Secret Land Deal Leaves Jerusalem Homeowners Fuming Over Future of Their Homes

A potential real estate agreement between Israel’s Jewish National Fund and a U.S. developer is rattling hundreds of families in some of Jerusalem’s most affluent neighborhoods.

Whispers of a behind-the-scenes deal between Israel’s Keren Kayemet LeIsrael–Jewish National Fund (KKL-JNF) and American real estate magnate Gary Barnett have ignited fury among residents living on long-leased plots in Jerusalem’s Talbieh, Rehavia, and Nayot neighborhoods. At the heart of the controversy? The looming expiration of leases on land once held by the Greek Orthodox Church — and a newly proposed 50-year extension that residents say leaves them dangling over the edge of uncertainty.

Deal in the Shadows: Residents Left in the Dark

The details emerged in a June 8 report from Israeli business daily Calcalist, revealing that KKL-JNF, which acquired the land from the church in 2017, has been negotiating privately with Barnett, the developer behind Extell, without the knowledge of affected homeowners.

For many of the 1,200 families living on the 570 dunams (about 140 acres) of land in question, the secrecy is what stings the most.

One longtime Talbieh resident, who requested anonymity for fear of reprisal, said bluntly: “We’ve paid taxes, maintained our homes, raised children here — and now we find out our future is being sold off in a closed room?”

The proposed agreement reportedly offers to extend land leases by just 50 years — far less than what residents had hoped would be a permanent or 99-year solution. In Israeli real estate, leaseholds nearing expiration can devastate a property’s market value and hinder the ability to sell or refinance.

The Land’s Turbulent History: From Church Hands to Private Deals

The roots of the controversy go back to 1950s agreements under which the Greek Orthodox Church leased swathes of central Jerusalem land to the Israeli government and later to the KKL-JNF. Homes built on this land were often purchased by families under long-term leases — with the assumption those would eventually be renewed or resolved.

But in 2017, the church sold the land to a private entity backed by Barnett’s Extell, triggering legal chaos, protests, and a mad dash to figure out who actually owns what.

To untangle the mess, KKL-JNF purchased the lease rights from Barnett’s holding company in 2022. At the time, the move was touted as a national salvation — a move to prevent foreign control over sensitive real estate near key government buildings, consulates, and the Prime Minister’s residence.

So when Calcalist revealed this month that KKL-JNF is back at the table with Barnett, seeking a redevelopment deal for parts of the land, residents felt blindsided.

A Tense Offer: 50 Years and Then What?

The core of the new proposal reportedly involves granting 50-year extensions on existing leases — but stopping short of outright transfer of ownership or long-term security. That has many homeowners nervous.

Some see the 50-year extension as little more than a delay of the inevitable: another countdown to another crisis.

One Nayot resident, 74-year-old Miriam G., put it plainly: “They want me to hand this mess to my grandchildren? No thank you.”

In the middle of the reported agreement is a provision allowing Barnett’s group to redevelop certain plots, demolishing older buildings to make room for new luxury condos. Residents worry that’ll trigger a creeping wave of evictions — or that developers will attempt to price them out through legal loopholes.

The anger isn’t just about the lease length.

• Residents are furious about the lack of transparency.

• They’re scared of skyrocketing maintenance fees.

• They fear gentrification pushing them out of neighborhoods they’ve called home for decades.

“Imagine building your whole life on land you don’t own,” said one Rehavia father of three. “Now imagine finding out you have 50 years left on the clock — if you’re lucky.”

KKL-JNF’s Silence Draws Scrutiny

As pressure mounted this week, KKL-JNF stayed largely silent, issuing only a short statement noting “talks are ongoing with various stakeholders to find a long-term solution.”

But the ambiguity has only intensified the mistrust.

The organization, founded in 1901 to purchase land for Jewish settlement, now finds itself criticized for ignoring the very people it was designed to protect.

Meanwhile, lawyers representing homeowners say they’ve received no official communication from either KKL-JNF or Barnett.

“This is a textbook case of opaque governance and poor public stewardship,” said Jerusalem land rights attorney Shira Levy. “You have a public trust — land acquired in the name of the people — now being negotiated behind closed doors with a private developer.”

Political Leaders Caught in the Crossfire

Several Knesset members have started to weigh in, including some from Jerusalem-area districts who are facing pressure from their constituents. While no official hearings have been scheduled, there’s growing talk of a parliamentary review of the KKL-JNF’s handling of the land.

City Council Member Laura Wharton, who represents Rehavia, said in a statement on Tuesday: “Residents deserve full disclosure. We cannot let a backroom deal determine the fate of some of Jerusalem’s most historic neighborhoods.”

A new coalition of residents from Talbieh, Rehavia, and Nayot — calling itself “B’Tzelenu” (“In Our Image”) — announced plans to organize a public rally outside the KKL-JNF headquarters next week. They’re demanding full transparency, homeowner representation in negotiations, and options for lease buyouts.

How Much Is at Stake? Big Money and Bigger Uncertainty

The affected land sits in some of Israel’s most valuable real estate corridors. Recent appraisals of the Talbieh and Rehavia zones peg average apartment prices between NIS 35,000–NIS 50,000 per square meter, making even modest properties worth several million shekels.

Yet the uncertainty over lease renewal has begun to chill the market.

• Local brokers say resale activity has slowed.

• Banks have reportedly grown cautious about offering mortgages on affected properties.

• Some homeowners have delayed renovation plans amid legal fog.

Here’s a snapshot of the affected area:

“It’s like trying to sell a house with a ticking time bomb under it,” said veteran broker Yaakov Shmueli. “Buyers want answers. And nobody’s giving them.”

For now, residents wait — again — as another deal quietly inches forward, leaving behind more questions than confidence.