Here comes the neighborhood

Tel Aviv unveils new subsidized development.

August 27, 2010 17:25
AN ARTIST’S impression of the new development planned on the site of the historic Shuk Ha’aliya mark

Housing 311. (photo credit: Courtesy)

The recent unveiling of a plan by the Tel Aviv Municipality to create affordable housing for young people on the site of the historic Shuk Ha’aliya in south Tel Aviv comes at a critical time.

For many young people, finding an affordable (and yet still inhabitable) place to live in Tel Aviv is a challenge on a par with Jason and the Argonauts’ quest for the elusive Golden Fleece: time-consuming, fraught with adventure and often unsuccessful.

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Soaring rental costs – even in traditionally low-rent areas – are one reason why apartment-hunting in the White City can be such a nightmare. Even in Florentin, once a magnet for poor new immigrants and cashstrapped artists looking for cheap digs, a single person can expect to pay around NIS 2,600 for a cramped, 25- square-meter micro-flat.

The situation is hardly better for young couples, who face monthly rents of around NIS 5,000 for a habitable three-room apartment in Florentin – an area which, while still relatively cheap, lacks green spaces and public facilities, making it a less-than-attractive proposition for couples looking to start a family.

Worse may yet be to come. Recent increases in interest rates and tightening of mortgage restrictions – measures to try to stem the nationwide surge in real estate prices – have raised fears that rental prices will soar even higher.

Young couples looking to buy their first home are already feeling the pain: A report by the Ministry of Finance revealed that new apartment purchases by young couples plummeted by 41 percent across the central region over the last quarter.

TO ADDRESS these issues, several cities are developing plans to create “affordable housing” – apartments offered at significantly less than market rates to those meeting specific criteria.

“There has been a huge outpouring of interest in affordable housing in the last year-and-a-half. City mayors are under a lot of political pressure,” says Dr. Emily Silverman, a specialist in affordable housing policy at the Technion’s Center for Urban Planning Research and a leading member of the Coalition for the Advancement of Affordable Housing in Israel.

Established two years ago by academics at the universities of Haifa and Tel Aviv, and NGOs including the Association for Civil Rights in Israel, the Association for Distributive Justice and Bimkom, the Coalition has focused political and public attention on the issue of affordable housing.

According to a study conducted by Silverman, who led the team of professional advisers to the Municipal Committee for Affordable Housing, to purchase an apartment in central or north Tel Aviv requires a monthly salary of around NIS 17-18,000.

Given that the average Israeli earns NIS 8,000 a month, many people have no chance of ever climbing onto the lowest rung of the property ladder in Tel Aviv.

And as house prices continue to rise, the gap between the Tel Aviv housing “haves” – those who can afford an apartment – and the “have nots” is widening.

Tel Aviv has at last decided to do something about these issues. Earlier this year, the Tel Aviv Municipality’s Commission for Affordable Housing approved a plan to advance affordable housing projects in the city.

For housing to be classed as “affordable,” says Silverman, people earning from minimum wage through the average monthly salary of NIS 8,000 should be able to meet the cost.

IN THIS, the White City is setting an example for other Israeli towns facing similar crises. “Tel Aviv is being innovative and is trying to figure out on a project-by-project basis what is best,” Silverman adds.

Other cities are following suit. In Jerusalem, Mayor Nir Barkat announced a scheme earlier this year to allocate 20% of new projects for affordable housing, while in Ra’anana mayor Nahum Hofree has advanced three new projects including affordable units aimed at young couples.

In a post on the Coalition for Affordable Housing in Israel’s blog, Silverman describes Tel Aviv’s new affordable housing plan as “a beginning that gives the basis for improvement.”

According to this plan, the municipality’s affordable housing units will be mainly rental apartments of approximately 60-80 square meters, designed for young couples earning a maximum joint income of NIS 12,000 per month net. Another criterion for eligibility is that couples must not already own another apartment.

