A Shining City On a Hill

  • Photograph by Yoray Liberman for TIME

    Housing boom Construction is expected to generate 10,000 jobs

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    It was while living in Washington, after earning a degree in chemical engineering at Virginia Tech, that Masri says he came to understand how homeownership can be a path to asset building. "The first thing I did when I saved $5,000 was to buy a house for $99,000. I was able to do that because the system allowed you to do that if you had a job," he says. "In Palestine, the system has not allowed you to do that. That is changing. We want young working people to be able to have that opportunity. One year after I bought my house, it was worth $140,000, and after five years, $250,000."

    When Masri returned to the West Bank (he still owns a home in Falls Church, Va.) in 1995, he tapped into the family's business and launched Massar International, a real-estate-development, financial-services and consulting firm with subsidiaries across the Middle East (Masri, through Massar, is investing some $25 million in Rawabi). He says the idea for the city clicked when he considered his employees. While his workers earned an average of $1,900 a month, just 10% owned their home. Traditionally, those wishing to buy a house in the West Bank generally had to pay a large sum of cash up front or take out a short-term, adjustable, high-interest-rate personal loan — a situation that along with high property values has priced out an estimated 85% of the population.

    Rawabi will circumvent those issues by linking to the recently established $500 million affordable long-term home-mortgage program known by the acronym AMAL. Something like a Fannie Mae program, AMAL was launched last June by the Palestinian Authority in tandem with a group of partners, including the U.S.-backed nonprofit Middle East Investment Initiative (MEII) and the Overseas Private Investment Corp. (OPIC). "With the housing sector, you get a real bang for your [development] buck," says MEII's Washington-based president, James Pickup. "When people can afford homes and they have jobs, that leads to stability. Look at what happened in Tunisia and Egypt. The driving force behind all that is that people wanted an economic future, and these efforts combined help to deliver that."

    Indeed, the development is expected to create up to 10,000 jobs related to construction and produce an additional 3,000 to 5,000 in banking, communications and IT — a not inconsiderable boon given that the West Bank (pop. about 2.5 million) currently has a 16% unemployment rate. "The housing sector plays a big role in economies," says Rami Khoury, a banking specialist with CHF International in Ramallah. "I do see that if all the pieces come together, this will probably be an important contributor to economic development in the Palestinian territories."

    Rawabi fits in well with the Palestinian Authority's recent strategy of institution building: attracting foreign investment as a cornerstone of a future state while weaning the Palestinian economy from its foreign-donor dependency. Qatari Diar, the real estate arm of the Qatari government, is financing Rawabi. It is hoped this will open the door to more outside investors. "Qatari Diar's investment represents a true development milestone for the West Bank specifically and for the Palestinian economy as a whole," says Ghanim bin Saad al Saad, CEO of Qatari Diar.

    While Rawabi has been enthusiastically received among Palestinians and the international community, the project has not been without hurdles. About 8% of Rawabi exists in what is known as Area C, a portion of the West Bank that remains under Israeli military and civil control. Requests to build an access road and apply for water rights remain in political-bureaucratic limbo. Initial plans to create a similar development in Gaza were scrapped after the split between Hamas, which took control of Gaza in 2006, and Fatah, which rules the West Bank, and the subsequent Gaza closure. Earlier this year, Israeli settlers in the West Bank made things difficult for Rawabi, protesting Israeli companies, including vendors and suppliers, that have contracted to work on the development and threatening them with boycott. (For his part, Masri has required Israeli suppliers to sign an agreement to follow the Palestinian Authority's boycott of goods from the Jewish settlements.)

    But a number of other Israelis, including Prime Minister Benjamin Netanyahu, have publicly supported the kind of progressive development that Rawabi represents, with Netanyahu praising what he has called "an economic peace" with the Palestinians. Writing in the newspaper Haaretz , Israeli commentator Ari Shavit said of Rawabi, "There is now a real opportunity in the West Bank. We must not miss it."

    As the bulldozers cut across the empty hilltops, Masri says he remains optimistic. "To live in this part of the world, you have to keep on moving. I am putting facts on the ground, and that pushes the politicians to do more." As Masri works to remove any remaining roadblocks, his team is sifting through the financials of Rawabi's applicants. There are thousands of people pinning their hopes on Rawabi. "I know this is the right thing to do," says Masri. "Look at the demand. If I began selling units right now, I'd already be sold out." With any luck, his boon will also become the West Bank's.

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