Is it morally justified to reduce the proportion of non-resident investors in the property market?
By ESTI KELLERnew house 224.88(photo credit: Courtesy)
With the percentage of inner-city homes owned by foreign residents set to increase to 50 percent in the next seven years, city planners, longtime residents and prospective first-time buyers are increasingly concerned about the "ghost town phenomenon."
But can the trend be reversed? The moral implications, which have long concerned Jerusalemites, were the subject of a conference hosted by the Jerusalem Center for Ethics on Sunday.
According to event organizer and head of the center's environmental ethics department Prof. Shlomo Hasson, the conference, entitled "The Right to Jerusalem: Between a bustling city and a ghost town," marked "the first attempt to reconcile the different, and at times seemingly contradictory, ethical positions raised by the issue of foreign ownership in the capital."
"Essentially there are three moral arguments that must be taken into account when considering who has the right to live in the capital or if any one party has a greater claim than another," explains Hasson.
"On the one hand, if an owner is willing to sell his property to a buyer with the means to purchase it, any attempt to curtail this process is an attempt to limit market forces and thus to restrict democracy - which is morally questionable," he explains. "But at the same time it's ethical to consider the rights of Israelis - who have grown up here and served their country in the armed forces - to live in their capital over the rights of wealthy American and French Jews to vacation in it for an average of a month per year."
He cites the plight of first-time property buyers, for whom he claims the above argument is particularly applicable. "Rather than encouraging young people to climb the first rung of the property ladder, the current situation is either discouraging them from doing so or ensuring that they leave Jerusalem altogether."
The third position, Hasson continues, concerns a city's ethical right to exist.
"The upshot of foreign investment in the capital is that inner-city areas, such as Mamilla, Talbiyeh and Rehavia, to name just a few, are relatively empty for the majority of the year...which is a trend that looks set to increase."
This ghost town phenomenon has had a trickle-down effect on the quality of services in the capital, he argues.
"Schools, and in particular kindergartens, are the services shown to have been most affected because there's less of a demand for them as the number of young families in the capital is decreasing." Hasson proposes a partial solution that also goes some way to reconcile the differing ethical stances by introducing an affordable housing program mirroring those established in metropolises in Europe and the United States.
"According to the findings I presented at the conference, the introduction of such schemes in prosperous capitalist societies such as Britain and the US has helped to ensure that urban dwelling is an option for all sectors of society," he explains. "In Jerusalem, the implementation of a program of this nature would require a certain percentage of the properties in every new development plan to be sold at reasonable prices."
The blueprint for the introduction of affordable housing schemes in Israel was laid out in Area Plan 35, a government plan approved in 2005. However, the plan has yet to become legally binding and according to Hasson, "little has been done to implement its proposals."
"The conference was partly aimed at putting this issue on the public agenda, which we hope will in turn convince municipality officials of the importance of implementing its suggestions.
"The virtue of an affordable housing scheme, beyond the partial redressing of the imbalance between the Israeli and vacationing foreign populations in the capital, is that it also recognizes the right of wealthy foreigners to invest in the city," Hasson continues. "Although our conference sought to find solutions to the problem of the decreasing Israeli population in Jerusalem, we don't wish to inhibit foreigners from investing in our city. Policies of this nature would be ethically questionable - and aside from the moral implications, we actually welcome the prospect of our Jewish brethren investing in our city and tying their future to Jerusalem."
Jonathan Loierr, owner of a municipal advertising company, presented data gleaned from tax office records. "I investigated the areas most attractive to foreign vacationers and consequently empty for the majority of the year," he says. "I found these to be Mamilla, Talbiyeh, Rehavia, the German Colony and Baka, as well as haredi areas in the north of the city such as Romema and Kiryat Mattersdorf."
The somewhat unexpected discovery of foreign investment in haredi neighborhoods, Loierr says, is due to a trend among American haredim of purchasing "family apartments," which serve as bases for family members spending extended study periods in Israel or visiting religious leaders.
"While such apartments aren't 'ghost apartments' in the same sense as vacation apartments, which are only in use for a month each year, their occupiers don't usually make their long-term homes here," he explains.
Loierr's "most troubling finding," he claims, was that "the percentage of inner-city apartments currently owned by foreigners stands at 20% but looks set to increase to up to 50% in the next seven years if the current foreign investment trend continues."
Amit Poni of New Spirit, an organization dedicated to encouraging young people to reside in Jerusalem, echoed his sentiments. "This summer was particularly problematic for students and young people hoping to move to the capital," Poni says. "It wasn't just a matter of being unable to afford to buy - they couldn't even afford to rent here."
Poni, who organized a demonstration protesting what he claimed was "the impossibility of young people to make a life in the capital" in conjunction with the conference, claimed that the decline of "a young force in Jerusalem," was taking its toll on the capital as a whole (see box).
"Jerusalem's services, academic institutions and cultural life are being affected by this phenomenon," he asserted. "The capital is becoming a city for the old."
