For decades, Jerusalem has always had an unusual place in the Israeli imagination. It’s both the country’s capital, spiritual center, and most symbolically charged city, yet economically it often stood in the shadow of Tel Aviv. Today, Mayor Moshe Lion believes that the story is changing.
“Jerusalem is the next big thing in the State of Israel,” he says, asserting that this is no longer a vision of the future but a reality already taking shape. “We’re not talking about plans anymore, we’re already doing it.”
Across the city, cranes have become part of the skyline. New residential towers rise above neighborhoods that saw little development for decades. Employment districts are expanding. The light rail network is steadily stretching across the capital. The transformation is so extensive that Lion repeatedly describes it as unprecedented.
“We’re talking about seven years of development unlike anything Jerusalem has seen before,” he says. “In housing, in employment, in transportation, we’re advancing on all fronts simultaneously.”
At the heart of Lion’s vision lies a simple premise: Jerusalem can continue to grow without sacrificing the natural landscape that surrounds it. “The apartments we’re building are based on one principle,” he says. “Keeping our nature alive and thriving. That principle guides me every step of the way.” This policy marks a dramatic shift in how Jerusalem will develop going forward, where, rather than expanding outward, the city is becoming denser.
“If you want to preserve the nature surrounding your city, you have to work within the existing urban footprint,” Lion explains. “And you do that by building upward.” That process is visible throughout Jerusalem. Kiryat Hayovel, Gonenim, the Katamonim area, Gilo, Har Homa, as well as other neighborhoods along the Hebron Road corridor are all undergoing significant redevelopment.
In many cases, aging low-rise buildings are being replaced by larger residential projects designed to accommodate a growing population, and the numbers frequently cited by City Hall illustrate the scale of the change. According to municipal figures, Jerusalem now issues roughly 7,500 building permits annually, more than three times the levels common in previous decades. The city also recorded approximately 8,500 housing starts in 2025, an all-time high.
“Unlike other parts of the country,” Lion states, “there has been a rise in real estate purchases in the city.”
FOR YEARS, discussions about Jerusalem’s demographic challenges centered on the steady departure of residents, particularly younger ones, to Israel’s coastal center. Lion argues that while insufficient housing was a major factor, it was only part of the equation.
“People left not just because there weren’t enough apartments but because they were looking for high-quality employment, a vibrant cultural life, and efficient transportation,” he noted. “When you upgrade all of these elements together, people don’t just want to stay – they want to return. We took note of that, and today Jerusalem’s cultural landscape is flourishing.”
Employment is a key part of his strategy. With the unique combination of the Hebrew University, Jerusalem’s tech colleges, Shaare Zedek Medical Center and Hadassah-University Medical Center, and a robust talent pool, Jerusalem has all the components needed to foster world-class hi-tech development.
Lion rejects the notion that the city is only now entering the technology sector. “It’s not that there wasn’t hi-tech here before and now there suddenly is,” he says. “It always existed, and now we’re in the process of upgrading it.”
The city’s growing technology landscape appears to support that claim, with international firms, including Apple and Microsoft, expanding their presence and joining established local success stories such as Lightricks and Mobileye. Meanwhile, the Gav-Yam technology park in the city’s west has emerged as a flagship project for Jerusalem’s economic ambitions. When the project was first announced, skeptics questioned whether companies would come.
“People raised their eyebrows,” Lion recalls, but today, the answer appears clear. “We’re at 100% occupancy. We’re already building the third building and about to begin the fourth.”
The broader employment strategy extends beyond technology. Municipal officials estimate that the commercial and office developments currently planned or under construction could eventually generate approximately 150,000 new jobs. Defense-related projects are also expected to play a role, with new facilities connected to Israel’s security industries planned for the city. The goal, Lion says, is not merely to create jobs but to fundamentally reshape Jerusalem’s economic identity.
THE THIRD element of the mayor’s vision, and perhaps the one most visible to residents navigating construction sites and traffic disruptions, is transportation. Lion speaks about the light rail network with the enthusiasm of someone who sees it not as a transportation project but as the framework upon which the future city will be built.
“The light rail is designed to move masses of people through the city,” he says, as for him, the connection between housing density and public transportation is inseparable. A denser city cannot function if every resident depends on a private vehicle. “At the end of the day, you need to create movement within that space,” he explains. “That’s what the light rail is for.”
Jerusalem’s existing Red Line already serves approximately 180,000 passengers a day, a figure that municipal officials often cite as evidence of the system’s success. The Green Line, now nearing completion, is expected to dramatically increase capacity, eventually linking neighborhoods across the city and connecting major employment centers, academic institutions, and residential districts.
“People will see results very soon,” Lion says. “I’m not talking about years from now.” He predicts that every few months, residents will witness another milestone: a new rail segment opening, a major housing project completed, or another employment center launched.
Yet he is also aware of the frustrations created by large-scale construction. The city, after all, currently resembles a worksite in many areas. “People need patience,” he says. “When you’re renovating your house, there’s a period that’s uncomfortable, things move around, and it’s truly difficult. Jerusalem is going through something similar. We’re building not for ourselves but for our children, grandchildren, and great-grandchildren.”
Underlying all these ambitions is an even larger vision, one that extends beyond municipal planning and into geopolitics. Jerusalem, Lion argues, possesses a unique social and cultural advantage, with both Jews and Arabs, secular and religious communities, immigrants and longtime residents all living in a city whose complexity often defies simple definitions. This, Lion argues, will play a significant role for the city that extends beyond Israel’s borders.
“After the current war ends, and if the Abraham Accords continue to expand, I want Jerusalem to become the capital of the Abraham Accords,” he says. “I see Jerusalem becoming the economic capital not only of Israel but of the entire region.” Whether Jerusalem ultimately fulfills that vision remains an open question.
The challenges facing the city remain considerable: housing affordability, infrastructure demands, political tensions, and the complexities of governing one of the world’s most contested urban spaces, yet even critics would struggle to deny that Jerusalem is changing.
The cranes are visible, the rail lines are extending, new offices are filled with workers, and neighborhoods that once seemed stagnant are undergoing dramatic renewal. For Lion, these developments are not separate projects but parts of a single transformation, and if his vision succeeds, Jerusalem’s next chapter may be defined not only by its past but by its future.
This article was written in collaboration with the Jerusalem Development Authority.