Real estate valuations,heritage branding and the construction of the world’s most expensive city

Abstract

This paper contributes to Land Value Capture (LVC) research by demonstrating how heritage conservation, typically linked to architectural preservation and cultural memory, can also serve as a fiscal extraction tool. Focusing on Tel Aviv-Jaffa, it traces how the local municipality used the 2008 Conservation Plan to transform heritage policies into financial instruments, legitimising betterment taxes and limiting compensation claims. It examines this process through one of Israel’s largest compensation lawsuits, where property owners challenged the plan’s restrictive measures, prompting the municipality to argue that, despite these restrictions, the conservation policies also branded their buildings, increasing their market value by approximately 5%. Additionally, the paper highlights two underexplored LVC challenges: first, that determining whether property values increase following public interventions is a contested process shaped by selective narratives and strategic framing; second, that even if such increases are assumed, attributing them directly to specific public interventions, rather than broader market dynamics, remains uncertain and contingent. This reflects the paper’s broader empirical argument that valuations are not neutral reflections of economic reality but performative acts of justification, crafted to legitimise fiscal claims and rationalise policy interventions. Together, these findings reveal how Tel Aviv-Jaffa’s transformation into the world’s most expensive city has been structured by contested processes of branding, fiscal justification and selective value creation, demonstrating how urban economies are actively shaped by the strategic deployment of cultural narratives and valuation practices.

Introduction

Tel Aviv-Jaffa’s transformation from an improvised urban area into the world’s most expensive city (Globetrender, 2022) is deeply tied to the strategic use of heritage conservation. This paper examines this dynamic by showing how conservation policies, originally aimed at preserving Tel Aviv-Jaffa’s Bauhaus architectural heritage (Alfasi and Fabian, 2008), and constructing the narrative of an historic Jewish city while downplaying pre-existing Palestinian heritage (Rotbard, 2015), have been reconfigured as a fiscal strategy. No longer limited to preservation, these policies now enable the municipality to impose betterment taxes – levies justified through claims of value appreciation. They also undermine compensation claims, which typically arise when property owners argue that planning restrictions reduce their property’s market value, by reclassifying conservation as a value-adding intervention rather than a regulatory burden.

In doing so, heritage becomes a performative tool of fiscal extraction (Weber, 2002). This shift raises the central questions of the paper: How did heritage conservation in Tel Aviv-Jaffa evolve from a strategy of cultural preservation and historical framing into a fiscal tool for value extraction, in what ways did this transformation contribute to Tel Aviv-Jaffa becoming the world’s most expensive city, reshaping its urban governance, social relations, and spatial organisation, and what does this reveal about the performative nature of value creation in relation to Land Value Capture (LVC) processes?

Drawing on the concept of LVC – a strategy for capturing revenue from land value increases associated with public actions such as planning and regulatory interventions (Bloom, 2023) – the paper offers three key contributions. First, it explores how municipalities employ LVC policies within the framework of heritage conservation, examining both the application of these policies and their contested outcomes. While conservation is often seen as a financial burden due to regulatory constraints and maintenance costs (Wu et al., 2019), this paper demonstrates that heritage conservation also functions as a tool for enhancing property values by preserving distinct architectural character, thereby increasing demand for these properties. This is illustrated by the Tel Aviv-Jaffa municipality’s imposition of betterment taxes on conserved properties and its minimisation of compensation claims, arguing that the conservation plan itself increased property values by associating protected buildings – structures designated for conservation by the municipality with strict preservation requirements – with cultural prestige and architectural uniqueness. However, the analysis of a 14-year legal battle between the municipality and local property owners over the economic impact of conservation policies reveals that the claim that conservation consistently raises property values remains contested.

Second, in contrast to what is often considered self-evident in most LVC literature (see, e.g. López-Morales et al., 2024; McAllister et al., 2018; Nascimento Neto et al., 2024) which posits that value increases resulting from public intervention are easily identifiable, this research illustrates that such changes are not empirically verifiable in any consistent way. Rather than constituting observable facts, value increases function as justificatory narratives used to rationalise fiscal claims, especially when moving from generalisations about broader property groups to the evaluation of individual private buildings. This will be illustrated by analysing the Tel Aviv-Jaffa municipality’s efforts to demonstrate property value increases following the implementation of the conservation plan. In this attempt, the municipality employed two techniques: first, making general comparisons with other cities around the world, and second, creating a large dataset of 19 paired properties, both conserved and non-conserved. These failing efforts demonstrate that it is not logically possible to extrapolate from broad market trends to individual property value increases. Such value shifts are not objective facts to be discovered, but claims constructed for justificatory purposes.

Third, the paper demonstrates that even if an increase in property values is assumed to have occurred, it is not straightforward to attribute this increase to specific public interventions. In other words, while property value increases may appear to happen, the causal relationship between conservation policies and market outcomes remains unclear. This is illustrated by the Tel Aviv-Jaffa municipality’s efforts to establish a direct connection between the conservation plan and property value increases, which ultimately proved unsuccessful despite attempts to establish causality through logical inference. As a result, the municipality had to resort to metaphorical reasoning, drawing comparisons between protected buildings and prestigious items, such as Michelin stars or certified diamonds. This ambiguity underscores a significant challenge for LVC scholarship, as it complicates the underlying assumption that property value increases can be directly linked to public actions, as opposed to broader market forces.

Theoretically, this study builds on Boltanski and Esquerre’s (2020) pragmatist approach to valuation, which conceptualises valuation as a political process of justification rather than an objective scientific practice. Their framework illustrates how cultural and historical significance is strategically used to enhance the perceived value of objects or sites. Drawing on this perspective, the paper explores how heritage is used for LVC, showing that LVC is not merely a technical concept but a strategic justification process, it demonstrates how municipalities mobilise historical and cultural narratives for economic capture. This redefined role of heritage conservation aligns with geopolitical agendas, particularly in affluent areas of the Global North, where much of the world’s cultural heritage capital is concentrated, commodified and strategically linked to broader economic goals (Nascimento Neto et al., 2024). Importantly, in the context of Israel and Palestine, these processes often intersect with settler-colonial dynamics, as the cultural heritage highlighted is selectively framed to privilege certain historical narratives, marginalising or erasing others, particularly those related to local Palestinian communities (Yacobi, 2008). In Tel Aviv-Jaffa, this selective framing has involved both symbolic and material strategies. As Levine (2005) shows, Zionist planning ideologies in the early 20th century deliberately erased Jaffa’s Arab urban fabric through spatial fragmentation, renaming, and the insertion of modernist Jewish architecture to claim territorial modernity. Milner (2020) further demonstrates how this logic persists in contemporary urban development, where Palestinian spaces and histories are devalued or demolished, such as in the redevelopment of Ajami and the gentrification of historically Arab neighbourhoods, reinforcing a settler-colonial urban order under the guise of heritage and renewal.

This analysis is based on 18 months of ethnographic research conducted in and around the Tel Aviv-Jaffa municipality, combining participant observation, interviews with key stakeholders such as planners, appraisers, and city officials, and extensive document analysis. The research closely followed the implementation of the conservation plan and the disputes it generated, particularly the ‘Branding Dispute’ – one of the largest legal cases in the city’s history, with claims nearing half its annual budget. This case, in which property owners challenged the assertion that heritage branding justified higher property values, tax collection and reduced compensation, offers a comprehensive understanding of how heritage conservation functions as a financial strategy in practice.

