Link to article: https://www.kolhair.co.il/realestate/254032/
For decades, small businesses have been the beating heart of Jerusalem—not only economically but also, and perhaps primarily, socially, communally, and even culturally. They created lively streets, connections between neighbors, gathering places, and a sense of local identity. But today, as streets empty out and competition becomes impossible, it’s time to speak seriously about how to save and strengthen the businesses that keep this city alive.
The problem: the commercial landscape is changing—and small businesses are being crushed
It’s no secret that in recent years Israel has been losing thousands of small businesses every year. According to data from Ultra Finance, in 2024 around 50,000 small and medium businesses closed—more than opened. This trend didn’t start in Jerusalem, but it is felt here more strongly than anywhere else.
And it’s not just economics. It’s urban geography.
The malls of the past: the beginning of the shift
In the 1990s and 2000s, large malls hurt small businesses in almost every city in the country. They attracted consumers, chains, and investment—and traditional commercial streets weakened. But Jerusalem survived that era, thanks to strong walking habits, established communities, neighborhood commerce, and a unique street fabric that couldn’t be duplicated.
But today, the threat is different: “mini-malls” inside towers—mixed-use developments in urban renewal projects.
And this trend is far more damaging than the classic mall.
High-rise projects with closed commercial floors, internal lobbies, and indoor galleries are becoming the norm. They look attractive at the planning stage, but in practice they create concentrated power for big chains, disconnect the street from the storefronts, drive commercial rents to suffocating levels, and—worst of all for small businesses—turn commerce into a “multi-level experience” instead of a living street.
It’s a mall without calling it a mall—and like the malls of the past, it drains customers from the surrounding streets.
So what do we do? We strengthen.
The municipality must give small businesses a real competitive advantage. Here are five steps that cities around the world have already proven effective—and some of them could be implemented in Jerusalem almost immediately:
A small business survives when the street is alive. Jerusalem needs an immediate plan for:
There are global models offering reduced rent for the first two years, followed by gradual increases. This gives businesses breathing room and lowers risk.
Instead of empty commercial floors waiting for a national chain, the municipality can require:
This works in many European cities—and it will work in Jerusalem.
Not just loans, but:
A business can’t survive if construction digs up the sidewalk beneath its window for three years. We need stable planning, binding timelines, and municipal responsibility to prevent commercial paralysis in neighborhoods and major corridors.
Jerusalem doesn’t need a “mega-mall” or a “mini-mall”—it needs a living street.
This city is built on countless small businesses: the bakery on Jaffa Road, the textile shop in Geula, the boutique in Rehavia, the greengrocer in the market, the small grocery stores in every neighborhood.
These aren’t “private businesses”—they’re the city’s living tissue.
If Jerusalem wants to preserve its identity—and build a strong, independent economy—it must take a clear step: make this a city where a small business can survive. And not just survive—thrive.