A major initiative has been launched by the English-speaking community of the Sorotzkin neighborhood of Jerusalem. At the behest of local Rabbanim, the community has banded together to control spiraling rent prices. A Vaad has been set up under the leadership of Rav Pinchas Frankel, Mot”z of Unsdorf.
Takanos have been enacted which will place serious sanctions on violators of the rules. The guidelines are modeled after a highly successful effort in Sanhedria Morchevet, which was implemented by Rav Yitzchak Berkovits, shlit”a. Similar efforts are being planned in the Romema, Ezras Tora, and Tel Arza neighborhoods.
(Info submitted by a YW Reader)
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58 Responses
how about for other areas as well e.g arzei habira.
Although Rabbonim are behind this effort, this is decidedly NOT a religious issue.
As demand in many neighborhoods have increased, landlords have raised prices in a unfair way. I know of one person who had his rent raised from $1000 to $1500 in one year. Free market economics is alive and well, but that’s just not right.
(As an aside, part of the reason this happens is as follows. An unscrupulous agent calls a landlord and tells him that he can get him $250 more than he currently receives. In truth, the agent can only get him 100 but by telling him 250, will convince the landlord to pay attention to the agent. The landlord tells the tennants, I can get 250 more so either give me that or you’re out. The tennant figures, It’s worth the extra money not to have to move, so he pays another 250. Then the next landlord hears about this and does the same, except he asks for 400. The next guy asks for 500…..)
So with the encouragement of neighborhood Rabbonim (Reb Don and others), a group of people formed to battle the landlords. If the landlords can use their power to force people to may more – in an unjust way – the tennants can band together to force lower rents.
It is similar to unions here in the US.
I wish them much success!
The following are the letters which were distributed to every memeber of the community:
תקנות הועד
1. All new tenants must have their rental agreements approved by the ועד. (This applies whether the asking price is being adjusted from its previous level, and/or even if the lease is merely being transferred.)
2. If the rental agreement is not approved, the apartment may not be rented by a new שוכר.
With regard to contract renewals, the following conditions apply:
3. Any raise in price must be approved by the ועד.
4. Anyone whose current rent is deemed unacceptably high will be notified by the ועד.
5. In the case of an unapproved rent increase, the landlord will be notified that his apartment will be blacklisted in the community the next time it is vacated and comes up for rent – even if he reduces the price. In all cases, the current שוכר will not be penalized.
6. Anyone ignoring these תקנות has set himself apart from the ציבור and will be treated accordingly. Consequently, he and his family will lose their ability to:
a. Acquire a seat in the בתי כנסת of the שכונה.
b. Participate in the “Neshei” functions.
c. Register their children in the גנים of the שכונה.
ועד לעניני שכירות אונסדארף
Dear בני הקהילה,
For many years, our שכונה has been the place of choice for many בני חו”ל who have come to reside in ירושלים. ב”ה, we have seen tremendous growth in the number of בני תורה residing in אונסדארף.
Paradoxically, this הצלחה has created a situation where affordable living has become increasingly harder, as the vast demand for rental apartments has resulted in the extreme escalation of prices.
In response to this ever growing issue, with the encouragement and ברכה of הג”ר אהרן ליב שטיינמן שלי”טא and other leading רבנים, a ועד has been formed under the auspices of the מו”צ השכונה, הג”ר פנחס פרנקל שלי”טא with the goal of maintaining prices at a reasonable level.
The specific goals of the ועד are:
1. To prevent any further extreme rise in prices.
2. To ensure that all rental agreements with new tenants are at a reasonable price.
3. To bring down current, unjustifiably inflated prices.
To accomplish this, the ועד has instituted a pricing system in which every apartment is fairly priced, taking into consideration all relevant factors. Based on this, the ועד will ensure that all rental transactions in the שכונה are not overpriced. Towards this end, תקנות have been instituted as listed in the enclosed letter.
Understandably, the הצלחה of the ועד strongly depends on the unequivocal support of the community at large, for only a stout and unified ציבור will ensure its ultimate success. ב”ה, we have already seen much enthusiasm and support from the community, and we hope that everyone will take an active role in the הצלחה of this project.
Therefore, we turn to you for the following:
1. Representatives will be circulating through the שכונה to form a union of שוכרים who will commit to adhere to the תקנות הועד. It is imperative that everyone will be part of this union, as only through this will we be able to take a unified stand.
2. To notify the ועד of any apartment being vacated or transferred to a new שוכר. Similarly, please report any future rise in rent regardless of the current standing price.
3. To notify any potential שוכר of the ועד and its תקנות.
We thank you for your support,
ועד לעניני שכירות אונסדארף
For your convience, a hotline has been established. To submit your request for an approval, or for updated information, please call: (02) 537-4547
Please submit your request 7-10 days in advance to allow the ועד ample time for processing.
Very interesting. Having lived in Israel for a number of years I can understand why this is necessary.
“Takanos have been enacted which will place serious sanctions on violators of the rules.” I’m assuming this refers to those that pay more than the suggested amount. What are the serious sanctions?
I think this is a very good idea. Although the owners wont like it, it is insane the prices that people pay. Yes you can argue that people can move else where but the Chariedim like to live together. I myself pay a lot more than your average person but I did so because I want to live in a frum environment. Yes I am paying for something in particular but in no means should the landlords have a field day with it. (you can go on with supply in demand but there has to be a limit…..)
