HOUSING CONSTRUCTION IN WEST BANK/GAZA SETTLEMENTS

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 001614

SIPDIS

NEA FOR BURNS AND SATTERFIELD
NSC FOR ABRAMS

E.O. 12958: DECL: 03/15/2014
TAGS: ECON PBTS IS SETTLEMENTS ISRAELI PALESTINIAN AFFAIRS
SUBJECT: HOUSING CONSTRUCTION IN WEST BANK/GAZA SETTLEMENTS
INCREASES SUBSTANTIALLY IN 2003

Classified By: DCM Richard LeBaron for Reasons 1.4 (B) and (D)


1. (SBU) Summary. Newly released statistics indicate that
housing starts in West Bank and Gaza settlements increased
35% in 2003, in a year when total housing starts in Israel
and the settlements dropped 8% compared to 2002 figures. The
great majority of the new housing appears to be within "the
Jerusalem district," that includes settlements surrounding
but not within the city's municipal border (examples are
Ma'ale Adumim, Givat Ze'ev, and Beitar Illit.) Housing
starts in central West Bank settlements, however, also
increased markedly. A contact at the Ministry of
Construction and Housing insisted that the increase did not
reflect any new policy to build more housing in the
settlements, but reflected decisions made in 2001 and 2002,
when the planning process to build the new housing began.
Building in the West Bank and Gaza Strip settlements
accounted for 16% of all government-initiated housing
construction in 2003, despite the area only accounting for 4
percent of the Israeli population. End summary.

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CBS Statistics Show 35% Increase
in Housing Starts in Territories
--------------


2. (U) Statistics released March 2 by the Central Bureau
of Statistics indicated that housing starts (actual
construction initiated) in West Bank and Gaza settlements
jumped from 1,369 starts in 2002 to 1,849 starts in 2003, a
35% increase. The CBS statistics covered both public and
private construction. The 35% jump compared to an 8% drop
overall in housing starts in Israel and the settlements.
Housing starts declined in every city or region in Israel
surveyed, except Haifa (where housing starts grew 5%).
Housing starts in the territories accounted for about 6% of
total public and private housing starts in Israel and the
settlements.

2003 Housing Percent Change
City or Region Starts From 2002
-------------- -------------- --------------

WB/G Settlements 1,849 35%
Jerusalem 2,260 -15%
Tel Aviv 2,725 -23%
Haifa 3,238 5%
South 4,568 -23%
North 5,959 - 3%
Center 9,074 - 6%
Total 29,673 - 8%

Source: Israel Central Bureau of Statistics

-------------- --------------
Ministry of Housing Statistics Show the Same Trend
-------------- --------------


3. (U) Provisional Ministry of Construction and Housing
data showed similar trends to the CBS statistics and provided
more detail about where the housing is being built.
MOCH-sponsored construction in the settlements increased 48%
in 2003 over 2002 levels. The great majority of that
construction took place in areas of the West Bank within "the
Jerusalem District" which includes settlements like Ma'ale
Adumim and Beitar Illit but not settlements like Har Homa
within the Jerusalem municipality. Housing starts in the
West Bank areas of the Jerusalem District increased from 717
starts in 2002 to 1,034 starts in 2003. Construction in the
"central" area of the West Bank nearly doubled, from 55
starts in 2002 to 107 in 2003. Construction in settlements
accounted for 16% of all MOCH-sponsored housing construction
in 2003.

2003 Housing Starts Percent Change
City or Region Initiated by MOCH From 2002
-------------- -------------- --------------

Settlements in
Jerusalem District 1,034 44%

Settlements in
Central District 107 95%

Total Israel and
Territories 7,258 -6%

Source: Ministry of Construction and Housing


4. (SBU) Contacts at the Central Bureau of Statistics would
not comment on the significance of the increase in housing
starts in the territories, except to note the strong contrast
with the overall drop in housing starts throughout Israel. A
contact at the Ministry of Construction and Housing insisted
that the 2003 increase in settlement housing starts did not
reflect any recent policy decision to increase housing in
settlements. He noted that the planning process for new
housing typically takes well over one year. The increase in
housing starts in 2003, he said, reflected planning decisions
made in 2001 and 2002.


5. (C) Comment: Although the rise in housing starts in the
territories may not reflect a recent government decision to
prioritize housing in the settlements, it does reflect the
GOI's decision not to enforce commitments it has made to
freeze settlement activity. Whether building decisions were
made two years ago or the Ministry of Construction and
Housing (led by vocal settlement proponent Effie Eitam) is
pushing its own agenda, the simple fact is that new housing
is being built in the settlements. This is taking place
despite a depressed housing market, significant existing
vacancy rates, and a dangerous security environment. End
comment.

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