Beirut and the creation of the rent gap

ABSTRACT

This article investigates how rent gaps are created in Beirut, Lebanon, and makes a two-fold argument. First, it argues that rent gaps are created by state-legitimized power and agents of capital through the legal framework, and that the role of location in determining differences between potential ground rents, so salient in Beirut, demonstrates the complementarity of neoclassical land rent theory and rent gap theory. Second, it argues that beyond the legal framework, rent gaps in Beirut are formed through informal, illegal and exceptionalist practices as well as civil, sectarian conflict and forced displacement. This extends the range of forces to consider when thinking about what creates and shapes rent gaps. The paper emphasizes the necessity of a critical perspective on the ways in which value in urban space is created in the interests of the state and agents of capital, while attuning rent gap theory to a more global perspective.

KEYWORDS:

• Rent gap
• Beirut
• informality
• land rent
• conflict

Acknowledgments

I would like to thank Michiel van Meeteren and Manuel Aalbers for feedback on earlier drafts of this paper, as well as the editor and three anonymous reviewers. Of course, I am solely responsible for the arguments presented here. Most of the research for this paper was conducted when this author was a PhD-student at Ghent University, funded by BOF-grant 01D34211.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. Note that the value of the building is not (only) reflected in the sales price because usually the land is sold with the building, and demand/supply play a role too, see Smith (1979b, pp. 542–543).

2. One could also argue that even when there is minimum fixed capital on a plot, i.e. in the case of a parking lot in Downtown Manhattan for example, the difference between actual and potential ground rent is relevant. I thank Michiel van Meeteren for this insight.

3. Often, these buildings are not owned by one “landowner”, but by a number of heirs, reflecting the fragmented nature of property in Beirut. Developers make use of this by employing a clause in the property law that encourages the streamlining and clarification of titles, acquiring a share from one of the heirs, forcing the dissolution of common ownership and financially compensating the other shareholders, whose often do not own a share large enough to claim ownership of an apartment. This process has been described in detail in Fawaz et al. (2017).

4. Of course, illegal practices that seek to speed up the eviction of tenants, such as intimidation, the cutting of services, and other forms of winkling (Lees et al., 2008, p. 14; Bekdache, 2015) are relevant to speeding up the process of rent gap closure as well.

Additional information

Funding

This work was supported by the Bijzonder Onderzoeksfonds [01D34211].