American University of Beirut

Hosting Refugees: The Impact of the Occupancy Free of Charge (OFC) Shelter Modality in Three Localities in Lebanon

​​​Resea​​​rch Report

Research Team
Watfa Najdi, Project Coordinator and Researcher, Refugee Research and Policy Program, IFI, AUB
Yasmine Farhat, Researcher, Refugee Research and Policy Program, IFI, AUB
Yara Mourad, Program Manager, Refugee Research and Policy Program, IFI, AUB

Research Advisory and Review Committee
Mona Fawaz, PhD, Professor in Urban Studies and Planning, AUB
Ali Chalak, PhD, Associate Professor in Applied Economics, AUB
Rayan El Hajj, Shelter and WASH Technical Adviser, SCI
Nasser Yassin, PhD, Interim Director, IFI, AUB

Hani Dimassi, PhD, Statistical Analysis, LAU

Refugee Research and Policy Program, February 2020​

Executive Summary

As​​​​ the Syrian crisis continues, the number of refugee households living in sub-standard conditions has considerably increased, affecting thereby the health, protection and economic status of the affected population (UNHCR, 2015). To respond to the growing challenges Syrian refugees face when it comes to securing adequate and affordable shelter in Lebanon, some humanitarian agencies started offering occupancy free of charge (OFC) or rent reduction, for a defined period, along with tenure security to vulnerable refugee households. The aim was to:​
  • Increase the availability of affordable, minimum standard housing
  • Improve refugees' legal rights and tenure security
  • Reduce the pressure on public infrastructure

This report provides a substantial review and assessment of the OFC modality in Lebanon, specifically in three geographic areas: Amayer (Akkar), Bar Elias (Bekaa) and Minie (North). Moreover, it explores the impact of the OFC shelter modality on (1) the livelihoods of Syrian refugees, particularly their ac​​cess to food, healthcare, and education; (2) social cohesion between refugees and their host community; (3) housing conditions and future plans of targeted refugee households; and finally (4) the housing stock and market dynamics before and after the implementation of this modality. The report is based on data retrieved from 1,284 surveys completed by OFC beneficiaries, previous OFC beneficiaries and nonOFC beneficiaries, complemented by qualitative data collected from six focus group discussions conducted with current and previous OFC households and key informant interviews conducted with landlords and local authorities in the three areas of the study.

The assessment finds that:

First, OFC provides immediate and necessary relief from housing costs to families that are paying well above their means to secure shelter. This relief happens in standards that seem to somewhat satisfy the refugees' expectations – albeit within a limited time span. In particular, OFC facilitated the access of refugee households to better and steadier nutrition. However, by comparing samples of current OFC beneficiaries with previous OFC beneficiaries it is clear that benefits were restricted to the period of the OFC agreement, i.e., a one-year period or more, in case the refugee household moves to another 7 shelter supported by OFC. This is mainly because OFC beneficiaries used the money they saved, by being relieved from paying rent, to pay off debts accumulated in previous years. Indeed, the meager funds saved by households through the temporary OFC rent waiver were quickly absorbed by their pressing food and nutrition needs, which are prioritized over longer-term human capital investments such as education. Furthermore, the means through which these food needs may be temporarily better satisfied by the OFC modality is through the settlement of past debts with grocers, and the purchase of more, if lower quality, food partly through further debt. It is therefore fitting to speak of the 'refugee economy' as one in which purchasing power is mediated through debt, rather than money.

Second, the study finds that the OFC shelter modality strengthened the relationship between the refugee tenants and the landlords. Indeed, all OFC beneficiaries agreed that being on OFC relieved them from the rent burden and reduced the risk of tensions arising from their inability to pay rent.

Third, from a housing perspective, and based on its stated goals, one can say that the OFC meets its two stated goals (the provision of affordable housing and the meeting of a minimum level of housing standard) reasonably well. Given that the OFC requires a certain level/standard of upgrading; we can say that the OFC increases the stock of affordable housing at a set standard. This is critical because reliance on housing affordability (cost/income ratios) outside of “deprivation" standards can mask very poor housing conditions where affordability is met at the cost of physical standards of decency, overcrowding, security of tenure, safety, and/or accessibility. As such, given the standards adopted by OFC, we can say that the increase is for an affordable, decent stock.

Fourth, tenure insecurity among interviewed households was mostly related to the inability to pay the rent, with evictions occurring particularly in urban settings without any of the required legal steps (e.g., pre-notification, leeway, official notice, and municipal police enforcement). Instead, their application rested on the profile of the landlord and her/his proximity to the tenant, and/or whether she/he was able to implement the eviction. Being part of the OFC program builds a healthy relationship between the landlord and the tenant as it sets the terms of their interaction and exchange. This helps both parties later on after the end of the OFC period.

Fifth, the findings of the study are well in line with other studies that looked at housing challenges of Syrian refugees in Lebanon. The majority of refugees accesses housing through a largely informal rental market where exchanges are highly unregulated and control over the quality of shelter non-existent. As a result, OFC introduces important dimensions to the rental market by both providing a level of (albeit low) standards and raising tenure security by guaranteeing housing for a year with a fixed no cost. While temporary, the arrangement contrasts with existing market conditions, creating a different reference for refugees to consider. Moreover, the fact that at least 50% of refugees in each of the three localities stayed in the same house after the OFC ended confirms that the OFC is increasing/widening the stock of affordable housing for the same refugee population it targets. This may be particularly beneficial since both landlords and tenants are able to build on prior mutual relations, reducing consequently the risks of market uncertainties and their negative externalities.

Sixth, the majority of property owners are small-scale landlords. This provides important indications of the positive economic impacts of the OFC on host communities since the small scale of apartment holding will secure the redistributive impacts of the intervention. However, as the Syrian crisis continued, others were encouraged to benefit from the opportunity. They participated in the housing production following the increased demand on housing and more specifically the implementation of the OFC shelter modality.

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