The paper opens with a theoretical discussion of heritage conservation and its relationship with LVC, situating Tel Aviv-Jaffa’s case within broader urban governance frameworks. This is followed by a background section that contextualises the city’s conservation policies within its historical and policy landscape, providing essential context for the analysis. The methodology section then details the ethnographic fieldwork conducted, including observations, interviews and document analysis, offering insight into how data was gathered and interpreted. The empirical analysis, presented in three parts, examines how the municipality uses heritage branding to justify fiscal claims, explores the complexities of determining property value increases, and interrogates the challenges of attributing those increases specifically to conservation policies. The discussion and conclusion section connects these findings to broader theoretical debates on value capture, while also addressing the contested role of heritage conservation as a fiscal tool and its implications for urban governance and inequality.

Branding as a regime of justification: An ethnographic study of real estate valuations

Historically, urban conservation has been seen as an obstacle to economic development, primarily due to building restrictions imposed by preservation regulations, such as limitations on height, floor area and design. These constraints often led key stakeholders to prefer demolition over conservation, as it allowed for the construction of larger, more modern and economically lucrative real estate developments (Ruijgrok, 2006; Zhang et al., 2025). Consequently, when conservation was promoted, it was typically for non-economic reasons such as a national desire to highlight specific historical narratives while marginalising others, as critically explored in the context of Tel Aviv and Jaffa by Rotbard (2015), or through the efforts to preserve structures that experts, particularly architects and planners, identify as culturally significant, aesthetically distinctive and vital for urban identity (Alfasi and Fabian, 2008). The government, therefore, faced the complex challenge of balancing these diverse needs – political, cultural, historical and aesthetic – with the economic costs and pressures of urban development (Mendelson-Shwartz and Mualam, 2024).

In recent years, conservation has increasingly been recognised as a vital component of entrepreneurial urbanism (Wu et al., 2020). Conservation can attract tourism and support local commercial activities (Yung and Chan, 2016), boost the economic vitality of local communities by creating jobs, generating income, and fostering sustainable development (Rivero, 2017), and contribute to city branding by reinforcing local identity and enhancing a place’s distinctiveness in a competitive global context (Kavaratzis and Kalandides, 2015). Additionally, it has become a tool in public-private partnership schemes, facilitating collaboration between municipal authorities and private investors to fund building conservation in exchange for additional development rights (Margalit and Alfasi, 2016). This evolving perspective highlights how conservation has been integrated into broader strategies of economic growth, investment attraction, and urban competitiveness.

Building on this shifting approach, research on conservation and its impact on local economies exhibits a dual focus. Firstly, scholarly work investigates the direct effects of conservation on economic indicators, highlighting the revenue generation from tourism, place branding, and other heritage-related activities for local businesses, property developers, property owners and municipal authorities (Bedate et al., 2004; Yung and Chan, 2016). Secondly, a less explored but increasingly relevant line of inquiry examines the capacity of municipal councils to strategically harness the economic benefits generated by conservation efforts for advancing policy and fiscal strategies. Mechanisms such as land-transfer fees, deed taxes and property taxes enable governments to capture the value generated by increased property prices near heritage sites, often reinvesting this revenue into urban infrastructure and services (Tan and Ti, 2020; Wu et al., 2020).

This article builds on this second line of inquiry, focusing on LVC, a concept increasingly central to urban governance (see, e.g. Ansenberg, 2022, 2024; Bloom, 2023; Canelas and Noring, 2022; McAllister, 2017; Nascimento Neto et al., 2024; Shih and Newman, 2024; Wolf-Powers, 2023), and seeks to further expand its application to the context of heritage conservation. LVC refers to a set of urban governance instruments, such as property taxes, development charges, betterment levies, special assessments and density bonuses, designed to capture the increase in land value generated by public investments or changes in land-use regulations (Canelas and Noring, 2022; Friendly, 2020; López-Morales et al., 2024).

The wide adoption of LVC by local municipalities worldwide is driven by various strategic justifications. First, it ensures efficiency by requiring those who benefit financially from public investments or planning decisions to contribute a fair share towards funding these improvements (Friendly, 2020). Second, it promotes equity by redistributing the financial gains resulting from public infrastructure and services, thereby reducing wealth disparities between landowners and the broader community (López-Morales et al., 2024). Third, it promotes investments in public infrastructure by generating revenues that can be reinvested in urban projects (Wolf-Powers, 2023). Finally, it aligns with principles of justice by capturing private gains that are unearned or result from public action, making it an ethical and socially responsible approach to urban governance (Nascimento Neto et al., 2024).

In this context, LVC should not be viewed merely as a technical instrument of fiscal policy but as part of a broader neoliberal logic of justification. As scholars have noted (Bloom, 2023; Canelas and Noring, 2022; Friendly, 2020), LVC operates as a legitimising framework that enables municipalities to convert public regulatory interventions into claims for private financial contribution, often framed as fair, efficient and economically rational. It exemplifies how neoliberal urban governance justifies the extraction of value through planning by framing these interventions as inherently beneficial and thus deserving of fiscal return. Within this logic, conservation is recoded not as a constraint but as a value-generating public act – an argument that municipalities use to defend taxation and reduce compensation.

By foregrounding LVC as a justificatory mechanism, this paper highlights how fiscal tools are embedded within moral economies of fairness and efficiency that normalise and legitimise economic extraction from the built environment. This paper identifies a parallel logic in the realm of heritage conservation, where municipalities frame the preservation of conserved buildings as a means to enhance their desirability and market value. This perceived value enhancement, akin to the benefits derived from other public investments, allows municipalities to capture financial gains through mechanisms like betterment taxes. However, as the analysis will show, the actual impact of conservation on property values is still debated, suggesting that this connection is not universally accepted.

Furthermore, the analysis highlights two critical complexities in this process. First, it is not always clear whether public actions, such as changes in land-use regulations or public investments, lead to an increase in property values or whether no increase has occurred. While the broader LVC literature often assumes that determining whether an increase in value has occurred is a simple, black-and-white question (see, e.g. López-Morales et al., 2024; McAllister et al., 2018; Nascimento Neto et al., 2024), the study of heritage conservation teaches us that this assumption is overly simplistic. In many cases, it is effectively impossible to conclusively determine whether any increase in value has occurred, not because of data limitations, but because value here is not an objective metric waiting to be discovered – it is the result of a contested process of justification. This impossibility reveals that what is often presented as a technical valuation is, in fact, a performative act of justification, where actors strategically draw on historical, cultural and economic narratives to legitimise fiscal claims.

Second, even when assuming that conservation leads to increased property values, attributing the source of this value increase raises significant questions about causality and responsibility. The interplay between conservation policies, market dynamics, and broader urban processes complicates efforts to isolate conservation as the primary driver of value increases. This ambiguity, often overlooked, underscores the need to critically examine how heritage branding and other factors are leveraged by municipalities to justify fiscal policies such as tax collection or compensation avoidance.

Given the impossibility of empirically demonstrating value increases, the paper approaches valuation as a process of justification rather than discovery. The research employs Boltanski and Thévenot’s (2006) concept of justification regimes, to analyse how conservation practices are utilised for value capture. This framework posits that ‘Beings’ understood as the interconnectedness of persons and things, achieve significance through a process of qualification – where they are recognised as exemplars of broader categories or concepts. Qualification occurs within a limited set of historically constructed forms of generality, referred to as justification regimes, which provide the normative basis for evaluating and legitimising actions or practices. Boltanski and Esquerre (2020) further refined these ideas by identifying valuations as justifications of prices. They demonstrated that contemporary wealth creation is increasingly reliant on exploiting historical and cultural elements, such as heritage, traditions and identity. Framed as the ‘economy of enrichment’, this approach emphasises how valuations often depend on an object’s ‘collection status’, which includes its historical lineage, cultural pedigree or association with traditions, to establish its worth. Consequently, the value of a given property is intricately linked to preserving a unique and uniform sense of identity that evokes the past in specific ways to legitimise higher prices.

