Project Renewal, a national programme for social and physical rehabilitation of distressed neighbourhoods, was aimed at reducing inequalities in Israeli society. This study analyses the influence of Project Renewal on the status of its target neighbourhoods, by means of a before-and-after comparison of these areas with matched control neighbourhoods. An extensive analysis of the characteristics of veteran residents, in-migrants, and out-migrants ( 200 000 households) shows that improving service provision in poor areas is not sufficient to change their status. Renovated housing and improved social services are valuable, but a neighbourhood status and its attractiveness are determined more by its reputation as a place for higher-status households than by the services it offers. Adding new housing to the old neighbourhood, after improving its services, seems to be the required breakthrough, given that the new residents are moderately better-off than the veterans. The final discussion puts the results of this and former studies of Project Renewal in a general context of welfare policy.
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