Looting in Britain’s cities, mass demonstrations in the Arab world, protests in Greece; none have the same possibility of a straightforward solution as does the recent uprising (largely of the middle class) in Israel in response to a lack of affordable housing. What began as a single person’s fight against eviction quickly became a mass movement from all sectors of Israeli society-Jewish and Arab – defenseless against housing costs that have skyrocketed by more than 40% in three years. And while pundits debate the underlying causes of Britain’s social unrest, experts hope that democracy will emerge triumphant in the Arab world, and everyone holds their breath that Europe’s debt crisis will be resolved; Israel’s affordable housing crisis can most certainly be fixed.

The solutions to Israel’s crisis will not be found in the ‘Free Market’ approach favored by the current government, or in a return to the country’s socialist origins. Rather, the government should look to New York City, where a hybrid model of public/private partnerships has produced hundreds of thousands of housing units affordable to everyone. By combining public financing incentives that attract private capital, land disposition strategies to promote economically diverse communities, and a wide range of private and nonprofit developers to construct and manage properties, New York could well be the blueprint for Israel.

In 1986, when then-mayor Ed Koch committed almost $3 billion to rebuilding New York City’s neighborhoods, city government was New York’s largest landlord, owning vast tracts of abandoned buildings in the city’s poorest communities. A housing strategy has been adopted by every mayor since (regardless of political party), and Mayor Bloomberg’s New Housing Marketplace Plan is on target and on budget despite a struggling US economy.

NYC rightly understood that city-owned properties’ real value was in returning them to the housing market in order to benefit low, moderate, and middle income households and rebuild entire neighborhoods.

The city’s housing leaders used flexible land disposition strategies and public financing to ensure affordability to a wide range of income groups and tenure types within communities. The housing created is privately developed and owned by both for-profit and not-for-profit companies, and its underwriting was designed to ensure that a variety of households could either rent or purchase. Not only was affordable housing created, but an entire sector of builders, managers and financers became committed to the improvement of local areas.

In crafting new affordable housing strategies, Israel today has many advantages NYC did not have.

Israel’s government owns over 90% of the country’s land. New York City had to battle crime and failing communities to attract families back to neighborhoods that seemed hopeless. Israel’s middle-class families are protesting because they want to remain in their communities; they need little to entice them to stay. And Israel’s innovative, entrepreneurial financial sector can certainly be counted on to respond to government incentives and policies.

An essential ingredient is government leadership in creating the public-financing tools for an Israeli-based solution. For rental housing, such financing mechanisms could include direct subsidies like below-market second mortgages to attract private bank financing and keep rents affordable. For home ownership, mortgage guarantees and concessionary construction and mortgage financing will promote greater flexibility in bank lending while maintaining sound underwriting practices.

By taking a page from NYC’s affordable housing experience – leveraging the expertise of private-sector developers and banks working with community organizations, Israel can build its own affordable housing industry and answer the call from its middle class.

Jerilyn Perine was commissioner of New York City’s Department of Housing Preservation and Development for Mayors Giuliani and Bloomberg, and is now Executive Director of the Citizens Housing and Planning Council.

Julie Sandorf is President of the Charles Revson Foundation.

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