Boltanski and Esquerre’s (2015) framework also carries significant geopolitical implications, reflecting a shift in global economic strategies where cultural and historical assets are increasingly instrumentalised for wealth generation. This ‘economy of enrichment’ aligns with post-industrial economic models, particularly in the Global North, where value extraction relies less on resource exploitation and more on the commodification of heritage, identity and symbolic capital. Urban conservation plays a pivotal role in this dynamic, as the preservation of historic buildings and culturally significant sites becomes a tool for cities to attract investment, tourism and higher property values. By emphasising historical narratives and cultural prestige, this approach often reinforces existing inequalities, as wealthier regions with more established cultural assets can further capitalise on their historical status, while marginalised areas face challenges in accessing similar forms of value creation (Boltanski and Esquerre, 2020) . This dynamic reveals how the global economy privileges certain historical interpretations and cultural markers, embedding heritage conservation within broader regimes of geopolitical power and economic influence.

This theoretical framework intersects with broader pragmatist approaches to the study of value (Lake, 2023), which emphasise the situated and relational processes through which value is constructed. Such perspectives underscore how valuation is not merely a technical or economic act but a social and political one, shaped by the interplay of actors, institutions and material contexts. Value emerges through the negotiation of competing interests and logics, where economic, cultural and historical dimensions are aligned to serve broader governance objectives.

In this context, justification regimes provide a useful lens for understanding how conservation practices transform cultural heritage into economic assets. Pragmatist approaches highlight how valuation processes often involve the co-construction of value between objects and their socio-cultural environments, with institutions playing a key role in legitimising these processes (Muniesa, 2012). Tel Aviv-Jaffa’s conservation plan exemplifies this dynamic, where heritage branding operates as a performative act that ties cultural significance to market logic. For example, by framing conserved buildings as part of a curated ‘collection’ the municipality situates them within an economy of enrichment, wherein their historical and cultural attributes are instrumentalised to justify fiscal policies intended to enforce betterment taxes and limit compensation claims (Mendelson-Shwartz and Mualam, 2024).

The present article applies this framework to analyse the ‘Branding Dispute’, a legal controversy that exemplifies how the Tel Aviv-Jaffa municipality strategically employs valuation practices to align cultural preservation with fiscal objectives. By examining the municipality’s three key strategies – drawing comparisons with other cities, using statistical evidence to substantiate value increases, and framing conserved properties as part of a prestigious collection – the study explores the mechanisms through which heritage branding is leveraged to generate economic value. At the same time, it exposes the challenges and contradictions that complicate this process and its outcomes.

Methodology

This study is based on 16 months of ethnographic research conducted in and around the Tel Aviv municipality from 2016 to 2017, supplemented by an additional two months of investigation in 2022. Throughout this 18-month period, the research focused on two central aspects: urban planning and real estate valuation, employing participant observation, interviews and archival work to examine the intersections between municipal governance, and property valuation.

The study of urban planning processes involved extensive participant observation within the Tel Aviv-Jaffa municipality, examining both political and professional planning practices. Fieldwork included attending all sessions of the Tel Aviv Local Planning Committee, composed of elected council members responsible for key urban planning and zoning decisions, alongside observations at the City Engineer Forum, a professional planning body that evaluates development proposals prior to their political deliberation. Additionally, the research closely examined the proceedings of the regional planning committee, and the regional appeal committee, both higher-tier government-controlled bodies overseeing the local planning committee, responsible for resolving planning disputes and managing large-scale urban development projects. It also involved attending meetings between developers and residents, community group gatherings, public participation meetings, court hearings and routine meetings across various municipal departments.

As the study advanced, the investigation increasingly centred on two detailed planning processes: the Tel Aviv-Jaffa conservation plan and a large-scale urban regeneration project aimed at reconstructing one central Tel-Aviv neighbourhood (Ansenberg, 2022, 2024). This observational work was supplemented by approximately 100 interviews with municipal officials and other key stakeholders engaged in urban planning. Participants included representatives from the municipal conservation department, the city architect department, multiple planning departments overseeing different city zones (e.g. East and Central Tel Aviv), the city’s transportation department, and the real estate valuation department, as well as other key stakeholders such as residents, developers, lawyers, architects, urban planners and heritage professionals.

The archival research conducted during the study included extensive work with multiple collections. The municipal construction archive provided official documentation related to construction approval, urban planning documents and conservation files, which are architect-prepared documents detailing the history and condition of buildings prior to conservation processes. Additionally, the Conservation Council Archive – a national heritage preservation organisation, and the White City Visitor Center Archive – a cultural centre dedicated to Bauhaus architecture, provided materials on Tel Aviv’s long term preservation plans, including technical evaluations of buildings, official protocols detailing the process of establishing and applying heritage designation criteria and records of public meetings and consultations. Private collections made accessible through various stakeholders supplemented this data, including original architectural drawings, personal correspondences and historical photographs related to the conservation process.

The study of real estate valuation practices included participation in an appraisers’ training programme aimed at understanding professional practices and standards, during which I took several exams unsuccessfully. Additionally, I conducted interviews with appraisers, closely followed 10 arbitration processes involving residents’ appeals against betterment tax assessments issued by the municipality and carried out an extensive archival study of real estate valuation reports and documents.

To address the complexities of participatory research within entangled urban settings, this study is grounded in the practice of tracing controversies in the field, which allows for a nuanced examination of how competing perspectives and power dynamics shape urban planning and real estate valuation practices (Venturini and Kristian Munk, 2021). This approach builds on actor-network theory’s emphasis on mapping controversies as a means of understanding the multiple realities at play in governance and valuation processes (Latour, 2005). Practically, by adopting this method, I was able to trace disagreements as they unfolded, allowing me to see how different actors justified their positions and constructed their arguments. Therefore, this approach provided insight into the internal logic of decision-making processes, revealing not only how urban issues were framed but also how social dynamics played out – what was considered important, what was dismissed, what was accepted as truth, and what remained contested. By exposing points of contention and the efforts to clarify them, this method highlighted the ways in which knowledge, authority and legitimacy were negotiated.

Data collection was meticulously organised through field notes and documentation of meetings, interviews and professional materials. These records were systematically analysed using MAXQDA, a qualitative data analysis software, which allowed for coding themes related to both urban planning mechanisms and valuation processes. This structured approach ensured a comprehensive understanding of the interactions between urban governance, property valuation and conservation strategies.

Background

Urban and historical context of Tel Aviv-Jaffa

Tel Aviv was founded in 1909 by Jewish settlers on the outskirts of Jaffa, which at the time was a predominantly Palestinian city under Ottoman rule (Levine, 2005). The city experienced significant population growth in the early decades of the 20th century, expanding from a small community to a sizeable urban centre by the early 1930s, driven mainly by the arrival of Jewish immigrants, primarily from Eastern Europe (Pace, 1996). These immigrants sought a new urban centre, separate from Jaffa, with modern infrastructure and a more European-style urban environment. The British Mandate over Palestine, which began in 1917, played a pivotal role in shaping the city’s development, as British policies were often aimed at promoting Jewish settlement in Tel Aviv, further fuelling the city’s growth (Rotbard, 2015: 108). Architecturally, during its formative years, Tel Aviv saw the rise of eclectic styles that blended elements from European traditions with local needs. This eclectic architecture featured ornamental facades, drawing from Baroque, Renaissance and classical influences, while also incorporating practical features designed to suit the region’s climate (Harpaz, 2013).