What was done in Sanhedria Murchevet? Why can’t the market decide? Look, due to price controls there was a challah strike last week. Rent control will leed to a shortage of apartments as there is less value in producing them.
we should do that in brooklyn to i agree
To Emes vayatziv-
1. Its not the market. Its dispoportiante to supply and demand. Just a few unscrupulous agents (see earlier posts) and a couple of chazerisha owners. Then, EVERYone thinks that prices are flying up, so owners ask more, and renters feel required to pay. While in essence, the TRUE average prices are much less.
2. In any event, if the kehilla bands together, as a union, they can decide: Ad Kan- we refuse to pay more. In Sanhedria Morchevet, people said it cant be done, and…its working like a charm!! You should see how fast those baalei battim folded up their tales and went like tattelach after the Vaad! Cuz for them its not worth having it empty for 2 months- they lose the whole ‘gain’ they thought they would make by raising!
And the few owners that refused tp give in- have their diros sitting empty!
destro613- what are you saying?
First of all, R’ AL Shteinman is majorly supporting this.
Second, noone is even dreaming of driving prices down. They are just keeping things fair/realistic. GEZEL is what the owners are doing! (COuld be the correct word is OSHEK)
To “thevoos”
Supply and demand works. If people are unwilling to pay prices will come down. I have no problem with trying to keep prices in check, however it has to be fair to owners too. If taxes, utilities, etc. go up the price has to respond accordingly. Many landlords when they are happy with their tenants, mantain a lower than market price to keep the tenant. Shouls the Vaad thus force an increase?
This is great news! Lets hope they do it in more areas too. The situation has gotten totally out of control to the point where only the very wealthy can afford living (near yeshiva) in yerushalayim and everyone else has to travel close to an hour to yeshiva every morning and an hour home at night! I personally know of someone whose rent went from $600 a month to $800 in less than 2 years. And their baal dira said he is being nice to him because he can get close to $1000 a month – which is true! People are paying $1400 a month in Ramat Eshkol for apartments on high floors with no elevators and unfurnished!
emesvaytziv- you wrote “If people are unwilling to pay prices will come down”
Thats the point exactly! Until now, the owners were using on eagainst the other. To wit, a shrewd owner wont even advertise a price- when called, he says, “How much would you pay?” Then when the next guy calls, he says, “Well, I have an offer for XYZ, will you top that?” Then he calls back the first one… and so on. So essentially, he’s playing one renter off the other, and people fall for it. Now, every is getting together and saying exactly what you wrote “we are unwilling to pay prices will come down”!!
Having been on both sides of this issue, I feel comfortable commenting on the situation.
On the surface, this issue seems to be similar to that in Manhattan regarding rent control. On one side you have the owners and landlords who want to maximize their investment and charge the highest rents that the market will bear. On the other side you have those that will get squeezed out due to the higher pricing. Advocates for the tenants emphasize that the character and flavor of the city will change because the artists and students and other individuals that could enhance the diversity of the city will be forced to move to Brooklyn (God forbid) or some other undesirable city with affordable housing.
Their argument is not without merit. However, why is it the landlord’s obligation to subsidize this cultural diversity by charging lower rents? If the market will support higher rents, that is the definition of a free market economy. The face of the city is constantly evolving. What was once a very undesirable place to live (downtown Brooklyn for example), is now one of the most expensive areas in the city.
Taking this to the issue at hand.
The Sorotzkin neighborhood of Jerusalem is a prime real estate location. If the free market is allowed to govern rents what will most likely happen is a typical cyclical pattern in local residential real estate.
The landlord’s currently have the upper hand and will take advantage of the situation to raise rents. This will likely cause a shift in the neighborhood by driving out those who can not afford to pay the premium. At this point two things can happen. One, the area becomes an enclave for the wealthier families that want the location and can afford it, or eventually enough families move out creating a glut in available apartments that those with money will not fill because they don’t want to be in such a chareidi neighborhood. If that happens, landlords will panic and eventually rents will come down again.
Either way it’s a gamble.
The landlords have a right to risk their investment by going after higher rents. If it backfires, no one is going to reimburse them for a dira that remained unoccupied for a few months.
Nor do the tenants have a de facto privilege to be in a prime location at a below market rent.
The best advice for tenants is to commit to a contract that will be agreeable to both parties. Landlords want stability in a long term contract by a reliable tenant who can pay on time. Most Landlords would be willing to forgo significant rent increases for the stability of a long term agreement.
In summary, enacting rent controls will ease the burden on tenants but hurt Landlords. I don’t see how protecting one party by punishing the other is a solution. Ultimately no one is forcing the tenant to remain in that location.
I do support the involvement of some kind of Vad that could mediate any disputes as well as set some guidelines for rental contracts. This would help set a standard for both parties to follow and still allow the Market to dictate the actual rent amount.
My favorite part about this whole debate is that parents are paying $1400 a month rent for an apartment, so that their children can learn with “mesiras nefesh” in EY!
You can get a nicer basement apt in Lakewood for $700 or less.
If all the rich spoiled Americans wouldn’t be hiking up the prices, the prices would come down by themselves. I know that I am probably offending many of the American yungeleit living in Yerushalyim, but you know that I am stating the truth.
