Rothschild Boulevard as an example

Like the cottage cheese uprising, the housing market protest is a symptom of a much larger ailment – the inability of a growing number of Israelis to make ends meet.

Tent City Undearwear 311 (photo credit: LAHAV HARKOV)
Tent City Undearwear 311
(photo credit: LAHAV HARKOV)
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.