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BUSINESS

IN ONE OF HIS MANY BAILOUTSof the early Jewish community in Israel,in 1883, Baron Edmond de Rothschildbought out the farming families of thenorthern colony of Rosh Pina, forgave

their debts and paid each a monthly sum tokeep them on the land.

But 120 years later, some farmers in thenorthern town fear that their neighbors arelooking elsewhere for financial salvation.According to Avihud Rasky, head of the RoshPina local council, several destitute farmerssigned deals about four years ago with buyersfunded by foreign sources, after they received

no help from government. “I met with the farmers of Rosh Pina,”

Rasky tells The Report. “I brought up the topicand said I don’t think it’s right to sell lands tooutsiders. But the problem is that we don’thave the ability to decide for every farmerwhether to sell or not, and to whom.” Raskysays the phenomenon has died down in recentyears, although he concedes that no one fol-lows the individual sales. According to BennyBen-Muvhar, the head of the Mevo’ot HermonRegional Council, Rosh Pina is one of severalGalilee towns where private landowners havesigned away their deeds to buyers funded bysources in Qatar, Saudi Arabia and other Arabstates.

The government owns 93 percent of thestate’s area, administered by the Israel LandAdministration. The Rosh Pina land is part ofthe other 7 percent, whose owners are free tosell to whomever they please. For Ben-Muvhar, the transactions show the risks of private land ownership. And Hayim Dayan,former head of the Israeli Cattle GrowersAssociation, adds. “What the Baron deRothschild and the Jewish National Fund(JNF) did – they [Arab countries] are copyingstep by step. And this is a great danger.”

And the danger, many warn, will be evengreater following the sweeping reform to theIsrael Land Administration (ILA), passed bythe Knesset in early August.

The ILA was founded in 1960 to adminis-ter territory that had been purchased by theJNF; state land managed by the BritishMandatory government and property confis-cated from absentee Arabs following the 1948War of Independence.

For nearly 50 years, Israeli law declaredthat even people who owned their apartments,houses and businesses must lease their landfrom the ILA. Critics of the law note thisadded an extra layer of paperwork for thosewho wished to sell, buy or even make minorrenovations on their property. But supporterspoint out that the cumbersome bureaucracyguaranteed collective Jewish ownership ofIsrael’s land while giving the government acritical say in planning.

In his election campaign, Prime MinisterBenjamin Netanyahu mentioned that heplanned to privatize the ILA to acceleratedevelopment, and he is now taking action,intending to replace the ILA with a slimmed-down Lands Authority. Homeowners will taketitle to the land under their apartments and

Privatizing the LandAn unlikely alliancebetween environmentalists,Arabs and Jewish nationalists argues thata new law will lead tosuburban sprawl, a travestyof justice and abandonment of national values

Daniella Cheslow

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URBANIZED AND CAPITALIZED:Beersheba strip mall – far from theoriginal socialist ideals of Zionismand reverence for agriculture

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houses; this will take the ILA out of minordecisions, such as closing in a porch. Further,the new Lands Authority will sell 200,000acres of state land, totaling 4 percent, in twophases, for residences or employment.

Spokesmen for the ILA support the reform.But an unlikely alliance between environmen-talists, Arabs and Jewish nationalists stronglyoppose it on the grounds that it would gobbleopen space, sell off refugee property andbetray the founding ideals of the Jewish State.Lobbied by all sides, the vote wobbled thegovernment and ultimately caused a chasm inthe ranks of the Labor party over the meaningof once-cherished socialist values in Israel.

THERE ARE TWO SECTIONS TOthe ILA reform: the slimming of thebureaucracy and the sale of state land.

The first part is wildly popular because theILA’s bureaucracy is notorious.

Toy importer Itzik Krispel founded theAhuzat Hanegev (Negev Holdings) organiza-tion two years ago to keep Ofakim residents inthe struggling western Negev city by offeringlocal cultural events, running computer classesand organizing locals to improve the quality oflife. He saw a potential strategy in sellinghousing lots to well-off residents, who couldbuild their own homes at the edge of town, andaccumulated a list of 200 eager candidates,including bookstore manager Efrat Avigzer,37. Avigzer wants to build a new house to giveher children more space and to build a bomb-proof room. But not one cornerstone has beenlaid because the lots are on ILA land that hasnot been released for development.

