Haifa seen from the sea. Should have been the biggest winner from the national housing shortage on paper. Ilya Melnikov

This City Wanted to Be Israel's Berlin. So What Went Wrong?

Haifa had everything needed to become a success story: A beautiful scenery, a major university, flourishing high-tech industries and cheaper housing than Tel Aviv



The banana groves along the Mediterranean coast tell me I’ve come home – along with the fish ponds of Kibbutz Ma’agan Michael and the mountain that stays green all year long. Another 15 minutes and I’ll be in Haifa, the city I left when I was 21. I only return for short visits.

The nostalgia hits me, but the numbers prove I’m just another statistic. Every year, about 2,000 people on average leave Haifa, making it a city suffering one of the worst population losses in the country. But this average can be deceptive; in 2016, some 26,000 people moved to Haifa and 35,000 left – a loss of 9,400 residents.

Rami Shllush

The consistent population loss has lots of explanations: a dull and gray aging port city whose topography – a mountain in the middle – has made it fail. Then there’s the competition with Tel Aviv, not to mention the city’s provincialism – “a city with the mentality of a small town.”

The eulogies flow in, even though Haifa would seem to have everything it needs: the juxtaposition of a mountain range, forests and a beautiful coastline; a city with a major university and the Technion technology institute; and the Matam high-tech industrial park. The city is also a natural magnet for tourism – plus jobs; Haifa is a port city with traditional sources of commerce and industry.

On paper, Haifa should have been the biggest winner from the national housing shortage and an answer for many young people from all over Israel. It’s cheaper than Tel Aviv and provides a refuge from the overcrowding of the Tel Aviv metropolitan area. Plus it’s a big city with public transportation on Saturdays, high-quality schools and a diverse population that includes secular people, a large Arab community and ultra-Orthodox Jews.

Eyal Toueg

In 2018, the average price for a new four-room apartment in Haifa was 1.6 million shekels ($460,000) – about a 1 million shekels less than a similar apartment in Tel Aviv, according to the website of Madlan real estate.

And yet Haifa’s story over the past decade is pretty sad. Between 2008 and 2018, the population grew by only 7.3 percent, compared with 27.5 percent for Ashkelon, 20.6 percent for Netanya and 22 percent for Petah Tikva. Even in Tel Aviv, where housing prices have hit record highs throughout the decade, the population increased 12.2 percent.

Bauhaus but brutal emigration

The numbers are sad, but there’s still some excitement. A year has passed since Einat Kalisch-Rotem, an urban planner by profession, trounced long-time Mayor Yona Yahav. During and after her campaign, Kalisch-Rotem promised that Haifa would be the Bauhaus capital, a center for international flights to Europe, an inexpensive and lively city that would attract young people and beat the brutal emigration figures. In fact, Haifa would be the Israeli Berlin.

As I drive past the neighborhoods along the sea, the comparison to Berlin echoes in my mind as the car climbs up the long and winding road to the Carmel Center neighborhood at the top of Mount Carmel. It’s 10:30 A.M. but for a whole kilometer there’s no sign of a pedestrian. On foot or on a bicycle you better be a real athlete.

Ilya Melnikov

In a few minutes I’ll reach Carmel Center, a convenient, flat stopping point with a mix of housing, shopping, cafes and restaurants. Carmel Center, where the Carmelit underground funicular railway has its last and highest stop, offers a raft of urban attractions: the Tikotin Museum of Japanese Art, the Haifa Educational Zoo, a center for concerts at the Gan Ha’em public park, the Haifa Cinematheque, the Dan Panorama and Holiday Inn hotels, and an impressive lookout over the Haifa Bay region. Meanwhile, dozens of businesses enjoy the renovation of the urban space of recent years.

But in some places, despite the sidewalks that have been widened for the better, “for rent” signs advertise empty stores. And the street traffic is very sparse, punctuated by a lack of young people. At the Panorama Center boutique mall, the average age in the main café approaches 80.

Figures from the Central Bureau of Statistics show that this is no accident. In 2019, Haifa had the second largest number of people over 75 in the country – after Bat Yam just south of Tel Aviv. But Haifa is well on its way to passing Bat Yam.

“Carmel Center is dead. I’m sorry to say, but I’ve had an office here for 30 years and the renovations the city did a few years ago only made it worse,” says Dror Aloni, the owner of the neighborhood’s branch of the Anglo Saxon real estate agency.

“Those who were supposed to be affected by the renovations were mostly the businesses operating on street level, but the city widened the sidewalks and didn’t take care of anything else. There’s nowhere to park, no drainage, no maintenance or cleaning, and one car stopping on the side of the road is enough to create a traffic jam for the entire area,” he adds.

Libi Kastel

“The city’s center of gravity has moved to the malls and the Lower City [by the port] with the encouragement of city hall, and here businesses are closing. The McDonald’s franchise closed, Domino’s Pizza closed [for sanitation reasons], and there are a lot of empty stores. True, other businesses are operating here, but there’s no action; people prefer to go to the mall, also because of a lack of parking.”

