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Israeli settlements: frozen, but still cooking

News analysis: Peace talks hinge on extension of settlement freeze.

In the settlements, Israelis frequently explain that they moved there for affordable housing for their family, rather than for the ideological or biblical reasons propounded by the stereotypical wild-eyed settler with his Uzi who’s often seen in foreign news reports. The B’Tselem document highlights exactly why it’s so affordable to move to the settlements.

Settlements receive preferred development status for government grants, even though settler income is 10 percent higher than Israel’s average and unemployment is lower than the Israeli average.

Land is subsidized, so apartments are cheaper. Even so, settlers get favorable mortgages with government assistance. The Construction and Housing Ministry gives a $25,000 grant to new apartment purchasers. Settlers can take out a government-financed $62,000 second mortgage, which the government’s own watchdog says lacks “any criteria for allocation.”

Teachers living inside the settlements receive benefits that boost their salaries up to 20 percent, including 80 percent of their rent and all travel expenses. Perhaps unsurprisingly, 25 percent of settlers work in education, which is twice the percentage of educators in Israel’s general population.

An income tax benefit to settlers was cancelled in 2003, but municipal taxes remain much lower than inside Israel.

The Interior Ministry funnels $285 million annually to settlement municipalities, double what city halls representing a comparable population would receive inside Israel.

B’Tselem officials point out that there are many more sources of funding for settlements that the government hasn’t disclosed. “Even the State Comptroller was unable to define how much the Ministry of Construction and Housing was giving to the settlements,” said Eyal Hareuveni, the report’s author.

Some observers argue that the number of settlers is now simply too large for them to be moved in a future peace deal. Montell disputes that.

She argues that if the financial incentives were reversed, many settlers would happily move back inside Israel’s borders. She cites settlements on the eastern side of Israel’s separation barrier — that is, those on what’s often thought of as the side which will one day be part of a Palestinian state — where residents have been quoted in Israeli media as saying they’d like to leave. They can’t leave, however, because their property values have dropped and a comparable home in Israel is too expensive. If, she argues, such people received aid to move back to Israel, many settlements would empty out.

“You could put in place policies for providing disincentives for living there,” Montell said. “People would leave if these were the conditions.”


Editor's note: This story was updated to correct an error: The B’Tselem’s report, called “By Hook or By Crook: Israeli Settlement Policy in the West Bank,” says that hundreds of millions of dollars are being paid to settlers, real estate developers and settlement municipalities — not hundreds of billions.