As the city expanded, tensions between the Jewish and Arab populations increased, particularly after the 1929 clashes, which marked a significant point in the Jewish-Arab relations in the area (Cohen, 2015). Despite growing security risks, the 1930s witnessed a period of significant transformation for Tel Aviv. The city’s population grew rapidly, partly due to the influx of European Jewish refugees fleeing the rise of Nazism. By the late 1930s, the population had reached around 130,000 residents (Azaryahu, 2020: 33). The British Mandate’s policies on land distribution and urban development facilitated this expansion, which saw the city extend beyond its initial boundaries (Marom, 2014). However, political tensions between Jewish and Arab communities remained a constant undercurrent, influencing the city’s development. For example, following the 1936–1939 Arab Revolt and the general strike by Palestinian workers, the Tel Aviv Port was established to replace the previously dominant Jaffa Port (Kessler, 2023: 110). Tamari’s analysis of the Arab Revolt and its profound impact reveals that it was not only a nationalist uprising against British rule and Zionist expansion but also a reflection of deep internal divisions within Palestinian society. It exposed class struggles and growing urban marginalisation, particularly in cities like Jaffa, where economic and social inequalities intensified the broader political conflict (Tamari, 1982: 177–179). This internal fragmentation, alongside the broader anti-colonial struggle, further destabilised the urban order, ultimately reshaping the spatial dynamics of the region.

Amidst this growth and political tension, Tel Aviv embraced a new architectural direction, drawing from the Bauhaus movement while integrating influences from the broader modernist discourse. Characterised by functional, minimalist design and the use of modern materials such as concrete and steel, this style aligned with the city’s vision of progress and urban modernity while also serving as a tool for shaping a distinct national identity (Anker, 2010; Cohen, 2003; Forgacs, 1995). The retrospective framing of this architecture as part of the ‘International Style’ – rather than the more specific ‘Bauhaus’ – carried significant political implications. As Nitzan-Shiftan (1996) argues, this reframing recast Tel Aviv’s modernist architecture as universal and modest, aligning it with Zionist narratives of progress and national rebirth while distancing it from both European socialist roots and Arab vernacular traditions.

This architectural positioning also served to reinforce Tel Aviv’s image as a rational, Western-oriented urban space – contrasted sharply with the representation of Jaffa as traditional and disordered. The contrast with Jaffa was particularly stark – while Jaffa was often portrayed as traditional and disorderly, Tel Aviv’s modernist planning followed spatial strategies rooted in colonial governance, using architecture to establish a sense of order, define national identity and consolidate urban control (Yacobi, 2008).

The ‘White City’ narrative later solidified this distinction, turning conservation efforts into a tool for branding and historical legitimisation. By emphasising Tel Aviv’s modernist heritage, these efforts helped reinforce the city’s image as an advanced, cosmopolitan centre while sidelining other histories, particularly those of Jaffa and its Palestinian residents. This process exemplifies how modernist architecture in Israel was not only a reflection of international trends but also deeply embedded in national identity construction and geopolitical strategies (Rotbard, 2015: 56–58).

After the establishment of the State of Israel in 1948 and the forcible displacement of the majority of the local Palestinian population from Jaffa, Tel Aviv expanded rapidly, driven by the arrival of Jewish immigrants from Europe and the Middle East. By the 1970s, its population had nearly reached 400,000 (Azaryahu, 2020: 95) solidifying its position as the country’s economic and cultural hub. This rapid expansion drove urbanisation and a shift in architectural approaches. While modernist high-rises, emphasising sleek design and private development, began to shape the skyline, the state also initiated large-scale public housing projects during the 1950s and 1960s. These public housing developments often adopted the Brutalist style, characterised by raw concrete and functional design, reflecting a more utilitarian response to the housing demands of the expanding population (Allweil and Zemer, 2022). During the late 1960s and early 1970s the city’s development began to stagnate. The rapid urban growth had led to overcrowding, traffic congestion, economic inequality, and growing environmental degradation, including rising levels of contamination and pollution (Ansenberg et al., 2024) contributing to a decline in the overall quality of life. Furthermore, Tel Aviv’s reputation as a modern, vibrant city was overshadowed by economic and social challenges, with many of the newly built high-rises seen as unappealing (Azaryahu, 2020: 110–115).

Considering its deteriorating conditions, Tel Aviv began adopting neoliberal policies in the late 1970s and early 1980s, aligning with a broader global shift towards market-driven urban development and private capital (Kemp and Margalit, 2017: 167–170). This shift encouraged significant private investment in urban renewal, particularly in the city centre and along the beachfront, leading to rising property values and the revitalisation of previously neglected areas. The city’s architectural style shifted, with an increasing focus on luxury high-rises and office buildings catering to the expanding financial sector, often characterised by post-modernistic designs. Nevertheless, despite the economic boom, neoliberalism led to growing inequality, as lower-income communities were displaced by the surge of private investments (Azaryahu, 2020: 148–150; Rotbard, 2015: 136–140; Schipper, 2015).

While this historical overview emphasises architectural developments, it is crucial to recognise that these transformations were deeply interconnected with broader urban processes, including evolving governance strategies, property relations and socioeconomic inequalities. Architectural preservation, initially driven by cultural and national identity considerations, progressively became intertwined with economic strategies that reshaped urban governance. This shift not only influenced the city’s-built environment but also reinforced socioeconomic divides, setting the stage for contemporary conflicts over heritage branding, property valuation and fiscal extraction, central themes explored throughout this paper.

The Tel Aviv-Jaffa conservation plan

Still recovering from the hard decades of the 1960s and 1970s, in which the city lost its glamour to crumbling cement and its populations to the suburbs, conservation first emerged in the mid-1980s as part of a plan to revive the city centre by reshaping its image, enhancing its cultural appeal, attracting tourism, and strengthening its urban branding (Marom, 2009: 329–341). Three hundred buildings were included in this plan and were supposed to take part in a concentrated effort to vitalise the heart of the city. Loyal to the neoliberal economic ideology of the 1980s, Adam Mazor, the main architect of this pioneering plan, suggested to finance the conservation via a trade with the property owners – the 300 listed buildings will be rewarded with additional development rights if they will be willing to enrol in a conservation process. In this way the city can earn impressively refurbished buildings with no cost and will, as a result, attract younger and more affluent population, improve the almost repugnant state of the streets and brand itself as an important hub that respects its glorious past as much as it strives towards a brighter future. The most well-known outcome of this new technique can be seen in ‘Rothschild avenues’ – the city’s main boulevards, in which a dozen renovated houses are physically connected to modern skyscrapers, thus presenting, some will say vulgarly, how one is born out of the other (and vice versa). In 1990, the city centre was already partly rehabilitated, and its image was starting to change. No longer perceived as grey and industrial, Tel Aviv had rebranded itself as a ‘Non-Stop City’, becoming a hub for youth culture, parties, left-wing political activism, and experimental art. This cultural transformation contributed to the city’s image as ‘mature’ enough for gentrification, as rising demand for urban spaces made it increasingly attractive for investment and redevelopment.

The new conservation plan that emerged at that time was a more ambitious and sophisticated development of Adam Mazor’s earlier initiative, made possible in part because the city had already undergone significant physical rehabilitation. However, it is important to recognise that the rationale for conservation was not purely instrumental or economically driven but, reflecting the spirit of the time, encompassed both economic motivations and architectural, cultural and political considerations. The significance attributed to heritage preservation was socially constructed and not self-evident, shaped in part by the actions of influential figures like historian Michael Levin. His 1984 exhibition, often credited with ‘inventing’ the concept of the ‘White City’ held at the Tel Aviv Museum of Art, highlighted a coherent collection of Bauhaus buildings and celebrated architects who worked in the city during the 1930s, helping redefine Tel Aviv’s architectural identity and historical narrative. As a typical news article described:

No one thought about the White City before the exhibition . . . Michael Levin invented the concept of the White City in 1984. (Shizaf, 2007)

A second individual credited with contributing to the development of the White City concept is the artist Danny Karavan, who presented in 1988 ‘Kikar Levana’ (White square) – an environmental sculpture celebrating the origins and the founding fathers of the city. Current visitor to the garden, located in a beautiful park, enjoy rolling over a pyramid that symbolises the tents in which the first town’s builders lived, improvise plays in the sunken amphitheatre standing there for the memory of the irrigation pools used in the orchards that surrounded the city, play hide and seek (or, if they are teenagers, secretly smoke) in the beautiful half dome representing the sand and the dunes from which, according to the common believe, the city grew, and climb the perfectly square construction representing the Bauhaus buildings that, just as the builders, the water and the sand, should be seen as a fundamental element from which the city came.

