Landlords Rule the Roost in Tel Aviv, but Will Rent Control Change Anything?

Tales of the city, like this one: 'I paid $650 for a tiny basement flat with no light.'

Eyal Toueg

For Israel’s tenants, the news this week that Finance Minister Moshe Kahlon is considering proposals first raised by MK Stav Shaffir (Zionist Union) and former Finance Minister Yair Lapid for controls on rent promises to level the playing field with landlords.

In fact, details of the Kahlon plan remain murky and may not even exist yet. But sources say it will likely involve requiring that contracts freeze rent for the first two to five years of a lease, spelling out by law what a landlord is obligated to do with regard to the tenant, including division of responsibility for repairs, and fixed criteria for what constitutes an appropriate apartment.

Landlords will get rights, too – including rules for when they can evict an obstreperous tenant. In spite of that, however, critics say rent controls hurt property rights and constitute improper interference by the government in the economy.

Meanwhile, Eitan Cabel (Zionist Union) proposed a law this week that would set commission fees for real estate agents helping people find apartments to a ceiling of 3,500 shekels ($904). The fee will be shared equally by the tenants and landlord, under the law.

The high cost of housing in Israel has focused on prices for people buying homes, but renters are suffering, too, notes Ron Melamed, deputy director of Yedid, a nonprofit that operates a network of citizens rights centers.

“The housing crisis isn’t only about buying and selling a house. First and foremost, it’s about the cost of living, and a major element of that is the cost of housing on the family budget,” he says.

Until now, there have been no rules governing relations between landlord and tenant, except what is written in the lease contract between them. That leaves tenants vulnerable to a host of problems, not least the landlord’s ability to raise rent from year to year as he or she chooses.

Since moving apartments costs time and money and may not be cheaper, tenants typically swallow rent hikes.

Ehud Mizrahi, an undergraduate in the business administration program at Ben-Gurion University of the Negev, has changed apartments four times in the four years he has been living in Be’er Sheva. He gave up his last apartment to move in with a friend.

“Since then it’s been a disaster,” he recounts. “During the winter we had a problem with the water solar heater and we had to leave it on for two hours at a time to heat water. The landlord took two months to fix it, which meant we were paying extra power costs for two months,” he recalls.

Mizrahi is now a member of the Student Tenant Committee at Ben-Gurion, which began as a Facebook group.

Mizrahi’s lease says that repairs will be made in a “reasonable” amount of time. If not, the tenant can hire someone to do it himself and take the cost off the rent.

“But nowhere is it stated what a reasonable amount of time is. If I decide after a week to hire a repairman for 400 shekels and deduct it from the rent, the landlord at the end of the year can take it out of the deposit or find problems and charge us for them, or just raise the rent the next year,” says Mizrahi.

“If I want to get into a battle with him, he can harass in other ways later. If there were a law that determined how long he has to fix a solar heater, none of this would happen,” he says.

Shir Cohen, a 25-year-old student, has switched apartments almost as many times as Mizrahi – three in four years in Tel Aviv and the suburb of Givatayim. These days she is living in Tel Aviv’s Florentin neighborhood.

Before that, she had a microscopic two-room basement apartment of 13 square meters (140 square feet), which included a tiny kitchen and a single window facing another apartment across a courtyard.

“I was under pressure to rent something before the start of the term, so I took it,” she says. “But after three months I realized it was impossible to live in an apartment like this. There’s no air, no light – and I was paying 2,500 shekels a month.”

From there, she moved into an apartment with her boyfriend – 34 square meters, at a cost of 3,700 shekels a month. At the end of the year, the landlord raised the rent by 300 shekels. “It’s crazy, but we had to eat it because it was exam period and we couldn’t stop everything to look for another apartment. She could’ve raised the rent 500 shekels,” Cohen says. “I’m sure she’s going to raise it again. It’ll never stop.”

Lihi Goralnik, a 34-year-old public relations executive, had been renting her Tel Aviv apartment for five years and dealt with a management company rather than the landlord directly. When it came time to renew the contract again, however, the negotiations got deadlocked.

“The management company announced I had to leave the apartment in two weeks. The company’s owner said he was evicting me because ‘we don’t get along.” He ended up giving me an extra two weeks – but for an extra payment, of course,” Goralnik says.

The management company took two months to repay the balance of the rent for the time after she left the apartment. She has yet to get back their deposit check.

With reporting by Zvi Zrahiya