“The other day I drove to the pool and Isaw all this empty land,” says Avigzer, whohas been waiting for two years and plans toleave in a year if she does not get a lot. “I said,‘dear Lord, there is so much land here. Whynot release it?’The people who build here willstay.”

Critics of the ILA also note that its bloatedoperations breed corruption. Last November,Israeli Police raided the ILA’s Tel Aviv andCentral District offices and questioned 20bureaucrats about serial tax fraud and bribery.One woman reportedly exchanged sexualfavors with ILA officials in exchange for per-mission to expand her house, according topress reports in 2008. That same year, the TelAviv District Court found ILA official OdedTal guilty of taking bribes from real estatetycoon Dudu Appel.

And developers see the ILA as a dinosaur,preventing modern commerce from rising on

farmland that has long lost its profitability. Yehuda Naftali, for example, learned the

strip mall trade during a 20-year stint runningmalls in California and returned home to buildthe brand-name “BIG” shopping malls acrossthe country and in India and Serbia. Naftali’stwelve centers are known for their Lego-brightcolors and acres of parking spaces developedat highway junctions and on city edges.Another eight are under construction.

According to Hay Galis, vice president ofManagement and Operations at BIG,Netanyahu is “definitely correct in hisapproach. There is no doubt that bureaucracyin the state is destructive to developers. Everycenter is a war.

“Today, you don’t find a lot of people wholeave their house with the decision of ‘I amgoing to a little store on Main Street,’” Galisadds. “If they are already leaving the house,they prefer to go to a big center with a lot ofconvenient parking ... not little hardware storesor tiny electronics shops.”

While no environmentalist would openlysupport the ILA’s bureaucracy, activists fearthat the reform will kick off a spree of BIG-style development that could kill Israel’s clas-sic downtowns.

Founded in 1883 as an agricultural colonysouth of Tel Aviv, Nes Tziona graduallyexpanded into a vibrant city of 32,500. But awalk down the wide, tree-lined sidewalks ofthe small downtown reveals the competingschools of thought about how Israel shoulddevelop.

In a small store with a bridal gown in thewindow and a red awning over the door,Hovav Mashiach, 42, runs the photo studio hisfather named after him four decades ago. It’sone of the few dozen storefronts that make upWeizmann Street and Rothschild Avenue,where on a Thursday in August locals strollwith shopping bags.

With his back to a wall of wedding photoshe snapped, the bald, quick-to-smile Mashiachtalks about the rapid development that hasbookended Weizmann Street in recent years.To the north, the small, traditional downtownends at the Knei Yoter (Buy More) shoppingmall. In 1997, a “power center” strip mallcomplex surrounded by lagoons of parkingspaces went up at the city’s southern edge.Mashiach says the development quietlypushed some of his neighbors out of business.

“There were corner groceries, clothingshops, shoe stores and toy stores that closed,”he says. Hovav Studios has persevered, hesays, because “photography is different from

clothes. If you’re developing pictures with mefor three years, it’s more personal.”

But City Hall sees development at the edgeof town as a crucial economic policy, stymiedby the frustrating ILA. One city official, whoprefers to remain anonymous, says that forsome 15 years, the city has had plans to builda high-tech center on ILA-owned propertynear the power center. While theAdministration waited to approve a rezoning,Nes Tziona lost high-tech ground to the neigh-boring city of Rehovot.

“In many instances, the ILA is a buffer, anobstacle to development because of its bureau-cracy,” the official tells The Report. “Andwhen you compare it to privately held lands,you can see the difference.”

TODAY, 5.5 PERCENT OF ISRAEL’Sland is built up with towns, housing,industry and roads, according to a sur-

vey conducted by environmental planner MotiKaplan. The reform will release an additional3 percent of Israel’s total land, enough tochange the face of Nes Tziyona and dozens ofother towns.

