A Star Settlement Is Born

In these hard economic times, Elad seems to be the only place that's booming as the ultra-Orthodox are flocking to its green spaces and relatively low house prices.

Given the economic recession and the lack of interest shown by contractors in land tenders for residential housing, the situation in the religious community of Elad is remarkable. Since 1995, the Israel Lands Authority has sold thousands of housing units in Elad and land developers have been keen to bid on nearly every tender in the growing settlement.

Their enthusiasm stems from the relative ease with which it is possible to sell apartments in Elad. Ultra-Orthodox (Haredi) Jews, who view Elad as perhaps the only option when it comes to living in a planned settlement in central Israel at a reasonable price, are gravitating to it. The fact it has been given approval by their rabbis only helps.

Elad is one of the "star settlements" born along the seam line with Judea and Samaria. The plan was masterminded by the man who was housing minister in the early `90s, one Ariel Sharon. Some of the settlements, Kochav Ya'ir and Shoham, for example, are considered success stories, others - like Katzir and Horesh - less so.

Elad was planned for a national-religious and Haredi population and was established by the Housing Ministry. It is situated next to Route 444 about four kilometers south of Rosh Ha'ayin and six kilometers to the north of Shoham. The first residents of the settlement moved there in 1998.

Elad's success, in spite of the recession, should come as no surprise. The purchasers are Haredim who wanted to escape the stifling crowdedness of Bnei Brak and Petah Tikva and national-religious who want to improve their standard of living. Both groups found a developing settlement, with relatively spacious construction and green surroundings. The settlement comprises low-rise, dense apartment buildings, with a small percentage of semi-private townhouses.

The Elad local council administers an area of 2,700 dunams, stretching eastward from Route 444. The Housing Ministry outline calls for no less than 8,000 housing units; by the time construction is complete, three years from now, the population will have reached about 50,000 and Elad will be accorded the status of a city. To date, over 5,500 housing units have been marketed in Elad, most of which were sold even before construction began, or immediately afterward.

The Housing Ministry, which is supervising the development of the settlement, estimates that the first 2,000 housing units are already occupied, another 800 are nearing completion and 2,000 more are at advanced stages of sales and construction.

Mishhab, a construction company that caters largely to the religious sector, is about to complete work on two neighborhoods in Elad, each of which comprises 160-190 housing units. Company CEO Shmuel Birnbaum says most of the people moving to Elad are young couples moving into their first apartment. He says the ratio of Haredim to national-religious is 2:1.

Elad has relatively easy access to the center. The Maccabit road is planned for the area, which, when paved, will connect the settlement to the center, via Bar-Ilan University and Bnei Brak - two areas in which many Elad residents work and study. Birnbaum says the settlement is developing at a rapid clip.

As the population is largely Haredi, most of the men are yeshiva students who do not work. Moreover, since most families have many children, there is abundant demand for education facilities - demand that often exceeds the supply.

`It's all word of mouth'

In spite of Elad's location on the seam line, residents do not receive special Housing Ministry loans or grants. This means mortgages taken by those purchasing apartments in Elad are far from inexpensive. For the Haredi population, the long-term financing covers close to 90 percent of the purchase cost; the national-religious sector suffices with loans that cover up to 75 percent of the value of the asset.

Yet the price of properties in Elad is not especially high. Most apartments are three or four rooms. A three-room apartment in the settlement costs $90,000-110,000; a four-room apartment is $120,000-140,000, substantially lower than the cost of an apartment in Petah Tikva or Bnei Brak.

Sarit Gal, of the Anglo Saxon real estate agency in Shoham, which recently purchased the franchise to market apartments in Elad, says most of the transactions are the result of word of mouth; a young couple moving to Elad, for instance, will draw in its wake its relatives, who may live in Bnei Brak.

Gal believes that those who have a little more money can buy an apartment in one of the two religious neighborhoods in Shoham, where they will find a higher standard of living. However, she reports a reverse trend - religious people who had bought apartments in Shoham and are struggling to make the mortgage payments due to the economic situation are selling up and moving to Elad, which is more affordable. Gal says there is no other alternative in the area for Haredim or religious people seeking quality of life. Hence, the demand for housing in Elad is so high.

Hila Felz, deputy director for marketing at Ashdar, which built 300 housing units in Elad, says there is a small percentage of national-religious residents, and an ever-rising percentage of Haredi residents. "At first, the company marketed apartments to the national-religious. Subsequently, Ashkenazi Haredim began arriving in the settlement. More recently, the buyers are mainly 'Shasniks.'"

Felz says that due to the high birth rate of these population groups, Ashdar, which began to build in Elad in 1997, has already managed to sell two apartments to the same family - young couples who bought small apartments in 1997 and moved into them in mid-'99 are now buying larger apartments.

Ashdar is selling a wide range of apartments in Elad. Three-room apartments measuring 90 meters square are sold at NIS 480,000-500,000; four-room apartments measuring 110 m2 are sold at NIS 557,000; five-rooms apartments measuring about 130 m2 go for NIS 650,000. In addition to marketing 5,500 housing units, the Housing Ministry is assisting in the construction of public institutions, in accordance with the Brodet standard. Thus, Elad residents will soon benefit from five nursery schools, nine synagogues, four ritual baths and a sports hall - at a total investment of NIS 23 million.

In 2002, the Israel Lands Authority sold land for the construction of 500 housing units in Elad's neighborhood A; the land sale for 500 other units is supposed to be finalized soon. The construction firms building in the area report that due to the strong demand for apartments, land prices are rising.

The Housing Ministry reports that continued development will halt once all 8,000 housing units have been sold, as there are no other available land reserves. Ministry officials say they are making arrangements to extend the boundaries of Elad to the east, in an area that currently serves as an IDF firing zone.