Its not only the apt owners who are looking for the opportunity to make money off the ‘rich Americans’. The problem also lies with some renters who are willing to overpay just to get the apt they want. “After all, its only for a year or two” is their reasoning…
This has been going on in Ramat Eshkol area also, a band of Americans under the direction of their rabbanim are trying to maintain normal rents for the area. Many foreign investors are at fault, they bought the apts for cheap and want to bring in the dough, there is always an European couple who will pay anything and they are killing the rents for the rest of the bnei torah. Uniform standards are difficult to maintain, there is always the one who doesn’t agree.
I really hope this works. For those of us who actually live in E. Israel and aren’t just coming for a few years to learn, this rental stuff has really made thing untenable for us. It is also in the purchasing of apartments.
Wealthier yidden (ken yirbu) pay for their kids to have a place to live. at that point I assume it becomes “what is another $100, at least they will be close to the yeshiva, stores (whatever)” BUT this extra $100 is actually quite a lot of money for us! and it just goes up from there.
also, there is a lot of room for abuse. since apartments are at such a premium there is a disgusting practice of bnei yeshiva who are renting making a deal with their landlord that THEY (the renters) will get the new renters. THEN the current renters insist new renters buy thousands of dollars of furniture as a pre-condition to getting the apartment.
My chevrusa, newly married, had to pay (no jokes) $6000 for furniture in order to get the apartment he rented.
this is a well known practice & it is terrible.
Chicago Mentsch, you obviously have a knack for business talk without proper background knowledge of what exactly is going on Sorotzkin and other such neighborhoods. Baalei Dirah have approached many couples and told them that despite the fact that there is a contract he wishes to up their rent. He gives them an option. Either they can stick to the contract but after it is up they have to leave or they can pay the new “out of contract” price and they can stay after the contract is up. The situation is extortion. THERE IS NOT AN IOTA OF CORRECTNESS IN CHARGING $1800 for a 2 1/2 bedroom non-renovated apartment with an airplane sized bathroom on THE EIGTH FLOOR!!!! Many of the Landowners are mafia like and call those who retain their fair prices (of $1200 for a 2 bedroom apartment!!)and pressure them to raise their prices as well. Or how about the Americans who have moved here 14 years ago, who’s husbands have rebbe jobs in Yeshivos but are forced to move to America due to the fact that they had to switch apartments 6 TIMES IN ONE YEAR, due to the ANNUAL price hikes ( True story!!) Not everyone in these neighborhoods are as some have termed “Rich Americans”. I am sorry to all those who disagree but there is nowhere that I know of that experiences $100 price hikes yearly. I know of an elderly woman in Boro Park that was still paying $750 rent for a ground floor apartment because the landlords did not want to raise the price until a new tenant entered. When someone moves into an apartment it is because they can afford the rent at the time. To kick someone out of an apartment mid contract is in now way correct
a few comments —
1. what about if an american wants to move in? will he have to pay “market” rents, or will the vaad say you can’t move in cause you’ll upset the pricing system?
2. what about my cousin who lives on panim merot (she owns her apt, so this doesnt apply, but …) and she had to pay higher arnona cause the rav who sold her the apt (and got financing twice from two different sources twice over the years) said the dira had less square footage (metrage — ???) than it really did? how will her “rent” be determined when / if she decides to rent?
3. maybe i should move to east willy where the apts are market rent and my landlord can charge what he wants and i can get a nice apt instead of a “lower” (ok, notv so lower) but cramped apt in willy proper; i.e., will landlords not rent out their apts cause rents are too low.
4. what about that apt, occupied by a prominent rav, who has protekzia by the vaad, while the struggling (evil, to some) landlord (maybe a poor almona, whose only real assset is the small apt — now her children take her in, but the dira stays empty, cause the rent is too low)
just some scenario’s.
meaning it dont work
all I know is last year my sister and brother in law purchased a relatively large apartment (4 or 5 bedrooms I believe, think 5) in Maalot Dafna. The apartment was a little over 200 thousand. My other sister lives in Sanhedria and is paying around $600 for a small 1 bedroom (though no kids).
In neither case are the parents actively supporting them beyond shana rishona and both of them have jobs where they can work from home (parameds) so they can watch after the kids that while don’t pay great, pay decently well enough that one can actually mostly support a family based off of it (including paying mortgage, which in my sister’s case is cheaper than her old 2 BR apt in sanhedria) when one factors in other sources of income (being chaluka, side jobs and the like).
In response to mormat’s comments.
You have some valid points. However I disagree with some of your opinions.
The “out of contract” scenario is actually an often used tool in rental or lease agreements. Essentially what the landlord is offering is an early renewal of the contract to lock in the current price and extend the term of the agreement. This gamble can go either way depending on the market price at the original expiration date of the contract. It is very conceivable that the tenant has benefited because he locked in a price before another surge in prices.
The tenant is by no means forced to accept such an offer. He can just wait out the term of the current contract at his base rent and only face a possible increase at expiration, which he is of course free to turn down and move out.
Bottom line – it can go either way, but most importantly, the tenant CANNOT be forced to accept such an agreement nor be kicked during the contract term.
Regarding the following comment:
THERE IS NOT AN IOTA OF CORRECTNESS IN CHARGING $1800 for a 2 1/2 bedroom non-renovated apartment with an airplane sized bathroom on THE EIGTH FLOOR!!!!
