Doomed investment

Shadee knew when he bought an apartment in a half-finished tower block in East Jerusalem that he was taking a risk. The project hadn't been approved by the city council, which meant the building was illegal and could be knocked down. He hoped he'd be lucky - but last month he came home to hear his new apartment was due to be demolished.

Ras Khamis is a rundown district of East Jerusalem behind the giant separation wall built by Israel. Home to hundreds of Palestinian families, it's on top of a hill next to an over-populated refugee camp, and although it's officially part of what is considered by the Israeli government to be the country's capital, it receives few municipal services. The roads aren't paved and rubbish piles up outside houses because the refuse collection company refuses to come here. People burn it when there's too much.

Shadee made the decision to invest in an apartment in Ras Khamis because it made no financial sense to stay in the camp where he grew up. Prices on the other side of the wall are much higher. He knew there was no building permit, but it was a gamble he was willing to make.

"If I want to rent, it will cost me between 200 and 300 euros every month and it will be very small and not very healthy. Here, after five years of payments, I will own the apartment," he said.

Starting a new life

After making a deposit, the 23-year-old construction worker started putting more than half of his 1,000 euro monthly salary towards repayments. He had intended to move in with his new wife and started to decorate, but stopped when soldiers from the Israeli Defense Forces turned up and pasted destruction orders on the outside of the building. Afterwards, he contacted the building owner, who told Shadee: "It's not my problem."

It's not just Shadee's future he is worried about. Homeowners complain a lack of oversight means building standards are low, with little attention paid to safety. They have to steal water because the utility company won't provide pipes for the illegal homes.

Developers behind the multi-story blocks deny they have taken advantage of fellow Palestinians by building without the required permission. They claim the profit they make on the apartments they sell barely makes it worth all the hassle. One entrepreneur, who asked to remain anonymous, said he'd been working around the clock to try and come up with a solution since receiving a demolition order for his eight-story building.

"I am worried about my building but also about the people who bought the apartments in it," he said. "They are poor; how can they survive? They put all their savings into this. It's like sitting on a volcano and not knowing when it's going to explode."

He says people were encouraged to build there by Jerusalem's mayor Nir Barkat. They say he turned a blind eye to planning irregularities in the Palestinian areas of East Jerusalem that fall outside of the wall - even though they're officially under his jurisdiction - because he wants to force the city's Palestinian residents back to the West Bank.

"This is all about politics," the developer said. "The municipality won't give permits here because they don't want people to be living here legally - this started in 1967 when they occupied the area … But what can people do? This is natural expansion. They need homes so we have to build in this way."

A spokeswoman for Jerusalem City Council denied the developer's claim that the mayor wants to force out Palestinians. "Nir Barkat has a firm policy against illegal building in all parts of the city, and that has always been the case," she told DW.

Uncertain times ahead

Whatever the case may be, the lack of a formal plan for Ras Khamis, with details of roads and proposed future developments, makes it impossible for anyone to obtain permission to build from the council. It's a legal black hole, according to Ronit Sela of the Association for Civil Rights in Israel (ACRI).

"Without the authorities creating a plan for the area, nobody can issue a building permit - because the building permits have to show they're consistent with a plan," Sela explained. "In some of the other Jerusalem neighborhoods, illegal building is because people build outside of the guidelines. But in this area, we're talking about a situation where there is zero planning."

ACRI "can't understand" why the orders have been issued - especially in a place all but ignored by authorities for many years - but Sela suggests the council might see it as a way to raise revenue.

Property owners who don't comply with the law can be hit with massive fines, and Jerusalem council raises millions of euros annually through such penalties, which can be as much as 15,000 euros per apartment.

Raising fines, making money

It's certainly one of the main reasons developers hide behind a cloak of anonymity: As long as the council can't identify them, it can't issue fines. And that's also why none of them are challenging last month's demolition orders. They had 30 days to appeal the decision but have chosen not to, because it would have meant running the risk of being forced to pay up.

At the end of the day, the real losers are the hundreds of people like Shadee and his friend Ali, who could see their savings reduced to rubble. As individuals they can't contest the court order and are now waiting to see whether public pressure on Jerusalem's council will force it to find an alternative solution.

In the meantime all they can do is wait, says Ali. "There is no alternative. If you want something legal, with a contract, you have to look inside Jerusalem - on the other side of the wall. There it will cost millions. Only the rich people can live there. We are just workers. We have invested all our money in these houses. This is all we have."

Shadee says he feels stuck between the developers and the council, but adds: "This is a fact, and we have to live with it and continue. We can't live in the street, so what should we do? It's an adventure for us, and a challenge, so we'll go on until the end."