Bnei Brak: The Poorest City You Can't Afford

With little room to build and high birth rates, Bnei Brak has one of the most overheated housing markets in Israel

Shlomit Tzur
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Shlomit Tzur

Bnei Brak may be the poorest city in the Tel Aviv metropolitan area, but its housing prices are among the highest in Israel. Young newlyweds from the city are increasingly being priced out of the local market and forced to look to farther afield when the time comes to buy a home.

Most of these young couples head to Elad or to Modi'in Ilit, with a smaller number choosing to live in Beit Shemesh, said Shmuel Deutsch, manager of the Bnei Brak branch of the Bank of Jerusalem.

Bnei BrakCredit: Haaretz

With little new construction and few empty building lots in Bnei Brak, demand outstrips supply, he explained. First-time home buyers who insist on remaining within the city generally choose the outlying neighborhoods of Kiryat Herzog and Pardes Katz.

Those who buy apartments in the center of Bnei Brak are generally families who already own a home in the city and are trading up for larger or better accommodations, Deutsch said.

A four-room apartment in an old building in Bnei Brak goes for at least NIS 1.2 million, Deutsch said. The asking price on a new, four-room, 126-square meter apartment in the vicinity of Rabbi Schach Street, the most popular and centrally located street in the city, is NIS 2.5 million.

One of the few new residential projects in Bnei Brak is the recently completed Merom Shir, located on Yehuda Hanasi Street and built by the Landau construction group.

It consists of a number of seven-story buildings with a total of 150 units of between three and six rooms each. The builders paid developer Israel Adler NIS 70 million for the 6.5-dunam (1.5-acre ) former orchard, which was rezoned for residential purposes.

When sales first began, a five-room apartment in Merom Shir cost between NIS 1.3 million and NIS 1.4 million, according to Yaki Reisner, a vice president at the Landau group. Now it's worth NIS 1.7 million-NIS 1.8 million, Reisner said.

The prices are similar to those in the Em Hamoshavot development in Petah Tikva, but while the latter benefits from new infrastructure development, the few new projects being built in Bnei Brak are crowded into the existing, outdated infrastructure, due to the shortage of land.

Bnei Brak Mayor Yaakov Asher notes that there are a number of other residential projects in various stages of planning or construction. These include Ganei Tal, 150 apartments in six buildings, four of which are completed.

A building permit is expected to be issued shortly for a 220-unit housing complex on Hashomer Street, part of the former Osem factory parcel. Then there's the 340 new homes planned for the Vizhnitz neighborhood. Even if all the plans are realized, however, we're talking about 1,000 new units in total.

Asher says there's no real solution for the housing crunch in his city, and that it is already at full capacity. "We have 165,000 residents on 7,000 dunams (about 1,750 acres ), while our neighbor, Ramat Gan has 150,000 residents living on 14,000 dunams."

The reason for the high housing demand in his city, the mayor says, is that members of the ultra-Orthodox community, who make up a majority of Bnei Brak residents, tend to marry, begin having children and to buy apartments at a younger age than in other communities.

This is compounded by the high birthrate in the community and by laws mandating a maximum of seven stories in apartment buildings in the city.

"Bnei Brak is meant for wealthier people," admits Asher, who says there will be "a serious problem" if more new cities like Elad and Modi'in Ilit are not built, if the freeze on construction in the West Bank settlements continues and if the government continues not to function. "Bnei Brak, which is 85 years old, was and will remain the capital of the Haredi community," Asher said. He said that the only thing that will bring down housing prices in Bnei Brak is the expansion of Modi'in Ilit and Elad, the absorption of Haredim by the communities of Katzir-Harish, near Hadera, and new construction in Betar Ilit.

Elevators decrease property values

For years the maximum height for construction in Bnei Brak was four stories. Gradually that was increased to its present seven-story limit. One peculiarity of the housing market in the city is that it's the only place in Israel where even in an elevator building the price of an apartment drops the higher you go.

Some new buildings have Shabbat elevators - elevators designed so that observant Jews can use theme even on the Sabbath - but residents don't use them because of religious rulings prohibiting their use.

