Last update - 00:00 11/02/2008
Matchmaker, find me an affordable 3-room apartment
By Ranit Nahum-Halevy
Threats. Blacklists, bans. It's all part of the day's work in the Haredi real estate market, mainly in secular neighborhoods marked as "migration" targets by the ultra-Orthodox community. In a market characterized by an extreme paucity of land for development and soaring prices, struggle was inevitable. But the rabbis hope to end the bad feeling with the establishment of rabbinical councils that set maximum prices for selling, buying and renting apartments.
The rabbis' power lies in intimidation: threatening sanctions against sellers, or buyers, who fail to heed the limits they set. In some neighborhoods, their intervention has badly slowed down the deal flow, but are they otherwise really influencing the housing market?
Not necessarily: "They're picayune," shrugs Avraham Ravitz, a United Torah Judaism Knesset member and formerly a housing minister. "They say not to buy apartments above a certain price, and you can abide by that for some time, but if somebody has an urgent need, he'll buy on the hush-hush."
An urgent need to buy, why exactly? Because it's the custom to buy an apartment for newlyweds. The ultra-Orthodox community sanctifies marriage but when prices are spiraling skywards, the custom of buying the young couple a home turns that blessing into a burden for many a parent.
Collecting money starts well before the nuptials: nonprofit associations, charities, loans, banks, meetings with rabbis, traveling abroad to tap the Diaspora for donations - don't forget that with one daughter or son married off, a Haredi family may well have eight or 10 more. These families often seek housing for the kids in satellite communities such as Beitar Ilit, Modi'in Ilit, Elad or Beit Shemesh, which were established to help resolve the housing crunch in the religious sector and where a 3-room apartment can be had for $120,000. But it isn't enough and religious families are trickling into distinctly secular neighborhoods.
Trickling? They're taking over. The religious conquest of secular neighborhoods has accelerated in recent years because there's no national plan to resolve the issue. The Housing Ministry issued a report calling for the construction of 80,000 housing units for the ultra-Orthodox by 2020, but nothing was done. Thus, in Jerusalem, formerly secular neighborhoods such as Kiryat Hayovel, Ramot, Gilo, Ramat Eshkol and Katamon have taken a religious hue. The religious have marked Pardes Katz by Bnei Brak, the secular quarters of Ashdod, Kiryat Gat and Gan Yavneh as targets for acquisitions.
At first these areas were solutions for young religious couples seeking affordable housing near their home communities. Then the rabbis started to grant their approval to buy in secular neighborhoods and prices started to climb. Pardes Katz is considered to be a relatively poor neighborhood characterized by blocks of "council housing," yet prices have risen by 50% in two years. The same is true of Ashdod - and of the market of apartments to rent to ultra-Orthodox tourists in Jerusalem.
The result is that bad feeling abounds. The local ultra-Orthodox community blame foreign Jews and the secular for the increase in prices. The secular grumble about their new neighbors. Matters have deteriorated to the point of blows, and threats against foreign Jews who bought apartments. This is what the rabbis hope to stop with their real estate councils.
Think of these councils as a filtering and control mechanism. They are a phenomenon of the last year. They rule on transactions, publish blacklists of assets where a decent family may not buy or rent housing, and may impose sanctions on any of the parties involved: sellers, buyers, landlords or realtors who fail to heed their decrees.
Tenants who overpay, thereby supporting the upward spiral of housing prices, will suffer sanctions. Some of the rabbinical real estate councils in Jerusalem are mulling a boycott of realtors in general because of their role in raising prices, and of mediating property deals themselves.
Who establishes these councils? Under what auspices do they operate? In general they are grassroots organizations that spring up locally, but they're supported by all the rabbinical groups. The councils lay down a price list for housing, depending on the dollar exchange rate, the apartment's condition, and so on.
The first rabbinical real estate council was apparently formed a year ago in Ashdod to fight the upswing there in prices.
