Haifa’s Lower City Is Becoming a Tel Aviv Yuppie Outpost

Developers are set on turning an area once the haunt of sailors and prostitutes into the Florentin of the north.

There is a sentence in one form or another that can be heard from just about everyone involved in real estate in Haifa's Lower City. It goes something like, "When I see girls starting to walk around with their dogs, I know that we’ve succeeded." Developers, real estate agents and municipality officials are all excited about the gradual transformation of Haifa's Lower City from an area that for decades was the dubious center of the city's nightlife replete with sailors, prostitutes and criminals to a part of town that’s beginning to take on a more middle-class air.

Most Haifa residents don’t know what is happening right under their noses. Because of the bad reputation the area has accrued, they stay away and haven’t witnessed to the gentrification underway.

The area undergoing a renaissance is located between the train tracks in the city's northeast and the former Turkish market, the crown jewel of the entire area. In the market district that comprises several packed streets, a branch of Café Puah from Jaffa's flea market recently opened up. Retail businesses from the trendy parts of Jaffa have opened branches in the neighborhood, including the clothing and furniture store Ma'asiya and the designer accessories store Asufa. A group of 21 artists have also set up shop in a municipality-funded initiative called Compound 21, which provides the artists with free workspaces for two years on the city's Jaffa Street and the streets of the Turkish market.

Crossing Ha'atzmaut Road and heading north there is the Port Campus, which includes university buildings and student apartments, as well as some restaurants and pubs that are part of local Haifa lore. For example, there is Anchor Pub (Pub Ha'ogen in Hebrew), which opened its doors in 1942 and is one of the oldest bars in the country.

"It's amazing to see how the area has changed in such a short time frame," says Eran Eldor, a high-tech professional and real estate developer. Eldor owns three buildings in the area, and like most of the area's investors he comes from the center of the country. "In 2009 when I tried to rent apartments, people would call the phone number I advertised mainly to mess around with me," he says. "When I arrived, I hoped the area would be like [the trendy Tel Aviv neighborhood] Florentin, but in my opinion it's becoming something way better." He continues, "Fifty-square-meter, one-bedroom apartments that I couldn't rent for NIS 1,200 [per month], I can now rent for NIS 2,000 [per month]. Studio apartments of 30-35 square meters can easily be rented for NIS 1,500."

For veteran Haifa residents the current gentrification of the neighborhood is about restoring it to its lost glory. The web of streets in the neighborhood surrounding Haifa's Palmer Gate, which separates the city from its principal asset, the port, was the most important business and administrative center in Mandatory Palestine.

Turks got it

To date, Haifa Mayor Yona Yahav has invested NIS 12 million in improving the infrastructure and renovating the Turkish market area. He says that in a couple of months a line of the Metronit, a system of rapid transfer buses that operate in Haifa and its surrounding suburbs, will begin operating, connecting Ha'atzmaut Road to Tirat Hacarmel in the south and the outskirts of Acre in the north. "The story of the Lower City must be told frankly." says Yossi Sionov. "Those who identified its potential were the Turks and the British, but the moment the state was founded, the area became more and more industrial and commercial in character and respectable people preferred to move away from the waterfront and up the mountain [Mount Carmel]." Sionov is one of the owners of a company promoting several projects in the area, like the apartment building called Loft Tower, which is built near the port campus and another residential project with 100 apartments on seven floors on Ha'atzmaut Road with street-level commercial space.

He says his company will start marketing the project after the end of the Jewish High Holiday season this fall with apartments of 50 -square meters valued at NIS 600,000. Actual construction for the project is slated to begin in a year and the expected move-in-date for owners is three years away. "Our audience isn't Haifans but [real estate] investors from Tel Aviv," says Sionov. "Investors that are needed here are ones with vision and daring, like those who at one time went into places like Florentin and Jaffa's Flea Market."

In the same area one can also find some of the construction industry's giants along with small and medium size developers and real estate investors. For example, on Hanamal Street Shikun & Binui plans to build an apartment building with 130 loft apartments, 50 of them for rent for a term of 10 years. In addition the building will have a ground floor for commercial use and three floors of parking. Darban Investments is also active in the area with a project called Soho on Sha'ar Palmer Street. It will restore the historic train station there and transform into a commercial center with restaurants, bars, cafes and designer stores with 6,000 square meters of commercial space.

Target demographic: Students

The target demographic for the residential rental market in the area is students. The majority of rental apartments on offer in the area are studios and one-bedrooms ranging from 25 square meters to 50 square meters in size. Two-bedroom apartments, with 60-65 square meters in floor space, are hard to find and the neighborhood really does not offer anything suitable for couples with children. Even without the arrival of families, the brisk pace at which real estate prices in the area have increased is impressive. Just a year or two ago, buildings which were erected in the 1920s and 1930s and not renovated were selling at prices averaging NIS 1,200 to NIS 1,500 per square meter. Today, they start at NIS 3,000 per square meter. Just a few weeks ago, the building that is home to the club Hurva, well-known among the city's nighttime revelers, was sold for NIS 6.2 million.

About half a year ago, Eli Yifrah, one of the owners of Eli's Pub on Haifa's Jaffa Road, invested in a 60-square meter apartment he bought for NIS 300,000. He put another NIS 70,000 into renovations and repairs. He now rents the apartment for NIS 2,500 per month, enjoying an 8% return on his investment. An apartment similar to the one he bought, Yifrah says, was sold several months ago for NIS 460,000.

Eyal Toueg
Rami Chelouche and Eyal Toueg
Avishag Shaar-Yashuv