Sandy Kedar is deeply concerned. As head of the Association for Distributive Justice, he sees how the state makes decisions about zoning and land sales – and is convinced that the people in charge are in cahoots with the tycoons and against the weak, lone consumer.
By Shuki Sadeh

It seems like everyone everywhere is talking about real estate, and that everyone’s suddenly an expert on that expensive commodity called land.
Sandy Kedar

Sandy Kedar.
Photo by: Ilya Melnikov

Nevertheless, most people probably don’t realize that since August 2002, the Israel Lands Administration, which administers 93 percent of the land in the country, has made 2,655 formal, written decisions, but only a mere 77 of them (3 percent ) became known to the landowners – i.e., the general public.

This does not surprise attorney Alexander (Sandy ) Kedar, who heads the Association for Distributive Justice. For the past 15 years, Kedar has monitored the decisions made by the state authorities regarding land management and allocation – a very tough task: First you have to get hold of the decisions, which are not published in any systematic way, and then you have to decipher what they say. This is not an easy task even for French-born Kedar, who holds a doctorate from Harvard Law School.

“The mechanism of information control, in other words, who is privy to information and who is not,” says Kedar, “is a central issue in the power setup relating to land and distributive justice. It is not a coincidence that the ILA from the 1990s was tied to Ariel Sharon practically all of the time, and then moved to [Ehud] Olmert. It is the source of power. The important decisions are made in the dark. When you finally get to the ILA decisions, you discover that they are written in Chinese, but someone on the other side has a dictionary. The combination of the material not being made public and incredibly opaque language creates a mechanism whereby the power brokers decide who will get more and who will get less.”

The ADJ is an Israeli NGO that was founded in 2004 to promote a more just allocation of land and other public resources. The mainstay of its activity is the Hebrew-language newsletter Land Watch, through which the association informs its readers about what is happening with land in Israel and takes action on various levels requiring intervention, such as in the legal domain.

Kedar, 51, who teaches land law at the University of Haifa, developed a theory more than a decade ago about ownership and control of Israel’s land. Its central tenet is that a shift took place in the early 1990s from a collective regime, where the land was for use by the general public, and is now being concentrated under the control of a limited number of hands – and all against the backdrop of the accelerated immigration and urbanization processes the country has undergone.

How might the problem be defined?

Kedar: “You could say that in the past the state gave land to various elements so they could use it for means of production, and under the new land regime it became privately controlled real estate. This happened without the distribution being done in a transparent, equitable and just manner, and without the public interest being safeguarded.”

How bad is the situation?

“There is a small group here that receives major perks. I don’t know if we are at the banana-republic stage, but unless the process is stopped, we are definitely headed in that direction.”

The term “distributive justice” is associated with the High Court of Justice ruling from 2002 that halted construction on the agricultural land of moshavim and kibbutzim – a move that Kedar helped to lead. A few other examples from the past 20 years: The Dankner family almost succeeded in turning the salt pools in Atlit and Eilat into real estate that would have brought them great benefit, despite the fact that the lands were leased from the state. Criminal investigations of Dan Dankner and the former ILA director general, Yaakov Efrati, were launched on suspicions of bribery. A second case involves Hazera Ltd., a company that was controlled by Avigdor Kelner, which sought to build on land it owned near Hiriya (formerly the major garbage dump outside Tel Aviv ), although it was zoned for agricultural use. That move is being scrutinized as part of an ongoing investigation into suspicions of bribery behind the Holyland luxury apartment complex in Jerusalem. A final example: The three major fuel companies that jointly own the Pi Glilot storage compound near Ramat Hasharon will apparently receive partial rights to develop that property – whose value is estimated at a billion shekels – when the compound is vacated, even though they were granted the land for the purpose of fuel storage.

“There is a group of developers here who understand the economic potential inherent in the land they received from the state, and who are using their power to obtain things that belong to the public,” Kedar says. “It looks complicated, but it’s basically simple: Any money that does not reach the state coffers is money that does not get directed toward medication, education, and any other service that citizens are supposed to receive.”
High-profile campaigns

One of Kedar’s association’s high-profile campaigns is intended to stop the agricultural company Yachin Hakal from rezoning its lands for building. Yachin Hakal was founded in the early 1950s by the Histadrut labor federation and the Jewish Agency, as a merger of two companies that dealt primarily in citrus growing. The company had 12,500 dunams (3,125 acres ) of citrus groves and orchards and packing houses, on land it leased from the state for agricultural use. Today the land is in particularly high demand because it is in Ramat Hahayal, an upscale neighborhood in northern Tel Aviv.

