by Fred Schlomka – The recent Israeli elections were followed by a number of pronouncements by US officials praising democracy in Israel. However democracy is much more than elections, and many freedoms that Americans take for granted are not available in Israel. For example, Israel’s Arab citizens suffer from discriminatory real estate and housing practices of the sort that were outlawed in the US almost 40 years ago.

Redlining, or restricting home purchasing by African Americans and other minorities in ‘white’ neighborhoods was once a common practice by realtors in the USA. Due to the 1968 Fair Housing Act, they are now required by law to treat all homebuyers equally. However in Israel the practice of redlining has been entrenched since the founding of the state.

The Israeli real estate industry, housing developers and the government, restricts Arab citizens of Israel, 20% of the population, in their housing choices. Contributing factors include marketing strategies by realtors and housing developers, segregated planned communities by non-profit developers, and government control of the most of the country’s property. As a result, virtually all new homes and pre-owned homes are sold exclusively to the Jewish population. Arabs mostly ‘make do’ with owner built homes in tightly zoned towns and villages, often having their homes demolished as a result of the lack of appropriate zoning and building permits.

The largest real estate development company in Israel, Industrial Buildings Corporation (IBC) is part of the Fishman Group with a market value exceeding $1.5 billion. IBC develops, and manages 230 infrastructure projects for tens of thousands of housing units in 80 locations throughout the country for the Israel Lands Authority (ILA), the Ministry of Housing and local authorities. All of the company’s projects are marketed to Jewish-Israelis and foreign buyers only.

The leading real estate brokerage firm is Anglo-Saxon, part of Africa-Israel Investments Ltd with a 2004 net profit of over $92 million. Their network of 55 offices, none of which are in an Arab locality, have marketed tens of thousands of homes exclusively to Jewish and foreign buyers. Other realtors, including Century 21 and ReMax follow the same pattern of selective sales, effectively excluding Arab buyers from the real estate market.

For example no homes have been sold to Arabs in the fast-growing new city of Modiin with a population of over 60,000. When Arabs try and gain access to segregated communities they are met with organized resistance and legal restraints. This happened in the northern Israeli town of Karmiel when the ILA cancelled a offer in October 2004 for leasing 26 lots. The cancellation was in response to a petition submitted to the Haifa District Court against the ILA, the Jewish National Fund (JNF), and the Karmiel Municipality, by the Association for Civil Rights in Israel and the Arab Center for Alternative Planning. Rather than extend the tender so that Arabs could lease land, the court allowed the ILA and JNF to withdraw the offer.

Government tactics to restrict housing choices include offering grants, low interest mortgages and tax incentives to Jews only, and requiring army service for residents. However the most blatant form of discrimination is exercised through the government’s control, through the ILA, of most of the land in Israel.

The ILA manages a total of about 78 million acres or 93% of all the land in the state. The 1961 Agreements between the JNF and the Israeli Government stipulates that the ILA would administer all JNF-owned lands. A primary objective of these documents is to prohibit land allocation to non-Jews. These agreements also redefined the JNF as a Public Authority in Israel, yet their charity organizations operate in numerous countries and have 501c3 non- profit tax-exempt status in the USA, possibly in violation of the US tax code. Their international activities are closely linked with the real estate industry in Israel and hundreds of segregated Jewish communities have been built on JNF land.

Thus today there are over 4.5 million Jewish-Israelis with free choice to live anywhere in the country while the 1.2 million Christian and Muslim Arab citizens are mostly relegated to a mere 3.5% of the land that they still own. Africa Israel Investments, The Fishman Group, or Industrial Buildings Corporation could not practice such blatant Redlining and segregation in their projects in Europe and the USA. Housing and land reform in Israel is long overdue and perhaps it’s time for investors to prod these companies, and the Israeli Government into the 21st century.

Sources:

Dun & Bradstreet’s Duns 100 Profile
Africa Israel Investments Ltd
Website of the Israel land Administration
ILA Annual Report 2003 (Hebrew).
Globes Online: Israeli business news
Israeli Central Bureau of Statistics
Jewish National Fund (JNF) Charter
1961 JNF Memorandum with the Israeli Government
Conversations with Israeli real estate agents