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Jan 19, 2010

Alleviating the crisis temporarily

There is a housing crisis in Israel. It is felt by all sectors, but most acutely by the haredi sector. there is no doubt about that. With the high numbers of average children per haredi family, the amount of young couple getting married among the haredim far surpasses the numbers in other sectors.

The housing crisis has been debated and politicized to the nth degree. Now UTJ is even threatening a coalition crisis if Netanyahu does not transfer half a billion shekels to the sector to alleviate the crisis and make it easier for the young couples to buy homes. Ariel Attias is working hard to release lands, and he is trying to find ways to flood the market with lands, and direct the tenders, that will cause housing prices to drop, so that it will be easier for the young couples to buy.

It looks to me like an interim solution has inadvertently been found. The construction freeze.

While according to all logic, the current freeze should be driving prices up, as demand is constantly increasing but supply is standing still for the most part, it might actually have the opposite effect. At least in some areas.

Because of the construction freeze, the Vishnitzer Rebbe has told his kehilla that they should no lnger buy apartments in Modiin Ilit, and anyone already living there should sell and move. His reasoning is that they cannot live with a freeze. They need to be able to buy houses, move in and get on with life. With a freeze in effect, life becomes unduly hard for too many people, so they are moving the kehilla to Ashdod.

With this declaration, we can expect a massive selloff of apartments, as his hassidim scramble to sell their apartments and move. I don't know how many apartments there are, but Kikar.net says there are 40 families already living there, and tens more that have been purchased by Vishnitzers that have not yet been built.

So while it might not be enough to effect a price drop in the general market, it might cause prices to temporarily drop in that area.

16 comments:

  1. and where would those families move to? still doesnt answer the question.
    if you ask me, israel should just make some dirt-cheap towns in the negev for the hareidim. they already have a few with hareidim, like yerucham, tifrach, etc.

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  2. Anon, your comment sounds just shy of, "Israel should just line 'em up and shoot 'em!"

    But I've read several times that Israel would like to settle more of the outlying areas to help relieve the overall congestion and expensive housing in the center of the country. The Negev can be cultivated too - it wouldn't be the first time Israel brought green to the dessert.

    But public transportation to outlying areas becomes important. You can't encourage masses of people to settle in remote areas unless there is access to urban areas by mass transit. So there's a lot of infrastructure that has to be in place first.

    See, Anon? You can't ship 'em out just yet. You need to be able to load 'em up in railway cars before you can send them off to their camps!

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  3. Israel does have such plans in place. Harish in the north in the Wadi Ara area and Katzir in the Negev are both such plans. the problem is they are years away from being implemented, though Attias has been working hard on getting Harish off the ground and started.
    Part of the fight to start these new haredi cities is that the locals in those areas have been fighting against it. they dont want to give up their lands (land must be appropriated to make such cities feasible) and they say they dont want haredim in their area forcing thme to change their lifestyles. I dont know why they should have a say in that where there is so much empty land, but that is the fight.

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  4. I don't know Rafi - it seems like a reasonable objection once you look at it in terms of economic strata. The lower the prices on these homes, the lower the income of the families who will buy them, and the higher the likelihood they won't even buy them with their own money. Who wants an entitled, impoverished, uninvested community sprouting up right next to them - of any type?

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  5. they gotta live somewhere. if the people in the cities dont want them and dont want building new neighborhoods for them, and the people in the areas of large open land dont want them nearby, where are they meant to live?

    The onyl other solution for them would be to buy up housing in existing areas. That is expensive, often, but at least it is housing. Then everybody gets upset at the haredim taking over the area.

    Despite being int he lower end of the economy, they do need to live somewhere... I think it is far better to provide them with cheap and affordable housing in an area that is already cheap, rather than force the prices down in an area that is "expensive" and cause everyone else to lose so as to offer them cheap housing.

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  6. Wanna Saab, your comment (last paragraph of it) is so disgusting, I am shocked Rafi let it through. It must have been posted before Rafi had a chance to read it.

