Knesset Won’t Put a ‘For Sale’ Sign on Israeli-Owned Land

Advocate For Privatization: Benjamin Netanyahu, center,
with security guards in northern Israel on July 20.
Getty Images
Advocate For Privatization: Benjamin Netanyahu, center, with security guards in northern Israel on July 20.

By Nathan Jeffay

Published July 29, 2009, issue of August 07, 2009.
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An unlikely alliance of settler leaders on the right, Arab parties on the left, student groups, Likudniks and many others across the political spectrum has united to scuttle a plan by Prime Minister Benjamin Netanyahu to privatize state-owned land.

Despite the vastly different beliefs of the various opponents, for all of them it was a matter of ideology. “This is unique in the history of the State of Israel,” said Yossi Katz, a Bar-Ilan University geographer and a leading campaigner against the proposal. “It’s a very unique struggle that has united left and right in a way that hasn’t happened here since the 1950s.”

The proposed law, which had to be withdrawn for lack of support, would have allowed the private sale of land that currently falls under state authority. Netanyahu, a student of free-market economics and an advocate of privatization, argues that the change is necessary to boost the economy, and vows to reschedule a vote on the bill.

In Israel, the Israel Land Administration (ILA), a government body, has authority over 93% of the land. While in everyday language, people with homes, businesses and farms on this land say they “own” it, legally speaking they are tenants who lease it for 49 years — the time period a nod to the Bible’s directions for land distribution.

This arrangement is safeguarded by a 1960 law ensuring that state land remain state proprety and has long been cherished by Israelis of all political persuasions as the embodiment of the Zionist principle of the “Land of Israel for the People of Israel.”

Netanyahu’s proposed law would have ushered in reforms for the ILA, as well as empowered it to sell land on the open market. While the proposal is ostensibly concerned with urban land, by extension it would give the green light for sale of rural land. The only ILA-managed land that would have been unavailable for sale was the 13% owned by Jewish National Fund.

The ILA claimed that the law was essential to reforming an antiquated system. “This will eliminate a lot of bureaucracy,” spokeswoman Ortal Tzabar told the Forward. “The current system takes a lot of manpower, as people who have already bought a home, whenever they want to make a [structural] change, get a mortgage or sell it, have to come to the ILA and fill in forms. We need to put a lot of energy into renewing leases.”

Netanyahu claimed in a speech at an economics conference in July that the reform “would remove the obstacles and release the spring” for economic growth. He said, “I estimate that for at least 15 years, solely as a result of this, we will see a significant increase of between 1% and 2% in our product every year.”

According to Ben-Gurion University geography professor Oren Yiftachel, there is “some logic” in Netanyahu’s plan. He told the Forward, “If you allow people to buy land, they will be able to speculate, have motivation to sell it, and it could speed the economy and bring property prices down.” Echoing doubts voiced by many economists, he added, “But given that there are a few big developers here, it’s hard to imagine that they will let prices go down.”

The law had its second and third Knesset reading July 22. Theoretically, as a government proposal, it should have passed smoothly. But wherever Netanyahu turned, he faced opposition.

The nation’s youth — from the Federation of Working and Studying Youth on the left to Bnei Akiva on the right — joined forces to demonstrate against the law. Inside the Knesset, Likud lawmakers, as high-ranking as Deputy Prime Minister Moshe Ya’alon, whom Netanyahu recruited to the party, were against it. Four Labor lawmakers planned to vote against, and the rest were absent from the plenum. Another coalition member, the Jewish Home, a religious-Zionist party, was against, as were many Yisrael Beiteinu lawmakers. With only Shas united around him, Netanyahu withdrew the bill.

The prime minister is determined to find a way to get the law through, although it is not clear when. Reports indicate that he has brought Ya’alon on board. But most of the opposition to the law is so deep-seated that it is unclear what Netanyahu could have done to persuade the opposers to change their votes.

Laborites’ opposition is rooted in the traditional left-wing antipathy to privatization. The failure of the bill represented “a victory of idealism over interests,” lawmaker Shelly Yachimovich declared. And while Yachimovich is seen as a rebel within Labor, on this issue her views are known to be mainstream.

Almost identical sentiments were voiced by the parties that flank Labor to its left and right. Dov Khenin of the far-left Jewish-Arab party Hadash called it “a giant achievement for the people’s struggle.”

Opposition leader Tzipi Livni of Kadima was once the nation’s leading privatizer, overseeing the sale of government corporations and monopolies, but even she drew the line when it came to land. “The robbery reform of the barons of privatization suffered a resounding defeat today,” said a Kadima statement released just after Netanyahu withdrew the bill. “This evening, the opposition delivered an important message to the prime minister, who has tried to buy reform and sell lands for a political prostitute’s hire.”

As if to underscore the strange alliances inspired by this bill, the unlikely Labor-Hadash-Kadima trio even has its own rabbi. Yachimovich went to visit Sephardic Chief Rabbi Shlomo Amar and obtained a letter warning against “hasty moves” that might possibly lead to an infringement of the Torah commandment that “the Land [of Israel] shall not be sold forever.”

Opponents to the law on the right — within Likud, Yisrael Beiteinu and the Jewish Home — voice the same concerns as critics in the center and on the left. They also have added worries: There is a fear that putting land on the open market could lead to vast acquisitions by Arabs — either Israeli Arabs or foreign Arabs channeling their sales through Israeli Arabs if that proves legally necessary — ensuring that while the country, politically speaking, may be Jewish, control over much of the land would lie with Arabs.

“The land of the State of Israel is not so expensive,” said Katz, a Jewish Home sympathizer. “Two Saudi sheiks… could buy up huge areas, decide how they will use the land and obstruct government planning.”

Tzabar said that even if land were to be sold, measures would be put in place to prevent large accumulations of land by a single person and the purchase of land by foreigners. She said that opponents of the law “are playing on people’s fears.”

Meanwhile, Arab politicians and community leaders have their own objections to the bill. They claim that Arabs who left their land in 1948 and 1949 still legally own it — even though Israeli law renders it property of the state — and hope for restoration of land to refugees in the future. “The transfer of the ownership of the land of Palestinian absentees clearly entails the complete and final negation of the rights of ownership of the Palestinian refugees to these properties,” claimed a statement by Ittijah, a union of Arab nongovernmental organizations, and the Arab Association for Human Rights.

Contact Nathan Jeffay at

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