The recent publication of the law on the liberalization of non-residential rentals in the Official Gazette marks a crucial turning point in the evolution of Lebanon’s real estate sector. This change goes far beyond a technical adjustment — it sends a strong message in favor of redefining the relationship between landlords and tenants, based on fairness, economic vitality, and social stability.

For decades, the “old rent” regime was based on a 1963 law that froze rents for contracts signed before July 23, 1992, effectively paralyzing the market and depriving many landlords of the full use and value of their properties. The financial crisis and the collapse of the Lebanese Lira only worsened this reality. The new law, passed by parliament in December 2023, aims to correct this imbalance.

Although it took over a year for the law on commercial leases to come into effect, this rent liberalization now gives essential room to maneuver for investors and property owners. It also places responsibility on the state to oversee this transition with fair and effective mechanisms, preventing speculative abuse or negative social consequences.

Two Pillars

The goal is not to favor one group over another, but to establish a new balance, based on two fundamental pillars: the protection of everyone’s rights and the creation of an investment-friendly environment, without harming urban cohesion or deepening inequalities.

One of the most debated aspects of the new law is the determination of annual rent at eight percent of the market value of the property. In today’s economic conditions, that rate is considered high, especially for small businesses already struggling to survive. A more balanced rate closer to five percent might have better protected both investment returns and tenant sustainability.

But more important than the percentage is how the property’s market value is calculated. It is vital to rely on well-trained, independent professionals to avoid market distortion or manipulation.

Market Benefits

In the medium term, this reform could generate several positive effects. The expected increase in rental supply especially in Beirut could drive prices down and improve housing access for many families. Apartments previously locked under old lease contracts would return to the market for sale, often at more accessible prices, helping a new generation acquire property, even in older buildings. This would contribute to urban reintegration and slow the exodus to suburban areas.

Gradually vacated buildings would also free up urban land for development. This could lead to a decrease in land prices and allow more viable real estate projects particularly in underserved neighborhoods with limited new construction.

Another anticipated benefit is the restoration of heritage buildings. Previously neglected due to low profitability, these structures could now regain economic value, encouraging renovation and preservation. This would support the protection of Lebanon’s architectural heritage rich, but often forgotten urban landscape.

Urban and Fiscal Impact

More broadly, rent liberalization could improve the visual and structural quality of our cities. With more realistic rental returns, landlords would have the financial means to maintain their properties, resulting in a more attractive and functional urban environment.

There would also be positive economic and fiscal repercussions. As properties are revalued and new contracts reflect actual market prices, government tax revenues from property and rental income will increase. These additional funds could be reinvested into infrastructure, public services, and housing programs.

A Missed Opportunity Without a Vision

However, this reform will only succeed if it is accompanied by a clear national vision. It requires serious leadership, effective regulation, and a genuine political will to integrate this reform into a broader strategy for social and urban recovery.

One urgent priority is the creation of a Ministry of Housing, capable of planning and implementing policies that reflect both citizen needs and market realities.

Rent liberalization should not be seen as a threat, but as an opportunity: to modernize our laws, stimulate investment, revive our cities, and guarantee a basic right — the right to dignified housing in a structured and sustainable framework.