Monday, August 1, 2011

Israel’s Housing Crisis: How did we get here and where do we go next?

When the Knesset passed a most controversial and anti-democratic law banning all forms of boycott of Israeli produce, including those grown and manufactured in illegal West Bank settlements, leftist NGOs may have been a little irate, but amongst the Israeli populace no noises of disputation were heard.

It is all the more remarkable, then, that in the past couple of months, we have witnessed the emergence of two large protest movements, the second of which threatens to tear the coalition government apart. The first was somewhat trivial, at least to the outside observer, over steep increases in the price of dairy products, in particular cottage cheese. Most recently, a second and much bigger movement has begun, in the form of tent cities and large marches, voicing anger at the exclusionary nature of house prices in Israeli cities, in particular Tel Aviv.

Principally this is a youth driven movement, a generation of graduates and young workers who cannot afford to break out on their own and set up home in Tel Aviv. In normal circumstances, and in larger nation-states, this particular demographic would arguably move away from the more expensive neighbourhoods and take up residence in the outer boroughs or in a different city altogether.

But Israel suffers from the reality that Tel Aviv is in many ways a nation unto itself, with its own unique liberal social atmosphere and way of life, one which many young people who have grown up in the city have imbibed, find attractive and difficult to leave. Tel Aviv is a magnet in many ways: a 24 hour pleasure palace, a hub of business and innovation with a pleasant climate, above-par infrastructure and beautiful beaches. The greater metropolitan area has a population of 3.3 million people, in a nation whose total population amounts to 7.7 million.

Thus it is dangerously overpopulated, but it is so out of necessity. The folks camping out in tent cities do so because they have nowhere else to go. Employment prospects in Jerusalem, for example, are bleak – it’s a city where you either take a government job or have nothing at all. Moreover, there is little incentive to branch out to locales in the more hostile northern or southern areas of the country, with less open, cosmopolitan social atmospheres. And, of course, these hubs are at greater risk of bombardment from forces hostile to the state’s very existence: Hezbollah in the north; Hamas in the south.

This precarious imbalance within Israeli is nothing new, so that Tel Aviv’s unhappy campers are without a roof is largely the responsibility of the state itself. A Forward editorial notes that between 1994 and 2009, the government constructed only around 20pc of the housing units built in Israel. The situation is all the worse in Tel Aviv, where from 2006 to 2009, not one of public housing was put up. Compare this with the fact that over the same time period, 48.4pc of all new homes in settlements in the occupied territories were erected by the Israeli government, and a picture of neglect and wilful ignorance begins to materialise.

The pain inflicted by an absence of a large subsidised housing stock in the Israeli métropole is felt all the more fiercely in Tel Aviv, which is presently experiencing a housing bubble. Globes reports that the average price of a four-room apartment rose 28pc in Tel Aviv to NIS 2.74 million ($800,000) in December 2010 from NIS 2.5 million ($730,000) a year earlier. In 2006, the average price was NIS 1.1 million ($320,000). The average income across all employment sectors is NIS 86,000 ($25,000) per annum gross (compared to $42,000 gross in the United States).

This price explosion coincides with an expanding gap between rich and poor – a scenario all too familiar to those of us residing in, for better or worse, Reaganised or Thatcherised societies. Israel in now on a par with the United States in this respect: in the latter, the poorest 10pc share 1.9pc of the nation’s income, compared to 29.9pc for the wealthiest 10pc. In Israel – a state founded on socialist and Labour Zionist principles – the poorest 10pc share 2.1pc of the nation’s income, in contrast to 28.8 for the richest 10pc. Whilst it must be taken into account that these statistics are skewed by the increase in the numbers of Orthodox Haredi Jews who often do not work and rely on welfare in order to maintain their pious lifestyles, this obviously represents a disturbing trend in such a tiny and compact country.

All of this taken into account, that protests have arisen at this juncture is not without good cause, yet in a nation so averse to the very idea of mass protest for so many years, these tent cities remain a pleasant surprise. The consequences of the most important movement so far in twenty-first century Israel are not yet clear, though writing in Haaretz, Gideon Levy is pretty adamant. “As of Saturday, Benjamin Netanyahu is a lame duck,” he wrote over the weekend. “Netanyahu will stay in office for a time, but his time is up. Finished. He will squirm and make promises, make declarations and turn tail, he will trot out a few more tricks, but it won’t help him an iota.”

For all the discussions about the occupation, the two state solution and the future of the Arab-Israeli conflict, Netanyahu may end up being brought down first by cottage cheese, and then by a housing shortage. In Israel as in the rest of the world, when it comes to politics, the economy trumps all.