decreased, since a $900 apartment now costs $400, but this claim is not reasonable.

The $900/month rent used to be equivalent to LBP 1,350,000 while the $400/month rent today is equivalent to roughly LBP 11,700,000. Not to mention that the increase in costs of living was not accompanied by an increase in salaries, with 80 percent of Lebanon’s population now living in multidimensional poverty.

Basic economic principles endow that as vacancy rates increase, the supply of apartments increases, and the rent “should” decrease. However, this has not been the case in Lebanon. The increased supply of apartments since 1992 never lowered rent prices in Beirut. This can be traced to one main reason.

Most of Beirut’s vacant apartments were never shelters. They were merely financial investments.

In places like Mar Mikhael, Badaro, Gemmayze, Achrafieh, Geitaoui, and Hamra, landlords aimed to gentrify the areas to attract wealthier tenants and buyers, changing the identity of the city along the way.

In other places in Beirut, tenants held on to their properties waiting to sell them to rich investors who can transform them however they deem most profitable or for a miraculous market adjustment.

What is common, however, across landlords in the city is that they began viewing their properties as safehouses to invest their money into after losing trust in the banking system that stole citizens’ life savings.

“You do not rent out your treasure box”

Real estate is often seen as the safest and easiest inflation hedge out there. Lebanese property owners see it as a tool to protect themselves against the decrease in the purchasing power of the Lebanese Lira. They see it as an equivalent to gold, which they will surely not lease for a desperate citizen seeking shelter. 

“My apartment is like a treasure box. You do not rent out your treasure box,” a Lebanese property owner residing in Montreal, Canada tells Beirut Today.

This ultimately means that the high vacancy rate does not truly represent high supply. The amount of unfurnished and furnished apartments in Beirut is not as high as it seems.

It has always been extremely difficult to buy a house in Beirut, but it has become even harder since 2019. After purchasing a house in the capital became a far-fetched dream to almost all Lebanese citizens because of the economic collapse, everyone shifted to renting. 

With the immense surge in demand and with the absence of governmental oversight, landlords were able to raise rent costs hysterically.

Homeowners are aware of the concentration of most jobs and most companies in Beirut and are also aware of the increasing fuel prices—which has made it arduous for people to commute from outside the city. The result? $650 studios.

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To combat this, people have opted to either live in shared flats with others to split the financial cost or to rent apartments outside of Beirut, where affordable rent is more readily available. The latter forces them to bear the hefty financial burden of frequently buying fuel to reach their workplaces or universities.

With rent control completely absent in a country considerably struggling both economically and politically, the options to fix the housing crisis are limited with one solution appearing the most applicable: The empty homes tax.

What is the empty homes tax?

The empty homes tax would tax the owners of houses that leave their properties vacant for a long time. This would generate considerable income for the government and decrease demand from foreign investors, which has already massively decreased since 2019.

Ideally, the net revenues generated from the tax can be reinvested into affordable housing units that would increase supply across the city and consequently decrease rent prices in all the other property units.

Additionally, imposing a tax on vacant homes might discourage their owners from leaving them empty to be used as inflation hedges and might encourage them to rent them out instead. This would also contribute in increasing the supply of properties that can actually be rented, thus lowering rent prices.

The tax has the potential to generally boost the Lebanese economy by providing revenue, of which a part can be used in other sectors.

This is why I could not find an apartment in Beirut close to work within my budget. Gentrification, selfish landlords, and malicious laws made apartment hunting in the urban capital a hopeless endeavor.

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I am not the only one suffering from this nightmarish sector. Ahmad Ahmad, a recent Environmental Health graduate from the American University of Beirut, tells me he changed houses four times during his final academic year alone because landlords kept increasing the rent on tenants already renting. 

Homelessness is on the rise, as rent prices shoot up with every further devaluation of the currency and increase in diesel prices. And with no government oversight whatsoever, the right to housing in Lebanon has been rendered a delusion.

Years of failed real estate laws have made renting in Beirut a thing of the elite.