Jerusalem Neighborhood Rejects Histadrut's Claim to Its Pound of Flesh

The Histadrut Labor Federation is attempting to oblige residents in neighborhoods it built decades ago to pay a 10 percent cut of the price they receive on apartments they sell, according to a lawsuit filed in Jerusalem this week.

The Association for Jerusalem Housing Projects filed suit on behalf of 239 Kiryat Moshe residents in the capital against Trade and Industry Minister Ehud Olmert in his capacity as chair of the Israel Lands Administration council, the Histadrut, and the Jewish National Fund.

The association seeks a ruling that the notices which the Histadrut sent to the residents claiming its cut is illegal. The Histadrut itself decided in 1956 to cancel the restraints it had set upon residents for whom it had built the neighborhood, when a committee appointed by then chair Pinhas Lavon determined that "there is no justification, need, or importance to the restraints."

The Histadrut built some 200 housing projects prior to the state's founding, totaling some 40,000 apartments, through its Shikun construction company. Shikun later merged with Naveh L'Oved to form the current Shikun Ovdim. Shikun built 239 housing units on 45 dunams in Kiryat Moshe.

The Trade Minister, who was also surprised by the Histadrut's move, appointed a committee 18 months ago to investigate the legality of the demand. On January 12, however, the attorney general disbanded the committee and lay the burden on the residents to turn to the courts if they wanted to cancel the Histadrut "tax".

The Histadrut commented that the demand to deduct 10 percent from the sale of the home stems from its right to collect a small part of the profits residents earn from the rise in value of their apartments, according to an agreement reached with resident representatives at the time the Histadrut built the homes.

"We agreed at every stage to investigate the legality of the decision, but the residents torpedo every attempt at arbitration or litigation. Even so, we compromised with residents because our demand to receive 10 percent of the apartment's sale value is not retroactive, rather only from 2003 on," said Histadrut representatives.