Jerusalem Court Rejects Public Housing Tenant's Bid to Buy Home via Developer Deal
A tenant living in public housing managed by Amidar in Mevaseret Zion sued the Ministry of Housing and Amidar to allow him to purchase his home through a combination deal with a real estate developer. The Jerusalem District Court recently dismissed his claim, siding with the defendants. The tenant, a disabled individual living on National Insurance benefits, has resided in the ground-floor home for decades, inheriting it after his parents, who were public housing tenants, passed away.
In 2014, he applied to buy the property, and after years of legal proceedings including a Supreme Court ruling, Amidar agreed in March 2022 to sell the home for 3.35 million shekels. However, the tenant could not afford the sum or obtain a mortgage, and his family could not assist financially. He then arranged for a family member, a real estate entrepreneur, to fund the purchase through a combination deal rather than a loan. The plan involved buying the home from Amidar, then transferring 80% of the property rights to the developer in exchange for a new apartment, while retaining 20% ownership.
To proceed, the tenant requested Amidar to allow the developer to secure guarantees on the property and to reduce state-registered liens. After prolonged discussions and extensions, Amidar rejected the proposal in July 2025. The state argued that financing public housing purchases must come from regulated financial institutions, not private developers seeking property rights as collateral.
The tenant challenged this decision in court, but Judge Arnon Darel upheld Amidar and the Ministry's position. He noted that exceptions to administrative guidelines are reserved for very rare cases, and this situation did not justify deviation. The judge expressed concern that allowing external financing by private developers could lead to commercial exploitation of public housing rights, unauthorized loans, and misuse of tenants' needs for profit. He compared the proposed deal to a redevelopment arrangement where the developer replaces the tenant's position, which conflicts with the law's intent to protect vulnerable residents and prevent speculative trading of public housing rights.
The Ministry of Housing was represented by Attorney Itay Sadan from the Jerusalem Prosecutor's Office, and Amidar by Attorney Shir Ashkenazi from Gil Efrati & Co.
