Lebanon’s politics of real estate

Solidere’s reconstruction projects in Beirut have been met with fierce opposition. (Matthew Cassel)

Nostalgia, insists architect and academic Rami Daher, is a legitimate feeling. While most individuals’ instinctive thoughts of the glories of Levantine architecture might run to ancient mosques, castles and palaces, Daher’s yearning is towards an era in living memory, and on a more everyday scale. According to Daher, from the 1940s until the early 1970s, cities like Beirut were the scene of important architectural movements. He explains that these cities brought together young architects who had trained in Europe or Cairo with traditional craftsmen such as stonemasons to produce “beautiful architecture which is very progressive — tall buildings, cinemas, schools, villas, which are very dynamic.”

Nowadays, Daher, a former American University of Beirut professor, is back in his home, Amman, where he heads efforts by the architecture group Turath to protect Jordan’s historic city centers from insensitive real estate moguls and ill-conceived World Bank tourist development.

Daher cautions that new economic and political influences are now shaping the Middle East’s cities — and not always for the better. In Beirut, these influences range from the defiant desire to rebuild suburbs devastated by Israeli bombs in the July 2006 war, to the capital flows of Gulf oil magnates looking for lucrative real estate opportunities amidst the rubble of earlier conflicts. Other commentators have suggested that the appropriation by commercial interests of public spaces — such as Martyrs Square — where people used to mix, as well as the entrenchment of specific communities in different parts of the city, have only reinforced the divisions which contributed to those conflicts in the first place.

Luxury and resistance

Solidere is a major urban regeneration company that was co-founded in 1994 by assassinated former Prime Minister Rafiq Hariri. Since the mid-1990s, it has been responsible for rebuilding large areas of downtown and waterfront Beirut, constructing major business and luxury residential complexes. It also claims credit for attracting big-name multinational companies to Beirut, and to returning the city to its pre-Civil War glory as “the Paris of the Middle East.” By July 2009, the company stated that it had at least $5 billion worth of development projects planned, including a shopping district called The Souks.

In addition to the major stake held by the Hariri family, other investors in Solidere include European and North American funds, and state and individual investors from the Persian Gulf. The projects have been funded via what the company calls “an innovative legal and institutional framework” which, it claims, has “enabled reconstruction to proceed without recourse to public funds.”

However, not everyone in Beirut accepts Solidere’s claims about the innovative funding mechanisms and high-profile developments. Within just a year of Solidere’s establishment, legal challenges were mounted, attempting to halt some of its planned demolitions and questioning its methods of compensating the owners of buildings in its development areas with shares, rather than cash. Allegations emerged that the Hariri family abused power and forced through demolition orders and harassed reluctant owners. The cases of more than 50 former building owners from the downtown area were taken up by Lebanese human rights lawyer Muhamad Mugraby.

In 2007, Mugraby claimed in the Lebanese Daily Star newspaper that “Solidere is a Lebanese form of vigilantism under color of the law. It violates the Constitution, which prohibits the confiscation of property without prompt compensation and only for the public good. Most of the people who were hurt were not strictly the property owners but the occupants or lease holders, whose rights were taken away by law 117 and given to Solidere.”

In addition to raising legal claims, groups of property rights holders from Beirut’s Central District have also called for the legislation which allowed Solidere’s innovative remuneration structure to be declared unconstitutional and annulled, and civil society organizations calling for greater transparency and accountability from Solidere have been among Lebanon’s most vociferous.

Other criticisms came from groups concerned about the impact on Beirut’s architectural heritage. In its early days, Solidere attracted considerable controversy over its demolition of historical buildings, claiming that their fabric was no longer structurally safe. But, supporters of the company claim, Solidere took the protests into account in later plans, preserving a higher percentage of buildings and respecting archaeological sites. In 2009, it donated over $2 million to various faiths around the city to pay for the restoration of places of worship, and it signed a renovation contract with Beirut’s Jewish community that guaranteed the city’s remaining synagogue will be restored and returned to use, not demolished. Solidere’s philanthropy and restoration work has been welcomed by religious organizations, including Hizballah, but dismissed by others as a public relations exercise and effort to co-opt religious leaders.

Along with residents of Beirut’s Central District, Rami Daher questions the capitalization system that Solidere so proudly trumpets, going beyond the immediate claims of property owners who don’t feel they’ve been properly compensated. “The whole concept of land ownership, and of memory, was completely obliterated,” he claims. “Instead of owning a property or a piece of land or an apartment or an office building, now you own shares in a company, where 50 percent of the shares are controlled by certain individuals. So the whole concept of ownership is completely shattered, and this makes a big difference regarding change. Most of the changes that are happening there are corporate in nature, not individual changes. So this part of the city, of downtown, is not growing naturally, like any other downtown or any other city; it’s growing artificially, because most of the decisions for inducing change are taken in the boardroom of a company.”

According to Daher, this corporate influence over regeneration decisions has had significant impacts on the new Beirut and the way its citizens are able to live in the city — or not. “There is a lot of fakeness that takes place,” Daher explains, “for example Saifi Village, it’s really only used by very rich Gulf and Saudi visitors to the city and they have certain restrictions at the ground level where they’re only allowed to open art galleries and boulangeries and the place becomes very classist. There are private police that somehow filter who is allowed and who is not allowed to be in this so-called public space, but it’s not really public space.”

