Jumps and Breaks:Reading in the Grays of the Rental Market in

Ayman A. Jalloul

Context

Syrian Forced Displacement

- Since the outbreak of the hostilities in Syria in early 2011, UNHCR estimates over 1 million Syrian have come into Lebanon, numbers are deflated

- 81% of this population in sheltered in (formal and informal) rental housing (UN, 2014)

The location of Nab’ah With respect to the city center

The Neighborhood

- Nab‘ah began as a housing area in the 1950s for rural-urban migrant workers

- Gradually, it transformed to a prime residential area for low-income migrant residents along with working class Lebanese families (Fawaz and Peillen, 2003)

- Social and filial ties have determined many of the migration patterns of Syrian refugees, making Nab‘ah the logical destination to many refugees seeking shelter in an increasingly unaffordable city

Renting Informally

- Interest in understanding the rental market was spiked by observations in the neighborhood

- Initial price inquiries show rental to be much higher than the $200 median income of a Syrian family (Livelihoods Report, 2013)

- Absentee owners, greedy realtors and a vulnerable and transient population have created a set of dynamics that are altering the rental market

The Research Aim- Evaluate the extent of the change that this refugee flux

has had- Assess the consistency of change when it comes to the

rental value of housing and its relationship locational attributes and quality of living conditions.

- Find discrepancies between theory and reality that are caused by sudden refugee fluxes.

- Shed light on the neighborhood of

Methodology

- Methodology borrows from study by Gulyani and Talukdar in 2008,- They propose the “Living Conditions Diamond” - a conceptual

model for the analysis and comparison of the living conditions of different settlements

- Multi-dimensional analysis based on the interaction between: Tenure, Infrastructure, Neighborhood’s Conditions and Location and the Unit Qualit

- This reveals differences in the quality of life among different settlements and within a slum itself. Thus, it moves away from the global categorized definition of slums and closer to a “context-specific

- Correlation between the living conditions and the value of rental - Adapting this model to Nab’ah was done through a macro and

micro scale analysis using GIS and Field Work.

The Market ContextWaddling Between the Legal and the Illegal

- Nab‘ah lies within the Eastern suburbs of Beirut,- Nab‘ah is one of the most susceptible to the effects of the

Syrian migration fluxes, mainly due to the large rental stock available, the existing social and filial networks to workers that have been in the neighborhood since the mid 1990s

- Informal legal frameworks facilitate entry to the neighborhood for undocumented refugeesup the rental procedure

- Mediators, such as the realtors interviewed for this paper, act as the link between the formal and the informal as they create paperwork that falsely registers the rent value at the municipality

- No contracts are drafted and receipts are rarely collected, making the whole rental procedure blinded, let alone regulated

- Throughout Lebanon, rents are estimated to have been raised by double digits due to Syrian refugee fluxes (Bank Audi, 2013)

- Logically, these prices should inflate consistently tied to the overall living conditions of a certain unit, as was highlighted by the Guliyani and Talukdar study.

- Against this hypothesis, conducted.

Macro-Scale AnalysisEstablishing Geographic Zones of Market Segments in Naba’a

Macro Scale Factors:

− Access to water, electricity and garbage collection points − Quality of transportation/road infrastructures − Proximity to landmarks such as schools, healthcare, source of

entertainment and churches and mosques. − Distance from the Yerevan Flyover, which is a large source of

noise and intersects the neighborhood in a completely irrational way.

Road Hierarchy

Raster Analysis Result of Roads Analysis

Final Raster of Living Conditions

Micro-Scale AnalysisTesting The Methodology at the Units Scale

Plot Number Number Of Rooms

Number Of

FloorsNumber of Units

Number of

Residents in unit

Floor Number

Sources of

IncomeRent

DurationTime in Naba’a

Rent Price/

moNotes

1 2718 3R + K +T 3 6 5 1st 1 22 years 6 $11 Old rental agreement

2 2293 1 R + K + T 2 2 6 Ground 1 9 months 9 months $300 6 females living together, rented from a realtor Sanitary problems. Unit under staircase

3 1218 1 R + KT 2 2 6 Roof 3 Less Than A Month

Less Than A Month

$250

1) 6 male workers, rented through owner’s mediator. 2)Price significantly lower compared to case above. 3) Unit is added on the roof using an asbestos roof

and CMU blocks

4 1128 2 R + K + T 3 6 5 1st 1 9 years 22 years $2001) Born in Naba’a, has witnessed many changes in

rental over the years. 2)Rental contract to be renewed soon, expects price hike

5 3448 2R + K + T 3 5 7 1st 7 3 months - $500 -

6 3409 1R + K + T 3 7 12 2nd 2 3 months 5 months $350 -

7 4335 2R + K + T 2 2 6 Ground 3 2 months 2 months $500 -

8 4046 1R + K + T 3 12 6 Ground 1 2.5 years 2.5 years $300

The family moved in 2.5 years ago, into a room that used to be rented by the daughter who has been

living in it for about 15 years (married and working) before that but has now moved to Naba’a.

9 4042 2R + K + T 3 7 6 Ground 1 5 years 2.5 years $300 Originally husband was living in Naba’a, the family then moved in in 2.5 years ago

10 3763 2R + K + T 3 7 3 2nd 2 2 years 3 years $450 -

11 1113 1R + K +T 4 17 6 3rd 6 6 years 13 $400The first of this group of tenants arrived 13 years ago,

other dwellers have arrived more recently. Ranging from 2 to 5 months

Conclusion and Discussion

Conclusions- Grouping the rental market segments into geographic

zones is inaccurate due to the fact that variances happen at the micro scale of a unit

- Find discrepancy when coupling rental directly to what was predicted in the geospatial analysis

- Situational conditions, such who is renting from whom, how many families or individuals are expected to live in that unit and how long the tenant has been in that unit, play a more significant role in setting the price than to any locational or quality factors of the street or the housing unit

- Price of rental housing tending to inelasticity

Conclusions

- High prices are accommodated for when multiple families/ sources of income divide the increased cost of housing

- Jumps and breaks within these grey zones of the market segment make identifying consistency or logic in the act of rental very difficult to construct

- Nanalysis, the increase in rents due to the arrival of the Syrian refugees on Lebanon as a whole

NotesThe following presentation was part of the 13th FEA Student and Alumni Conference in April, 2014 and won the Best Paper Award. The following research was done in two phases: The first during the Fall semester of 2013 at The American University of Beirut in two courses: The second part, specifically that micro scale analysis and field work were conducted while working as a research assistant with Dr. Mona Fawaz in January of 2014. This part of the paper and the corresponding research was essential for the content and conclusions of this paper. Foremost, I would like to express sincere gratitude to Dr. Mona Fawaz for the deep insight and the countless learning opportunities throughout this research paper - from the initial thoughts, to the very final edits.

Th full paper can be found

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