The Jewish-Arab relations, central to the city’s history, alongside broader inter-ethnic dynamics within Israeli society, also played a key role in the emergence of the plan. Rotbard’s (2015) analysis of the conservation plan provides a prominent example of this perspective (pp. 9–11). While Rotbard accepted the importance of the Michael Levin exhibition, he is not sympathetic to what he calls an act of ‘fairy-telling’ and accuses Levin of inventing Tel-Aviv’s new ‘old city’ as part of a nationalistic move against the (memory of the) city’s real 4000 years old source – Jaffa. Rotbard’s accusations consist also a detailed explanation regarding the exploitation of the Bauhaus ‘real’ socialist spirit for a nationalist-capitalist move, the outraging use of the colour ‘white’ that helps differentiates the city and its population from its (’black’) surroundings while having no real connection to the ‘real’ colour of the city, the artificial boundaries of the conservation list that does not overlap with the historical movement that they claim to represent, the fabrication of the historical story in regards to who really build the modern style buildings in Tel-Aviv (mostly French and Belgians architects not associated with the Bauhaus school) and the surrender to the racist narrative of a White City myth, much older than the actual ‘White City’. The result of this acts of ‘fabrication’ cannot lead to anything else but a situation in which:

An increasing number of residents, who live in neighborhoods and districts with equal, if not richer, histories than the White City chronicle, are finding themselves deleted from Tel Aviv’s annals. In some cases, as with Jaffa, they have even been forcibly stripped of their own narratives. (Rotbard, 2015: 68)

It is important to note that despite the economic, social, and political motivations, there was also a significant architectural aspect to the conservation community’s efforts, which held significant power. While members of the conservation community – primarily architects, artists, and preservation advocates – may recognise the political implications of the conservation plan, they often operate within a professional ethic that emphasises architectural integrity, material authenticity and formal design value. This perspective assesses buildings based on their physical features, historical style and preservation standards, rather than on the broader socio-political narratives surrounding the site. In this sense, conservation professionals focus on the object itself, while the municipality mobilises its contextual symbolism to justify fiscal claims and urban policy decisions.

This understanding reflects another perspective, in which the preservation of the ‘White City’ did not aim to conserve the entire ‘city’ or even a specific district, but rather focused on the individual buildings, each with independent ontological value and its own unique significance (Yarrow, 2018). This viewpoint is exemplified by the actions of Nitza Metzger-Szmuk, the first head of Tel Aviv’s Conservation Department, who played a central role in developing the conservation plan. Upon her return to Israel in the early 1990s after years of working in Italy, Metzger-Szmuk conducted a detailed survey of the city’s architecture, personally selecting buildings based on a set of professional criteria, including architectural significance, the building’s physical condition, location and the identity of the architect. Her approach emphasised the intrinsic qualities of the structures themselves rather than their broader historical or political contexts, focusing on the preservation of buildings as independent architectural artefacts. This emphasis on architectural integrity was foundational to the development of Tel Aviv’s conservation policies and informed the selection and protection of the 961 buildings included in the final plan (Ansenberg, 2019).

In summary, the conservation plan initiated in the early 1990s was shaped by a combination of political, cultural, architectural and economic motivations. While the economic rationale aimed at promoting urban development was significant, it operated alongside other objectives rather than dominating the planning process alone. This multifaceted approach reflects a strategy where economic, cultural, and political justifications intersect and reinforce one another. At this stage, however, the municipality’s use of the plan as a formalised value capture mechanism had not yet materialised, as would later become evident.

The structure and implementation of the conservation plan

The conservation plan governs a total of 961 private buildings, establishing specific directives for future construction with a primary focus on preserving their exteriors in line with professional council guidelines including the restoration of original architectural elements and restrictions on structural modifications. Building owners, restricted from making other renovations, must adhere to these directives if they wish to undertake any construction on their deteriorating properties. Additionally, the plan incorporates financial incentives to make conservation economically viable. The Tel Aviv-Jaffa conservation plan is unique in that it does not focus on a specific area of the city. Instead, it encompasses individual buildings classified as International, Eclectic, and Special, selected for their distinct qualities, which were determined through a specific valuation system that assessed their architectural, historical, and other culturally significant attributes based on six factors, rated on a scale from 1 to 6. Buildings that scored more than 20 points were designated for protection, while those exceeding 30 points were classified for stricter preservation measures. These buildings are primarily located in the city centre, now known as the ‘White City’ but are not confined to a single area. Unlike typical conservation zones, the buildings are interspersed with non-listed structures throughout the neighbourhood, contributing to a more integrated and diverse urban landscape.

Implementing this ambitious plan, however, required moving beyond the initial identification of the buildings. The process demanded the establishment of detailed mechanisms for enforcement, including the formalisation of valuation criteria, the introduction of financial incentives and the regulation of renovation practices to ensure long-term adherence to conservation goals.

There is another side to this coin. Normally, a plan is something that adds value to a property as it usually grants it with additional development rights. In the rare cases in which plans reduce the value of properties, the council is liable to pay compensations. Being unusual, the conservation plan’s inner logic is based on limitations forced on property owners, who are required to follow strict orders to do what they were previously allowed to do freely. Thus, its depriving logic, combined with the scope and magnitude of the conservation plan as one of its kind, was forcing the council to be creative in making sure that the financial side of the plan will deny the right of homeowners to claim compensations. This strategy aligns with a broader tendency in Israel to limit direct public investment in urban development, instead favouring market-based tools to shift financial responsibility away from municipal budgets and onto private actors.

Responding to the challenge, the council employed a few mechanisms. The first was based on the list’s main separation between ‘severely’ protected buildings that were required to be conserved perfectly, as close to the original as possible – without any additions or changes, and therefore lost all of their development rights, and ‘simple’ protected buildings that were allowed to keep their original development rights but had to comply with orders such as the need to ‘open’ balconies that, during the years, were connected to the inner parts of the houses, and the prohibition to add elevators and parking spaces in front of the building facade.

The Transferable Development Rights (TDR) mechanism, based on similar techniques that were taken from United States (McConnell and Walls, 2009) allowed owners of severely protected buildings to sell development rights they previously held, along with additional rights granted as compensation for the high renovation costs and as incentives to encourage conservation efforts. However, these rights were not directly tied to physical construction, complicating their valuation and exchange. Rather than simply selling the rights on an open market, property owners had to identify development projects elsewhere in the city where additional construction was permitted, contingent on purchasing TDRs. Once a deal was negotiated, the transaction required approval from the Local Planning Committee – a lengthy process aimed at ensuring compliance with the conservation plan’s objectives. This mechanism became significant after the conservation plan’s approval in 2008, when numerous newly planned skyscrapers in the city could increase their height exclusively by purchasing TDRs, making conservation a central tool in Tel Aviv’s urban growth strategy (Margalit, 2014). Despite these complexities, the system ultimately proved profitable, as demonstrated by the creation of companies such as the White City Group, which acquired and conserved severely protected buildings specifically to trade TDRs and subsequently developed numerous conservation projects.