    Once the town's infrastructure is set up, transportation isn't a problem for Hareidim since the men don't need to commute to work. Just set up a good kollel in their new town, and they're good to go.

    The women can work locally in their town as gannenot, teachers, baby clothes sellers, etc.

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  7. wanna's comment was tongue in cheekly responding to the previous comment. He did not mean it the way you are reading it. At least I understood it that way. It was subtle criticism at the previous comment suggesting that shipping all the haredim to remote areas is not right.

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  8. i dont see how my comment was offensive. just talk to the hareidi askanim/rabbis, tell them we can provide ample-sized housing for the hareidim at affordable prices, just its not going to be anywhere near jlem/bb.
    i dont see why they would be opposed -- sounds like a win-win to me.
    [and infrastructure is far from an insurmountable problem...]

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  9. I agree. your comment is reasonable, and as I said it is something the government is already trying to do to a certain extent. Maybe instead of creating one large city they should build a few smaller towns...

    But I understood Wanna's comment to say what right do we have to just ship them out to some remote area

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  10. I'm not sure what the point is of leaving. The freeze (which so far is only temporary) does not affect those living there. If Modiin Ilit, or any decent-sized city, would have to stop growing immediately, the people living there could still go on with life just fine.

    The declaration seems to ignore the fact that if people would leave, others would have to take their place (unless someone is buying them out without having someone else move in, which seems unlikely, and a waste of money in my opinion). It's therefore a zero-sum game. The population of MI will remain the same, not go down.

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  11. I want mycake, icing and to eat it too!January 19, 2010 2:34 PM

    We are all missing the big point here.

    We have a community that is growing by leaps and bounds and professes openly to not wanting to make an income yet demands home ownership.

    When I was in kollel people rented apartments until they went out to make a living and could afford to buy a house.

    We didn't demand that the government lower housing costs or make us homes available to us in the neighborhoods we wished to live in.

    It is attitudes such as this that cause people to have less than favorable feelings toward many in the Charedi world.

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  12. yoni - the point of leaving is that these vishnitzers feel that they cannot build a community out there. If 40 families are already living there, and were expecting another 100 families (I made up the number - the article said "tens more"), that would be a decent kehilla, and maybe more would buy there as well. It is not a matter, for them, of MI growing, but of their own community growing.

    My point was that with a hundred families suddenyl selling out so they can quickly move to Ashdod, might lower, albeit temporarily, prices in Modiin Ilit, at least for that immediate area of the city.

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  13. I am sure if the Vishnitzer Rebbe, any other Rebbe or big Litvish Rav were to get up and move from Bnei Brak / Yerushalayim to Ashdod or to a new Yishuv in the Negev with affordable housing etc., you would find many following. The transport and other infrastructure issues would soon be sorted out to assist those wishing to visit the Rebbe / Rav.

    Lets remember that many Rebbes left Tel Aviv more than 50 years ago to Bnei Brak / Yerushalayim so such a move is not unheard of. Prior to the Holocaust many Rebbes also lived in small villages.

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  14. Sorry - don't believe it. I've heard nothing about it said in Modiin Elite, where there's a big viznitz yeshiva. People are starting to build again - my neighbors started on Sunday.

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  15. I thought the issue with Viznitz is that their immediate expansion plans are frozen for the next 10 months. So instead of waiting 10 months for the other half of their community to merely resume building, their Rebbe hopes they can all move at once to existing housing elsewhere.

    But 40 real homes can be bought now; 100 homes (or whatever the real number is) frozen in construction won't do anything to today's prices.

    And BTW Rafi you're right it's much better to set up a Charedi city than legally force an existing, sought-after city to absorb them over others.

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  16. I think suddenly putting 40 homes on the market, and maybe another 100 that are sold on paper, in a place like Modiin Ilit that probably has somewhere in the range of 100% occupancy, could be considered a [short term] flooding of the market and will affect prices. Again, this is only in the short term. it obviously is not big enough to affect anything long term or in other cities, but locally short term it could.

    But Shalom doesnt believe it. I only know what was reported, but Shalom says facts on the ground dont support it

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