How state absence shaped Lebanon’s housing crisis

Lebanon’s housing sector has long operated without a comprehensive national strategy capable of ensuring access to affordable housing, protecting property rights, and supporting sustainable urban development.

Despite the recognition of housing as a fundamental right under Lebanese legislation and international commitments, state interventions have remained largely fragmented, relying on temporary measures, rental regulations, and housing finance programs rather than a coherent long-term policy.

A missing national housing strategy

In an interview with The Beiruter, Lebanese lawyer Dr. Aline Nehme asserted that Lebanon remains among the countries lacking a comprehensive national housing policy integrating urban planning, affordable housing mechanisms, infrastructure development, and social protection.

Housing governance has historically been shaped by fragmented legislation responding to specific crises, particularly population displacement, economic instability, and post-war reconstruction. In this sense, Dr. Nehme stated that

The problem began when the state failed to fulfill its role in housing and shifted the responsibility onto the old landlord.

Lebanon’s Housing Law No. 58 of 1965 formally recognized housing as a right and established the state’s responsibility in protecting access to adequate housing. Moreover, Lebanon ratified the International Covenant on Economic, Social, and Cultural Rights in 1972, whose Article 11 recognizes the right to an adequate standard of living, including housing.

However, despite these commitments, Lebanon has struggled to translate the right to housing into effective public policies.

The right to housing is a responsibility of the state, not of one citizen towards another. We reached a situation where the old landlord effectively became the state.

The origins of the old rent system and the creation of a structural imbalance

One of the most influential factors shaping Lebanon’s housing landscape, as per Dr. Nehme, has been the system of rent control, particularly contracts signed before July 1992.

Following the end of the Lebanese War (1975-1990), Parliament adopted Laws No. 159 and 160 in 1992, creating a distinction between “old rent” contracts signed before 23 July 1992, and new rental contracts established afterward. While new contracts became subject to market conditions and contractual freedom, old rental agreements remained protected under exceptional regulations. Dr. Nehme believed that

After the war ended, instead of liberalizing old rents and applying the general rules of contractual freedom, the state created an exceptional system that kept tenants in place indefinitely.

The objective was initially to preserve housing stability for tenants who had signed contracts during previous periods of instability. However, according to Dr. Nehme, the problem emerged because these exceptional measures continued for years, maintaining restrictions on landlords, without being accompanied by alternative housing programs.

Under the old rental system, rents remained significantly below market levels despite inflation, currency depreciation, and increased maintenance costs. In many cases, tenants continued paying symbolic amounts compared with neighboring apartments rented under new contracts.

This created a major imbalance within the same buildings. According to Nehme, a building could contain one apartment rented under an old contract for extremely low amounts while another apartment in the same building could be rented according to market prices.

The problem is not between the landlord and the tenant. The conflict we see today is the result of a state-created imbalance.

The consequences of the rent crisis: Buildings, markets, and social balance

Dr. Nehme stated that Lebanon’s rent regulations created economic and social consequences affecting property owners, tenants, businesses, and urban development.

One of the most significant consequences was the deterioration of many residential buildings. With rental revenues frozen at very low levels, numerous owners struggled to finance maintenance and rehabilitation works, particularly as construction and repair costs increased.

When the owner does not have the financial means to maintain the building, deterioration becomes inevitable.

The rent system also affected access to housing, she added. While old rental protections provided security for existing tenants, the absence of state-supported affordable housing programs meant that younger generations and low-income households without old contracts faced increasing difficulties entering the housing market. According to Dr. Nehme, the state effectively transferred social responsibility onto private owners.

The consequences also extended to commercial activities through old non-residential rental contracts. Businesses benefiting from decades-old agreements often operated with significantly lower costs compared with competitors entering the market later, creating unequal competitive conditions.

One trader could operate with almost no rental burden, while another starting the same activity had to pay market prices.

The rent issue also influenced urban development. Low financial returns discouraged investment in some properties and contributed to changes in Lebanon’s urban landscape, particularly in central areas where rising land values encouraged redevelopment.

The 2014 rental law: Reform without full implementation

After years of political and legal debate, Parliament adopted a new rental law in 2014, later amended through Law No. 2/2017. The legislation aimed to gradually end old rent protections while protecting vulnerable tenants through financial assistance mechanisms.

The law introduced a transitional period during which rents would gradually increase toward a “fair rental value.” It also established a dedicated compensation mechanism through a housing assistance fund for eligible tenants. According to Dr. Nehme, the law represented an attempt to correct previous imbalances between landlords and tenants by avoiding immediate rent increases. Vulnerable tenants who qualified for assistance were granted extended protection, while financially capable tenants were gradually integrated into market-based rental conditions. “The 2014 law tried to create balance. It did not immediately free rents; it introduced gradual increases and gave tenants time to adapt,” she stated.

However, implementation became the main challenge. The problem, she argued, was the state’s failure to activate the necessary institutions. “The state created the fund and committees, but they did not operate,” Dr. Nehme said. The lack of effective implementation prolonged uncertainty for both parties and prevented the reform from achieving its objectives.

The issue was not only the law, but its application.

Towards a state-led housing policy

Historically, Lebanon’s housing policy focused mainly on promoting home ownership rather than developing affordable rental housing.

The Housing Bank, established in 1977, and the Public Corporation for Housing, created in 1996, became key institutions providing subsidized housing loans. During the late 1990s and early 2000s, mortgage programs offered interest rates ranging between 3% and 5%, repayment periods reaching 30 years, and required down payments of around 20%. However, these programs primarily benefited middle-income households capable of accessing credit.

For Dr. Nehme, addressing the housing crisis requires restoring the state’s central role in housing.

She argued that Lebanon needs public housing programs similar to those implemented internationally, where governments provide affordable rental units for citizens unable to access market prices. “The state must intervene and create housing projects for those who cannot afford rent,” she said, referring to subsidized housing models used in several countries.

She also stressed that implementing existing laws could gradually restore balance between landlords and tenants. According to her, freeing rents through a gradual process would increase housing supply, encourage owners to place vacant apartments on the market, and improve tax revenues for the state.

The solution is not to choose between the landlord and the tenant. The solution is for the state to assume its responsibility and create balance.

Moving forward, Lebanon’s challenge is not simply to reform rental laws, but to establish a complete housing framework combining affordable housing programs, effective regulation, urban planning, and social protection.