The challenge facing the council regarding the ‘simple’ buildings was more serious. Being forced to allow 850 protected buildings to use their previously owned development rights (to avoid compensation lawsuits), the conservation plan was not able to contain any more construction over the protected properties. Thus, to reward the property owners for the additional conservation costs, the construction of gardens in between the buildings and its connection to the ground level apartments, the construction of top floors over the entire roof except for 2.5 m of withdrawal, and the construction of cellars that could be connected to the main building, were included in the plan. Nevertheless, the simple buildings’ compensation scheme was still limited in its ability to stop lawsuits and push property owners towards the conservation of their houses. Thus, the idea that the plan was not only responsible for additional costs but was also responsible for an increase in the values due to (what was later termed as) the branding value was hatched.

As was explained to me by a former council appraiser working in the real-estate valuation department, the idea of the branding value is a relatively straightforward one:

One of the guys in the department noticed that some offices that were located in protected buildings added a sketch of the buildings to their business card. That was the first time we were thinking about the branding factor. If someone uses his building’s image on his business card it means that the building is branding his firm and thus is a bit more valuable than what it used to be before it became protected. (23.08.2017) ¹

Another council’s appraiser told a similar story:

My partner had a lighter that he wanted to sell for 50 USD, but then he discovered it was a limited edition and could be auctioned for 1000 USD. This made me realize that a conservation plan is similar in nature. Once properties are cataloged, they become part of a collection and their value increases. (3.3.2022)

Lacking admissible defence against compensation claims, the council had to find a new way. The logic of the suggested solution was simple: If a building’s value was negatively affected due to its inclusion in the conservation list, and its resulting incurred costs, but, in parallel, the building gained value due to the same inclusion, then, the unavoidable compensation lawsuit will magically turn into an accounting disagreement, with regards to which both parties are, more or less, equal.

As part of this logic, the council started to issue betterment taxes claims for the value added to the protected buildings due to the branding factor. Calculated as 5% increase in protected houses and 6% increase in severely protected ones, the betterment taxes claim of half of this increase were extremely large. What made this strategy successful was the fact that in these years the council’s real-estate appraising unit was allowed to negotiate with homeowners and, when required, reduce the expected betterment tax. Thus, if one was to agree not to seek compensations, the appraising unit reduced his branding associated betterment taxes.

In 2008, after the plan was approved, the council, expecting to be flooded with compensation lawsuits, offered every property owner who will agree not to seek compensations to nullify her future branding associated betterment tax bill. This offer was tempting to many property owners. The fact that betterment taxes claims must be paid relatively quickly, while the payments of compensations might entail years long saga in the courts, pushed many to agree to the council’s deal. In 2011, when the period for legal appeals regarding compensations had lapsed, a total of 350 lawsuits amounting to 2.4 billion NIS were filed. This figure is nearly equivalent to half of the annual budget of the council and constitutes the most significant compensation-related litigations, or more accurately, real-estate valuation related disputes, in the annals of Israel (Mendelson-Shwartz and Mualam, 2024).

The branding dispute

Early attempts to prove the branding factor

The dispute over branding justification has persisted for 14 years, with the Tel Aviv-Jaffa Arbitration Committee for Betterment Taxes and Compensation Disputes addressing the case for 13 years before issuing its initial ruling in 2023, which favoured local property owners and rejected the council’s branding claims. The council immediately appealed to the regional court, leaving the case unresolved. Given the scale of the dispute, involving nearly 50% of the city’s annual budget, many expect the final decision may ultimately reach Israel’s Supreme Court, prolonging the conflict for several years. This uncertainty has shaped the strategic decisions of both sides, particularly the municipality’s efforts to frame branding as a legitimate basis for betterment taxation. The detailed narrative that follows draws primarily from the arbitration committee’s proceedings and testimonies, which continue to guide the evolving strategies of both parties.

Central to these proceedings, the arbitration committee chairman outlined two key conditions for the municipality to justify its branding-based tax claims: first, it had to demonstrate that the value of protected buildings increased more than comparable non-protected buildings; second, it had to assume that the value increase was established – without knowing whether this was actually the case – and then demonstrate that this increase was directly attributable to the heritage branding process rather than other market factors. These requirements highlight aspects of LVC theory that have yet to be critically questioned – specifically, the need to demonstrate both the existence of a value increase and its causal connection to public action. However, the municipality’s initial efforts to substantiate the branding factor, as part of an attempt to ensure the economic viability of the planning process prior to the plan’s official approval, relied on indirect global comparisons that often-lacked relevance to the local market context. This section is crucial because it illustrates how the municipality sought to frame value increases as universally replicable while ignoring the specificity of local conditions – a core tension in the broader debate over whether public action can reliably explain rising property values in conservation contexts.

A key attempt to support the municipality’s branding claims emerged in a 2003 report by the strategic consultancy firm City-Link, which cited examples from cities with historical preservation plans where property values increased following conservation measures (IL City-Link, 2003). Notably, these comparisons did not account for Tel Aviv-Jaffa’s unique UNESCO heritage status, as the cities chosen for comparison did not hold similar designations. Additionally, significant policy differences were overlooked, such as the inclusion of tax benefits in other cities that influenced property values – unlike Tel Aviv-Jaffa, where development restrictions were enforced without corresponding financial compensation.

This pattern continued with the municipality’s repeated citation of Deodhar’s (2004) study of property values in Ku-Ring-Gai, Sydney. According to the council’s argument, the conservation plan there led to a 12% rise in property values with a strong correlation between the architectural quality of the listed properties and their increased market value. However, this comparison was contested by property owners who noted that the Australian conservation plan included direct financial incentives, such as tax benefits and subsidies for conservation work, absent in Tel Aviv-Jaffa. As one frustrated property owner remarked:

They get money from the state to conserve their houses, and nobody thought it had any effect on the prices. (20.1.2017)

This challenge highlights a theoretical problem in LVC implementation: the assumption that value increases can be generalised across markets despite significant contextual differences. This issue became particularly evident as the arbitration process unfolded, with property owners disputing branding betterment tax claims and increasingly questioning the council’s reliance on fragmented global comparisons. Appraisers from both sides began acknowledging the limitations of universal market comparisons for justifying betterment tax collection, with one noting that:

the increase in price in one place simply indicates that the price has increased in one place, nothing more, and nothing less. (13.12.2016)

This acknowledgement underscores a key difficulty in LVC theory – establishing a direct causal link between public intervention and value increases when multiple market dynamics are at play. Thus, the council’s initial attempts to justify the branding factor illustrate two key theoretical points central to this study. First, they demonstrate how conservation can serve as a justification mechanism for value capture, with municipalities strategically framing heritage branding as a rationale for betterment taxation, even when the link between public action and property appreciation remains unproven. In the early stages, both before and immediately after the plan’s approval, such research played a practical role in helping the municipality extract value from heritage, reinforcing its claims and facilitating taxation efforts. Second, the case reveals the difficulty in determining whether property value increases have occurred at all, as demonstrated by the municipality’s reliance on fragmented international comparisons instead of direct, localised evidence.

The Kapelner Report – A scientific attempt to substantiate branding

Following the limitations of its earlier attempts to justify the branding factor through global comparisons, the municipality shifted its approach, focusing instead on producing localised, empirical evidence to establish a direct correlation between heritage protection and increased property values within Tel Aviv-Jaffa. This strategic adjustment aimed to satisfy the committee’s demand for contextually relevant data, as previous international comparisons had been dismissed for their lack of applicability to the city’s specific market dynamics.

