Meet the New Construction Baron Pouring Millions Into West Bank Settlements

Zeev Epshtein made his fortune in Russia after the USSR fell, but a few years ago he shifted to ideological investments in the West Bank

Zeev Epshtein, photographed walking on a street in Jerusalem, November 2017.
Emil Salman

“The next Supreme Court president will live here,” claim the social media ads showing a young, religious woman looking out over a neighborhood of single-family homes set in a pastoral mountain landscape. The ads are for the settlement of Leshem, which has become a big hit among the religious-Zionist bourgeoisie. The prices in Leshem have risen accordingly.

In 2012, for example, it was possible to buy a new home at the planning stage for about 1 million shekels ($284,000), or even a little less. Today, the price for a used home in Leshem can reach 2 million shekels, or 1.5 million for a house whose construction has yet to start.

One of the entrepreneurs making money off this vertiginous price hike is Zeev (Vladimir) Epshtein, who bought the rights to 700 units in Leshem in 2007 for 6 million shekels from businessman Hillel Merari, who in 1999 had planned to build a neighborhood for Chabad Hasidim. But the second intifada started soon after and the 20 homes whose construction had already begun remained shells, and were ultimately used for training IDF infantry units.

Epshtein, along with two partners, bought the housing rights and in 2011 – after the government’s settlement construction freeze ended – a massive project commenced. Today, the project spreads over 2 to 3 kilometers (1.2 to 1.8 miles) in the northern West Bank area between Ariel and the Green Line (Israel’s pre-1967 border). So far, Epshtein has sold some 500 housing units and is now busy selling the rest.

Over the past few years, Epshtein has become the West Bank’s new real estate baron, with rights to build 2,500 to 3,000 units in 10 different settlements.

“At the moment I may be the largest private developer in Judea and Samaria,” he said in a recent Tel Aviv District Court session, on a matter related to a separate West Bank construction project of his in the ultra-Orthodox city of Immanuel.

Epshtein, 41 in December, was born in Moscow and immigrated to Israel in 1990 along with his mother. His father, a businessman, remained in Russia, where he still lives. Epshtein took his mother’s last name when his parents divorced. They lived in Tel Aviv and, near the end of high school, Epshtein became religious. He started studying in a yeshiva and decided to postpone his army service in order to continue his studies. At 23, he was drafted into the IDF Armored Corps, and at the same time completed his bachelor’s degree in Middle Eastern History at the Open University.

After finishing his military service, Epshtein returned to Russia and, using family money, began investing in real estate developments in rural areas outside of Moscow. He exploited the reforms of the 1990s after the collapse of communism, when land rights for residential or industrial development were parceled out to workers of the kolkhoz collective farms.

His main endeavor was to register such terrain in the Russian land registry and obtain legal permits to rezone the agricultural land for housing or industry.

Epshtein learned the business quickly and prospered. In 2007, he decided to invest part of the large amount of money he had made in Israel – not for financial motives but for ideological ones, to support the settlement movement and the political right. In 2009, he returned to Israel and moved to Jerusalem.

Leshem, in the northern West Bank. Zeev Epshtein has sold some 500 homes in the neighborhood, which now stretches over 2 to 3 kilometers.
Michael Jacobson

Today, Epshtein’s 10 West Bank projects include homes in Neria (Talmon Ilit), Mevo Dotan, Avnei Hefetz, Immanuel, Kfar Eldad and Na’ama. His projects are mostly expansions of existing communities.

Investing in a door factory

Epshtein has invested some 20 million to 30 million shekels to buy land in Immanuel in recent years, but at this stage massive construction there has yet to begin. In Avnei Hefetz, he has the rights for 900 housing units in a new neighborhood. He is now selling 128 units there and has invested 1.5 million shekels in marketing the project.

He insists on investing in places that are considered financially risky for political and security reasons. In Leshem, for example, he encountered problems because part of the access road to the settlement was built on privately owned Palestinian land (with a petition filed to the High Court of Justice on the matter).