This is nonsense. A 300 square foot studio on Central Park South costs $4,000/month. Is this also not correct?
As far as the ‘Mafia’ type landlords you describe, why do you feel the landlords have any less right to share rent information as tenants do? Certainly one cannot coerce the other into charging a certain price; however, sharing rental information is certainly not illegal or immoral.
Your story of a Rebbe being forced to move 6 times in one year due to ‘annual price hikes’ doesn’t add up. Annual, would imply once a year only. Sounds like he may have failed to secure a rental agreement and was then subject to unexpected raises.
Your story of the elderly woman in Boro Park, although it is very kind of the landlord, it is by no means an obligation.
For the flip side see MiMedinat HaYam’s comment #4.
Finally, your last comment “To kick someone out of an apartment mid contract is in no way correct”, I couldn’t agree more, however none of your scenarios demonstrated such an example.
To summarize my opinions on the matter, I feel that there is an unjust bias against the ‘big bad evil landlord’. As a property owner, one has the right to maximize their investment as long as such dealings remain within the legal limits of the city, state, or country. Adding an extra layer of oversight and restrictions from a Vad, only serves to undermine the laws already in place.
Waste of time ! in my humble opinion its simple as if your expensive we wont rent by you will go to your Neighbor , but saying that wont be any more apart of the community , Thats a MAFIA of some jokers !!!;)
Although there are definitely unscrupulous agents and landlords out in the market, they are not the problem.
No one has mentioned the simple fact that real estate prices have gone up 50 – 100 % in the last three years in most “chutznik” neibourhoods in Israel. Tel Aviv / Ramat Gan has also seen a dramatic rise in prices over the past two years. This increase has followed a greater international trend in almost all major cities in the USA, Canada, UK, Australia and Europe. As a resident of Jerusalem for the past 9 years, I have seen that the rental return on an property in Jerusalem has usually been between 4 – 5% of the value of the property. With the current rise in real estate prices in Israel, the rise in rental prices in Jerusalem has kept pace within this 4-5% return. So I think the issue is not one of “outrageous” or price gouging landlords but a simple fact of economics and the free market at work. Current rents (as high as they seem), for the most part are still with in this 4-5% range of the new property prices. Higher rents follow higher real estate prices, and landlords as in most parts of the world are entitled to a fair return on their investments. As an aside, 4-5% rental return is still at the lower end of the scale, when compared to other major cities.
The real fight is to control real estate prices, and is a difficult job given how many overseas investors are vying to own a piece of the Holy Land. There is a lot of Jewish money in the Diaspora, that is currently pouring into Israel and along with the welcomed investment, your average Kollel family is being pushed out of the market. Rent controls, might have the impact of keeping property prices down, by discouraging investors looking for higher returns on their money, but there is only one Jerusalem and by international standards many areas are still ” relatively ” cheap. Expect higher prices and higher rents because they are here to stay !
Its important to note that dollar interest rates have climbed from 3% to 7% over the past three years which means many landlords have had increases in their mortgage payments. Raising rents to cover this increase is both justified and ethical. Don’t be so quick to assume every rent rise is due to price gouging and greedy landlords and agents. Prices go up – its called inflation. Its a little simplistic and naive to expect rental prices to remain the same over extended periods. Some of the rental increases are definitely unjustified, but many are inline with basic market forces.
Chicago mentch- Usually, the people living in Unsdorf are young kollel families who decided to live in Eretz Yirael. They are by no means scraping odds and ends to live in the luxuries of Central Park South. The two are incomparable!
I personally know of several families who were forced to leave their apartments due to major rent increases.
TO GEMORAHOP,
WHOEVER YOU ARE . WHAT IS THE DIFFERENCE WHAT THE RENTS ARE IN LAEWOOD. THESE YOUNGERLITE WANT TO LIVE NOW IN EY FOR A FEW YEARS AND EVRYONE NOWS THAT THE LEARNING IN EY IS MUCH BETTER THEN IN LAKEWOOD AND THAT THE YOUNGERLITE IN EY MUCH MORE THEN THE YOUNGERLITE IN LAKEWOOD , SO WE HAVE TO FIGURE OUT AN EZAH HOW THEY CAN AFFORD IT . IF WE WANT OT HAVE GEDOLAI TORAH IN THE NEXT DOOR THEN WE NEED AMERICAN YOUNGERLITE LEARNING IN EY
I’m with you bush, what is the comparison between diamonds and plastic?
My mantra is, if you can’t afford the rent in that particular area, find some place else to live.
Beautiful homes, villas and apts in TelseStone, Har Bracha, Beitar, Modiim, and in yishuvim around yerushayalim.
HAKDOMAH:this Vaad has the backing of the local Rabbanim, Maran HaRav Shtainmon, and R’ chaim P. Sheinberg Shlita therefore although you might not fully comprehend the reason this what gedoilay yisroel think is fair and right. so if you cant understand it you agree anyway as it says Daas Bal Habayis Hepech M’shel Torah.
Not to go into the sugya at length about how the Baal Hadiras unfairly raise the price on young kollel couples, who by no way can afford such a thing, the only svarah is were staying only another year we will have to come up with money.
However I strongly disagree with comment about the price of an apartment in Manhattan.
1)that is the price of all apartments in the area therefore that is called the going price however many many apartments are considerably lower therefore just because some rich kid wants an apartment and is willing to pay anything for it doesn’t necessarily raise the market value.
