Israel's Public Housing Includes a Ra’anana Cottage

State housing company owns and rents out some 650 detached homes in some of Israel’s most sought-after towns

A single-family house owned by Amidar in Ra'anana.
Ofer Vaknin

The two-family house in Ra’anana’s Neveh Sharett neighborhood would certainly count as a fixer-upper. The owners have added on to the build over the years, but official property records show it to be a tiny 55 square meters. Even so, in Israel’s red hot real estate market, those homes could be worth millions of shekels.

In 2015 and 2016 two two-family homes in the same neighborhood of Ra’anana, which were listed at 53 square meters each, sold for 2.3 million shekels ($660,000 at current exchange rates) and 2.4 million shekels, respectively.

So, why aren’t the owners selling?

Only the government knows because the houses are public housing, owned by the government and managed by the state housing company Amidar.

Amidar manages 40,000 units around the country and the great majority of them are apartments in multistory buildings, as most people imagine public housing to be. But the company also manages 2,500 detached homes in various parts of Israel, built in the early days of the state when land was cheaper.

A single-family house in Ramat Hasharon.
Ofer Vaknin

A lot of those homes are in towns in the periphery, like Shlomi , Kiryat Shemona and Beit Shean in the north and Arab in the Negev, where land continues to remain inexpensive and demand for homes is tepid.

But 650 of those detached homes are located in some of Israel’s most desirable communities, including 77 in the Tel Aviv suburb of Ra’anana. Another 28 are in nearby Kfar Saba, 52 in Herzilya, 54 in Hod Hasharon and 63 in Ramat Hasharon.

In many cases, the homes are in neighborhoods that – by the standards of the town – are neglected. But all over Israel gentrification has lifted land prices and made areas once out of bounds for middle class families into in-demand areas. In areas like Jaffa, when Amidar enabled tenants to buy their homes, the process was accelerated.

Asked by TheMarker why the state is sitting on such valuable property, Amidar denied it was responsible saying it role is only to manage public housing. The job of deciding what properties to buy or sell or upgrade belongs to the government, which is the landlord.

For its part, the Housing and Construction Ministry said policy didn’t it allow selling homes simply because the government could earn money from it.

“The ministry treats tenants equally and respectfully and doesn’t relate to them differently based on the value of the property they live in,” the ministry said. “The ministry ascribes a great deal of importance to allowing resident to stay in the neighborhoods in public housing even when the land is valuable.”

“The ministry will never evict public housing tenants even is the property is deemed valuable,” it added.

Hatzlacha, an organization dedicated to a fair economy and consumerism, thinks the policy represents a misuse of the public’s assets.

“Proper management of public-housing assets needs to consider factors like replacing and selling assets in order to increase the stock of housing and provide optimal solutions for those entitled to public housing both in terms of quantity and quality,” said Elad Man, the group’s legal adviser.

The fact that Amidar is holding onto expensive assets comes at a time when it is trying to increase the stock of public housing in order to cut down on a waiting list of more than 3,000 families waiting for apartments.

Amidar is raising 1 billion shekels in a bond offering and has gotten a 200 million shekel budget from the Housing Ministry, which it will use to buy by its estimate 943 units. But then money will only reduce the waiting list by less than a third.