In 1992, having fallen on hard times, Yachin Hakal was sold to the Jewish-British businessman Sami Shamoon, who died a year ago. Shamoon claimed in 2004 that before he bought the company in 1991, he received a promise from Ariel Sharon, then minister of housing and construction and chairman of the ILA’s board of directors, that when the time came to renew the lease, he would be given preferential terms that would enable him to build on the land. Menachem Mazuz, who was attorney general in 2004, ruled that the lands were to be used for agricultural purposes. None of this prevented the ILA’s board of directors, headed by Ehud Olmert, from deciding that Yachin Hakal’s lease agreement would be extended until 2009, and renewed in 2010 for another 49 years. That decision enabled Shamoon to move ahead with building plans on the land in question. In 2007, the Interior Ministry approved a master plan for rezoning lands for housing in north Tel Aviv. Yachin Hakal’s lands are included in this plan, which stands to profit the company hundreds of millions of shekels.

The ADJ sent a letter to Housing and Construction Minister Ariel Atias a month ago, requesting that he look into the ILA’s conduct in this case, and suspend the renewal of Yachin Hakal’s lease. If these requests elicit no action, the association is considering a petition to the High Court of Justice.

What exactly happened in this case?

“Here we have a series of decisions, each of which dealt with something ostensibly minor, but amount to 12,500 dunams of land, mostly in the center of the country … [It all happened] despite a clear-cut opinion from the State Prosecutor’s Office that Yachin Hakal should not be granted anything other than permission to cultivate the agricultural land.”

This affair has been going on for almost 20 years. Is this ongoing negligence, or corruption plain and simple?

“In my ‘Law and Society’ course, I use an article that draws a distinction between a one-time player and players who are involved in an ongoing way. The latter are big companies, banks, insurance companies and the like. The one-time player is the lone consumer who buys an apartment or sues the insurance company. It applies in this case as well: There are strategic players here with a long-term interest. They have the know-how, the skill and the connections, and they will work patiently until they change decisions in a way that benefits them. It does not always have to mean receiving a bundle of cash. Bureaucrats come and go; some of the bureaucrats proceed, after a cooling-off period, to work for the tycoons themselves – people they previously oversaw.”

Yachin Hakal issued this response on the affair to Haaretz: “Mr. Shamoon invested $130 million in Yachin Hakal, based on commitments that he was given in writing. In 1991, contrary to what Kedar said, the ILA rejected the demands of Mr. Shamoon and of Yachin Hakal to honor these commitments, which meant extending the lease agreements for another 49 years under the same terms. Due to this, the estate of Mr. Shamoon and the Yachin Hakal company filed a lawsuit against the State of Israel, to get the latter to honor the commitments made.”

Yet another maneuver Kedar’s association is following closely is the land reform being initiated by the current government of Benjamin Netanyahu. Under this reform, 8 percent of the state’s lands are to be privatized, with the object being to increase the supply of lands available for construction. Concurrently, the government is pushing for reform of the planning institutions. This would include, among other things, expanding the powers of the local planning and building committees, at the expense of the district committees, to expedite the planning process. ADJ is among those opposed to this reform.

What is the problem with this reform?

“One problem is that once the land is in private hands, it will not be possible to make use of it to solve social problems. Although proponents of the reform say it is merely 8 percent of the land, it constitutes an area that is twice as large as the built-up area in Israel, and most of it is in those areas in demand; most available land in the country is in the Negev. After that, you have to cut into nature reserves, military bases, industrial facilities. So out of the reserves available for building, a very high proportion will be privatized.”

Won’t this move increase the supply of land for building and therefore reduce apartment prices?

