Israeli housing protests evolve into major crisis By Aron Heller | Associated Press, Tuesday, 26 Jul 2011

JERUSALEM (AP) _ Thousands of young protesters have set up sprawling tent camps in Israeli cities, forcing Prime Minister Benjamin Netanyahu on Tuesday to introduce economic reforms to address a swell of discontent over high housing costs and stave off the worst domestic crisis of his two years in power.

Netanyahu’s reforms, meant to bring down steep housing prices, appeared unlikely to end the crisis, which already has forced him to cancel a high-profile visit to Poland and sent his approval ratings plummeting.

The housing protests, which have sprouted up over the past two weeks in parks and along city streets from Tel Aviv to the desert city of Beersheba, have tapped into a wider sense of frustration over an eroding middle class and growing gaps between rich and poor.

In recent months, the country has experienced protests against high prices of gasoline and cottage cheese and seen lengthy strikes by social workers and doctors over low pay and harsh working conditions. The unrest also appears to be inspired by the success of demonstrations in neighboring Arab nations.

The skyrocketing real estate market _ which has driven prices for modest apartments to well over $500,000 in major urban areas _ largely stems from the country’s economic strength.

Israel emerged from the global financial crisis relatively unscathed. The economy is enjoying rapid growth, and unemployment is at its lowest in decades.

But not everyone is enjoying the good times, and the ranks of working poor are growing. With the housing supply unable to keep up with demand in this nation of 7.6 million, home prices jumped some 35 percent between December 2007 and August 2010. Rental rates have also risen steadily.

Israel’s parliament speaker, Reuven Rivlin, a member of Netanyahu’s Likud Party, said the party risked losing its working-class base if it doesn’t do something to fix the problem.

“The economic situation is one that cannot be ignored anymore,” he told The Associated Press. “All the things that strengthen the economy on a macro level end up hurting people on the micro level.”

At a hastily called news conference, Netanyahu said the protests were “justified” and pledged to speed up housing construction, create more apartments for students, and sell government-owned land at discount prices.

“The housing problem in Israel is one that can be solved,” Netanyahu said, flanked by his finance and housing ministers. “The only way to lower prices in the long term is to make sure there are many more apartments in Israel.”

The protesters, led by university students who have dim prospects of ever being able to afford their own apartments under current conditions, promptly rejected Netanyahu’s proposals as insufficient and said they would continue demonstrating. The rejection reflected deep distrust of the government and its promises.

Demonstrators said that their protest had grown beyond housing _ they were also demanding reforms that would correct decades-long distortions in Israel’s wage structures and standard of living.

As Netanyahu spoke, protesters at a Tel Aviv encampment shouted at a TV screen showing the prime minister’s news conference, denouncing him even before he made his proposals.

In a matter of two weeks, the movement has swelled from a small gathering in Tel Aviv to a nationwide campaign that has captured the country’s attention.

At the movement’s unofficial headquarters in Tel Aviv, a string of tents more than half a mile (one kilometer) long lines Rothschild Boulevard, a stately tree-lined area that has come to symbolize the crisis. This week, protesters blocked main streets and disrupted parliamentary sessions in Jerusalem.

One of the protesters, Yael Friedson, a 26-year-old recent college graduate in Jerusalem, said she was encouraged by the protests.

“There was a feeling for a long time that the government and the tycoons could get away with whatever they wanted,” she said. “I feel that suddenly there’s a change and people are saying ‘no, and you can’t just do whatever you want on our backs.'”

Recent polls have shown broad support for the protests and a sharp drop in Netanyahu’s approval ratings.

Avraham Diskin, a political scientist at Jerusalem’s Hebrew University, said the protest has resonated with Israelis across the political spectrum because so many have been affected by the high price of housing.

“If you are a young couple and you have to spend 40 percent of your salary on rent, there is a problem,” he said. “There is something genuine about all that.”

Netanyahu’s news conference was broadcast live on all Israeli TV stations and watched closely by protesters. “What Netanyahu is offering is nothing less than deception,” said Daphni Leef, one of the protest leaders. She predicted that government land freed up for construction would end up in the hands of wealthy developers.

In a reflection of the depth of the crisis, Israel’s ceremonial president, Shimon Peres, chimed in.

“There is a distressing feeling that the middle class cannot financially meet their monthly obligations and live respectably,” he told reporters. “This is a real problem.”