Transportation expert Kevin Dwarka hasworked for the past year on a Guide for SmartGrowth, as a consultant to the Israeli Union forEnvironmental Defense (IUED). Between1970 and 2000, the portion of Israelis ridingpublic transit to work declined from 60 to 30percent. Development of car-centered stripmalls and shopping centers like those of NesTziona and BIG pull people out of walkabledowntowns, he contends. Farther away, busesand trains can’t properly service the newhomes built in small cities and on isolatedfarming communities. Other building is in“island cities” like Modi’in, located betweenJerusalem and Tel Aviv and detached from thealready existent infrastructure of either.

“In the places where we have increasedroad capacity, traffic levels have gone up,”Dwarka tells The Report. “There is a point atwhich Israel is going to have to reduce autousage.”

Hebrew University geographer AmiramGonen says that cutting the ILA red tapeserves as a guise for allowing a sprawl free-for-all. “The ownership and leasing issue –everyone is happy about it,” he says. “But theother element is all the land that is not built up,which is owned by the state and administratedby the ILA…. These are the pieces of landaround the cities that are waiting to be subur-banized, sprawlized and capitalized.”

ILA Spokeswoman Ortal Tzabar tells The

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BUSINESS

Report that all land sold will have to have aplan before the transaction can go through,which should reduce the chances for sprawl.“We are not selling open lands,” Tsabar says.“The planning institutes are the watchdogs onthe open spaces, on green space, on the properdistribution of population.”

But environmentalists and social activistsdo not trust this safeguard, which they say isalready ineffective in places such as KibbutzYagur, next to Haifa. According to a 2007Haifa District Court ruling, Yagur received apermit to erect an agricultural sales building in2005. That building, however, is actually a55,000 sq ft “Stop Market,” selling everythingfrom dog food to cosmetics. They wereordered to stop selling non-agricultural pro-duce, but the law has not been enforced.

“The supermarket in Yagur was allowed tobuild a building connected to farming,” saysNadia Mogilevsky, a lawyer at the Associationfor Distributive Justice, a non-governmentalorganization. “[The planning bodies] definite-ly didn’t mean a supermarket. Now there areall sorts of legal proceedings, but the chancesthat it will be demolished are infinitesimal.”

Mogilevsky adds that Stop Market is openon Shabbat and can offer cheaper pricesbecause farmland is free, whereas a similarparcel in Haifa would be expensive. “It’s notfair that land that no one paid for becomes apresent you got from the state,” she says. “Justbecause you are on the land doesn’t give youthe right to do whatever you want.”

Iris Hann, who works on open lands for theSociety for the Protection of Nature in Israel,adds that the reform is all the more worryingbecause the ILA did not release a map of landto be sold.

“There is no map because we don’t know,”spokeswoman Tsabar replies. “There are a lotof unborn plans. We don’t know where we willplan.”

Like the suburbanization of the UnitedStates, in Israel the exurbs are home to upper-middle class, highly educated former citydwellers. These suburbs increase social strati-fication, Gonen says. And he also points to theprivatization’s potential to widen gaps in Israelby widening the gaps between the core and theperiphery. “Once the 800,000 dunams arereleased predominantly in the core of thecountry, all the money available to capitalistswill go into this development,” says Gonen.“And if there will be a [housing] supply in thecenter of the country, why should a personthink about moving to the Negev or to theGalilee? Forget about it... the supply might

lure the middle class from the Negev and Galilto come and join.”

Tzabar counters that building will followapproved guideline plans, such as the NationalOutline Plan 2020, which pushes for develop-ment on the periphery. She adds that beyondthat, communities should take their own initia-tive. “Every municipality on the periphery

which is interested in pulling people to themhas to make a strong education infrastructure,and a strong employment infrastructure, andnot to forget about Ir Habahadim [the armybase to be built in the Negev],” she says.