To support its claims, the council commissioned the Kapelner (2011) Report, a valuation study aimed at determining whether the inclusion of protected buildings in the conservation plan resulted in greater value appreciation compared to non-protected properties. The report compared pairs of properties based on proximity, sale date and size, while deliberately excluding units with significant development potential, such as top-floor apartments eligible for rooftop expansions or ground-floor units with private yards. This methodological narrowing sought to isolate the branding effect by focusing on ‘sandwich apartments’ – middle-floor units without unique development advantages. Despite the restricted sample of just 19 protected and 30 non-protected apartments, the report concluded that protected properties sold for an average of 8.5% more. However, given the variability in the data, including instances where non-protected properties outperformed protected ones, the council adjusted its claim to a 5% branding-related value increase (6% for the severely protected properties).

Property owners contested these findings, arguing that the limited and selectively chosen dataset undermined the report’s reliability. During a committee site visit, they highlighted substantial differences between the supposedly comparable apartments, such as building condition, street character and proximity to main roads – factors that could independently influence property values. Moreover, they challenged the underlying assumption that the branding effect could be captured through standardised comparisons, emphasising that the uniqueness of protected buildings made direct comparisons inherently problematic.

The methodological disagreements revealed deeper tensions regarding valuation practices and their application in LVC strategies. By commissioning the Kapelner Report, the council sought to quantify branding’s impact as a generalisable increase in property values, aligning with the principles of LVC, which justify fiscal claims on the basis of publicly generated value. However, the selective dataset and the reduction of a complex and context-specific phenomenon into a fixed percentage figure underscored the challenges of applying universal valuation models to historically unique properties. The council’s shift from individualised, case-by-case valuation practices towards a more standardised market logic – moving from ideographic to nomothetic valuation – was ultimately contested by both sides, with even the council’s appraiser acknowledging the limitations of statistical modelling in this context:

Unless we go to every seller and every buyer and interview them personally and get inside every apartment and scrutinize every toilet seat, we will not be able to have a better proof than what we already have. (Tochnit Hasimur 2650b – Protocols [Conservation Plan 2650b – Protocols], 2016)

These developments reflect three core theoretical insights central to this study, as illustrated by the municipality’s efforts in the Kapelner Report. First, they demonstrate how conservation can be strategically mobilised as a fiscal tool, with the report used to justify betterment taxes by attempting to quantify a branding premium despite methodological limitations. Second, they expose the challenge of determining whether property value increases occurred at all, as the selective dataset and inconsistent findings failed to provide conclusive evidence. Third, they highlight the difficulty of attributing any observed value increase specifically to public action, as the study’s results could not disentangle the branding effect from broader market dynamics. Together, these insights reveal how valuation reports can function not only as technical assessments but also as rhetorical tools for fiscal justification.

Linking the rising value to the conservation list

Following earlier challenges in justifying the branding factor, the municipality further refined its strategy, this time focusing on establishing a direct causal link between the conservation list and rising property values, in line with the second challenge posed by the committee chairman, who required proof not just of value increase but of its direct connection to heritage branding rather than broader market fluctuations. The deliberations in the Tel Aviv-Jaffa Arbitration Committee reveal how the council’s appraisers attempted to meet this evidentiary challenge, uncertain whether they had satisfied the first requirement, yet assuming they had, while grappling with the complexities of valuation itself.

The council’s appraisers initially argued that scarcity alone – created by the limited number of designated heritage buildings – was sufficient to influence value. A senior council appraiser summarised this perspective by appealing to market logic stating that ‘rare assets attract higher demand’ (14.11.2016).

Additionally, they pointed to property listings where sellers prominently mentioned a building’s protected status as a selling point, suggesting this feature was framed as an asset in marketing practices. This, they argued, indicated the presence of added value directly linked to the conservation plan.

However, property owners challenged this reasoning, emphasising the burdens imposed by conservation requirements, such as costly renovations and restrictive building limitations. Some owners argued that the visibility of a building’s protected status in advertisements was less about stating its prestige and more a legal necessity aimed at shielding sellers from accusations of misleading potential buyers. As one property owner expressed during a hearing:

I have to disclose the building’s status, not because it adds value, but because it gives it a negative branding – buyers see it as a burden, and I’m worried I’ll get sued if I don’t mention it. Just because something is rare doesn’t mean it’s desirable – after all, rare diseases exist too. (14.11.2016)

The presence of both ‘positive’ and ‘negative’ branding effects complicated the council’s effort to establish a uniform causal link between listing and increased value.

Unable to establish a clear causal link between the conservation list and rising property values based on the concept of rarity, both parties turned to metaphorical reasoning and rhetorical comparisons, using parallels to illustrate what seemed to them as evidence of causality, yet could only be shown, not proven. The council’s appraisers frequently likened the conservation list to prestigious ranking systems, arguing that inclusion inherently enhanced market value, similar to how a Michelin star raises a restaurant’s prices. ‘A Michelin-starred restaurant doesn’t just serve food – it serves recognition’, one appraiser argued, emphasising that the conservation list conferred a similar form of cultural capital (14.11.2016). Another appraiser compared the list to diamond certification, suggesting that just as a certified diamond’s value is enhanced by institutional validation, so too was the value of a listed building. ‘We’re like a diamond institute. Without our certification, who can tell a real gem from a fake?’ (14.11.2016).

Pushing the metaphor further, a different council appraiser referenced fine art valuation, claiming that while a Van Gogh commands high prices due to inherent artistic value, the buildings on the conservation list were ‘unknown baroque paintings’ whose value could only emerge through institutional recognition. ‘We’re not dealing with a Rembrandt. These buildings are like unsigned works hidden in a cellar – our listing gives them value’ (14.11.2016).

Property owners and their representatives strongly contested these comparisons. They argued that the conservation list was not a quality marker sought after by owners, but a regulatory constraint imposed without consent. Drawing sharp distinctions between luxury certifications and involuntary heritage designations, one property owner remarked: ‘A restaurant can choose whether to be listed in the Michelin guide. I had no choice when my house was placed on this list’ (14.11.2016). Another added, ‘A diamond certificate protects buyers. This list imposes obligations on us, not benefits’ (14.11.2016). These critiques reframed the debate from market-driven enhancement to municipal control, further weakening the council’s claim that heritage branding alone could generate value.

The performative nature of valuation practices, where claims of value rely on persuasive narratives rather than objective proof, became increasingly evident as both sides struggled to identify causal mechanisms linking the conservation list to rising property values. The council’s rhetorical shift from empirical measurement to metaphor signalled the difficulty of substantiating the branding factor as a quantifiable driver of value appreciation. Instead, the argument rested on symbolic capital, where the list itself was presented as a generator of value through institutional recognition rather than tangible market effects.

Ultimately, these debates illustrate three theoretical insights central to this study. First, they highlight the difficulty of isolating branding as a measurable factor within valuation processes, as both positive and negative effects complicate causal attribution. Second, they reveal how the council sought to justify taxation by framing conservation as a form of value generation, aligning with LVC principles where public action is used to claim a share of value increases. Third, the performative nature of valuation emerges clearly, as both sides relied on rhetorical strategies rather than empirical certainty to frame their competing claims, reinforcing the subjective and negotiated dimensions of real estate valuation in heritage contexts.

Discussion and conclusion

In earlier days, before the turmoil of the recent war and the profound effects of the COVID-19 pandemic transformed the city, The Economist ranked Tel Aviv-Jaffa as the most expensive city in the world in 2021 (Globetrender, 2022). Exactly 31 years earlier, so the story goes, Nitza Metzger-Szmuk spent the first half of 1990 riding her bicycle around the city. The renowned architect who recently returned to Israel after 20 years in the Italian conservation scene and quickly became the first head of the Tel Aviv-Jaffa Council’s conservation department, was riding slowly, stopping occasionally next to a building, scribbling a few sentences in her notebook and moving on.

