In August of 2008, the Tel Aviv Municipality announced with great fanfare that it had formulated a "revolutionary plan" to build hundreds of affordable apartments for young people in the city.

Apartment buildings in Tel Aviv
Photo: Ariel Jerozolimski

As in many of the world's big cities, rising rents in Tel Aviv had resulted in public pressure for the municipality to intervene in the housing market. Despite the fact that no other city in Israel had yet developed a modern, progressive, affordable housing policy, the municipality promised that its new plan would help young people remain in the city, and prevent the city from becoming exclusively for the rich.

According to the announcement, a newly-created Municipal Commission for Affordable Housing, composed of experts from various disciplines, had spent months researching the issue, and had come up with a list of initial recommendations. Two large residential projects in the south of the city, containing some 1,650 apartments, were to be pushed forward immediately, while the commission's other recommendations would be translated into concrete policies.

That was last August. One year and a global financial crisis later, apartment prices in the city continue to rise. Local elections came and went, and neither the municipality nor the deflated economy have come to the aid of the city's hapless renters, for whom rising rents often mean either moving away from the city center or crowding into tiny, dilapidated flats (and paying top dollar for them).

In May of 2009, a press release by the municipality announced that the commission had completed its work, and its recommendations would be presented to the mayor and deputy mayors for their approval "in the coming weeks." However, to date that has not yet happened and the plan remains without an official stamp of approval, while the commission's full report has not been released to the public.

Dr. Emily Silverman, a researcher from the Technion - Israel Institute of Technology's Center for Urban and Regional Studies, headed the team of professional advisers to the Municipal Commission for Affordable Housing.

"Our main recommendation was that new residential projects in the center and north of the city include affordable rental units," she says. "In exchange for these units, developers would be given extra building rights."

Silverman continues: "Another recommendation was to push forward building plans in the south of the city and in Jaffa which have already been approved, but have yet to be built due to various regulatory obstacles. Pushing forward those plans would significantly increase the supply of housing. We also proposed several other recommendations, and specific plots for pilot projects."

As to why the commission's recommendations have yet to be approved, Silverman blames the delay on opposition to the plan among senior figures in the municipality.

In response to an inquiry by Metro, the Tel Aviv Municipality explained the delay thus: "The subject of affordable housing is a strategic issue of great significance. Therefore it is important that the approach be allowed to mature in order to reach an operative state. The same goes for the full publication [of the commission's recommendations]."

However, even if the plan is eventually approved and implemented, it is not generally expected to lower rents across the board.

Building a large number of affordable apartments for a specific group, Silverman admits, would not have a significant effect on the general rental market. "Affordable housing programs don't usually result in a general lowering of prices, except for the target population."

However, speeding up construction of already approved plans in order to increase supply could theoretically lower rents across the city - it's a matter of supply and demand. Another idea that could potentially benefit all of the city's renters, notes Silverman, is rent control.

Gil Gan-Mor, a human rights lawyer at the Association for Civil Rights in Israel (ACRI), agrees with many of the commission's conclusions, but he thinks that they don't go far enough.

"The municipality could decide to set up a rent control mechanism that would allow landlords to raise rents incrementally, according to a set percentage every year. Today, landlords take advantage of a lack of supply to hike rents substantially, and if a tenant doesn't agree to this, he simply has to look elsewhere."

The problem, he says, is that regulatory tools that have been implemented successfully in many places in the world, such as rent control, are not even being discussed by the municipality - at least not according to the information that the municipality has made public.

Says Gan-Mor: "The city's method of releasing information through periodic press releases does not allow for a proper public discussion of the issue." He also notes that the municipality is considering making army service a condition for eligibility for affordable housing, a move which would effectively exclude the Arab community of Jaffa from the program.

Questions have also been raised regarding the project's choice of target population. The commission's mandate was to find affordable solutions for households with monthly incomes of between NIS 12,000-13,000. Last year, Dr. Emily Silverman described the target group to Metro as "moderate-income, socially-mobile young professionals." For this population, the city would offer rents of around NIS 2,800.

However, as Gan-Mor points out, the plan provides no solutions for low-income residents of the city, for whom affordable housing often means publicly-built apartments or rental subsidies.

The municipality admits that this is the case, but argues that it does not have the resources to provide housing assistance to a low-income population. The Tel Aviv Municipality told Metro: "Public housing, everywhere in the world and in Israel as well, is the responsibility of the government, and not the responsibility of the local authority. The municipality does not have the capability to supply public housing like the government, without any means or appropriate tools. Therefore, the recommendations define the target population as an intermediate population, which is able to pay, but unable to afford to live in the city at market rates.