ISRAELI SUBURBANIZATION IS FARfrom the original socialist ideals ofZionism, which revered agriculture and

enacted stiff laws to protect farmland. Gonen, who wrote a 1995 book about

Israeli suburbs, says they were so unpopularinitially that the 1966 Hebrew translation ofWest Side Story was called “SippurHaparvarim” (“A Story of the Suburbs”),equating Israeli suburbs with the bad neigh-borhoods of New York. That began to changein the late 1970s, when the anti-socialist, right-wing Likud party, headed by MenachemBegin, came to power. Begin had famouslydubbed kibbutzniks “arrogant millionairesenjoying swimming pools” and cut off gov-ernment loan guarantees to the rural sectoreven as inflation and declining price drovethem into debt. The farming sector was stillgasping when a million immigrants from theFormer Soviet Union arrived in the early1990s and jammed the housing market.

In a panic, the ILA released swaths of landfor private-sector housing to ease the gridlock.The first barrier to private construction onfarmland had been broken, and kibbutzim and

moshavim lunged at the chance to build theirway out of debt. However, rather than buildingstarter apartments for immigrants, they erectedextension neighborhoods of upscale homes forcity dwellers. Banks were only too happy tofinance a solution to their outstanding debts.

In addition to these expansions, Israelissued building tenders for exclusive “commu-nal settlements” in the Negev and Galilee,beginning in the 1980s. Like kibbutzim ordevelopment towns of the past, the exurbswere meant to bring Jews to the Israeli frontier.But unlike the farmers and disenfranchisedimmigrants of the past, the new pioneers wereyuppies looking for a backyard and a drive-way, built by developers and financed bybanks.

Erez Tzfadia is a Public Policy lecturer atSappir College in Sderot and a member ofBimkom: Planners for Building Rights, a non-profit activist group. He says the entry of pri-vate capital into rural Israeli developmentchanged the model of how new towns areformed.

“Up to the 1990s, communities gotadvances to land rights by taking part innational projects,” says Tzfadia. “If I werewilling to go live on a moshav near Lebanon,I could lease land cheaply.”

But since the 1990s, Tzfadia says, the ini-tiative switched from government priorities toprivate capital. The reform, he warns, willincrease the influence of developers. “Thereform doesn’t stop after registering leasingrights,” he tells The Report from his detachedhome in Omer, a suburb of Beer Sheva.“Suddenly people can buy five dunams (1.25acres) for commerce and industry, with nolimit. This is very problematic because it pre-sents a benefit to the rich.”

THE DEBATE OVER DEVELOP-ment takes place against the back-ground of Jewish values and increasing

demands for equality by Israel’s Arab citizens. MK Uri Orbach, of the ultra-nationalist

Jewish Home party, says he tried to negotiatelong-term leases into the reform instead ofpurchase because of the biblical injunction,Leviticus 25:23, “Thou shall not sell the landin perpetuity.” On failing, he opposed the mea-sure, despite the fact that the Jewish Home isin the coalition.

Arab Israelis, meanwhile, claim that Israelis selling confiscated Arab property thatshould be returned to its original owners. MKHanna Swaid (Hadash) lives in Illaboun, anArab town in Israel’s northern Galilee with a

‘I don’t have a problem ifthe state wants to sell itslands – on condition thatthose lands weren’tconfiscated in the pastfrom private Arabowners’

– MK Hanna SwaidHadash

THE JERUSALEM REPORT SEPTEMBER 14, 2009 31

population of 4,400. He says the town lostabout 500 acres to the National Water Carrierproject, confiscated by the State in 1956, 1959and 1961. Overall, Swaid says, the State ofIsrael has taken about 4 million dunams fromArabs, be they refugees who left in 1948,absentees who moved to other villages, orIsraeli citizens whose land was taken for thepublic good.

“I don’t have a problem if the state wants tosell its lands – on condition that those landsweren’t confiscated in the past from privateArab owners,” says Swaid.

Moreover, Swaid says, the reform includesa worrying land swap between the JewishNational Fund, which owns about 14 percentof land in Israel, and the ILA, which adminis-ters that land. Under the exchange, the JNFwill give up its land holdings in the cities and,in return, receive 70,000 dunams (17,500acres) in the Negev and Galilee. This land willbe available as potential forests or as newcommunities, says Eli Uliel, the director of thesouthern district for JNF, noting that new com-munities will have to be for Jews only underJNF bylaws.

