Opinion |

Israeli Spike in Housing Prices Is a Social Problem

Chaim Levinson
Chaim Levinson
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In affluent Netanya neighborhood of Ir Yamim.
In affluent Netanya neighborhood of Ir Yamim.Credit: Amir Levy
Chaim Levinson
Chaim Levinson

Israel is turning into Real Estate-stan. The increase in housing prices is not only an economic problem, it’s a social one. It is reorganizing the social classes and causing the disintegration of society. Literally. The increase in housing prices – both for purchase and for rent – along with the impossible cost of living, is splitting Israel into three classes: home owners, renters with high salaries and those who can’t afford anything.

At the upper end is the class of property owners. The crisis is only enriching them. The economic gap is turning us into America: People skip over the homeless on their way to their high-rise office buildings, the connection between work and wealth is gradually being severed. That’s the first sign of a society in trouble. The grandmother’s apartment goes to the grandchildren, who leverage and leverage and leverage. Anyone who succeeded in joining the class of property owners a few years ago is in good shape. For anyone who didn’t there’s no chance in sight.

We’ll get to the second class later. But first let’s look at the third class, which was once the middle class. The truth is that today anyone in the middle class is poor. In the new reality he has no security and no chance of aging with dignity.

In effect, the common denominator of all the various shortages – the shortage of police officers, the shortage of teachers, the shortage of nurses, the shortage of workers at Ben-Gurion International Airport and of restaurant workers – is one and the same: There is no middle class.

If in the past it was possible to live a relatively comfortable life on two petit bourgeois salaries, today it’s impossible. A teacher and a policeman don’t earn enough when the rent they have to pay continues to soar.

A society needs a multi-layered job market. Not only Instagram influencers and high-tech programmers. The problem is that many members of this class find it difficult to survive, which is why everyone is trying to switch to high-tech in an attempt to keep up with the pace of the price hikes.

But high-tech is not the solution. In many senses it’s the problem. And here we come to the second class: the renters with the high salaries, the “illusion class.” The upper echelon of high-tech’s newly wealthy has created an insane real estate bubble and the illusion that wealth is within reach.

Members of this class receive monthly salaries of 15,000 to 20,000 shekels ($4,330 to $5,800), with which they pay the high rent and a comfortable lifestyle. They live well, but they’re living in a bubble. Most do not have enough equity to advance to the class of property owners. A small shake-up in the markets and everything is over. They live in constant dissonance: They work like crazy in a state of denial until the blow strikes.

The Israeli government’s greatest betrayal of its citizens is manifested in the real estate crisis, which will continue. In the final analysis, the reason for it is almost trivial: The government ministers are human beings, and human beings live what they are familiar with.

Defense Minister Benny Gantz is not interested in housing prices, he and his children are in good shape. The same is true of Prime Minister Yair Lapid, former Prime Minister Naftali Bennett, Finance Minister Avigdor Lieberman, and so on. Experience determines awareness, and the disconnect between the leadership and the reality is steadily expanding.

In spite of the words they say and in spite of the concern they express, these people, who are responsible for the cost of living and the housing prices, don’t have an in-depth understanding of what’s going on here. They don’t understand the destructive significance of eliminating the middle class, they aren’t internalizing the magnitude of the social rift that is caused by our turning into Real Estate-stan. They don’t see the despair, don’t feel the anger and are not aware of the frustration.

They look only at high-tech, at the exits, at the unicorns, at the success stories spread over the front pages of the newspapers, and tell themselves lies about a developed country and a flourishing economy.

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