Just Deserts: A House in the Middle of a Negev Nowhere

Devoid of industry and lacking employment opportunities, Mitzpeh Ramon is looking to tourism and high tech to boost its real estate market.

David Bachar

What best describes Mitzpeh Ramon? The most disconnected community in Israel? The most remote one?

Lior Nehama from the Mitzpeh Ramon Development Company doesn’t like the term “disconnected,” with all its negative connotations. The term “remote” seems more apt, in his opinion.

“It takes an hour and a quarter to reach the nearest hospital from here, as it does to reach a clothing store. We actually do have a dentist here, a health maintenance organization doctor, but the overall picture is dominated by our distant location,” he says. “In contrast, Eilat enjoys all the basic services that are required for daily life.”

Mitzpeh Ramon is indeed far – 160 kilometers north of Eilat and 80 kilometers southeast of Be’er Sheva – but no more than Kiryat Shmona in the north and Eilat in the south are. Nevertheless, it is more disconnected than these two towns. As a result, the original master plan drawn up by the regional council representing 5,500 residents, envisaging the construction of an industrial park, has failed. It is not economically viable to set up a plant so far from other urban communities – there are real problems in recruiting people to work there.

The town is now undergoing changes that involve turning it into a desert tourist attraction, as well as a high-tech center. The new master plan currently being developed sets a growth target of 15,000 residents, relying on an interlinked plan for housing and employment.

However, visions often clash with reality. Mitzpeh Ramon is characterized by a poor range of apartments, most of which are located in older tenements. Others are in older two-family detached houses. There are also some villas in a neighborhood that had a “build-your-own-home” project.

“Shiki” Bezalel, who owns a real-estate company, says that three-room, 55-square-meter apartments located in the older tenement buildings, which need serious renovations, are valued at up to 300,000 shekels (roughly $75,000). Similar apartments that have been renovated go for 450,000 shekels ($115,000). The villas cost 1.5 million shekels ($385,000), with asking prices for ones that include a swimming pool set at 2 million shekels.

Between these extremes of villas and older tenement apartments are two-family detached houses that were built at least 30 years ago. They include 65-square-meter apartments on quarter-dunam (0.06-acre) plots. Over time, many of these were expanded by building on the roof, with some people purchasing the second half of their building, creating 130-square-meter villas on a half-dunam plot. These larger villas cost between 600 and 700,000 shekels ($150-175,000), and 1 million shekels or more in cases where they have been upgraded.

The market for “build your own home” plots expresses more than anything else the remoteness and disconnection of Mitzpeh from other cities. At the end of 2004, the Israel Lands Administration issued tenders for 80 plots of 400-500 square meters (0.1-0.12 acres), intended for “build your own home” in the southwestern part of the town. The neighborhood was called “The Camel” because of the adjacent 850-meter high Camel Mountain. These plots sold for 70,000-110,000 shekels at that time. Ten years later the neighborhood remains largely empty.

“This is a result of greed,” says Bezalel. “People bought these plots cheaply, hoping and waiting for prices to go up. The ILA did not condition the sale on subsequent construction, so people are still waiting.”

This kind of anomaly can only take place in a static real-estate market, with not enough factors that encourage plot holders to either build or sell. Besides these empty plots, there are hardly any other available plots for construction in Mitzpeh Ramon.

“I’m looking for a plot to build on – I’m willing to pay 300,000 shekels – but there is nothing available. No one is selling,” says Nehama, who works with the head of the local council in areas of construction and agriculture. “The people who purchased these plots did so for their children and grandchildren. They don’t really intend to build anything on them, but the local council has no way of imposing fines on these people. We looked for ways of doing this in the past and even met with Housing Minister Uri Ariel and ILA Director Benzi Lieberman, but to no avail. The attorney general ruled that the owners of these plots cannot be forced to build or resell the land to the state.”

Dozens of plots stand empty. This is not a marginal issue, but one sufficiently large so as to impede the development of the neighborhood and the entire town, which has few locations for housing improvement. Most of these are limited to detached houses and “build-it-yourself” projects.

Almost half the real-estate deals in Mitzpeh Ramon are made by investors.

Mitzpeh Ramon’s low housing prices hold great interest for investors from the center of the country, not only with respect to the empty plots. The town is one of the more active ones in terms of investors, with estimates indicating that almost half of all transactions that take place each year involve investors who have concluded that more traditional investment locations in the south, such as Be’er Sheva, have leveled off in their housing prices.