Later on, he submitted a new construction plan in which the entire community is built on state-owned land. But he was still forced to deal with lawsuits from a number of Israelis who built their homes at the edge of the community and claim that because of his company’s negligence, part of their plots are built on private, Palestinian-owned land.

Epshtein says the Israeli government and World Zionist Organization’s Settlement Division are responsible for the mistake, and the cases are still being heard in court.

Now, after his success in the real estate market, Epshtein is looking to invest in other business spheres in the West Bank. A few months ago, he submitted a request to the Economy and Industry Ministry for land to build a door factory in Ariel’s industrial zone, along with a Russian company that makes doors. The idea is to use the plants to supply the doors for his housing projects, as well as for other developers. He plans to invest some 40 million shekels in the factory.

He is also a partner in an organization named Lev Haolam, founded by Nati Rom, a lawyer and well-known activist in the settler movement. Lev Haolam is trying to fight the boycott, divestment and sanctions movement against the settlements, including by selling products from small companies in the West Bank.

Epshtein, who was excited by the idea, is a 35% partner in the organization and helps to facilitate business between small companies in the West Bank and evangelical Christians in the United States who buy their products, mostly agricultural ones.

He is extremely well known in the settlements and is well connected among the settler movement’s key figures. “The settlers think of him as a sort of magician,” said someone who once worked with him. “A young man, a Russian, who one day, something just went off in his head and he invested in Judea and Samaria – even though no one regards the place as profitable. In a way, he threw his money away, but what’s so amazing is that somehow he manages to make money out of it.”

A banner detailing the contractors working on a property being built in the settlement of Leshem in 2012.
Moti Milrod

A religious Zionist, Epshtein wears a knitted skullcap and sports stylish glasses. He looks every bit the young yuppie. He rents a huge garden apartment in the Rehavia neighborhood of Jerusalem; loves to drive big and luxurious jeeps, and also owns a Yamaha motorcycle.

“It’s impossible to catalog him,” says someone who previously worked with Epshtein. “He has this Haredi religious thing. On the other hand, he likes the good life of new cars and luxurious homes, and he also has Russian oligarch friends he likes to hang out with at all sorts of events.”

His first deal when he moved back to Israel was Leshem, which he went into with two oligarch friends – Mikhail Birg, who recently moved out of Tel Aviv; and Gregory Granovsky, who made aliyah in 2013 and lives in a magnificent home in the Nof Yam neighborhood of Herzliya Pituah.

Another oligarch, Yaakov Gitritz, is the partner of Epshtein’s mother, Larissa, and Gitritz is also an investor in Epshtein’s businesses in Russia.

Epshtein’s name has also been linked with the late Motti Zisser – but not in a flattering way. In June 2015, only a week after a request was filed in court to declare Zisser bankrupt, Epshtein bought the Kochav Hashomron property development company from him.

Zisser had founded the company in the 1980s to build Immanuel, but over the years ran into trouble and never managed to realize his building rights in the city. The special manager in charge of Zisser’s assets in the late tycoon’s bankruptcy proceedings claims the sale of the company may have been in effect a smuggling of assets to Epshtein, calling him a straw man for Zisser. Epshtein denies all allegations, saying it was a regular business transaction.

It seems Epshtein will be kept busy completing his projects in Avnei Hefetz and Immanuel for the coming years. But in the longer term, assuming large-scale construction projects are not approved in the West Bank, he will have to decide whether to continue with these businesses. He will have to decide whether to go into real estate development within Israel proper, too.

“If it weren’t for the political, ideological question, he wouldn’t invest here at all,” said an associate of Epshtein’s, who spoke on condition of anonymity. “But now he knows how things work and knows how to work. If you examine the places he operates in the territories – Immanuel or even Leshem – these are places people gave up on. And he actually decided to go for it because of the challenge of developing the locations.

“Who knows what will happen in the coming years,” the associate added. “If the real estate bubble bursts – and this is not an unreasonable scenario – Epshtein is exactly the type of person who will start buying cheaply, so in the long run he will have a lot of properties he can profit from. At the moment, all options are open to him.”