Coexistence put to the test: How will the recent riots affect real estate in mixed Jewish-Arab cities?

Earlier this month, Jaffa, Lod, Haifa, and other mixed Jewish-Arab cities across Israel saw violent clashes between local Jewish and Arab residents that left dozens injured. Now that the riots are over, the housing market may have a hard time recovering. In Lod, however, where the worst violence took place, some interested buyers may actually choose to sign up now in order to capitalize on an expected drop in real estate prices.

During the recent ten day conflict between Israel and Gaza, residents of several Jewish-Arab cities across the country were faced with two types of violence simultaneously: the external threat of incoming rocket attacks from terror organizations in the Gaza Strip, alongside the internal clashes between local Arab and Jewish residents in their own cities that left dozens wounded. 

These riots took place in a number of mixed cities throughout the country, including Haifa, the largest and most well-known, as well as Acre, Ramla, Lod, and Jaffa. During normal times, the Jewish and Arab populations in these cities live side-by-side in an inspiring example of peaceful coexistence that is a source of optimism for the rest of the country. 


However, with the start of Operation Guardian of the Walls, some members of the Arab-Israeli population of these cities broke out in riots and violent demonstrations. On May 11, Yair Revivio, the Mayor of Lod, stated that the police and the municipality had “completely lost control” and warned that the country was on the brink of “civil war.”

In many cases, the Jewish population did not stand idly by during this time. Groups of local Jewish residents and others who came from other parts of the country took to the streets to confront the Arab gangs, turning these cities into an ethnic battlefield. People from both sides threw stones, vandalized businesses, and torched cars, homes, and even synagogues. Perhaps most disturbing of all, there were several lynchings, where unsuspecting victims who stumbled up an angry mob were severely beaten and, in some cases, even murdered.

Violence in the trendy city of Jaffa has caused some Jewish residents to question whether or not it is safe to stay

In some of these mixed Jewish-Arab cities in Israel, like Jaffa, the riots broke during a period of economic prosperity, where the real estate market was thriving. For many years, Jaffa was considered the dirty backyard of Tel Aviv, the strongest and wealthiest city in Israel. While most parts of Tel Aviv are clean, well-kept, and enjoy strong infrastructure, Jaffa suffered from decades of neglect and was overrun by poverty, drugs, and crime.

However, this trend began to change gradually in the early 2000s, when the northern area of the city, adjacent to Tel Aviv, became popular with young Tel Avivians and Bohemians. Demand soon spread south to other neighborhoods in Jaffa, and the municipality began to seriously invest in the development of the city. 

More and more boutique real estate projects popped up, including in the Arab neighborhood of Ajami overlooking the sea. In the southern neighborhoods of Jaffa C and D, prices tripled within a decade, from an average price of half a million shekels for a 3-room apartment in 2010 to 1.5 million today. The accelerated momentum of real estate development has drawn criticism of gentrification, as many veteran residents, both Arab and Jewish, are being priced out of their own homes by the upper-middle class. 

The riots that broke out in the city shocked its Jewish residents, most of them secular and liberal. In media interviews, some even said they were weighing whether or not to stay in Jaffa. At the same time, however, there were a number of joint demonstrations by local Jewish and Arab residents condemning violence and promoting peaceful coexistence in mixed cities.

Ironically, the riots in Lod have actually attracted two new types of buyers

The worst clashes occurred in Lod, where dozens were injured and two people were even killed – one Jewish and one Arab. Many buildings were set on fire, including homes, businesses, and five synagogues. Most of the riots broke out in the Rakevet neighborhood, an Arab area in the west of the city, and Ramat Eshkol, a former Jewish neighborhood that has become mixed over the years. Today, about 70% of the residents of the Ramat Eshkol neighborhood are Arab, and about half of the Jewish residents are part of a local garin torani – a community-building initiative that aims to strengthen the Jewish and religious presence in the city.  

Now, after about two weeks of relative calm, the atmosphere in the area is still tense. According to Shevi Shneorson, franchisee of Anglo-Saxon Real Estate in Lod, riots broke out in the city during a period of prosperity and growth in the Israel real estate market: “The month started off really well, with a large number of deals signed and many more contracts in the pipeline. Over the course of the week and a half of violence, all of the deals were canceled,” she said. “Now that the storm has died down, some of the buyers are once again interested, but others have decided not to finalize the deals.”

However, according to Shneorson, the riots also attracted some new buyers to the Ramat Eshkol neighborhood. “There are now two types of new buyers. The first are investors who want to buy immediately in order to take advantage of the drop in prices. The second are ideological. They want to move to the city in order to increase the Jewish presence and strengthen the religious community. Most of these buyers are members of the Religious Zionist settler community.”

Asked whether the riots caused a drop in prices in the city, Shneorson replied that there are some specific opportunities that have emerged: “Before the riots, a three-room apartment was listed for NIS 840,000, and today the owners are willing to sell for NIS 750,000. This is not a widespread or long-lasting trend, however. Sellers who do not have to sell immediately know that they will ultimately be able to get the asking prices listed before the riots. Within a few weeks, people will forget all about it.”

Despite a return to normalcy, some are wary of what the future holds for Israel’s mixed Jewish-Arab cities

Day-to-day life in the mixed cities has largely returned to normal, and over the next few months, apartment sales will probably be back on track as well. It is important to remember that despite the difficult images and stories that emerged from these cities, the vast majority of their residents, both Jewish and Arab, were not actively involved in the riots. Most were shuttered in their homes in fear trying to keep themselves and their families safe.

Nevertheless, what happened in these mixed Jewish-Arab cities reminds us all that underneath the apparently peaceful reality, the residents of Israel’s mixed cities actually live at the mouth of a volcano; without a fundamental change in the status quo and the relations between the two peoples sharing this land, things could erupt at any minute.

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The contents of this article are designed to provide the reader with general information and not to serve as legal or other professional advice for a particular transaction. Readers are advised to obtain advice from qualified professionals prior to entering into any transaction.

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