The housing crisis facing Israel’s hareidi-religious world may be a barometer warning of the impending storm about to hit the general housing market.
Families in the various communities that comprise the insular society of the hareidi-religious world, to a large extent, have developed a self-sustaining economic system of their own. The system, which includes a network of food stores, gift shops, clothing outlets, dry goods, hardware and other types of stores that a family might patronize, is designed to create a self-sustaining economy within any particular neighborhood.
Within the system is a network of free-loan societies known as “gemachim” – charitable loan funds that offer various items at a low cost, or on loan, which are provided by generous donors. These can vary from apparel and equipment for life-cycle events such as engagements and weddings to baby furniture for young couples starting new families.
Another “gemach” available for new families is a special free-loan society that provides funding for down payments on new apartments, in a combined loan-grant described by business journalist Dror Marmor last week in the financial daily, Globes. Hareidi-religious families can join such group funds as members, paying a certain sum each time a child is born into the family. When the time comes to marry, the fund provides money towards the child’s wedding and apartment.
However, the world economic crisis has slowly increased the pressure on every sector of society in Israel, and so has the political situation – with damaging effects on the hareidi-religious world, as others.
Lack of money due to a drop in donors has combined with a lack of housing options to create a pressure cooker.
Housing options once available near parents in the crowded hareidi-religious neighborhoods of Jerusalem, Bnei Brak or elsewhere within the 1967 borders have long been priced out of reach of the average young couple.
The next best option, one taken by many, was to move to budding communities in nearby Judea and Samaria, or in eastern Jerusalem, past the 1967 borders. Housing was more plentiful, more spacious, and less expensive. It was also often more attractive and a better buy for the hard-earned shekel.
The building freeze
However, the economic crunch coupled with the politically-motivated 10-month construction freeze recently imposed by the Netanyahu government, and with the unofficial construction freeze that preceded it months earlier, have made these homes unavailable as well.
Young hareidi-religious couples, either newly married or married with growing families, are increasingly finding themselves with nowhere to live. When they consider moving into secular neighborhoods, preferably in groups so as to have neighbors with whom they can relate, the existing neighbors protest out of fear of a change in atmosphere. There has been increasing hostility in at least one Jerusalem neighborhood as a result of precisely such a situation, and similar friction is growing in another neighboring Jerusalem suburb.
It is likely that similar scenarios will mushroom if the current circumstances continue, noted Marmor, who warned that the housing crisis faced by hareidi-religious couples may be a prelude to that to be faced next by secular couples.
Ripples from the situation that triggered the housing crunch in Israel’s fastest-growing Jewish population are beginning to emerge in wider Israeli society circles, which are not as tightly-knit.
Housing starts in many places even inside the pre-1967 border have stopped, and the special financial incentives that enabled young Israeli couples to begin new lives in new housing have disappeared along with them.
Although interest rates for mortgages are still low, the percentage required for the average down payment is today out of reach for most young Israelis, even new immigrants with additional special rate cuts.
Cutbacks on salaries that were low to start with – for those lucky enough to have hung on to their jobs during the past 18 months – combined with the astronomical prices of the housing that is available, is a challenge that will face the general market next.