Hanan Rubin

Double the tax on Jerusalem’s ghost flats

A sharp tax hike for non-resident homeowners will help shape the capital into a vital and tolerant city

The first time we went to the government with a proposal to double the municipal tax on “ghost apartments” (empty apartments owned by non-residents) in Jerusalem, we were promptly shown the door: the ministers viewed this measure as potentially damaging for their friends abroad. Following the elections, we found a sympathetic ear in Interior Minister Gideon Saar and Finance Minister Yair Lapid. It was May 2013, and we were right at the finish line: both ministers approved the proposal, and all that was left was the formal approval of the government.

Then the government collapsed, Israel went into another electoral cycle, the ministers changed and we had to start the process all over again. Political instability is very characteristic of Israel, and often disheartening for its young public officials. But it is in the nature of good ideas to finally break through all obstacles.

Not everyone thinks increasing municipal taxes for non-residents is a good idea, and for each of our claims in favor, there always seems to be response. We say that non-residents don’t shop in the city, and others retort they also don’t use municipal services; we claim that they are pushing up prices and housing standards, and are answered that these real estate deals generate income for the city. To the claim that increasing municipal taxes would contribute to the city’s budget, the response was that people would find all kinds of ways to escape payment – like paying people to use water and electricity.

In my opinion, we’re looking at this all wrong. Instead of viewing the increased taxation as a penalty for homeowners, we need to think about this measure as an opportunity.

Jerusalem is in full bloom. Over the past few years, we have seen much progress in education, culture, tourism and the economy. The city has bounced back from politicking, social tensions and terror attacks. Today’s Jerusalem is all about innovation, creativity and optimism. Across all sectors of society, Jerusalemites recognize the inherent value of diversity and coexistence. Jerusalem is a pilgrimage site, home to Israel’s basketball champions (finally!), a place of wondrous architecture, sacred sites, top-notch museums and world-class restaurants. Everyone wants a part of Jerusalem – not in order to save it, but to take part in its success as a city combining tradition and innovation, religiosity and diversity.

It is this success that has made the beating heart of the Jewish world attractive for investors the world over. Jerusalem currently has around 9,000 “ghost apartments,” including entire neighborhoods such as Kfar David or Mamilla, in the very heart of the city. In the building where I lived until recently, seven out of 11 apartments were only in use for a few days each year. It is sad to see whole sections of the city empty. But it is even sadder to think of the young, dynamic population that won’t be able to afford an apartment in central Jerusalem so long as there is someone who will pay more.

Jerusalem is unlike any other city in the world. It is the fountain of ideology and innovation in the Jewish world. It is a challenge and an opportunity. It enjoys a unique, mutual bond with the diaspora: connections formed here are of special significance to Jews both home and abroad. The cohort of young leaders being formed in Jerusalem is hard at work breaking every known paradigm.

Many owners of “ghost apartments” have invested time, energy and money in Jerusalem with the best intentions at heart, and have a great share in what has become of the city in recent years. They have done it through encouraging young people to be the change they dream of. But this phenomenon has driven housing costs to the level where it is nearly impossible for the average young Jerusalemite to buy an apartment, or even rent one at a reasonable cost. These young people will not be able to stay, and that is what gave birth to the idea of doubling municipal taxes for non-residents. Or as I like to call it, “the pro-affordable housing tax”. This new ordinance is projected to generate around 10 million NIS annually, solely dedicated to creating affordable housing for the city’s young.

So before you take issue with this proposal, please remember that Jerusalem is not itself without young people. Every property bought for millions of dollars only pushes our dream of finding a home in Jerusalem further away. Again, this is not a penalty, but an opportunity: to take part in one of the great challenges of the contemporary Jewish world – maintaining Jerusalem as a vital, tolerant and dynamic city.

About the Author
Hanan Rubin is a Jerusalem City Councilman and co-founder of Wake up Jerusalem, a social-political movement in Israel for young adults.