What's the real estate market like in the Israeli settlements?

Answers to your questions about the news.
June 15 2009 6:17 PM

Beautiful Two-Bedroom on One Disputed Acre

How much does an Israeli-settlement home cost?

A new housing project in the Jewish settlement of Maale Adumim.
A new housing project in the Jewish settlement of Maale Adumim

Israeli Prime Minister Benjamin Netanyahu defended his country's settlement activity on Sunday in response to recent criticism from President Obama. Netanyahu pledged not to build new settlements but argued that Israelis living in existing settlements are entitled to their homes, and homes for their children. If a settler decided it was time to relocate, how much could he get for his house?

Not much. Housing is cheap in established Israeli settlements; in new outposts, it's bubkes. For example, a two-bedroom in Tel Aviv runs about $400,000, but you can get a place for around $180,000 in the settlement of Modi'in Illit just 25 miles away. If you're willing to live in an outpost—a usually illegal housing community that spreads out from the recognized settlement—you can stake your claim to some disputed land by building a makeshift house. But there are no guarantees you'll be allowed to stay.

Established Israeli settlements don't look much different from the rest of Israel. Nothing about the tall buildings and paved streets indicates that the residents are living on disputed land. And purchasing a condominium in an older settlement isn't much different from buying in Tel Aviv—or in New York, for that matter. A prospective settler contacts a real estate agent or buys directly from the developer. Most settlers take out long-term mortgages on units in multistory apartment buildings. Detached, single-family homes are hard to find in the densely populated settlements. Low-price rentals are often available directly from the state, sometimes for less than $150 per month.

Developers, however, operate under rules that make the settlement business appealing. First and foremost, they buy the land from the government—although, according to an Israeli report, many settlements were developed on land owned privately by Palestinians with neither compensation nor consent. The government issues a tender announcing the availability of a plot of land on which a developer can build a certain number of housing units. There is a competitive bidding process, but the price is generally lower than comparable real estate within recognized Israeli borders. Israel also regularly subsidizes development in some settlements, and building codes are somewhat less strict.

For settlers, the communities have benefits other than simple economy. While they offer few jobs outside the service sector, most are within easy commuting distance of major cities. And many Israelis choose settlements because they are densely populated with their coreligionists or compatriots. Beitar Illit, just six miles from Jerusalem, is dominated by Haredi Orthodox Jews. About one-quarter of the residents of nearby Efrat are immigrants from the former Soviet Union.

The outposts are an entirely different matter. These temporary housing communities are built outside the boundaries of the settlement and are often occupied by politically motivated young people seeking to expand Israeli borders with varying levels of governmental consent. Outpost construction is an act of speculation. Many large settlements started as tiny outposts. Ma'ale Adumin, for example, began as a 22-family camp in 1975 and now houses more than 30,000 people. In other cases, the government has bulldozed the outposts with little warning.

Got a question about today's news? Ask the Explainer.

Explainer thanks Geoffrey Aronson of the Foundation for Middle East Peace.

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