That means that most people effectively live in a walk-up apartment on the Sabbath and holidays.

Apartment buildings in Bnei Brak usually feature small apartments on the upper floors, for young married couples who are able to climb stairs on Shabbat. The lower floors have the larger, family-size apartments.

In Merom Shir, apartment prices drop by NIS 25,000-NIS 30,000 for every additional floor. The prospectus for the project, published a few years ago, illustrates differences between selling in the Haredi and the general housing markets.

Developers selling to the general public might emphasize the development's proximity to the sea, shopping malls or parks, but these have no value to the Haredi public.

Merom Shir's builders instead indicated the development's proximity to the homes of important rabbis, yeshivas and synagogues.

The project includes 5,000 square meters for commercial use on the ground floor. This is a sensitive issue: The stores and businesses must be chosen carefully to prevent possible demonstrations and even a boycott of the entire project.

Reisner notes that the commercial space drew opposition because it was covered and thus similar to a shopping mall. "In Bnei Brak there's no mall because the mall culture contradicts the Haredi lifestyle.

That's why we promised only to lease very large areas, and that there wouldn't be many stores, and in the past year we rented out most of the space," Reisner said.

The occupants include a 1,000-square meter branch of the Meuhedet Health Fund, a 400-square meter branch of the NewPharm drugstore chain and the city's first branch of the Shilav chain of children's stores.

At first the Bnei Brak Shilav store seems like all the other branches. But upon closer inspection, you find that copies of the company's catalogue aren't stacked next to the cash registers as in other branches, and on the copy retrieved from a storeroom by a salesperson any bare arms and legs on the catalogue models are covered over with stickers, for modesty.

The stickers come out again in NewPharm, where the faces of the women on the boxes of hair dye are concealed by black stickers.

The residents' parking lot is located underneath the shopping center.

On a recent weekday evening, most of the 150 or so spaces set aside for tenants were empty, and a number were being used for storage. It's hard to imagine that happening in Tel Aviv, where car ownership is much higher.

Expansion everywhere

For someone arriving from outside the city, what catches your eye most are the many brown protrusions sticking out from the outer walls of the buildings. After a few guesses the mystery was solved: These are sukkot that constitute an inseparable part of the apartments. On the Sukkot holiday the roof of the sukkah can be opened to the sky.

The sukkot booths are built carefully, so that none blocks the view of the sky for the one below it, rendering it unkosher. In Merom Shir, the sukkot are part of the project's design. In old buildings, on the other hand, quarrels between neighbors are a common result of changes made by one family to expand their apartment that ends up blocking the sky view of their downstairs neighbor's sukkah.

As far as investment is concerned, Asher believes that the solution lies in the north of the city. "Bnei Brak has always suffered from financial deficits, but now we're building the City complex on Ben Gurion Street, adjacent to the Besser Towers.

This includes almost 800,000 square meters of office buildings, and the property tax generated by the complex will do for Bnei Brak what the Diamond Exchange did for Ramat Gan."

Deutsch says that the real estate market in the Haredi sector includes purchasing groups organized by a Haredi non-profit organization that has sold many apartments in recent years. One of the group's projects, now under construction, is a complex of 170 apartments in Modi'in Ilit, some of whose buyers are from Bnei Brak and Jerusalem. It was the last project built in Modi'in Ilit before the building freeze. Apartments cost NIS 500,000. Another large purchasing group is being organized to build 1,600 apartments on Moshav Ahisamach, near Lod, where a three-room apartment is expected to cost NIS 500,000.

Deutsch notes that both families usually help young couples with the downpayment on a home, to the tune of 30%-40%. There are also various Haredi charities that offer no-interest loans. The families also help with the mortgage payments, typically, in the beginning.

While a couple belonging to a specific Hasidic "court" is willing to pay a premium for a home that is close to their rabbi, the bank's appraiser does not take the proximity to a particular rabbi into account when evaluating the property. That can lead to a gap between the assessor's evaluation and the actual price of the apartment, Deutsch said.

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