 |  |
Click for Contents
The Great Land Sell-Off
Tom Sawicki
Until recently, much of central Israel was farmland. Now huge tracts of that land are being sold off for housing - to the delight of developers, cash-strapped farmers and the government, and to the dismay of some Zionist purists.
It's a weekday morning at Kfar Shmuel, a moshav of some 400 families half-way between Tel Aviv and Jerusalem, about a mile away from the main highway connecting the two. New homes stand amid lush gardens - testimony to the villagers' obvious economic well-being.
It wasn't always so. Until 1992, the moshav's members scraped out a living by working fields leased to them in the early 50s, some 20 kilometers away near the town of Lod, not far from Ben-Gurion Airport.
But on this morning, the Kfar Shmuel moshavniks are not headed for the fields. Some of them commute to outside jobs they've held for years, others work in the moshav itself, in a motorcycle dealership recently established by members. Still others stay at home, overseeing the construction of handsome new additions to the simple moshav houses built for them four decades ago.
Kfar Shmuel's obvious new prosperity dates back to early 1992 when the Likud government, in response to skyrocketing urban housing prices and an insatiable hunger for building land, ordered enactment of Regulation 533 by the Israel Lands Authority (ILA), official caretaker of state land. The measure freed some farmland for residential building and a handful of kibbutzim and moshavim in the Tel Aviv and Jerusalem areas were paid handsomely by real-estate developers - some initially against their will
- for land they'd been leasing.
It didn't take much to convince Kfar Shmuel's farmers to trade agriculture for real estate: Their land is in an area where demand for housing is
highest, and anyway the citrus groves and vegetable fields were losing money.
The moshavniks are unwilling to discuss the specifics of the deal, but The Jerusalem Report has learned that each family received up to $100,000, a sum they wouldn't earn in years of farming. The land on which they used to raise their crops has been cleared for 4,000 housing units, and construction of the first 500 is well advanced. Only a few dead range trees bear witness to the groves of the past.
The effect of Regulation 533 was not limited to the half-dozen kibbutzim and moshavim in which the government took the rezoning initiative. It also opened the floodgates for unauthorized, illegal transfer of state-owned farmland to developers.
In the next two years, without asking anyone, some 150 farming cooperatives in the center of the country accepted hundreds of millions of dollars from developers proposing up to 40,000 housing units on land zoned for farming. Most were for luxury apartments or town houses with gardens. In more than one case, say knowledgeable sources, moshav and kibbutz members accepted cash bribes to sway their votes in community meetings in favor of the deals.
The contracts themselves were illegal. They violated the zoning status of the real estate, and the conditions under which the farmers leased agricultural land from the state. Those regulations specified that the land be used only for farming, and that if it were ever rezoned it would revert to the state. The entrepreneurs promised the farmers that they'd sort out these legal quibbles.
In effect, without government permission, kibbutzim and moshavim had sold off public land to private developers who had absolutely no right to build on it in the first place. About a year ago, when the government realized what was happening and sought the means to regain control, some construction had already begun and some of the money the farmers got had already been spent. The result today, say some purists in the World Zionist Organization, the environmental movement and the kibbutzim themselves, is that the Zionist dream of working the land has been bulldozed to make way for the yuppie dream of a home with a garden.
That earlier dream dates back to the beginning of the century. In 1901, the Zionist Movement's leaders decided that Jews all over the world should start putting money in pushkes, blue-and-white tin collection boxes, "for the purchase of land in Palestine and Syria."
Within two decades, large tracts had been bought from Arab land-owners in Palestine, including a strip of continuous Jewish settlement in the Coastal plain and stretches in the Galilee and Jordan Valley. The Jewish leadership in British-controlled Palestine saw land as the main national asset, working the land as a key Zionist goal.
By the early days of the State of Israel, fields and orchards were blooming from the Lebanese border to the Negev Desert. Much of the land had been bought by the Jewish National Fund (JNF) as an agent of the Jewish people; more belonged to the state, which took possession from the Arabs who fled the 1948 fighting. Within a few years kibbutzim and moshavim, using land leased from the JNF and the state for symbolic amounts, were already feeding the nation.
