Chutzpah or Economics?

So, what’s really behind the largest street protest in Israeli history? Palestinian human rights? Way too divisive. Cottage cheese prices? Now that’s something I will fight for. Doesn’t anyone else see the satire in this (not so) poor man’s Arab Spring (aka Jewish Summer)?

While their neighbors in Syria are protesting for the most basic human rights, Israelis are protesting in the streets because they claim rent prices are too high. And, while protesting in the Arab world can lead to death, the worst-case scenario in Israel is a nasty combination of falafel-and-beer breath. The tent cities feel less like Tahrir Square and more like Burning Man.

I doubt this protest would have happened in January, because leaving the house in winter is, well, not as much fun. Why not turn off the air conditioning on a steamy Saturday night, get some fresh air, and take a stroll while complaining about real-estate prices?

So, what’s really behind the largest street protest in Israeli history?

Palestinian human rights? Way too divisive. Cottage cheese prices? Now that’s something I will fight for. Doesn’t anyone else see the satire in this (not so) poor man’s Arab Spring (aka Jewish Summer)?

Don’t get me wrong: I know firsthand what a major rip-off Tel Aviv has become in recent years. As a freelance journalist based there for the past eight years, I saw rent prices balloon. When I first arrived, in 2003, I paid $1,200 for a 1,20-square-meter apartment one block from Tel Aviv’s famous Metzitzim Beach. But when the dollar took a nosedive, landlords began collecting rent in shekels, and prices went up.

When I was forced out of that apartment, I decided to try my luck in Palestinian East Jerusalem. I paid one-third of the price, shopped in cheaper markets, and saved a lot of money. I ended up leaving because I was fed up with the lack of municipal services on the Arab side of town. My trash was never collected. The streets were filthy. But I never saw any major protests against that.

So I moved back to Tel Aviv, where last year I paid NIS 5,600 a month for a 90-square-meter apartment. This summer, amid the protests, the landlord raised the rent by NIS 500. I have since moved back to the United States, and am apartment hunting in the mother of all real-estate rip-offs, New York City.

Is this a case of landlord chutzpah or just free-market economics?

I’m afraid it’s the latter. Landlords are raising the prices in Tel Aviv because people really want to live there. With good reason, too: Tel Aviv is one of the most vibrant and beautiful cities in the world. Putting a decent apartment on the market there is like throwing chum in shark-infested waters. Landlords get to just sit back and watch it get devoured.

But the high cost of living in Tel Aviv is the exception, not the rule. Apartment prices and just about everything else are cheaper in other parts of the country. Israelis don’t need to move to Israel’s rocket-prone periphery to save money. They should simply venture to less exclusive municipalities like Or Yehuda or Be’er Yaakov, just 20 minutes by bus from Tel Aviv, where they’ll find that prices drop off drastically. Even larger cities like Jerusalem and Haifa are comparatively quite affordable.

Spaniards were perfectly sane to flood the plazas of Madrid to protest 21-percent unemployment a few months back. But Israel boasts one of the healthiest and fastest-growing economies in the world. Unemployment is at an all-time low, a record 5.7 percent. The economy is projected to grow another 5 percent this year. If businesses are doing well, shouldn’t these protests be directed at stingy bosses instead of a government enabling economic growth?

A common, valid complaint in Israel is that the prices of appliances, fuel and cell phones are higher than in the rest of the world. With a population of just seven million, Israel is a relatively small market so vendors need higher margins to compensate for lower sales volumes. Due to economies of scale, there is no question that the cost of living is greater in Israel than in the United States.

However, examining consumer products, appliances, footwear, housing, vehicles, education and health care, Haaretz’s financial newspaper, TheMarker, recently found the cost of living in Israel to be on par with European countries like France, and considerably cheaper than Australia. One product they found to be cheaper in Israel than anywhere else: tomatoes. I had to leave the country to finally understand the obsession with Israeli salad.

According to the Israeli Central Bureau of Statistics, the net average monthly income per household in 2009 was NIS 11,354. On average, roughly one-quarter of that was spent on housing (an average of NIS 3,200, according to the same source). Assuming you are happy with government-subsidized health care and education, that leaves a decent chunk for food, transport, insurance, communications, etc. That is acceptable by Western standards. In the Middle East, it makes you rich.

I wonder what the first kibbutzniks, who were among the founders of modern Israel, would have to say about this. I imagine many of their grandchildren are leading the protests now. The kibbutz was the communist experiment that helped establish the state by settling inhospitable, remote areas. The kibbutzniks were idealistic dreamers, but when their dream was realized, it was abandoned by their children and grandchildren, who preferred city life. Now there is a small, but interesting reverse trend happening, with some Generation Xers returning to the kibbutz. They are getting great deals on bucolic plots of land there. They commute to work or create their own tech start-ups to make ends meet.

Just because life in Israel’s most expensive city, like life in Moscow, Tokyo and New York, has become more expensive, it does not mean the system is broken. The peace process is another story.

Jaron Gilinsky is a foreign correspondent and filmmaker who can’t afford to live in Tel Aviv or New York. He can be followed on Twitter at @jaronreport.