Rents for these affordable apartments – which are perhaps better described as subsidized apartments – will be around NIS 2,800 per month, a rate that should not exceed 25% of the renters’ income. Rental contracts would be renewed annually for five years.

Other ideas included in the plan include recommendations that contractors be offered incentives in the form of increased building rights in return for including a percentage of affordable housing units in new buildings, and a scheme to offer special grants for students agreeing to live in depressed southeast Tel Aviv neighborhoods like Neveh Sha’anan.

As yet, the plan does not examine related problems, such as the specific housing needs of the Arab population in Jaffa – another big issue for the Tel Aviv Municipality as the continued gentrification of neighborhoods like Ajami drives up prices.

Other crucial issues that are yet to be determined include specific eligibility criteria for affordable apartments.

Criteria such as length of residence in Tel Aviv and completion of army service have been suggested but not yet approved. Also unclear are the mechanisms by which the municipality will ensure that its affordable apartments remain affordable over time.

Housing expert Silverman says it is important that the municipality makes decisions about eligibility criteria public and transparent, particularly in light of the fact that there is no national legislation to act as a guideline.

The Tel Aviv municipality has drawn considerable criticism in recent months over failures to adequately consult residents over TA/5000, its citywide plan to increase housing capacity and revamp the center of the city.

Will projects like Shuk Ha’aliya really have an impact on Tel Aviv’s housing issues, or it this merely a simplistic and populist solution, as opponents to the scheme have argued? SHOULD YOUNG couples struggling to live in Tel Aviv expect a hefty government subsidy, or should they instead move out to cheaper neighboring cities like Bat Yam or Holon? Silverman argues that moving out of the city to a cheaper suburb is not necessarily good for either individual people or for society as a whole.

“People need to be able to live in a place where they can find work,” she explains. “Since there is more work in Tel Aviv, if people are forced to move out to find cheaper housing, they end up spending more money on transport.”

Even if someone cuts housing costs to 30% of their monthly income by moving out of Tel Aviv, transport costs can reach 15% of their income.

“So moving out doesn’t help them,” notes Silverman.

There are social costs, too. As young couples with average incomes leave, parts of the city become reserves for the wealthy only – while areas on the periphery are mired in poverty.

“When you have concentrated areas of poverty, it costs society a great deal,” says Silverman.

Opposing this view is Dr. Yair Duchin, an economist at the Hebrew University of Jerusalem, who argues that creating subsidized housing for young couples in Tel Aviv is not a solution to these sorts of social problems.

Duchin calls the affordable housing plan a “terrible solution, not a solution to anything,” adding that apartments of 60-80 square meters would only be a stopgap fix at best for young couples, since the apartments are very small – not big enough to raise a child, for example.

Duchin offers a quite different solution to the issue of young couples not being able to afford to live in Tel Aviv.

“Why does Tel Aviv have to be the only economic center in Israel? There are enough places around the country suitable for a national economic project to develop industry,” argues Duchin.

“EVERYONE IS talking about a ‘housing bubble’. By developing industry on the periphery, in places like Karmiel, Beersheba, Tiberias or even Lod and Ramla, the government could make a dramatic impact,” he continues.

“If young couples were offered good jobs and a place to live in a moshav in the north or in Beersheba, they would move there – but since the government doesn’t do anything [to develop industry in these places] the result is everybody moves to the center, to Tel Aviv.”

On the other side of the argument is Aharon Maduel of Ir Lekulanu (City 4 Everyone), the largest municipal opposition party. Maduel, a resident of Kfar Shalem in south Tel Aviv, believes that the Shuk Ha’aliya project is a step in the right direction not just because of its efforts to address affordable housing, but also because the plans include steps to revitalize the neighborhood and provide much needed public facilities for local people.

The apartments will be adequate for young couples, he believes.

