Yet another grassroots movement fed up with the skyrocketing prices of basic
necessities was born over the weekend. This time it was discontent with our
troubled housing market that sparked a surprisingly dynamic protest
initiative.
Hundreds of demonstrators who had coordinated their steps via
Facebook converged on Rothschild Boulevard in Tel Aviv Thursday evening and set
up tents in a dramatic demonstration of “homelessness.”
Exiling
themselves from their conventional abodes, the disgruntled spontaneous activists
dragged with them mattresses and couches, and jerry-rigged electrical extension
cords from nearby apartments, and transformed one of the city’s main avenues
into a political statement of dissatisfaction with the chronic shortage of
affordable housing, particularly in Tel Aviv.
Like the “cottage cheese
uprising,” organized discontent over housing prices seemed to bridge the classic
political divide separating the Left from the Right. But though the most recent
example of grassroots activism focused on housing, the scenes at Rothschild
Boulevard – like the cottage cheese uprising – were a symptom of a much larger
ailment – the inability of a growing number of Israelis to make ends
meet.
Still, the cottage cheese uprising focused on a fairly
straightforward and relatively solvable market failure: outrageously priced tuna
fish, apple juice, honey, olive oil, garlic and other foodstuffs that cost
Israeli consumers significantly more than their European or American
counterparts for the exact same product.
In contrast, the reasons for the
ongoing housing market crisis are complicated and varied. Unsurprisingly, Daphni
Leef, 25, a freelance filmmaker who organized the Rothschild tent city
demonstration, and others who joined her have been far more adept at initiating
a “revolt over rent” than at offering a solution. Many critics have rightly
pointed out that the Rothschild Boulevard activists are naïve to think the
average young couple will ever be able to afford to live in the heart of Tel
Aviv, the most prime real estate location in the country, no matter what the
government does.
In fact, numerous steps – all of which relatively
longterm – have already been adopted by this government to make housing more
available and affordable, perhaps not in Tel Aviv where there is no more
state-owned land to be re-zoned for apartments, but in outlying
areas.
Construction and Housing Minister Ariel Attias has pushed to
provide more residential projects in central locations such as Modi’in and
Herzliya and has also proposed changing tender laws to encourage building
contractors to push down the price of land, which often cost NIS 300,000 to NIS
400,000 per housing unit even before construction begins.
Bank of Israel
Gov. Stanley Fischer, meanwhile, has taken measures to prevent banks from
pouring millions into the financing of investments in housing, particularly now
that interest rates are low and mortgages are more affordable.
The
government could also discourage foreigners from keeping summer apartments
vacant most of the year, by taxing them. Another possibility is to add to the
NIS 1.3 billion per year already provided to the needy to subsidize
housing.
The government might even consider providing special incentives
to building contractors to make it profitable to build projects designed for
long-term rental. With annual rent for an average three-room apartment at 4
percent of the value of the apartment, it makes no economic sense to invest in
rental property, though it does make sense for families to rent instead of
buy.
In the final analysis, however, grassroots movements such as the
cottage cheese uprising or the Rothschild Boulevard tent city illuminate a much
deeper socioeconomic malaise: Growing numbers of Israelis are unable to pay
their expenses.
Housing and basic supermarket products are part of the
impossible equation. The so-called “free education” provided by our state-run
schools is another glaring example.
Parents pay for school books,
extra-curricula activities and afternoon childcare. And if they want to remain
productive at work through the long summer vacation, parents must also
underwrite the costs of keeping children supervised.
Fuel and water
prices continue to climb. Electricity will too as Israel – confronted with an
Egypt no longer able or willing to protect Israeli natural gas interests – is
forced to resort to more expensive fuels. And many Israelis, knowing they could
never afford private health care if crisis struck, pray even more fervently for
good health.
All of these expenses and others lumped together have become
an unbearable drain on a growing number of Israelis. Rothschild Boulevard and
the cottage cheese uprising are just a part of a much larger phenomenon.