2)most important, in Manhattan the price is such being that it close to the office, the nightlife, the upper-class apartments, etc. etc. etc. However the reason Sorotzkin is such a desirable neighborhood is because of the large amount of American B’nai T’orah living on Sorotzkin now the reason you want to live there is because of them however if they cant afford it i.e. all there rents were raised they would surly move out therefore it wont be a desirable place to live which causes all the prices to fall as has happened in Maale Dafna.
Now the Matara of the Vaad is as many people questioned “if you cant afford that particular area, find some place else to live.” is that the people would move elsewhere (as it has to happen being the large amount of yungerlait moving to EY and very limited amount of apartments)and that would Memaila cause the price on sorotzkin to fall. So to save the unnecessary anguish of having every one move the Vaad is in place to regulate the rent.
Avner “The Bunt”
1.What makes you think that all owners are paying mortgages? The majority are diras which have been in their hands for many years, as yerushas or from before they moved elsewhere over 10 years back.
2. All that financial talk aside (we can tell a mortgage broker when he talks!)if the renters band together, they can and will effect a change. People have asked here what will be done to ‘violaters’? Well they will be totally ostracized from the community, in every way possible. And, to all the naysayers “it’ll never happen!”, take a look what Rabbi Berkowitz, your rebbie, Avner, has accomplished in SM. FACT- it has worked!!
I used to rent and appartment while I was in kollel, as well as when I started to work. I now am managing an appartment which belongs to a family member. As such I have been on both sides of the argument and feel I can speak evenly.
We spent a year in Sanhedria Murcheved before the Takonos were enacted. We rented a converted machsan for which we paid around $500 per month. after our 6 month lease was up, the landlords raised the price by 10%. At the end of 6 months they wanted to raise it by another 20%, at which point we told them that they are out of their minds, and we would rather go somewhere else. This landlord was only willing to sign 6 month leases as he felt that he could raise the cost each time.
At the same time it was advised by R’ Berkowitz that acceptable rent costs were $700 for a 3 room and $800 for a 4 room appartment.
It must be realized that someone learning in the Mir yeshiva (where a large percentage of Sanhedria Murcheved citezens are learning) may get about $200, and a full time kollel salery is little over $400. In addition, a woman working half day in an unskilled job can expect to earn between $500 & $600.
In addition, many of the young kollel wives do not work, even part time, so many family incomes fall way short of monthly expenses even for a young couple without children.
Market forces can only work if the young families who are renting (and agreeing to pay the high prices) understand the value of money. Many young couples pressure their parents to pay the rent because they want to live in neighbourhoods such as Romema or Sanhedria Murcheved. I can understand why they would want to live in comunities like that, but one has to realize that if you aren’t paying your way, you can’t make outrageous demands. We have friends who are living in 1.5 rooms in Bet-El and are paying only $150 per month so that the husband can stay in kollel. I understand that people are not willing to move out there, but it gives you an idea of how some people are willing to live in order to stay in learning. (granted they are “Chardal”, but they are willing to make greater sacrifices for torah than most, myself included.)
In case you were wondering, we were not supported by our parents when we got married, and I left kollel and began working after a very short period because we could not support ourselves on my wife’s salary. We also rented a converted machsan because it was cheeper than a normal appartment.
This is indeed a fantastic initiative which has worked in other places and will enable more couples to stay in Yerushalayim.
One more point: people are able to ask more for an appartment, but only if they improve their appartment. A landlord will no longer be able to get an increased income just by pressurizing his tenants. I would also support a similar initiative here in Ramat Bet Shemesh, even though I am effectively a landlord myself.
I wish the vaad and the families in Romema et al. the best of luck.
I agree with Mistermann and Chicago Mentch. Why is this any different than Manhatten, which most people understand they can’t afford to live in?
Sorotzkin is prime real estate. Why do frum people think they can get anything – even when it’s not in their price range? THAT is the problem. In my opinion, a lot of kollel couples and families living in e”y come from well-off homes to begin with, otherwise, how could their parents afford to support them. At least in Lakewood, there’s a bigger chance that the wife will get a good job and won’t have to be supported nearly as much.
And there’s obviously more to the story of that Rebbe who was forced to move to America. Why couldn’t he move to Neve Yaakov or Beitar or other places with cheap rent that people who know they can’t afford the best move to? Why was is a choice between Sorotzkin and America?
The real problem, is what Shmuel99 said, regarding forcing the next tenant to buy your furniture at inflated prices. That is just getting worse and worse and must be stopped.
QUESTION to all who quote supply and demand.
Would you be upset if gas prices rose to $10 a gallon?
after all no one forced you to drive a car.
(besides let those poor Arabs make a decent parnossa.)
After reading all your pros & cons, I have one question, I am on both sides. I take care of my friends apt which have a high morgage. a yr ago say the rent in dollars was $ and the dollar rate was 4.45 or 4.5 The amount went straight to the bank. Know with the dollar rate low, She has to add at least 3-400 shekel ($100.) each month. Doesnt she have the zchus to raise it $50. to cover the loss, or change the whole asmount into shekalim We are taking about a fair rental lechatchila. something to thlink about!?
bush – I am not disputing the maaleh of learning in EY. (FYI, I learnt (altz bachur) in EY for 3 years.) However, as a general rule (I am not talking about the yungeleit who go to stay, they are not the ones spending $1400 for an apartment, many of them go to Beitar, Kiryat Sefer, etc.) the more yeshiveishe yungeleit (and girls) are the ones who stay in Lakewood, and the more “with it” guys and girls want to “go back” to EY for 2 years.