“It doesn’t always work that way … In my opinion, the reform will not lead to various sundry small contractors buying lands and competing with each other. There will be a few strategic players, real estate sharks who will create land monopolies, which is easier to do in real estate than in other fields. Big real estate firms and banks will coordinate prices and take other actions of this sort. Land will be marketed here even before the planning stage – and that begs corruption.”

It has been argued that reducing bureaucracy will remove some of the conditions for corruption.

“That is not correct. The mechanisms for oversight are very important. Perhaps certain things could be streamlined and better people integrated into the system. But in other ways it would spell chaos. How, for example, can not recording the meetings of local planning committees be justified? We are talking about critical decisions!”

What do you make of the Bank of Israel’s latest decision to toughen the terms for receiving mortgages?

“Caution in taking out mortgages is not in itself problematic, but this has to be seen in the more general context of a shortage of cheap apartments, which derives from, among other things, the cessation of public construction and the failure to subsidize mortgages.”

What do you make of the growing role of real estate issues in public discourse?

“This stems from the lack of equality we are talking about. It is sad to see how much an apartment rents or sells for today, compared to the average wage. In its early years the country managed to provide housing solutions for everyone, through public construction … But the state stopped building, and the result is that it is very hard to get an apartment. In my opinion, the state should go back to building public housing, including apartments for rent.”

Then it would be said that the government is too big and wasteful, and that building should be left to the private sector.

“I don’t accept that. There are a few problems that the free market does not resolve; one is housing. I am not an economist, but if you provide a reasonable solution for public or affordable housing, and build apartments for rent at reasonable prices, you drive housing prices down. The state can give companies like Israel Salt Industries or Yachin Hakal breaks, but can’t build public housing?”
A driving force

In 1996, when Kedar returned to the University of Haifa from his studies in Boston, the decisions had already been made to rezone agricultural land in moshavim and kibbutzim for expansion of residential and commercial areas, and he began exploring the issue. A year later, while teaching a course at the College of Management, in Tel Aviv, he referred during one of his lectures to a new movement he had read about: Keshet Hamizrahi Sephardi Democratic Rainbow, founded to advocate the rights of public housing residents.

“After the class, Dr. Yossi Dahan, a philosopher who had decided to study law, came up to me and said: ‘I am a member of Keshet. I invite you to attend our meeting.’ I went along and said they should pay attention to what was happening in the kibbutzim and moshavim. That is how I joined the organization.”

Kedar, an Ashkenazi Jew who grew up in affluent Ramat Hasharon, became one of the driving forces behind Keshet’s petition against the ILA decisions to rezone agricultural lands for construction. In 2002 the Supreme Court ruled those decisions null and void, among other reasons, because they contravened the principle of distributive justice.

How do you view that achievement?

“It was a great accomplishment, but it was not enough. Subsequently, orders were issued that freed a great many plans for construction that were in the pipeline. To this day you can see the expansions that were done. The main achievement was actually the statement about distributive justice, which had some educational value. Today there are good people at the ILA, in the State Prosecutor’s Office, and other places, who understand that this thing is significant; that it is something that must be taken into account.”

In recent years members of moshavim and kibbutzim have claimed that at least some of the lands were purchased with members’ private funds, and voluntarily transferred to the communal institutions and then to the state.

“The extent of the lands that were purchased for money is very limited – a few tens of thousands of dunam, compared to the 2.8 million dunam of lands in the hands of the moshavim and kibbutzim. Furthermore, you have to ask, how far back in history do we go? After all, a large share of these lands once belonged to Palestinians. Does anyone want to give them back to them?

“Let’s assume that the property was bought, but donated as part of the ideology. The fathers of the land settlement wrote explicitly in the historic lease agreements that land profiteering is forbidden. You can’t say, ‘after 50 or 100 years I’m changing the rules of the game.’ Remember also that the moshavim and kibbutzim received privileges for years from the state.”

Others say that moshavim and kibbutzim deserve high compensation because, purely by virtue of having sat on the land for many years, including during the tough times before the state’s establishment, they caused it to prosper.

“Dov Weisglass, who represented the kibbutzim before the High Court, used that blood-sweat-and-tears argument. We were backed by the Forum of Development Town Mayors, who said: ‘Did we not get hit by Katyusha rockets? Did we not absorb immigrants? Did we not fight and serve in the army?’

