Have you ever asked yourself why property prices are so high in Lebanon? Why Beirut homes are prohibitively expensive for at least 90 percent of the city’s daily users who cannot dream of ever claiming an address in its quarters? Have you wondered why Barcelona, Marseille, Nice or Limasol display miles of public beaches accessible to all dwellers and visitors while in Beirut, the last 100 meters of so-called public beach is privately held and, in fact, currently under negotiation for the municipality to purchase, we are told, at a meager $18 million or so? Do you wonder why an iconic national symbol such as the Pigeon Rocks in Raouche and its natural surroundings can be forever transformed through the decisions of private developers? Do you buy the idea that the laws of supply and demand are regulated by some supernatural hand that sets the price of a built square meter of land in Beirut at several thousand dollars? Indeed, could that be why the residents of Lebanon’s cities and countryside find it increasingly impossible to secure not only shelter, but also recreational areas and communal spaces? Are they just bought out by other, more deserving actors? No, they surely are not.
In these few lines, two frameworks will be developed to think through these questions and derive strategies from each to move beyond the current crisis: first, market prices are highly determined by regulatory and social institutions and second, public claims should extend far beyond what is earmarked as ‘public’ property.
Like any other good exchanged on the market, the price of land — and housing — is highly determined by the legal and social frameworks in which exchanges occur.
In order to understand why property prices have risen as they have over the past decades, we have to look first at the regulatory and institutional frameworks in which these exchanges occur. A quick review of the taxation systems and incentives that organize property transactions indicates that while efforts were deployed to facilitate property exchanges in the 1990s through the digitization of the land registry, very little was done to curtail the widespread speculative practices that dominate the real estate sector.
On the contrary, a whole set of policies and administrative practices allows developers and speculators to evade taxes. These taxes are set well below international benchmarks, preventing the profits reaped by the real estate development sector from benefiting the community at large.
To take one simple example, a developer whose project overlooks the Horsh Beirut park or the seafront may charge his clients a hefty premium for this view, but they are not cumbered by any charges for these public amenities. The developer has also no requirement to produce affordable housing or any shared or communal facilities when they build in the city, as they are required to do elsewhere. In sum, a developer is encouraged to target the most lucrative segments of the market, allowing for narrow individual profit maximizing strategies to guide building investments in the city.
We also have to recognize that supply and demand curves are socially constructed, which means that they are derived from particular social and economic choices made by social agents. Recent market studies indicate that real estate demand stems from Lebanese expatriates and other well heeled buyers looking for long-term secure investments in the country. Despite the flagrant need to balance this demand for placing capital, at least partially, with the more immediate needs of those who look for shelter, no policy is taken to curtail the long-term speculative intentions of investors. To the contrary, an entire advertising industry supplements their financial interests with constructed ‘private’ ideas of ‘exclusion’, ‘luxury’ and ‘safe living’ that are consistently pegged to highly segregated housing models. In sum, developments that drive prices up are desirable for the city.
Given that land is not just another commodity — not only because its supply is naturally limited but also because it holds a special social value due to its role as shelter — the framework organizing its exchange is expected to reflect this special nature. Here too policies have lagged behind. While developers in many US cities, for example, are required to secure a percentage of affordable housing in every building development they produce and frequently negotiate the right to build in exchange for the provision of public amenities such as playgrounds and community pools, no such provision is even considered in Lebanon. Despite the urgency of the housing crisis and the dearth of communal amenities throughout the country — with Beirut meeting only one tenth of the World Health Organization minimum required open areas per capita — neither the municipality nor other public planning agencies have revised
the regulatory framework to meet social needs.
These trends are, however, reversible. It was only after the second world war that northern European countries socialized the profit reaped by land development. These countries have heavily taxed all land developments and building rights and reinvested their profits in public amenities in ways that have made their cities routinely recognized as the most livable around the globe. And if Europe is too high a benchmark, we may instead look in the direction of Brazil, where revised forms of property taxation, introduced in 1991 through the City Statute, have socialized the meaning of land and ushered in the possibility of reversing decades of speculative building developments through the introduction of progressive taxation systems. Now studied in planning schools around the globe and emulated in other national contexts, the Brazilian City Statute shows that property taxation is not only desirable, but also necessary for building more inclusive cities. Those interested in more affordable housing and better public spaces should be looking in the direction of public regulators rather than relying on mere incentives for developers.
Hence, the fact that land prices are so prohibitively expensive as to rule out the possibility of both affordable housing and public spaces is the result of specific, clearly identified and reversible policies. To change them would require the type of political will sustained by social mobilizations of the type witnessed in Brazil throughout the 1980s. While we may not be there yet, a growing number of civic organizations are working in this direction and we may have to look toward them, rather than toward corrupt political classes, to achieve change.
Rethinking public vs. private
This, however, is not enough. We also need to restore the value of the ‘shared’ in our cities. To own land is not to disembed it from its socio-spatial context and decide alone on its development.
A common explanation for the absence of playgrounds, parks and other shared facilities — as much as for the deterioration of our built and natural heritage — is that most properties in Beirut are ‘privately held.’ Given that land is very expensive, it is prohibitive for public authorities to expropriate areas for the development of parks and other shared amenities. To counter this point, a critique of the too easily accepted conception of private property as full dominion is needed. This is deeply rooted in the revival of 18th century liberal thought, mostly associated with John Locke or William Blackstone who at the time advocated for an understanding of the natural and built environment as necessarily propertied. This conception depicts urban and natural landscape as the sum of individually claimed parcels each labeled as ‘private’ or ‘public,’ the latter reporting to the authority of the state. Numerous critics — starting with Marx and Proudhon in the 18th century, but since then with a whole body of literature in