Those are the ones jacking the rents in Arzei HaBirah, Maalott Dafnah, Sorotzkin, etc.
Hey klurre kup
In the last year I have cut down on my driving due to increased gas prices. Although I B’H have a large family I live in a 3 bedroom house. It is called living within your means. If prices are too high find something cheaper. If you wanted to sell your car and a Vaad said maximum price is $7000 for a 2006 would you feel that is fair? If you are asking too much you won’t sell it. If a landlord asks for too much, he will remain empty. If people are willing to pay then that is a fair price.
Thank you to everyone for the interesting debate.
As a new poster on this site I feel our various opinions are all valid and have a good forum to be heard.
Let’s be clear though. All we are doing is talking. At the end of the day, the Vaad will never succeed in gaining a chokehold on the pricing of apartments. The letter they have sent out is all bark with no bite. Regardless of their threats to those who don’t follow their guidelines, they have no power to enforce them.
The only landlords that the Vaad will be successful in persecuting are the ones that live within the community. All the rest will just ignore this whole issue and continue to rent their diras to the highest bidder. Whether it be a couple from America, Europe or even the local Arab and his three wives.
Bottom line is ‘dina d’malchusa dina’. As long as the landlords are not violating any laws they will continue to have the right to rent their apartments to whomever they please and at whatever price they choose.
reb emesvayatziv-
A new day, same line: “If people are willing to pay then that is a fair price”. Thats the point here: “The people” are now saying: We are NO LONGER willing to pay! The party is over.
Additionally, all the casuistry (that means pilpul) on this topic is wonderful. But, its irrelevant…because its happening whether you guys like it or not! The community is unified in this plan, and everyone is going to keep it. And you know what, the baalei battim wont have a choice. Most of them cant risk having an empty apartment for 1,2,, or 3 mths- it’ll destroy whatever extra they want to charge.
Also, many other sanctions are not being publicized, but will go into effect if called for. It wont be pleasant.
So the important thing is to get the word out to people coming from the outside. DOnt rent an apt without clearing it for the Vaad, b/c if you do, your stay in the neighborhood will be very uncomfortable.
what about the vaad regulating the price of food (like emesvyatziv says about cars)?
you cant pay more than x shekel (i think the post was $1.90) for chalah on shabat? what will happen? no more chalah (even from that little bakery across from the mir, as a poster suggested).
actually rabonnim tried that once in europe regarding shabas fish, to lukewarm success.
also, what about that kollel student who really wants that apt, and tells the landlord to write up two separate leases, one to show his father in law who wont let him pay more than $500, and another the real lease. true story, happened to my father in the alter heim (boro park) many years ago ($500 rent)
CHICAGO MENTCH is on the money (so to speak).
When you boil this issue down, all it is is a simple redistribution of wealth from landlords to tenants, enforced by Rabbis. Some may consider this right, and some may not, but that’s all it is.
For the most part, supply and demand works, and a balance is struck at the appropriate price. For prime real estate, this price will be higher than many people can afford. Shocking.
The argument comes down to whether Rabbis have a right to determine how much someone should earn on their investment. Some people may be fine with this, some may not be.
In my mind, the primary “extortion” here is forcing people to accept below-market rents or face sanctions. The victims have become the aggressors…
I don’t really understand what all the fuss is about. If you can’t afford Sorostkin and want to learn with mesiras nefesh in E.Y., why not go to a cheaper neighborhood? Or does the mesiras nefesh go hand in hand with keeping up with the Jones’s (or Cohens).
The landlord also has to make a reasonable return on his investment, so why should he suffer?
It’s about time daas torah is taking a stand. I live in maalot dafna and yes there are people here who told landlords they can get them much more money. This caused major price increases $1300 for a 3 bedroom on the seventh floor!!!!!!! The vaad also should set takanos on furniture pricing which is out of hand! how can 7 year old furniture cost $10,000?!?!?
It looks like no one here got the point. This wasn’t a poll! YW reported the news that the rabbanim, including Rav Shteinman, made a takanah and IT WORKED!!
A family in Sanhedria Murchevet paid more for their apt than the vaad said they could and they were put in cheirem (their kids can’t get into gan, the rav won’t pasken their shailos, and they can’t be part of n’shei). I bet they’re not going to do that again – and neither will anyone else.
Yes, the landlords can charge as much as they want. And, yes they are legally allowed to. But if no one is going to rent their overpriced apartments, the apartments are going to stay empty until they lower their prices.
About the dollar going down – many landlords are charging the new prices in shekalim, or saying they want $1,000 on the 4.5 exchange rate, so this has nothing to do with them losing money on the exchange rate.
And why are these areas prime real estate? Only because they are close to the yeshivas!
For all of you asking why people don’t move further away where it’s cheaper –
We looked into just about every chareidi community that’s accesible to yeshiva in yerushalayim. Every one had another chisaron – traveling was too long and the buses come only once an hour, so if you miss it, you are stuck. Plus, traveling is so expensive, you hardly save any money. The people who move out of yerushalayim usually end up going to a small yeshiva or kollel nearby.
