Last update - 00:00 29/01/2007
Stop distributing money, start distributing population
By Arik Mirovsky
The policy of Israel's population distribution failed because of inflated tax incentives that did not attract residents of the center of the country to the Negev and the Galilee. By contrast, the government neglected housing benefits that were proven incentives. These are the conclusions of a recently released study commissioned by the Housing Ministry. The researchers also discovered that the settlement policy for the nation's periphery was fraught with cookie-cutter models that failed to take into account those localities that attracted residents without incentives, and those that failed to attract residents despite the enormous incentives offered.
The Zenovar consulting company conducted a study to examine the efficacy of the government campaign to settle residents in the periphery, based on a sense that the population distribution policy of recent years has produced almost no migration to areas of national preference. Israel's governments have employed six main measures to encourage residents to move to the Negev and the Galilee: Housing assistance to make living in the periphery less expensive; establishment of railways to provide access to the center of the country; promotion of capital investment to create new places of employment; development of detached housing (i.e. "villas") to tempt apartment dwellers of the nation's center to move; educational assistance, including an upgraded education system; and tax incentives.
"They never examined what works and what doesn't among all the measures they employed, and they certainly didn't try to maximize the benefits of these measures," remarked Tzvika Or, one member of the research team. "There is no question that we must rethink this matter."
A separate examination of each of these measures revealed the biggest failure: The largest budget was allocated to tax incentives. Yet, research showed that the benefits derived from tax incentive programs, such as the "Negev Law," were almost nonexistent. "To the best of our knowledge and based on research, in their current format tax incentives have little influence on the balance of migration to preferred communities, if at all." One of the reasons for this failure may be that the list of communities entitled to tax benefits was not based on clear criteria. On the contrary, it was housing assistance that played a clear and influential role in the nation's periphery. If the government wants to attract people from the center of the country to live in the periphery, it must provide incentives that permit the purchase of inexpensive, detached homes. But the extent of such incentives actually diminished.
Another important factor that proved to be highly effective in the campaign to disperse population was the promotion of capital investment to attract factories. The current study referred to previous research that examined Intel's move to Kiryat Gat and the establishment of the Kiryat Gat industrial park. "That research highlights a convergence of people in the southern direction. However, those people did not go to Kiryat Gat, but to nearby communities, and the city failed to gain a maximum benefit," explains Professor Shaul Krakover, an author of one of the relevant studies. "The factory undoubtedly influenced the entire South - not only Kiryat Gat. It even managed to permanently tie down some of those who came to the area." The Intel model is also accepted by current researchers as evidence of the success of a well-placed investment of resources.
Israel's new railways represent another piece in the puzzle. "The strong link between the frequency of trains and migration to communities astounded us," noted Tzvika Or. "Additional residents arrive whenever a train is added." Indeed, the additional arrival of one train in a given community results in a predicted increase of 0.4 percent in the balance of migration. "Especially now, when we hear about expected budget cuts in railway development, it is important that the government be aware of this tool's power," Or says.
The failure of measures to promote population distribution can be traced back to a lack of understanding of the dynamics that influence movement to the periphery. The most important finding of the study dispels the prevailing notion that people tend to move to the periphery to settle in rural communities. Residents of the country's center do not initially migrate in search of a rural or suburban lifestyle - the numbers of those who do arrive in such communities are low and occasionally approach zero. Or says, "We discovered that migration from the center of the country develops in two stages: In the first stage, people from the center prefer to settle in urban communities, apparently because of the relatively low cost of apartments there. At that point, they cannot yet afford more expensive, suburban houses. Only when they are more settled, a few years later, do they move to the suburbs."
Most of the people who move to these communities are established individuals from neighboring cities, like Be'er Sheva, a fact that disappointed researchers. They maintain that this trend indicates that the urban elites in peripheral areas are leaving cities for suburbs, thereby providing no real improvement in the general rate of migration to these areas. This is not what the government intended when it allocated considerable funds to promote population distribution.
Given the lack of demand, on the part of residents of the center of the nation, for rural and suburban communities, the report recommends that incentives mainly be directed toward the urban sector. To attract more residents from the Center to the periphery, researchers recommend that emphasis be placed on the development of neighborhoods with detached houses. Thus, young couples who cannot afford villas in Kfar Vradim or Lehavim may settle in cottages in Be'er Sheva or Ma'alot.
The study also revealed that the public perceives these urban communities in a negative light that sometimes surpasses the temptation of any grants or incentives. The persistent isolation of some communities caused such government perks to fail. Other communities, blessed with a positive image, barely needed such incentives to progress.
Netivot is the most profound example of this phenomenon. "Although this community suffered from a negative image in the past, in recent years, it has flourished and enjoyed a positive migration balance - mainly because of its surroundings. The revolution in Netivot may in part be related to the fact that it is a spiritual center hosting a variety of events that expose the city to many visitors. Some of them fall in love with the place and move there," the research report states. Netivot's economy is booming without there being any connection to the government's incentive campaign, and the city's positive image is drawing in new residents.
Two other communities that benefit from a positive image are Meitar and Lehavim, but as mentioned before, these communities attract residents already living close by rather than residents of the center of the country. Be'er Sheva, Omer, Ofakim, Sderot, Kiryat Gat, Migdal Haemek, Afula, Upper Nazareth, Nahariya, and Carmiel were defined as "neutral" in the study. In other words, these communities failed to draw in, but also did not repel new residents. Mitzpeh Ramon, Yeruham, Dimona, Arad, Tiberias, and Acre were found to be "communities that deter residents."
A negative image can spell real trouble for any community. Such a view is not formed in one day, and it is not easily dispelled. The researchers did not offer a solution to this problem, but they noted that Netivot's success story indicates that communities that have been plagued by a negative image for years, like Dimona, Yeruham, and Mitzpeh Ramon, may yet shed their bad reputation.
Other communities in the study, like Migdal Haemek, Kiryat Gat, and Sderot (examined before the second intifada and the frequent Qassam missile attacks) are viewed quite positively by residents of the country's center. "These communities are relatively close to the center of the country. That may explain their power to attract residents of the center," the report infers.
The report's conclusions regarding more remote communities are subsequently different. Kiryat Shmona, Upper Nazareth, Dimona, Mitzpeh Ramon, and Yeruham suffer from a clearly negative attitude on the part of central residents that is unrelated to their image. People from the center of the country simply refuse to go to these communities because they are too far away.