With time, new technology helped farm production outstrip demand, and prices fell. To survive, kibbutzim and moshavim had to use some of the land -
with the state's reluctant permission - to build factories, hotels and public swimming pools. Many farming cooperatives even had to take out bank loans to invest in these facilities, an anathema to the socialist founders of the settlement movement.
By the 1980s, 70 percent of all kibbutzim and moshavim were making money from non-farming activities, principally tourism and industry.But the land's primary purpose remained agriculture.
At the same time the cities were growing, sometimes right up to the orange groves and tomato fields. But as long as there were enough roofs for everyone's heads, those who saw the fields thought of their morning juice and salad.
The city folk had a dream of their own: moving out of their apartments into houses with gardens. During the years of Likud government rule, many got exactly that by moving to settlements in the West Bank -
principally in a non-ideological belt of suburbs north and east of the Tel Aviv conurbation. Inside sovereign Israel, for the most part, the state said no: Private homes with their own backyards would require too much land, a national asset.
At the end of the 80s, hundreds of thousands of Soviet immigrants flooded Israel's cities. The state built homes for them in outlying towns, but the immigrants didn't want to live far from Tel Aviv and Jerusalem. Apartment prices in the cities skyrocketed; immigrants and young Israelis unable to afford decent housing became desperate. So the government freed up some farmland for building, triggering a chain-reaction of unauthorized transfers to land developers.
"Everybody had the government by the throat," observes a former government official who was involved in the land-release program and now advises private land developers and investors. "Housing prices were going up, immigrants were putting up tent cities and the developers came up with a solution. While the government dithered, the farmers - many of whom were deep in debt - saw a chance for quick profits," says the former official, who does not wish to be identified.
When it realized what had happened, the government faced two choices - to sue farmers to get the land back, or to face facts and reach a compromise that would enable the state to collect most of the profits. Suing would have meant years of court proceedings, without satisfying the country's hunger for homes; the politicians opted for compromise. After all, they reasoned, in one stroke they could solve the housing crisis and spare themselves the financial nightmare of bailing out dozens of kibbutzim and moshavim, massively in debt from the ballooning balances of bank loans they had taken out in the 1980s.
In October 1993, facing a no-win situation, the Lands Authority adopted Regulation 611, which allowed limited release of farmland for housing -
with the government receiving most of the developers' money while kibbutzim and moshavim got unspecified compensation for the years they tilled the land. Essentially, explains the former land official, the government agreed to rezone much of the farmland in central Israel for development, and cut farmers in on the profits.
Then, last month, the Authority adopted Regulation 666, setting the farmers' share at between 25 percent and 29 percent of the current land values -
which are high and climbing. To all intents and purposes, the new decision allows the 150 original illegal deals to stand.
Kibbutzim and moshavim have or will have sold off about 100,000 dunams (25,000 acres) of agricultural land; that is equivalent to one-twelfth of all land zoned for agriculture, one-sixth of the land currently under cultivation. It represents one-quarter of the agricultural land in the coastal strip from Haderah in the north to Ashdod south of Tel Aviv -
which Environment Minister Yossi Sarid says is becoming one of the most densely populated areas in the world.
Unlike Kfar Shmuel, Kibbutz Ramat Rachel, a border settlement next to Jerusalem that became an enclave inside the city after 1967, actually tried to fight the rezoning of its lands. Members of this deeply socialist kibbutz are proud of having sat on the Israel-Jordanian line between 1948 and 1967, when they often braved Jordanian bullets to work their fields. So a few years ago, when the ILA and the city of Jerusalem came to the kibbutz asking for its land, the members said no and turned to the courts. The city's Jerusalem Development Authority argued that the need for housing took precedence over kibbutz objections; the kibbutz argued that its lease to farm the land still had decades to run. A year ago, the court ruling came down, against the kibbutz.