Also, most landlords who own apartments in yerushalayim inherited them and are not paying a mortgage. They are raising the rent because they can! But now, they can’t!
And, gemorokop, as a kollel wife living in yerushalayim to be near yeshiva, not getting supported, working very long, hard, crazy hours (even in the middle of the night) to stay here so that my husband can shteig and so that we can live in the kedusha of E”Y for a very long time – hopefully forever (like many of my friends), I take your comment personally.
I agree with Shmuel99. The rentors promise the landlords to find a new tenant, and the new tenant is forced into buying the last guy’s junk! A landlord is an owner of a property and he can do as he sees fit, while a rentor should live in a place that is within his means. But the old tenants like to get in on the “deal”, and they really have no rights.
By the way, you never see business owners, for example, shaitle machers, clothing stores… lower their prices because “it isn’t fair.” Life isn’t fair and business is business-but the shnooks that cash in on other peopl’s needs, that really bothers me!
abba englander,
many of the baalei dira have already made their return on investment by the time they take the flight back home from America before purchasing the apartment.
With respect to KLURRE KOPS’S point:
“just because some rich kid wants an apartment and is willing to pay anything for it doesn’t necessarily raise the market value”
ACTUALLY, YES IT DOES. ESPECIALLY IF A LOT OF OTHER RICH KIDS ARE WILLING TO DO THIS AS WELL.
As a “MirBoy” we have this issue in many other areas, like those directly surrounding the Mir. If we would be able to form a Vaad in each neiborhood it would directly help many yungelleit from non-gvirish homes move to Eretz Yisroel and thereby (though i feel bad to say this) make the Mir a much better place, and give ernsteh bochurim a “Kosher Enviorment” to eat their Shabbos meals.
It seems as if “supply and demand” is the only economic principle people on this page are familiar with! The Vaad does not want to deprive landlords of a reasonable return on their investment. The key word is reasonable. The concept of “rent control” is acceptable and very legal! The Vaad wishes to put an end to extortion and the raise of rent mid-contract. They also want to ensure that when the rent is raised (and the Vaad does allow for this in certain circumstances), it is done fairly and within reason. 20% from one lease to another is not reasonable. In fact, the Vaad has a professional working with them to evaluate apartments (based on size, location, condition etc) so that landlords will NOT be cheated out of what is rightfully coming to them. While it is true that those that cannot afford a specific neighbourhood should/could move elsewhere, the issue is more about being taken advantage of and less about dollars and cents. Clearly posters have done their research, have their facts straight and are not simply spewing what they feel are valid ideas based on nothingness and lack of understanding of the situation! Interesting that the most opinionated and opposed do not even live in the neighbourhood in question.
I am a landlord of an apartment in Yerushalayim. I Purchased the apartment when the adjustable rate mortgage was 3.38 percent. This was not a “come on” rate, it was the prevailing rate. I put down 40% of the purchase price. I then was able to rent out the apartment at the going rate, add a few dollars monthly and pay the mortgage. the adjustable rate is now roughly 8%. (Mortgage rates are adjusted quarterly in Israel) I now must add the equivalent of the rental price in order to pay the mortgage. Clearly I am not in the minority. Most landlords pay mortgages. Did any of the askanim present this side of the equation to the Gedolim? The Gedolim are not Neviim. They can only deal with the facts presented to them.
While I understand and sympathize with you over your inflated mortgage payments, I challenge you – litvok613 – to provide us readers with the exact details of your apartment i.e. size, condition, and price.
Perhaps your increase would be approved by the committee. Otherwise, how can a landlod justify a $300 price hike overnight?
Case in point – a two bedroom apartment is being raised from $1300 to $1600.
Yes, landlords may pay mortgages. But do they maintain fair, transparent, and systematic market practices?
YG
To thevoos
Aside from the personal attack, which is totally out of line (and requires michila – you apparently know where to reach me), and your obvious disdain for the financial “talk” – which puts numbers on a heated issue, attempting to provide some important facts, I never denied the fact that in certain cases there are unfair practices in the rental market. I am not against this vaad or my Rebbe and do think it will have a impact. I just think its important not to throw every landlord who raises rent into a single category. A rise in rents is justified, in many cases, I hope the information provided in this forum will help those involved to get a better idea of the different forces at work, so that a fair compromise is reached for all parties involved.
2. All that financial talk aside (we can tell a mortgage broker when he talks!)if the renters band together, they can and will effect a change. People have asked here what will be done to ‘violaters’? Well they will be totally ostracized from the community, in every way possible. And, to all the naysayers “it’ll never happen!”, take a look what Rabbi Berkowitz, your rebbie, Avner, has accomplished in SM. FACT- it has worked!!
The livley debate in this forum is definately in the spirit of yiddishkeit, and with all due respect to our Gedolei Yisroel, the following quoted article is taken from an accomplished economist on the overall effects of rent control and if they work. Now granted Eretz Hakodesh and Yerushalayim in particular, are not always governed by the same laws as other nations but its important to know at least what the potential outcome of “rent controls” can produce, derech hateva.
