Tel Aviv’s Hottest Area Demands a ‘Nationalism Premium’

(Bloomberg Businessweek) -- A Jewish developer recently made an unsolicited offer for Nouha Siksek's beachfront home in Jaffa, Tel Aviv's historic port. With land prices surging in the city and the run-down neighborhood undergoing a major face-lift, he was prepared to pay millions of dollars for the two-story house, planning to raze it and build an apartment tower with views of the Mediterranean. Siksek said no. “I'm not interested in the money,” says Siksek, 69, sitting with fingers intertwined on her black leather couch, a mural of the Dome of the Rock—one of Islam's holiest sites—on the wall behind her. “Where would I go?” she says. “My father was buried here. My uncles were buried here. I want to be buried here with them.”

The quandary Siksek and her neighbors face is an economic distillation of the struggle over land in Israel. Prices have almost tripled in some parts of Jaffa since 2010, enriching—on paper, at least—many of the area's 16,500 Arabs. But cashing out means surrendering to a wave of new residents, mainly Jewish, and hastening the end of 1,400 years of Arab presence in the area. What's resulted is a market in which buyers must pay what could be called a “nationalism premium,” the extra cash needed to persuade sellers to disregard ancestral loyalties. “Everyone has a price,” says Abed Abou Shhadeh, a member of a prominent family that's been in Jaffa for at least seven generations. “But the price is outrageous, and a big portion of them just don't sell.”

Abou Shhadeh says the reaction is rooted in the Arabic word beit. While it literally means “home,” he says that for many Arabs it has a far greater significance: Beyond just walls and a roof, it's the place they expect to die. The feeling is especially acute in Jaffa. In the 1920s and '30s, wealthy Arabs in the city were castigated for selling their homes to Jewish newcomers. Then in the war of 1948, 95 percent of Jaffa's 75,000 Arabs fled. After Israel prevailed in the conflict—which Palestinians call the Naqba, or “disaster”—the new government barred their return and settled Jews from other countries in Jaffa, leaving Arabs in the minority.

For decades, Jaffa was decrepit and crime-ridden, and most Tel Aviv residents would visit only for cheap hummus, pot, or prostitutes. “Back then, choosing to live in Jaffa was considered hardcore, like you're taking a risk,” says Yaron Tsruya, whose real estate office sits on a once-derelict Jaffa street now home to some of Israel's wealthiest families. After a few pioneering art galleries popped up, hip cafes followed about a decade ago, and today Jaffa has some of Tel Aviv's trendiest hotels, bars, and restaurants. Siksek's husband, Ibrahim, used to keep goats and a horse that grazed on vacant land near the house. Today, he has to content himself with a dozen caged canaries, because the lots have been filled with modern villas. “Animals can't eat houses,” he says with a laugh.

The boom has created a two-speed Jaffa. Young Israeli couples and affluent families have moved into parts of the city, reflecting an improved sense of security. Police, however, are reluctant to patrol Arab areas, so business owners often pay young toughs for protection, according to Daniel Monterescu, an anthropologist who's studied the area. “There's a total lack of trust in the police,” he says. Although Siksek says she has no problem with her new Jewish neighbors, she suspects the gentrification reflects a not-so-subtle nudge toward the exit from the Israeli government. A reminder came on March 10 in the runup to parliamentary elections, when Prime Minister Benjamin Netanyahu said, “Israel is the nation-state of the Jewish people—and the Jewish people alone.”

Pressure to resist selling homes to anyone besides immediate family or, in rare cases, other Arabs, remains intense, says Ayman Mugraby, an Arab who owns one of Jaffa's top real estate brokerages. The community “thinks like this,” he says, making a tunnel with his hands around his eyes. He understands the reluctance to sell, as passions on the issue run high: Some Jewish groups fund purchases by Jews to increase control of the land, and in parts of East Jerusalem, Arabs who sell property to Jews have even been threatened with death. But Mugraby says the same forces that have made many families rich are making it difficult for young couples to buy homes. “We're sitting on diamonds,” he says, “and we don't know how to polish them.”

To contact the editor responsible for this story: David Rocks at drocks1@bloomberg.net

©2019 Bloomberg L.P.