“What happened with the rezoning of land is that within the moshavim and kibbutzim movement, those who contributed the most received the least. After all, land belonging to a kibbutz or moshav in the middle of the Negev or tip of the Galilee is not worth a tenth of land in [centrally located] Bnei Zion or Glil Yam. If the key is contribution to the country, fine. We might also talk about the Israel Defense Forces’ dead and wounded.”
Agricultural debacles

There are still hundreds of thousands of dunams of agricultural land in the center of the country, some of which remains uncultivated. Housing Minister Atias last week called on moshavim and kibbutzim to return these lands to the state, to increase the supply for construction. Atias believes that 12,000 housing units can be built on them.

Let’s assume that moshavim and kibbutzim voluntarily give the uncultivated land back to the state. Is there no danger that open spaces in the congested center of the country will turn into concrete, and that the money will wind up going to the tycoons?

“I think that Israeli society is so powerless and tired that in a confrontation between power groups, the general public interest finds no expression. There are agricultural lands in the center on which we should build. But this has to be handled in an orderly manner, so that the money goes to the state coffers for providing services. But most of these areas need to remain green, and they must be safeguarded against real estate developers. Several solutions come to mind: We could give farmers subsidies to continue cultivating the land – that would have an environmental and economic advantage. We could expropriate land from moshavim and kibbutzim to build parks – and pay them compensation, according to the agricultural value of the land.”

Eight years after the High Court ruling, there are quite a few issues over which Kedar and his colleagues are still fighting the moshavim and kibbutzim. Indeed, the State Comptroller’s Report, published a month ago, provided the association with ammunition on two other fronts. The first is unallocated agricultural plots: Today there are approximately 4,000 agricultural plots that the Agriculture Ministry has yet to allocate to any kibbutz or moshav. The ILA and the ministry have disagreed for years over whether and how to allocate these lands, whose precise number is unknown. The association supports the ILA’s position, and requests that if plots are allocated, that it be done by means of a tender open to the general public, so that land does not go directly to the moshavim and kibbutzim.

As the flipside to the picture of the kibbutzim and moshavim, Kedar is examining the situation of public housing tenants, as well as of people who are living in homes that belonged to Palestinians until 1948, without the legalities having been ironed out. This is the situation in Tel Aviv’s Shalem neighborhood, for example. Currently the authorities maintain that the residents are living there without permission, on land that belongs to the state, and so they are defined as squatters. What these populations have in common with moshavim and kibbutzim is that the legal status – concerning residents’ rights to the land – has not been fully resolved since the state was founded.

How does it happen that people who have been living for years in their homes are suddenly designated squatters? Isn’t everything set down in laws?

“I’ll give you an example: Akirov Towers, where Defense Minister Ehud Barak lives, was built on the lands of Givat Amal [in North Tel Aviv]. Once upon a time, before 1948, it was a Palestinian village named Jamusin. During the War of Independence, poor Jews who lived in the Jaffa-Bat Yam area fled or were evacuated, and were resettled in Givat Amal. David Ben-Gurion promised them they would move out of there, and that everything would be all right. Over the years they tried to straighten out their legal standing, and applied to the Tel Aviv municipality to that end, but it refused.

“In the 1960s, the municipality built in that area the neighborhood of Shikun Tzameret, which was intended for the top echelon of municipality employees. They were granted land-lease agreements for generations. When the residents of Givat Amal got wind of this, they said to City Hall: Let us buy the apartments according on the same basis as the municipal workers. It was explained to them that this would not be possible, because the land is earmarked for defense needs. Over the years the residents of Givat Amal were ousted, and Akirov Towers went up. Now tell me, who is the respectable owner of the property and who is the squatter? The residents of Givat Amal, among them the journalist Ben-Dror Yemini, waged a campaign. They managed to obtain compensation: Anyone who owned a square meter in Givat Amal received money – the value of about a square meter in the buildings that went up. However, they got substantially less than what they would have received had their status been that of leasees for generations, like the Shikun Tzameret people. Nevertheless, they were called extortionists, which is completely untrue. You cannot ignore the fact that the residents of Shikun Tzameret are Ashkenazim, and the residents of Kfar Shalem and Givat Amal are Mizrahim.”