The Effects of Rent Control
Economists are virtually unanimous in the conclusion that rent controls are destructive. In a late-seventies poll of 211 economists published in the May 1979 issue of American Economic Review, slightly more than 98 percent of U.S. respondents agreed that “a ceiling on rents reduces the quantity and quality of housing available.” Similarly, the June 1988 issue of Canadian Public Policy reported that over 95 percent of the Canadian economists polled agreed with the statement. The agreement cuts across the usual political spectrum, ranging all the way from Nobel Prize winners Milton Friedman and Friedrich Hayek on the “right” to their fellow Nobel Laureate Gunnar Myrdal, an important architect of the Swedish Labor Party’s welfare state, on the “left.” Myrdal stated, “Rent control has in certain Western countries constituted, maybe, the worst example of poor planning by governments lacking courage and vision.” Fellow Swedish economist (and socialist) Assar Lindbeck, asserted, “In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”
To see the entire article http://www.econlib.org/library/Enc/RentControl.html
litvok613
I do not pretend to know the lending situation in EY but did you have to get a variable rate? You probably chose a variable rate because it was cheaper, and enabled you to maximize your rental profits. Understandable. However, there is risk involved in a variable rate mortgage which the mortgagee should assume (since he is after all the one who chose the risky product). Why do you think that it is right for you to transfer that risk to your tenant? I’m sure that if you had consulted your tenant originally they would not have agreed to assume the risk and would have told you to get a fixed rate. Your risk = your gains/losses. Would you have given your tenants a decrease if rates fell? Hah!
If the demand is there then you can charge whatever you want, but I don’t see the justification of a landlord raising the rent because he can no longer afford his investment. With no rent controls you can do what you want but I don’t think that your reason is a valid one if there are controls. Perhaps rent controls would encourage landlords to seek fixed rate products and then seek an increase from the Vaad to cover the more expensive, but stable product.
no one responded to my comment re: what about the landlord with “protekzia” with the local vaad, or the tenant that the vaad rov has a beef with? (and dont tell me it doesnt happen)
what about dirot in other neighborhoods — they will now be more desirable because no vaad to interrupt your rent?
and with all the kavod to the members of the vaad
bupkiss,
Crazy as it might seem, completely fixed mortgages only came onto the market within the last six months. And they are only up till 500,000 shekel. And the rates really are not competitive at all (Variable is currently around 4.2% for the shekel while fixed is holding at 6.4%). So even if litvok613 did buy in the past six months it still was probably a better choice for him to take some form of variable mortgage. The fact that he chose a dollar mortgage and got stuck with 8% is bad luck.
Yehuda Goldman,
You wrote: “While I understand and sympathize with you over your inflated mortgage payments, I challenge you – litvok613 – to provide us readers with the exact details of your apartment i.e. size, condition, and price.
Perhaps your increase would be approved by the committee. Otherwise, how can a landlod justify a $300 price hike overnight?
Case in point – a two bedroom apartment is being raised from $1300 to $1600.
Yes, landlords may pay mortgages. But do they maintain fair, transparent, and systematic market practices?”
Why are the conditions of the apartment the determining factor? As far as I know, outside of communism, the way to determine a fair price is by seeing what people will pay for it. Happens to be that worldwide, areas with a high proportion of renters pay between 5-7% of the value of the apartment per year. Meaning that an apt worth $250,000 should get between $12500 and $17500 per year. Divide that by 12 and you get monthly payments.
All that is true. But even so, I agree with you that it is immoral to throw a tenant out of his apartment for not agreeing to a huge rent increase. The absolute most that a baal dira should be allowed to increase on one tenant is 10%. Anything more is tountamount to kicking him onto the streets, especially in areas where there are very few apartments available. So I agree that going from $1200 to $1500 is out of hand.
However, the tenant should make an effort to try to find another apartment, because he is, in effect, preventing the baal dira to make the most of his property.
Some have taanad that since many of the baal diras got their apartment as a yerusha or very cheap the above arguments don’t apply. This is ridiculous. If I have a $1,000,000 cash yerusha you have no right to tell me how to use it! Even if you say that anyway it was free! So too here, the fact some of the baal diras got the apartments substantially less than their current value does not give anyone the right to tell them what to do with it! They are allowed to get their money worth.
Unless you say that it really isn’t worth its current price. But that has already been discussed above.
To TheVoos:
(Before any argument: your personal attack was completely outside the bounds of halacha, and I suggest you get mechila for it.)
1. To say that this vaad is simply exerting the economic power of the renters ignores the fact that the power being weilded here is Rabbanus and Cheirem! This is no different than what once (and does) went on with union organizers who used similar strong arm tactics to force workers into the union.
2. This whole thing will backfire as landlords gradually sell their properties – (that no longer produce a suficient return) and less an less rental apartments are available for rent – for ay price – to anyone.
3. As far expanding this vaad into areas like Ramaat Eshkol as some have suggested be done – I think this would be missing the point:
I know for a fact that a close talmid of one of the Rabbonim involved in the vaad just raised his R.E. tenants’ rent from 1150 to 1550 in one shot. When the tenant went to the rav himself to complain he got no help. I like to think that the Rav did this because the reason for rent control that he believes to apply in Sanhedria simply doesn’t apply in Ramat Eshkol. To preserve a Torah community is one thing,but what are you looking to protect in Ramat Eshkol – the poor exploited kollel couple who just simply can’t live without Nina’s and Sam’s? If your rent is too high – move to one of the many very nice torah communites where lower prices are in efect. You don’t have to live in the hottest neighborhood in Jerusalem to learn in kollel!