“The lands will be around Arab villages,and when these villages will need to expand,they won’t be able to,” Swaid accuses. He sayshe is preparing to sue the state over the sale ofconfiscated private lands in Nazareth, UpperNazareth and Karmiel.

IN THEIR ATTEMPTS TO BLOCKthe reform, the improbable alliance againstthe privatization went into high gear. The

Israeli Union for Environmental Defense(IUED) opened a “war room” in its Tel Avivoffice. Zionist youth movement members filledthe Knesset halls to pressure politicians.Physics student Ofek Birnholz illustrated hisopposition to the move by uploading a photo-graph of himself to privategrounds.org.il,where he poses nude save for a strategicallyplaced sign reading, “Some things can’t be pri-vatized.” Birnholz, 28, tells The Report hemade his “modest” contribution because hewas in Switzerland during the vote.

Within the Knesset, opposition partiesKadima and Meretz opposed the reform, whileShas and Likud supported it. Orbach’s JewishHome party was split, and the Arab partiesgave a nay.

The reform caused an uproar within thealready beleaguered and divided Labor Party,an ambivalent member of Netanyahu’s broadgovernment coalition. During the originalJuly vote, the party was so conflicted about

the reform that members hid in the cafeteriaand their offices rather than cast their ballots.A livid Netanyahu delayed the vote anddemanded that Labor’s parliamentarians casttheir ballots in the next round. LaborChairman Ehud Barak followed orders, but inleaks to the press and in closed-door partymeetings, rebellious party members fumedand called him a sellout.

Labor MK Ophir Pines-Paz, an opponentof the reform, was widely quoted in the Israelmedia as saying that his party’s support for thebill showed “the final failure of the Laborparty.” But Labor Party Knesset faction headDaniel Ben-Simon dismisses the claim, whichhe says is made by those “romantically linked,almost erotically linked” to the land.

“The use of land as a sacred cow is theout-of-fashion Zionism of sticking to theland at all costs,” Ben-Simon tells TheReport. “We are in 2009, and not in 1947,and not in 1907. It’s just 2 percent of theland that will go on the market, with all thepreconditions and conditions around it.What worries me is lands other than the landreform – the outposts and the settlements.”

Originally, the provisions for the ILA pri-vatization were tucked into the annual budgetbill. It was later split from the budget vote,because the coalition would fail if the budgetwere not passed.

The bill’s opponents complain that thedebate was so short that they could not ade-quately muster their defenses. Indeed, in thelast week of July two separate surveys, the onesponsored by AMI, an organization devoted tosocial change, and the other by the Civil-Environmental Coalition in Opposition to thePrivatization of Israeli Lands, both revealed

that an overwhelming number of Israelis didnot understand what the reform would do. Thefirst survey revealed that 81 percent of Israelisdidn’t understand the terms of the reform. Thesecond one showed that 60 percent of the pub-lic believed the reform would only help realestate moguls.

Tzabar refutes the accusation, saying thatthis summer’s debate was merely an extensionof years of national discourse regarding landownership. In 2005, the Gadish Commissionappointed by the head of the Ministry of theInterior recommended allowing homeownersto take title to their lands. The GadishCommission, however, did not recommendthe same for industry and commerce, whichthe present reform allows.

“Israel approved private ownership in theGadish Commission after a very long discus-sion. And, also, I think that in the months inwhich we advanced the reform, there was alively public debate,” Tzabar says.

The bulk of the reform goes into effect inJanuary 2010; however, private homeownerscan already begin taking title of the groundsunder their houses and apartments. Lots up to2700 square feet will be transferred free, withlarger lot owners paying fees by size.

In mid-August, 17 days after the passage ofthe bill, cattleman Dayan led a conferencecalled “Who will save my house?” to discussland protection in the north in light of the ILAreform.

Rosh Pina’s Ben-Muvhar, who attended theconference and worries about foreign buyerssnapping up privatized Israeli land, says, “Wehave to reduce the bureaucracy in the ILA. Butfrom there to complete privatization we haveto be very careful.” •

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OVER- OR UNDERDEVELOPMENT: Karmiel shopping center – supporters say newlegislation will modernize planning; critics say it will lead to inequality