10% of Israelis live in Jerusalem, Israel's capital and one of the leading cities in the number of building permits issued. Talking to "Globes" deputy editor Dror Marmor at the Globes-Bank Leumi Israel Real Estate Conference in Tel Aviv today, Jerusalem Mayor Moshe Lion spoke about the reasons why Jerusalem has become particularly attractive for developers, and how growing housing supply will meet demand.
We will later present the large survey we conducted that shows that real estate developers go out of their way to praise the municipality's conduct in Jerusalem. But we also see this in the numbers: the city leads in building permits, and especially in urban renewal. Ultimately, when developers are complimentary, the real test is the test fort the city and the residents. Don't you think this could turn out to be a double-edged sword?
"With us here is the Jerusalem city engineer, who in my opinion is the best city engineer in the country. He really, really deserves a lot of praise. The secret is to outline a vision, determine the path you want to take, and then step back and let the system work. Anyone who does not act according to this policy cannot continue. In Jerusalem, we have a planning director of the highest level, who listens to everyone, to developers, to residents. He does everything in partnership with the public. We don't look at the egos of the workers, but at what our city needs. Before I started the job, there was a sense of frustration, because the residents were constantly talking about negative migration from the city. It's clear that construction takes five to seven years - but I promise you that by the end of my term, you won't hear about negative migration. Because the number of apartments that are currently being built in Jerusalem is intended for all residents of the city."
Yet in 2024, 7,800 more people left the city than came to live there
"A rough calculation is around 1,700 families. But in principle, this is the fourth year that we have been building and issuing at least 7,500 building permits. This year, we expect to reach 8,000. We will also see similar numbers in the next two years. This will result in two things: significant positive migration to the city and the arrival of a strong population in Jerusalem."
Other mayors will say that in effect it is easy for Lion to embark on unlimited construction because Jerusalem enjoys a special grant as the capital city of more than NIS 1 billion annually, which helps you overcome the challenges that other cities have
"Our current spending in the city is high, but I have no criticism of other mayors, everyone has their own problems. But the complexity that exists in Jerusalem is not found in any other city in the country. When we talk about one million residents, we are talking about three types of population: the general population - between 350,000 and 400,000 residents, the size of Tel Aviv (minus). This includes religious Zionist and secular residents, about 350,000 haredim and 350,000 Arabs. There is no Arab city in the country the size of Jerusalem. Because of this population composition, we do not receive property taxes from many of the residents. That is why we are carrying out tremendous development to improve our socio-economic situation."
Most of the new construction is planned for high-rise towers. Where will the demand come from, when it is known in advance that towers are suitable for a population that is basically different from the one that currently lives in the city?
"I don't know of a situation where there is supply and no demand. The towers started years ago in Tel Aviv. When we talk about the size of a population like Tel Aviv, we have to understand that the socioeconomic situation in Jerusalem stems from the composition of the population. Therefore, when I talk about what we are building right now, it is about 70 to 75% of the housing for a high socioeconomic population. I have not heard of a single developer in Jerusalem who said, 'I started building and no one will buy.'
"Right now, we have strong demand from Jerusalem residents who want to improve their housing conditions, foreign residents who want to move to Jerusalem, immigrants - especially from the US, Canada, and Europe. Today's immigrants want to come to Jerusalem first and foremost. I travel around the world and see the longing of Jews for Jerusalem. Therefore, the demand is very high. We are in the midst of starting to build about 25,000 housing units and I don't know of any problem. Every developer manages to sell. We have been blessed with demand, and I thank God for this privilege. We need to continue to increase supply. And ultimately, I expect the housing market to stabilize. The number of housing units is increasing, and eventually there will be moderation, stability, and a decline. We are talking about 50-60,000 units, which will ultimately help moderate housing prices."
Do you have any good news for young people living in Jerusalem?
"I am sure that those young people, in a few years, will be able to buy apartments and pay off the mortgage. There are actually three vectors that I am developing in the city: construction of housing units, employment opportunities, and transportation."
But offices development have difficulty coming to Jerusalem
"The construction process is slow throughout the country. Building a tower takes a minimum of five years. After that, the towers start to go up. Naturally, when a company wants to come and offer jobs, it looks at when it can actually move in. We are not yet in a position in which it can be occupied in two years, but we are getting close to that. We are building an office zone that I believe will be the best in the State of Israel in Givat Ram, in cooperation with the Hebrew University. A combination of leading companies and the university itself. We have now opened 60,000 square meters of offices and it has all been leased. I think the office zones are the next thing for Jerusalem, and they are developing in parallel with housing construction."
You are the first city that will operate a light rail network, which is a major boost for public transport.
"I said that Jerusalem would be the first to get rid of traffic jams and we are on our way there. We have shut down the light rail and we have been criticized quite a bit on that, but we are on schedule. This is a huge revolution, and God willing, the light rail will be back in operation on September 1. But what is more important is that before the next line (Green Line) is operational, the existing line (Red Line) carries about 200,000 passengers a day, between Hadassah and Neve Yaakov. Think about what would happen if these 200,000 passengers were traveling by car.
The Green Line is already halfway there, and it is expected to start operating in the first quarter of 2026 in about eight months and will reach Mount Scopus. Between 70,000 and 80,000 passengers will travel on it every day. Think about what this does in decreasing the number of cars. Ultimately, when I finish with the Green Line, I will ensure that cars do not enter Jerusalem, and those who do will pay a congestion charge. As soon as the light rail is at a sufficient level, there will be no justification for entering with a car."
Including on Shabbat?
"No. There will be no transport on Shabbat. But the Jerusalem light rail will run, and what is special about it is that you can change lines and get anywhere in the city. Then there really is no reason to travel by car."
You mentioned earlier the population mix of Jerusalem, which, let's understand, is the State of Israel in a few decades.
"In Jerusalem it's a given. We all live together. Everyone is in a coalition. We argue, we fight, but we live together."
Full disclosure: The conference was held in cooperation with Bank Leumi and sponsored by Mivne Group, Shikun and Binui, Solel Boneh and the Fischer law firm. (FBC)
Published by Globes, Israel business news - en.globes.co.il - on July 22, 2025.
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