The exact nature of the above scene was still in the centre of the public discussion when I joined the conversation. It was 25 years after the unofficial launch of the Tel Aviv-Jaffa Conservation plan, seen today (for better and worse) as one of the most crucial steps in the process that turned an improvised urban area into the world’s most expensive locale (Mualam, 2015).

This story of the conservation list’s creation is accompanied by other similar accounts of the conservation plan’s early stages, which, although driven by architectural and national interests, were not strategically aimed at extracting economic value or generating financial gains. One such story is the account of the conservation list’s institutionalisation process, as detailed by a senior Tel Aviv-Jaffa council employee:

Nitza compiled the list between January and September of 1990. Initially uncertain of its utility, she shared it with a colleague in the council’s licensing department, who, lacking compelling justification, uploaded it to a shared drive. Anyone searching for information about the properties in the council’s computers encountered a notification indicating that the building was unique, prompting them to exercise particular caution. Consequently, the initially descriptive list, in the absence of clear directives or policies, de facto began to assume prescriptive qualities. (24.08.2017)

Moving ahead to our current days, the initial focus on architectural preservation has evolved into a financially strategic discourse, with heritage conservation increasingly leveraged to justify municipal revenue generation. This shift can be illustrated via the words of Dr. Yirmi Hoffman, the current head of the considerably bigger conservation department, according to which the council:

[is] moving towards the second generation of conservation . . . we are much more open to the idea that protected buildings will be used to help projects become economically feasible. (Vardi, 2018)

In another interview he provided a glimpse into the conservation department’s contemporary work model:

The new Brutalistic Conservation plan is still under economic scrutiny. We are using the services of real-estate appraisers to check the economic viability of each and every part of the plan. (Riva, 2017)

The stark contrast between the statements of Dr. Yirmi Hoffman and the above introductory descriptions highlights how conservation, initially seen as at odds with development and thus championed predominantly by groups with a refined aesthetic vision, such as architectural advocates (Alfasi and Fabian, 2008), and was also part of a settler colonial effort to highlight Jewish over Palestinian heritage (Levine, 2005; Milner, 2020; Rotbard, 2015), evolved to become a substantial component of the urban growth machine, thereby playing a critical role in shaping strategies for urban expansion and renewal (Moreno Zacarés, 2020; Yung and Chan, 2016).

This transformation occurred amid municipal efforts to enhance the city’s brand as the ‘White City’ and a UNESCO (2003) heritage site which facilitated a shift in its image from being a deprived and unattractive urban area with a population experiencing an outflow of its more prosperous and youthful inhabitants, to a globally recognised cultural hub, the liberal heart of the Middle East and a dominant centre of innovation and technology (Ram, 2007).

This shift in the city’s conservation approach, from cultural, symbolic and political motivations for preservation to financial strategy, has simultaneously driven real estate demand by the performative effects of the city’s branding as the ‘white city’, while constraining supply by limiting new construction and reducing affordable housing availability. For example, when conservation did occur, it frequently resulted from partnerships with developers who, in return for their conservation efforts, were granted the rights to build highly exclusive, luxury apartments (Margalit, 2014). This interplay of branding processes that amplified demand for the city, together with the limited supply resulting from conservation efforts, significantly contributed to Tel Aviv-Jaffa’s transformation into an exceptionally expensive urban environment.

This study offered fresh insight into the integration of conservation into urban growth models, shifting focus from the broad impact of conservation on the urban economy to how local authorities actively utilise it to enhance their economic profits. Specifically, it examined how the Tel Aviv-Jaffa municipality use conservation to strategically increase its tax revenues and minimise its compensation payments, thus amplifying its extraction of economic value from the city and its residents.

To do that, the study employed the concept of justification regimes (Boltanski and Thévenot, 2006) which are historical constructs that enable social actors to achieve agreements through a pragmatic negotiation process. This process involves appealing to higher levels of generalisation or commonly accepted superior principles. Boltanski and Esquerre (2020) argue that in recent years, the use of heritage preservation to justify higher prices has become a significant mechanism. This approach is tied to their pragmatist view that valuations serve as justifications for prices, suggesting a direct connection between heritage conservation and economic valuation. Essentially, by preserving historical sites, urban municipalities can enhance their perceived value, thereby justifying higher costs associated with these areas.

Building on the idea that heritage preservation justifies higher prices, this study explored how urban councils leverage this strategy. It employed an ethnographic approach to investigate the ‘Branding Dispute’, where a 2.5 billion NIS lawsuit arose from property owners challenging the constraints imposed on them by the conservation plan. The council countered that the plan’s branding enhanced building values by 5%, offsetting any losses. The paper detailed three cases where the council used the conservation plan’s branding to justify cost increases, effectively capturing increased land value.

These three strategies reveal how municipal valuation practices evolved over time in an effort to legitimise fiscal claims. Initially, the municipality relied on global comparisons, presenting international cases where conservation was associated with rising property values, yet these contexts differed significantly in policy design and financial incentives. When this failed to hold, the municipality shifted towards a localised, data-driven approach with the Kapelner (2011) Report, which attempted to isolate a consistent branding premium in protected properties. However, the report’s methodological limitations and inconsistent results exposed the difficulty of standardising heritage valuation in such a complex market. Finally, the council resorted to rhetorical arguments, comparing the branding effect to luxury certifications like Michelin stars and diamond grading – an approach that emphasised symbolic rather than measurable financial value. These dynamics unfold through the interactions of multiple actors: municipal planners and legal departments, real estate appraisers tasked with quantifying value, residents and their lawyers challenging municipal claims, and heritage experts providing cultural validation. Each actor mobilises different forms of authority – technical, legal, and cultural – to assert their own justification regimes. These negotiations, often occurring in arbitration hearings or policy settings, expose how value is co-produced through institutional, rhetorical, and performative practices.

This study further argues that these valuation practices reflect two broader theoretical challenges in using heritage preservation as a tool for LVC. First, it questions whether conservation itself can be conclusively linked to price increases, given the difficulty of isolating its effects from broader market dynamics. Second, it highlights the challenge of establishing direct causality even when price increases occur, emphasising how municipal strategies often rely on narrative framing rather than empirical certainty. These findings underscore the performative nature of valuation, where economic claims are actively shaped and contested, revealing how heritage conservation has become entangled with fiscal governance strategies aimed at maximising municipal revenue extraction. This reveals how valuation functions not merely as a technical tool, but as a mechanism of political legitimation, enabling municipalities to assert authority and extract value under conditions of uncertainty. The empirical contribution of this study thus lies in demonstrating how valuation does not uncover objective price effects but constructs politically consequential claims through institutional and rhetorical means.

At a global scale, the Tel Aviv-Jaffa case exemplifies a broader trend in heritage commodification, where historical districts in cities such as Paris, London, and Barcelona are reframed as financial assets under neoliberal urban policies (Boltanski and Esquerre, 2020). Drawing on Boltanski and Esquerre’s concept of the ‘economy of enrichment’ this strategy reveals how cultural significance can be mobilised to justify fiscal extraction, even in the absence of conclusive market effects. The Tel Aviv municipality’s use of heritage branding to justify betterment taxes and reduce compensation payments illustrates how symbolic value is leveraged as a tool for revenue generation. By framing heritage as a premium asset – focusing specifically on the architectural legacy of the Jewish population while erasing Palestinian historical presence – while simultaneously imposing development constraints that limited new construction, the municipality amplified property scarcity, driving speculative investment and further inflating housing prices. This dynamic, where cultural branding both elevates property values and restricts supply, has played a major role in transforming Tel Aviv into one of the world’s most expensive cities, even though, as this study demonstrates, it is nearly impossible to point to a single building and say – ‘This is where the price hike began’. Future research could expand on how such valuation strategies function in other urban contexts, with particular attention to their implications for housing affordability and urban inequality.