The stores are having a really hard time, Aloni adds.

The Carmel area is dying off also because of the city’s policies toward developers, Aloni says. “In Haifa there are a lot of retired people who have lawyers and money, and they simply don’t want changes,” he says.

“This atmosphere makes it very hard for developers in the city, and I’m not embarrassed to say that the current city hall doesn’t make it easy for developers at all. It’s hard to believe how much internal politics, how much bureaucracy they pile on developers. Many of them have abandoned Haifa and prefer to build elsewhere. In general, the feeling is the door to city hall is closed.”

It’s hard to find Israeli developers and contractors who will criticize mayors publicly, but the vice president of the Israel Builders Association, Haim Feiglin, is happy to lambaste city hall.

Rami Shllush

“Unfortunately, the current mayor chose to act completely without any contact with the builders association in the Haifa district,” he says. “Throughout the 80 years of its existence, the association had a relationship with the Haifa municipality, city engineers and professional staff, but today this relationship simply doesn’t exist.”

The developers’ and contractors’ frustration from the lack of new construction is understandable, but it’s hard to blame Haifa’s woes on someone who took office a year ago. For 15 years Yona Yahav was mayor, and his predecessors too never managed to fix mistakes from the past – the most important being the failure to remove the polluting industries from the Haifa Bay area or find a solution for the train tracks that cut the city off from the sea. Here and there you can find interesting construction projects – but there’s a lack of connection between them.

No new homes and high property tax

The dreams about Berlin – a lively and modern European capital that doesn’t suffer from hilly topography and its parts cut off from one another – are becoming more and more distant. In its place, the realization that the city needs an urgent revamp is gaining ground, amid a dire need for young people.

Eyal Toueg

So why, despite all its beauty and advantages, does Haifa consistently lose the battle for the hearts and minds of young couples? And where are they all going when they leave?

To say people are leaving Haifa for Tel Aviv isn’t quite true, because Tel Aviv isn’t Haifa’s problem, it’s a national one, says Eido Minkovsky, the owner of a PR firm named after him. Minkovsky, a former spokesman for Yahav, grew up in the city’s Krayot northern suburbs. He says people are leaving Haifa not just to central Israel but mostly to communities near Haifa.

Rani Bender, the head of the Change in Haifa nonprofit group, says young people think first about making a living. “The main problem is employment,” he says. “The employment zones in Haifa have hardly grown in 20 years, so young people are leaving.”

According to the organization, every year some 1,500 businesses in the city move to nearby towns such as Tirat Hacarmel, Nesher and Yokne’am. With city hall, the group is trying to help.

“Haifa is deteriorating according to every parameter, and unfortunately there’s no strategic planning that provides a vision and work plan for another 20 or 30 years,” Bender says. “We support extending the airport runway to allow flights from here to Europe, and we think we have to strengthen [the Hadar neighborhood in the city center] with a museum campus that will revive it with tourism.”

A shortage of new apartments and prices that can’t compete with nearby communities join Haifa’s high property taxes compared to other cities. In this metric, Haifa is perennially the third most expensive city, and this year the city council approved a 2.6-percent rise.

Eyal Toueg

The king of Carmel nightlife lives in Tel Aviv

In the battle for young people’s hearts, Haifa City Hall has promoted steps in the Lower City and produced a bevy of cafes, bars and restaurants. But even this success story has its own dark lining: Business owners in the Lower City have harshly criticized the city’s stance on opening hours.

A number of Haifa businesspeople told Haaretz that new initiatives in the Lower City are part of a zero-sum game in town, with the flowering of the Lower City at the expense of areas that have emptied out, says Yoni Lam, 36, who grew up in the Neveh Sha’anan neighborhood and owns three bars and a club in Carmel Center. When he began 11 years ago, Thursday nights were packed with customers, but the numbers have fallen drastically.

There simply aren’t enough people out on the town in Haifa to parcel out the city’s entertainment centers, Lam says. He’s almost the last person left in the nightlife scene in Carmel Center, but he says he doesn’t plan to move his businesses anywhere. Still, Lam himself has left Haifa, where he grew up; a few years ago he moved to Tel Aviv. “It’s hard living for so many years in the same place,” he says.

According to an old Haifa joke, the best place in Haifa is the road to Tel Aviv, but on my way out I cheer myself up by stopping at the German Colony neighborhood near the port. Ben-Gurion Street, which largely deserves its title as the most photographed street in the city, has a perfect symmetry with the stairs of the Bahai Gardens above it.

Younger and older people, Jews and Arabs, fill the cafes and restaurants along the street, tourists leave their hotel in a gorgeous Templer building, and a gray cargo ship is in the background in the port. It reminds me that Haifa still has its charm – the kind that Berlin will never have.

Rami Shllush

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