Even more accessible areas that have come under Solidere development, such as parts of downtown, are exclusive. According to Daher, they have become “too expensive for the average Beiruti, so it becomes a tourist place, it becomes a place to see and to be seen, especially at night and at the cafes. But if you go there during the day, it’s not really your bustling downtown.”

Negotiating change

Rami Daher fully acknowledges the desperate need for investment and reconstruction which Beirut experienced in the wake of the Civil War. He admits that rebuilding around Martyrs Square and the former green line zone between “Christian” East and “Muslim” West Beirut “was a symbol of reconstruction after the war, nobody denies that, and maybe as a reconstruction project after the war it was very successful. As a symbol of reconstruction for a nation which is trying to deal with a past that is extremely sensitive and vulnerable at the same time, from that perspective it was very successful.”

Not every neighborhood has welcomed large-scale regeneration like that Solidere specializes in. Hamra Street, for example, has since the 1960s been an area of cafes, cinemas and other hangouts for intellectuals, writers and poets. Daher claims that some properties in the Hamra neighborhood have been bought up by real estate investors with money from the Persian Gulf. However, many of the neighborhood’s existing property owners are refusing to sell to developers. He adds that the “Hamra is becoming a kind of symbol which rejects the Solidere model, and this is why it is becoming very popular amongst the intellectual crowd within the city of Beirut.”

Although Daher acknowledges that the Hamra is “as critical and as active in the public sphere as in the days of the Cafe de Paris, but yet there is resistance to Hamra becoming another Solidere.” He points to the example of the Medina Theatre, which dates to the 1950s. Daher explains that it has been appropriated as a cinema house and a “sign for the resistance — it’s literally the Theatre of the City.” Moreover, there are cafes in the Hamra where a lot of public activities such as lectures by professors are held. While he acknowledges that there is some gentrification in the neighborhood, he describes it as “individual and not massive.”

Hizballah — the real estate developer

In the southern suburbs of Beirut, urban regeneration is dominated not by Solidere but by the resistance group Hizballah. In the wake of the July 2006 war, Hizballah established itself as a major real estate developer in its own right. According to Mona Fawaz, a professor at the American University of Beirut, staff from Hizballah’s construction wing, Jihad al-Binaa, were already surveying buildings damaged by bombs before the war even ended (Jihad al-Binaa had been active in post-war reconstruction in southern Lebanon since the late 1980s). In addition, the party disbursed maintenance payouts to those who had lost their homes months before money from the Lebanese government or international organizations was delivered.

In late 2006, Hizballah established Waad, a private non-profit development agency, to carry out rebuilding housing for up to 20,000 individuals in Beirut. Meaning “promise,” Waad is a reference to a speech by Hizballah’s General Secretary Hassan Nasrallah during the July 2006 war in which he pledged to rebuild bombed areas. Hizballah’s performance during the war and political support from and reputation within Lebanon’s Shia communities made it a vital partner for relief agencies. It also earned a seat on the National Commission formed to advise the government of then Lebanese Prime Minister Fouad Siniora on the rebuilding effort.

While Hizballah’s popular support may also mean that its efforts are better received than Solidere’s city center regeneration, it is not without controversy.The American University of Beirut’s Mona Fawaz said that like Solidere, Waad’s work in the Haret Hreik neighborhood has violated urban and building codes. This was done partly because the company simply replicated the previous edifices, thereby evading requirements for planning processes and local consultations.

As Fawaz told Middle East Business Intelligence this year, Waad’s main difference from Solidere is that “Rather than a private company with an eye for profit and capital, it is a political entity looking for political capital. This is the privatization of reconstruction, except it is not Solidere but Hizballah.” Like Solidere, Fawaz points out that Wad employs prestigious architects and has a board. However, the board is accountable to Hizballah, instead of corporate shareholders.

Real estate capitalism

Although Hizballah’s model in the southern suburbs may be more popular with poor residents than Solidere’s corporate takeovers, it is not without complaint. Many are critical of the Party’s practice of operating outside state organizations and formal “democratic” structures. However, Professor Mona Harb of the American University of Beirut explains that the party does have strong mechanisms of internal accountability which “ensure their responsiveness to local needs while disseminating participatory values, and guarantees regular feedback to the service providers, enabling them to adapt their services to local needs.” Harb explains that “Hizballah’s institutions perform well and are considered effective, especially in a context known for its corruption and bureaucratic laxity. Hizballah’s institutions are keen on scientific knowledge, rational thinking and technical expertise as these are believed to produce effective and ‘modern’ outputs. In addition, Hizballah’s institutions trust learning from experience; they evaluate their work regularly and revise their policy agendas accordingly.”

However, Harb says that even Hizballah’s notions of urban regeneration are vulnerable to the influence of neo-liberal agenda in privatizing public domains and service. Moreover, Rami Daher asserts that many Middle Eastern governments are either directly involved in the kinds of insensitive redevelopment he criticizes, or have no political will to resist big development companies looking for places to generate good returns on investments with Persian Gulf oil money. He explains, “These types of projects, a lot of people are against them because they’re not really leading to development, just real estate development, not actual community development.” Daher adds that the money is “not being spent on what the Arab world actually needs, which is improvements in education but also healthcare, agricultural and industrial development. But this money is only for stupid real estate projects.”

Sarah Irving (http://www.sarahirving.net) is a freelance writer from Manchester, UK. She worked with the International Solidarity Movement in the West Bank in 2001-02 and with Olive Co-op, promoting fair trade Palestinian products and solidarity visits, in 2004-06. She now writes full-time on a range of issues, including Palestine.