“Apartments of 60 to 80 meters, the size specified in the plan, are sufficient,” says Maduel. “In the past, the country used to build whole neighborhoods with flats this size designed for young couples.”

Maduel adds that in addition to affordable housing, the municipality also needs to focus on improving public transport, so that workers who don’t live in Tel Aviv can travel to the city more easily.

Regardless of whether the Shuk Ha’aliya project is the start of a panacea for Tel Aviv’s housing problems, renovating it will provide the area with a much needed facelift. Constructed in the Bauhaus style in 1938 on the edge of the Florentin neighborhood, the Shuk was a lively marketplace for over forty years until its closure in 1981.

Today, it is a rotting eyesore plastered in graffiti and used as a garbage dump.

Still owned by the municipality, the land consists of approximately 8 dunams between Aliya, Matalon, Wolfson and Chelnow streets.

Three residential buildings will be constructed on the site: two buildings of 11 floors each and one of 8 floors containing a total of 147 apartments of 85 square meters each. Of these apartments, approximately 30% will be designated as affordable housing for young people, Deputy Mayor Meital Lehavi (Meretz) told Metro.

The municipality has yet to announce the precise eligibility criteria for these apartments.

These plans for Shuk Ha’aliya are new, according to Lehavi. Until recently, the municipality had very different ideas for the site, and had intended to construct a 36-story tower housing commercial offices and luxury apartments – the sort of plan that has caused outpourings of anger among local residents.

The plans were redeveloped in response to public demand, with the aim of creating residential and public buildings more suited to the needs of the local population.

The new Shuk Ha’aliya project is also part of the municipality’s ongoing plans to improve and revitalize the Florentin neighborhood.

“Florentin lacks green spaces and public facilities,” Lehavi explains. “These new plans for Shuk Ha’aliya include a public garden, a swimming pool, plus three floors for culture, education and community projects.”

By including these much-needed public facilities, the new Shuk Ha’aliya project could provide this depressed area with a much-needed boost.

Although neighboring Florentin is experiencing a wave of gentrification, the streets east of Rehov Aliya remain mired in neglect and poverty. A high percentage of residents are foreign workers living in slum conditions.

“We used to be a society that aimed for integration,” says Silverman. “New olim lived in the same areas as native Israelis.” In Tel Aviv, the cost of housing means that this is often no longer the case.

OTHER FORMER run-down Tel Aviv neighborhoods – such as Florentin’s now uber-posh neighbor Neveh Tzedek – have been gentrified to such an extent that most of the original inhabitants have moved out. The aim of the Shuk Ha’aliya project, however, is not to gentrify but to create the possibility for a thriving middle ground between the very rich and the desperately poor.

“Tel Aviv is a pluralistic city,” concludes Lehavi. “It is very important that middle income people can continue to live here and that they can take part in city life.”

The Shuk Ha’aliya project is part of a wider scheme to create affordable housing in Tel Aviv and stem the exodus of young couples struggling to afford to build a life in the city.

Earlier this year, the municipality announced plans for another affordable housing development on the corner of Rehov Arieh De Modina and Rehov Ba’al Ha’akeda in the depressed Shapira neighborhood, in southeast Tel Aviv.

Whether affordable housing schemes like Shuk Ha’aliya and Shapira will have any noticeable impact on the city’s ability to accommodate middle-income young couples remains to be seen.

Yet if plans for Tel Aviv’s continued population expansion continue unchecked, it is clear that the current housing problems are not going to go away.

Since the municipality’s ambitious citywide plan, TA/5000, includes reinforcing the city’s position as Israel’s major business center by doubling the amount of office space it seems guaranteed that more and more young people will flock to make Tel Aviv their home.

How many of them will be able to afford to live there? The cultural capital of Israel, Tel Aviv is often described as a melting pot of people and cultures. It is hoped that the wonderful variety of residents that make Tel Aviv such a vibrant, fascinating place to live and visit will not be priced out of their city.

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