Most investors who come to Mitzpeh Ramon look for three-room apartments that cost between 380,000 and 450,000 shekels ($97-115,000). These can be rented out for 1,700-2,000 shekels a month, yielding a 5.5%-6% profit. Renters are mostly employees of local hotels, notably Beresheet, the Rimon Inn and Ramon Suites. “Since most of them are temporary laborers they require furnished apartments on a short-term basis” says Bezalel.

Here again is a scenario that typifies a community with a very small real estate market, in which it is impossible to find alternative housing in adjacent communities. “The prices that owners demand are often unrealistic. A three-room apartment that has been refurbished may go for 450,000 shekels. A neighbor sees this and asks for the same price, even when his apartment hasn’t been renovated.”

He says that this often happens in multi-apartment buildings. Buyers aren’t willing to pay an unrealistic price and the owners are in no rush to sell. This often leaves apartments on the market for three or four years.

“Buyers investigate and find that the asking price is unrealistic,” says Bezalel. “Some owners want to test the market from time to time, throwing out a price and waiting. In some cases people came from the Tel Aviv area, saying later that for these prices they wouldn’t have come.”

The most desirable locations in the town are those closest to the Ramon crater. There is a catch here, since very few houses offer a view. Nahal Arod Street is the closest to the crater’s rim, but the crater can only be seen from a small number of houses, and then only from higher floors. The same goes for the parallel street, Nahal Sal’it.

Mountain and desert scenery are also sought after. Camel Mountain, next to the undeveloped “build-your-own-home” neighborhood, offers one of the best views of the crater. A view of the mountain itself raises the value of a house. A regular three-room apartment in the area may sell for 350,000 shekels, but an open view of the mountain can raise the price to as much as 480,000 shekels.

There are currently 500 new housing units in the planning stage. The local council has recently started preparing the ground in the Givat Sapir neighborhood in the town’s center, ahead of the construction of 200 units by several contractors. The new buildings will consist of split-level buildings with 3-4 floors, equipped with elevators – a novelty on the local scene. Nehama hopes that the new buildings with their updated standards will diversify the local market.

“I’d prefer that most of the town consisted of detached houses, but the town’s history compelled a more saturated construction. New construction here will be of high standards,” he said.

The plan calls for the construction of 100 semi-detached “cottages” in the Gvanim neighborhood. In the central neighborhood, 50 dual-family low-cost cottages are planned, with plots of 800 square meters (0.2 acre). Nehama estimates that in this project plots will cost 100-200,000 shekels, compared to the current price of 400,000 shekels for similarly sized plots in the town.

“It hasn’t been decided yet whether to sell to developers or to “build-your own-home” customers. Most likely it will be to the latter. Another plan for 234 units on 800-square-meter plots in the western part of the city will be submitted soon.”

The new plans will substantially diversify the type of apartments built in Mitzpeh Ramon. It will enable residents wishing to improve their housing to purchase better apartments than the ones they currently own, at reasonable prices. They will also partly offset the damage caused by passive investors who do nothing with their empty plots.

“There will be no industry here”

Nevertheless, the root problem of the town is employment, admits Nehama. “We realize we’re far away, but our strength lies in tourism. There is a valid plan for unfreezing six plots for tourism, next to the Beresheet Hotel. This should give great impetus to tourism, not just for hotel employees but in terms of adding attractions.”

Mitzpeh Ramon is pinning many hopes on a new initiative by the McCann Erickson global advertising agency network, called “McCann Valley.” The project’s website states that McCann Valley is a digital advertising agency located in Mitzpeh Ramon. The local office is a branch of McCann Erickson, established in January 2013 as a social and business venture with a commitment to develop the south and the Negev, particularly Mitzpeh Ramon.

“Our conception is that advertising in the digital age is not limited by distance or location,” says Nehama. “That is why we chose one of the prettiest places in Israel, in the middle of an enchanted desert. Our aim is to supply job opportunities in leading occupations to local residents, becoming a magnet that attracts a strong population from the rest of the country.”

There are currently 35 people employed locally by McCann Valley, and Nehama views this as a pilot project for jobs that are usually associated with high tech or the Internet, in which large distances from the center are not a problem.

“There will be no industry here, and the right avenues of development must be found. Anyone looking for cheaper housing, the desert, quiet, education and a unique atmosphere can find it here,” says Nehama.

However, Mitzpeh Ramon cannot contend with the challenges and difficulties it faces on its own – the government should commit to helping in finding solutions and granting benefits to businesses that move there.