Today, few at Ramat Rachel complain. Since 1967, the kibbutz had been evolving from a purely farming settlement into a tourist and leisure center, with the farmers allocating some shifts to tend the pool and fitness room, the guesthouse and the restaurant. Now, with the tens of millions of dollars the kibbutz has received in compensation for its lost fields, ground will be broken for a new Olympic-size swimming pool, a new fitness center, and extensions to the hotel. And those wishing to catch the last glimpse of the kibbutz's Jerusalem orchards had better hurry - the bulldozers are already at work.
The examples of Kfar Shmuel and Ramat Rachel helped persuade other kibbutzim and moshavim to accept deals the developers were offering them. Kibbutz Netzer Sereni, in the same Lod-Ramlah area as Kfar Shmuel's fields, saw a builder's offer of an eventual $5 million for part of its farmland as a godsend. The kibbutz was struggling under the weight of a 12-million-shekel ($4 million) debt.
When Netzer Sereni and other farming communities asked how the land could be developed without government permission, the developers - C.M.B.K., building town houses and apartments at the site - winked, handed over cash advances, and asked for a signature.
"These entrepreneurs knew what they were doing," says the former land official. "They knew the government would give in to pressure to release land for new housing, they knew that no matter how much they paid to the kibbutzim, they'd still turn a very high profit."
The official points to one-time farmland near Petah Tikvah, a satellite city northeast of Tel Aviv. When a group of moshavim sold 400 dunams (100 acres) to a developer in mid-1992, the land was valued at about $150,000 per dunam. By early 1993, a dunam was worth $250,000. By mid-1994 the price climbed to $650,000 per dunam - $2.6 million per acre.
"No wonder those kind of earnings attracted foreign investors to Israeli real estate," says the official. "And the more money comes in, the higher prices climb."
Not all farmers are getting rich. Kibbutzim and moshavim far from central Israel haven't had anyone knocking at the door with wads of dollars. "We're concerned about our members on the periphery," says Ariel Reichman, who heads the Labor party-linked United Kibbutz Movement. "We're now asking that kibbutzim which have already made deals share some of the profits with their poorer comrades."
What if they refuse? "It will have far-reaching effects on our movement's future," he says, without elaborating.
A spokesman for Hakibbutz Ha'artzi, a smaller movement linked to the left-wing Mapam party, says it has asked all kibbutzim signing deals to set aside 2 percent of the money for the movement. "So far no one has refused."
Such moves, however, are not enough, says Salai Meridor, head of the World Zionist Organization's settlement division. "The government must direct all earnings from changes in land use to support kibbutzim and moshavim in the country's periphery," Meridor (a Likud member and brother of the former justice minister Dan Meridor) wrote in early September to Prime Minister Yitzhak Rabin. It's in the national interest, he argued, to support outlying settlements that could collapse because of new economic realities in Israel.
Other Jewish Agency sources say the government will have to find a way to return some of the profits to the Agency, which collected the money from Diaspora Jewry to help farm the land in the first place. "It's inconceivable that after subsidizing moshavim and kibbutzim for decades, we'll allow some to become millionaires," said an official.
What's happened in the past two years, says Prof. Aryeh Shachar, head of the Hebrew University's urban studies department, is a revolution. Land, considered by all previous Israeli governments to be a national birthright, has become an economic commodity. Land bought with money collected in the JNF boxes or donated to the UJA and Keren Hayesod has become subject to the same market forces that control the price of fish or computers.
Shachar, also a senior researcher at the Floersheimer Institute for Policy Studies, a Jerusalem think-tank, says he's put together a team at the Institute to examine the implications of the land sales for the future of Israeli agriculture. "In a few years, perhaps, agriculture will disappear from most of the center of Israel and will only remain in outlying areas," he says.
"Whether it's good for the country, or not so good, only the future will tell." But by then, it may be too late.
1994
 |
|
 |
|
© The Jerusalem Report 1999-2000 |  |