"The rabbis issued an injunction limited in time, banning the acquisition of homes in the Gimmel and Vav neighborhoods, which were turning Orthodox," says property assessor Moshe Dekel. "The term expired and the rabbis are monitoring prices in cooperation with us, through the appraisals we issue and bring before them for approval."
The committees aim to help, not hinder. They helped halt the mad race for housing that was lifting prices too high, says one local. "Sellers and realtors can't ride on our backs any more. When a certain seller is shunned for overpricing, the word gets around fast."
The Pardes Katz rabbinical committee divided the town into areas and, working with realtors, set ceiling prices for apartments in each. A 3-room flat in Area A, the ritziest, would cost no more than $133,000, dropping to $118,000 in Area B and $110,000 in Area C, for example.
In Jerusalem the committee started as a local initiative in Romema and won support from a rainbow of rabbis, leading to the establishment of similar councils in northern Jerusalem, from Kiryat Belz to Ramat Eshkol.
In Pardes Katz, some 800 religious families bought housing following the rabbinical rules, and about half have already moved in. It's a great community for the ultra-Orthodox: affordable housing and access to services. Three new synagogues arose in the last year alone. However, prices in the town soared from about $90,000 for a 3-room apartment to around $140,000 for the same flat today, and in fact, pricing is now roughly equivalent to Bnei Brak. Which is absurd, complains one member of the Pardes Katz committee - Bnei Brak is by far the superior city.
Be that as it may, for some neighborhoods the local rabbinical real estate councils have created computerized databases of the assets, including the number of rooms, condition, floor, condition of furnishings and so on. With the parameters entered, the software spits out a price, for confirmation by the rabbis.
"Everybody who wants to rent has to pass through us first. Anybody who breaks the rules gets tossed outside the camp. Some obdurately demand high prices but their apartments stand empty. They'll break," says the chairman of one Jerusalem council.
In fact anybody wanting to settle in a haredi neighborhood and integrate into the community must heed the real estate council, explains another Jerusalem council chairman. Newcomers must not be allowed to rock the boat. If they insist, they are declared outcasts, denied community services from schooling for the kids, membership in women's organizations for the wife and no Torah readings for the outcast husband.
"A person who breaks the rules and rents for a price that suits his pocket but not that of the local consumer causes prices to rise in the whole building," explains the chairman.
Jerusalem is, as always, a unique case, and foreign residents seeking a foothold in the holy city have significantly skewed the real estate market, both in rentals and buying space. One committee member points at a 3-room apartment in Kiryat Belz that had been rented for $850, then was re-leased last month for $1,600 a month without the domicile having been improved in any way whatsoever.
The problem becomes all the more acute in short-term rentals, which tend to command even higher prices: "A guy pays $800 for a four-room apartment, he's been there 15 years, built a life and a family. Then one day his landlord knocks on the door and tells him he has somebody willing to pay $1,600. Meet that or get out," says a resident of Jerusalem's Sorotzkin Street. Frightened tenants refrain from complaining about problems in their apartments, he adds.
Shlomo Rosenstein, a United Torah Judaism member of the Jerusalem city council, says the collapse of the Heftsiba building company didn't help, nor did the government freeze on housing subsidies for young couples three years ago.
"The situation today is utter chaos, complete collapse," he says. "A young ultra-Orthodox couple can't find a 3-room apartment for less than $140,000 - they live in holes, in Jerusalem and Bnei Brak apartments of 22 square meters rented for $700. They live in storage rooms and bomb shelters. They need a solution."
Are the rabbinical committees really a solution, or are they truly marginal? Well, their sanctions can be pretty effective.
The worst sanctions slam the children, denying them entry to schools. If a school dares accept a child from an errant family, the other families promptly withdraw their offspring, wrote Yaakov Reinitz in the paper Ba'Kehila. In some neighborhoods the battle escalated, with the dissemination of blacklists of overcharging landlords.
Some realtors and landlords didn't just sit there and take it. A month ago two council members in Ramat Eshkol received death threats and the schools where their children study were told to expel the kids, or they'd be burned down. The rabbis complained to the police and hired private detectives. Stay tuned.