"A historic, thrilling event," Haredi newspapers enthused, describing a cornerstone-setting ceremony held last Thursday in Tiberias. The cornerstone was laid for a new ultra-Orthodox neighborhood, Kiryat Sanz, to be built in coming years. Thousands of celebrants flocked around the stage, with the festivities continuing even after one bench collapsed and three people were lightly injured.

The new neighborhood will be built on a slope, rising above the city on the western side of the Kinneret, and will feature 300 housing units. Unlike the astronomical prices in the center of the country, young couples in Tiberias will be able to purchase a four-room apartment with a striking view of the Sea of Galilee for just NIS 500,000. The contractor propped up a large sign in the area where the houses are to be built: "This is not an advertisement," declares the sign. "This is your home's view."

Tiberias is not an isolated case. It is part of a growing trend whereby ultra-Orthodox neighborhoods are being built in the northern region of the country, to help solve a housing crunch felt among the Haredim. After Passover, construction work commences on the Har Yona Gimel neighborhood in Upper Nazareth; the neighborhood will feature 3,000 housing units for the Haredi population. Two other cities in the region that host growing ultra-Orthodox populations are Carmiel and Afula. Safed long ago became a favored destination for Haredi residents.

Sophia Jako, who has lived for 40 years in Tiberias and defines herself as a "traditional" Jew, is quite pleased with the new neighbors. During the past two years, three Hasidic families have moved into her building in the "Plus Matayim" (200 Plus ) neighborhood. "These are really good people," she says. "They are quiet and gracious. They are much better neighbors than the people who lived here beforehand."

These three families are not alone. During the past two years, close to 60 families from the Karlin Hasidic movement have moved to Tiberias, particularly in the city's upper neighborhoods. Jako relates that her three children have left Tiberias "because there's nothing for them to do here," and not due to the ultra-Orthodox influx.

The festive cornerstone event for Tiberias' new Haredi neighborhood featured Rabbi Yosef Moshe Dov Halberstam, whose voice choked with emotion. Other honored guests at the event included Housing and Construction Minister Ariel Atias and Tiberias Mayor Zohar Oved. For the Hasidim, this event symbolized a breakthrough in an ongoing effort to solve the population's housing woes.

The Tiberias municipality adamantly opposes the establishment of a Haredi neighborhood close to the Poriya junction, but it has supported the Sanz quarter's construction close to this site. "We are talking about good people here - orderly, decent neighbors," said area resident Meir Iluz. "But I am worried that they will come to constitute the majority, and that would change the character of the neighborhood, and of the city as a whole."

Housing Minister Atias is committed to the establishment of many new Haredi neighborhoods, but observers claim that the state has not forged a comprehensive approach to ultra-Orthodox issues. It has yet to implement employment policies to supplement Haredi building initiatives in a number of cities, like Tiberias, these critics complain.

Rabbi Uri Regev, chairman of Hiddush - Freedom of Religion for Israel, warns about "the possibility of massive Haredi movement to the north not being accompanied by a jobs-creation policy. This would mean that Haredi cities, or cities with growing Haredi populations, would become poverty traps.

"It appears the only thing that concerns Ariel Atias is finding low-cost housing solutions for his constituents, and subsidizing a large portion of the housing units' prices," Regev adds. "That's not enough. The government and Atias should be forced to create large employment centers alongside ultra-Orthodox neighborhoods, to ensure that the influx of Haredim creates prosperity in the north, rather than turning it into a low income, needy region. Shas, perhaps, prefers its constituents to be needy and dependent; but the state cannot afford to bury the Galilee in poverty."

The ultra-Orthodox movement into the north has been supported by prominent rabbis. Recently, a group of rabbis established a professional steering committee whose purpose is to "establish Torah quarters for the entire community of pious believers, and help with Haredi settlement in these [northern] cities," as an announcement in the Yeted Ne'eman newspaper phrased it.

The professional committee is comprised of Bnei Brak's deputy mayor, Rabbi Avraham Rubinstein; Jerusalem municipality member Rabbi Shlomo Rosenstein; and a member of the Rechasim regional council, Rabbi Avraham Mishkovsky. The flagship project - to be undertaken by the committee in the days ahead - will be the establishment of the Har Yona Gimel neighborhood in Upper Nazareth, a project that is much larger in scale that the Sanz quarter housing initiative in Tiberias. Some 3,000 housing units are to be built at Har Yona; as Upper Nazareth Mayor Shimon Gafsou told Orthodox newspapers, the new neighborhood will be utterly Haredi, "and that will be the key to its success." In recent years, the Arab population of Upper Nazareth has come to constitute about 15% of its residents. Trying to augment his town's Jewish population, Gafsou instituted a number of initiatives in past years. None were successful. Among other things, he draped the town in menorahs during Hanukkah season, and toyed with changing the town's name to "Lev Hagalil" (Heart of the Galilee ).

The mayor has now adopted the housing project as a means of staving off Upper Nazareth's transformation as a mixed, Jewish-Arab town; in past years, he worked intensively with Haredi government ministers to promote Har Yona Gimel's establishment. "Such a Haredi neighborhood does not suit Upper Nazareth. It might be better suited to Tiberias' character. Upper Nazareth is a secular city in which, for instance, stores remain open on Shabbat," opines Samyon Baron, an Upper Nazareth council member from Kadima. Baron points out that buses traveling between neighboring Arab towns and villages stop in Upper Nazareth's main bus station on Shabbat. "The Haredim will change the character of this town; they will weaken it, not strengthen it, and at some stage they will take over Upper Nazareth," he says.

Others in Upper Nazareth have voiced opposition to the establishment of a large Haredi neighborhood in the town, especially after reports circulated in past months about the seclusion of women in Beit Shemesh. Even before tensions regarding Haredi groups in locales such as Beit Shemesh reached the national media spotlight, Mayor Gafsou told Orthodox newspapers that "quite a few people in this town, especially Arabs, do not love [Har Yona Gimel]. But the facts speak for themselves and most of the population, including secular residents, know that a Haredi population is preferable, compared to the Arab public."

Afula, which has in the past two years witnessed a real-estate boom, has also turned into a favored destination for Haredi groups. Recently, Afula's municipality announced that a 400-unit Haredi neighborhood is planned for the town's Upper Afula quarter. Yet after this announcement, Haredi leaders complained that prices for planned housing units were skyrocketing; as a result, Haredi groups decided to buy existing apartments at affordable prices. Yesterday the Behedrey Haredim website announced that 20 Hasidic families have moved into the Givat Hamoreh quarter in Afula.

Afula is considered another city which could provide cheap housing alternatives for the ultra-Orthodox, compared to the center of the country and Jerusalem. The Behedrey Haredim site relayed that during a visit last week to Afula, deputy housing and construction minister Menachem Eliezer Moses (United Torah Judaism ) declared that he "sees Afula as having great potential for the [Haredi] community, which yearns for housing opportunities in the country."