Neighborhood Watch: Unsettled market

Ma’aleh Adumim used to absorb the overflow from Jerusalem at more affordable prices, but a dearth of new housing has slowed the process.

Ma'ale Adumim 521 (photo credit: Marc Israel Sellem)
Ma'ale Adumim 521
(photo credit: Marc Israel Sellem)
The most easterly part of Jerusalem is not east Jerusalem but is, in fact, Ma’aleh Adumim. This town is not within the municipal boundaries of Jerusalem, but it is an integral part of what can be termed metropolitan Jerusalem.
For most of the town’s 39,000 inhabitants, Jerusalem is where they work, do their shopping and enjoy entertainment. Ma’aleh Adumim has a vibrant industrial zone with 220 businesses, which provide employment for residents of Ma’aleh Adumim, as well as Jerusalem proper. Ma’aleh Adumim is located seven kilometers from Jerusalem and was built in part to supply affordable housing for the capital. It is surrounded on four sides by the Judean Desert. Since it is situated more than 600 meters above sea level, its climate is dry and relatively cool.
Ma’aleh Adumim was originally a settlement of Nahal, a military unit whose soldiers double as farmers.
It was called Ma’aleh Adumim (red heights) because it is located in an elevated stony plateau, and its rock formations have a reddish hue.
In 1975 prime minister Yitzhak Rabin decided to upgrade the military settlement into a civilian one, and from there the road to creating an urban settlement was very short. Work on new housing and public buildings began in 1977, and by 1982 the first inhabitants moved in.
From a real estate perspective, Ma’aleh Adumim had been a safety valve for the capital, as it absorbed the overflow of Jerusalem at prices that were lower than in the capital. But lately Ma’aleh Adumim has been unable to perform the task for which it was created.
The municipal boundaries cover a vast area for an Israeli municipality: 48,000 dunams, or 12,000 acres. Tel Aviv, with a population of more than 400,000, covers an area half as large again as Ma’aleh Adumim – 68,000 dunams.
But these large urban reserves of land are not being utilized. Benny Kashriel, the mayor of Ma’aleh Adumim, is very bitter about this state of affairs. In a talk with In Jerusalem, he said, “Ma’aleh Adumim needs more housing. The birthrate of the current residents adds 700 a year. When these children mature and get married, it is very difficult for them to find housing, and they radiate toward Modi’in and Beit Shemesh.”
The problem, as Kashriel explained, is political. Ma’aleh Adumim is legally part of the West Bank. Under international law, it is considered “occupied territory.” At these sensitive times, the government is reluctant to authorize building projects in areas that were occupied in the wake of the Six Day War, and that includes Ma’aleh Adumim.
Kashriel further added, “Our situation was always abnormal, but it is more so at these times with a freeze on new building projects over the past three years. Before that, building permits had to be authorized by the Defense Ministry, which is the relevant government body in charge of areas in Judea, and that created multiple problems for us. I strongly advise the prime minister to put an end to this ambivalent state of affairs. In any political settlement Israel will retain sovereignty over the large concentration of settlements, and this includes Ma’aleh Adumim. So why not formally annex Ma’aleh Adumim now by extending Israeli law to our city?”
The political problems of Ma’aleh Adumim are beyond the scope of this article, but not so the repercussions on the real estate scene.
Benny Steinberg, the executive in charge of Ma’aleh Adumim at the Jerusalem Anglo Saxon real estate company, told In Jerusalem that there is upward pressure on housing over and beyond the current rise in real estate prices in the country as a whole.
“Demand in Ma’aleh Adumim is high,” he says. “It is famous for its quality of life. Its 9,000 households are serviced by 21 schools and 80 kindergartens. The streets are clean, and the municipal administration is efficient. Because of the freeze on new building projects, supply of new housing is meager. Demand outstrips supply; consequently, most of the current realestate market is in second-hand properties. Since demand exceeds supply, prices are rising. They are also rising because of psychological reasons. Up until 2009, the amount of new housing coming on the market was very high. Consequently, the market was attuned to a situation where supply was plentiful. At these times the opposite is true, and the change from a state of multiple supply to one of practically no supply at all has influenced the market.”
Real estate prices are determined by the location of the property. Ma’aleh Adumim is divided into approximately seven neighborhoods. The more expensive areas are Nofei Hasela and Tzemah Hasadeh. These are relatively new areas with open views of the Judean Desert and the Dead Sea in the distance. Four-room apartments in these areas can cost from NIS 1.35 million to NIS 1.45m. In less posh areas with no scenic vistas, a similar apartment can cost from NIS 1.11m. to NIS 1.25m.
Ma’aleh Adumim has a considerable number of semi-detached dwellings. On average, they cost from NIS 1.65m. to over NIS 2m., depending on the size and location.