Safed has seen better days. In the 1940s and '50s, this northern city was where affluent locals went to spend their summer holidays. Perched atop a 900-m. high mountain and surrounded by pine forests, it is the highest city in the country, and its geography makes for cool summers and very cold winters. As such, the town's many hotels tended to be full during the former and empty during the latter. At that time, Safed was also considered the artistic capital of Israel, and many local painters and sculptors made it their home and the location of their studios. But tourism has its ups and downs. In the 1960s Safed became unfashionable as a summer resort, and since tourism was the mainstay of the economy, the city went into a period of decline. This was accelerated when large numbers of ultra-Orthodox Jews began coming to the city in the '70s and '80s. The increase in poverty affected the economy, and consequently the town's real estate market. Safed is a very ancient city, associated with the town of Seph, which Roman-Jewish historian Josephus mentions. Later, in the 16th century, it was considered one of the four holy cities of Judaism, together with Jerusalem, Hebron and Tiberias. Since then, it has been famous as a center of Kabbala. Today the city is in a period of regeneration due to the establishment of Bar-Ilan University's new Galilee faculty of medicine in the town, and due to the current municipal administration, which is strenuously promoting the city's economic development. These days, some 1.2 million tourists visit the city each year. However, this tourism is different from that of the '50s, as today's tourists come not to stay over in hotels, but to see the sights, which does not take more than a couple of hours. Yet despite their short stays, such tourists have begun spurring economic growth, and that has affected the real estate scene. The increased economic activity and the impact of the school of medicine have increased demand for housing, which currently outstrips supply. As such, prices are rising. Narkis Chanya, the manager-proprietor of Narkis Real Estate – one of Safed's leading real estate firms – explains that “the town is undergoing big changes. The school of medicine will employ large numbers of highly trained people – mainly doctors, but also administrative staff. The medical school will also create ancillary services and businesses, and to accommodate [the staff of all these establishments,] a new neighborhood of some 3,000 residential units will be created.... Together with dependents – children and wives or husbands [of the staffers] – the new residential area will accommodate from 12,000 to 15,000 [people], a dramatic addition to a city of barely 35,000.” From a real estate perspective, Safed is divided into three main areas. Inhabiting the southwestern area on the slopes of the mountain is a haredi community of approximately 12,000 people – about 30 percent of the city's population – including a large Chabad community. This the poorest part of town, and consequently has the lowest real estate prices. This area was built in the '50s and early '60s to house new immigrants from Arab countries, mainly from North Africa. Most of the original residents have died out, and those still living have moved out. They and the heirs of their neighbors sold their properties to ultra-Orthodox buyers who flocked to Safed because of the low real estate prices. Since it is difficult for outsiders to adapt to the haredi community's distinctive way of life, the area has become exclusively haredi. An average three-room apartment there costs no more than NIS 450,000. The second area is the Old City, a picturesque area of some 800 households, constituting about 10 percent of the city's population. This is an area of old Arab houses. Some of them have patios, but they all take up the entire plot of land on which they are built, with doors and windows that open up straight onto the street. Some of these houses belong to artists, who have their own studios there. Others are derelict, waiting for the right person to buy and restore them, and still others have been bought and restored already. In many cases, the buyers of the latter are families from the US, who have converted them into oneof- a-kind homes. Houses in old Safed cost some NIS 10,000 per square meter. The third part of town, where the remaining 60 percent of the population lives, consists of suburbs built in surrounding areas such as Mount Canaan. These are modern areas with diverse types of dwellings: single-family homes, semi-detached dwellings, penthouses and rooftop apartments, as well as ordinary apartments. The price of building land for single-family homes in the new areas around the new school of medicine is NIS 1,000 per sq.m. A single-family home in one of the better areas of Mount Canaan can cost from NIS 1.5 million to NIS 2m., a penthouse can cost NIS 1.2m., and an average three-room apartment NIS 800,000. At present, there are a number of luxury projects under construction. One is the Shemura Terraces, opposite the Mount Canaan forest, boasting panoramic views of the forest and the surrounding area. The project has four- to six-room apartments, duplex garden apartments and duplex penthouses. Another new development is Lavi Residences, located in the center of town near the Old City and offering views of the surrounding countryside. Potential residents may see the large ultra-Orthodox population as a deterrent – due to fears that its lifestyle will become dominant in the town. However, Mayor Ilan Shohat says that such fears are unfounded. “It is true that in the past there was a constant flow of haredim to Safed, but this has ceased,” he says. “The price of real estate has increased substantially, and consequently housing in Safed is no longer as inexpensive as it was in the past. Furthermore, our haredim are very well-integrated in the economic activity of the town.” He also says that his town is “the ideal place for English-speakers to settle. We already have a relatively large English-speaking community, while the expanding tourist trade, as well as the new school of medicine, will open up new business and job opportunities.”
