Elderly Housing in Israel: No Country for Old Men (Or Old Women)

As Israel’s population ages, demand for specialized housing is growing fast — faster than it is being developed: By one estimate, Israel will need 29,000 more units over the next decade. Space will be tight for those who want it.

Aquatherapy at a Ramat Gan assisted-living facility.
Aquatherapy at a Ramat Gan assisted-living facility. Credit: Tomer Appelbaum

Israel’s population of elderly is growing fast, much faster than the country is building appropriate places to house them.

In 1983, Israelis age 65 or older made up just 8.4% of the population and even as recently as 1995 it was 9.2%. But at the end of 2014, there were 883,000 people in this age group, accounting for 10.7% of the population, according to the Central Bureau of Statistics. This year, the number of senior citizens will reach an estimated 910,000, or about 11% of the population.

By Western standards, Israel is a young country. But in the years ahead, as average life expectancy continues to climb, there will be more and more oldsters. In 2025, the number will hit 1.3 million or 14% of the population, the statistics bureau says. By 2035, they will number 1.6 million, or 16%.

A lot of the elderly will remain in their regular homes, but many will need assisted-living facilities or nursing homes – and unless policies change and a lot more facilities are built, many of Israel’s oldest citizens are going to struggle to find appropriate living quarters.

Today, there are about 28,000 beds at government and private nursing homes and another 2,300 custodial nursing care beds. There are an additional 24,000 apartments in assisted-living facilities. The consulting firm Czamanski, Ben Shahar & Company estimates that the number of units will grow by another 1,500 to 2,000 over the next three years, but that will fall far short of a projected average annual demand for 3,000 units. “There is excess demand in the market that will only grow,” concludes the report .

“Israel is not looking after its growing population of elderly citizens. There isn’t even proper quantitative information on the anticipated national or regional supply. The current supply only partially addresses the present demand,” the report concludes. “That means shortages and further increases in the price of [housing] products and an absence of solutions.”

Margarita Milman, the study’s author, said demand for elderly housing will exceed elderly population growth and that by 2025 the country will need 8,000 to 12,000 assisted-living apartments and another 13,000 to 17,000 beds in nursing homes.

Haphazard planning and building

Not only is supply failing to meet demand, but what is being built is being done haphazardly without any master plan addressing needs or taking into account where the elderly currently live and what they can afford.

“The supply that is being planned is luxury [housing], which will only be relevant for a limited segment of the population living mostly in the center of the country. Outlying areas will remain behind and the disparity will actually grow,” the study says.

“With the rise in life expectancy and the pushing back of the age in which people begin to get their pensions, the target population for assisted living facilities and homes for the aged will be postponed to age 75 and upwards, but they will remain in this housing for longer, which is expected to exacerbate the shortage of apartments,” she says.

The population of Israelis 75 and older has grown at a much faster pace than the 65 to 74 age group and soon the two age groups will be about the same size. In 2014, 55% of the elderly population was a relatively youthful 65 to 74 years old, the most likely candidates for the independence of assisted-living facilities. Since 2000, their number has grown by more than 40%. The older 74-84 age group – the one more likely to need nursing homes – once made up only about a third of the elderly, but their numbers have soared to 52%. Another 13% were over 85.

It’s not only the fact that Israeli life expectancy has risen over the past two decades by four years for both men and women. In addition to that, many of the one million Russians who immigrated to Israel during the 1990s and gave the country a sudden population boost, are now approaching retirement age.

Growing old, with the health problems and diminished strength and stamina that it brings, is difficult enough as it is. Moving to an assisted-living facility or a nursing home is another, often unwelcome change. There are advantages, of course, because upkeep and maintenance, including chores like paying for utilities and municipal tax, is taken care of by the facility. At nursing homes, doctors and nursing care are close at hand and often adult children are close by. But for many of the elderly moving into an old age facility is a traumatic experience. People trade their more spacious homes of many decades and their associated memories for a smaller and unfamiliar environment.

Difficult transition

Among the alternative available to house the elderly, nursing homes often make for the more difficult transition because not only does the newcomer leave their familiar surroundings, they also lose their independence. Nursing home environments are also more institutional and privacy is minimal as residents are often required to share rooms. The decision to move to a nursing home is often not solely that of the tenant.

As a 2013 report by the Knesset Research and Information Center says, “usually the decision to move to a nursing home is not the elderly person’s alone but is made instead in cooperation with their family and in coordination with health and welfare authorities.”

Assisted-living facilities offer a smoother transition for the elderly, with their individual apartments equipped with kitchenette and bathroom facilities, allowing tenants to prepare their own meals, personalize their space and manage their own households. Such facilities also provide cleaning services, recreational, cultural activities and cafeterias, as alternatives, albeit at an additional charge.

The catch with assisted living is you have to be relatively independent and not in need of constant medical attention. You also need to be prepared to spend a lot of money.

Most nursing homes offer a range of alternatives for the elderly, ranging from those who need minimal assistance on a daily basis to those in custodial nursing care who need extensive help, and the mentally frail. But all these alternatives assume that the patient requires a lot of attention and intervention. People who can’t afford nursing home care are entitled to apply for government assistance. If they require custodial nursing care or are mentally frail, they qualify for Health Ministry funding for a government nursing home, based on their socioeconomic circumstances and that of their families. Government assistance may cover up to 70% of the cost of a nursing home.

The government, however, regards elderly people in assisted-living as independent. Thus, if their health deteriorates they are usually eligible to hire a home health aide the same as they were they still living in their regular homes. In cases where there is no such eligibility, the costs may be formidable. With the exception of just a handful of government-owned facilities such as Mishkanot Hadekalim in Tel Aviv and Beit Hanarkis in Ashdod – assisted living residences are expensive private businesses, and only an option for the well to do.

The Czamanski report estimates that annual revenues of the private assisted-living industry ranges from 2 billion to 2.2 billion shekels ($530 million to $585 million). The Mishan network has 18% of the market, with 2,600 housing units. Migdalei Hayam Hatichon is in second place, with 1,300 units, and Ahuzat Rubinstein is third with 1,250 apartments. All told there are 14,400 privately managed assisted living units in the country and 9,600 government-owned units.

Maintenance fee plus eroding deposit

At private facilities, the costs typically consist of a monthly maintenance fee involving thousands of shekels. In addition residents are required to pay a deposit of 800,000 to 2 million shekels, depending in part on the size of the apartment and the services offered. Residents then forfeit between 3% and 3.5% of the deposit fee annually for approximately the first 10 years, linked to the cost-of-living index. If a resident moves out, the deposit balance is refunded. If the resident dies, the balance is paid to his or her heirs.

In the greater Tel Aviv area, the deposit is generally between 1.5 million and 2 million shekels. In the Sharon region, it is usually 1 million to 1.5 million shekels and in the north and south it runs about 800,000 to 1.2 million shekels. There are facilities, however, that require a smaller deposit.

Not all assisted living facilities work this way, however. Some require no deposit at all, but then charge a higher monthly maintenance fee. There are also properties that allow a six-month trial in return for what they call a “security deposit” of about 70,000 shekels, which residents get back if they decide not to stay.

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