SDEROT, Israel — What to do with rusty old shipping containers no longer fit to haul goods across the high seas?

Here in this southern Israeli town, they have been cleaned of rust, given a lick of paint and recycled into a chic but cheap living space, replete with two bedrooms, a living room, kitchenette and bathroom. Stacked atop one another, the worn boxes now constitute Israel’s first student village made solely of retired shipping containers.

Israel is not the first place to realize the value of the containers. Across the United States and Europe and in Australia, the hunks of metal have been refurbished and turned into luxury homes. In the oil fields of Saudi Arabia, Libya and Kuwait, they have for years been used as rough, temporary housing for guest workers. And in Amsterdam, students have been living in the converted boxes since 2006, in the largest shipping container village built to date.

In Israel, where hundreds of thousands of people led by a group of university students took to the streets in 2011 to protest the high cost of living, converted containers are being used as a solution to the dire shortage of affordable student housing.

“There are millions of these containers that can be used. They are usually discarded after only two or three years and the companies don’t know what to do with them,” said Effy Rubin, director of partnership at the nonprofit student organization Ayalim, which encourages young people to move to the Galilee and Negev desert regions.

Rubin said the containers were bought from Israeli companies for about $2,000 each and were transported this year to two locations in Israel — Sderot in the south and Lod in the center — to form the basis of the country’s first two container villages.

Renovations to turn the containers into a livable space — two containers were fitted together for each apartment — cost a little more than $40,000 per apartment and took less than six months to complete. In Sderot, a city that sits in close range of rockets fired by Palestinian militants in the Gaza Strip, the container village includes interlocking stairwells with reinforced concrete to provide bomb shelters.

Both villages — Sderot, which initially will house up to 86 students, and Lod, built for 36 — are set to open Dec. 1. Rent for the two-person apartments will be no more than $160 a month per person.

“This is an opportunity that can’t be missed for students in Sderot,” said Bar Asaev, 31, a student of industrial management at the local Sapir College. “My school does not have student housing, and this really gives us a good solution.”

Sapir College is one of 56 institutes of higher learning in Israel — distinct from the country’s seven longtime universities — that have opened in the past 20 years to provide students with alternative learning options. Set in some of the country’s more peripheral towns, most of them do not have the means to operate student dormitories or offer rent-controlled accommodations. As a result, thousands of students rent apartments on the open market.

Asaev will live in the container apartment with his girlfriend, Avital Ben David, 27, who recently completed four years of study in social work.

“This is a great project. I wish it would have happened sooner,” she said. During her years at the college, she said, she rented apartments on a nearby kibbutz, worrying each year that the price would increase beyond her meager student budget.

The plight of students with no choice but to rent apartments without price control rose to prominence in July 2011, when a group of Tel Aviv University students pitched a tent on the city center’s upscale Rothschild Boulevard to protest the high cost of accommodations.

Within days, a tent city formed around the students, a show of solidarity from other Israelis angry about exorbitant housing prices in Tel Aviv. Throughout the summer, hundreds of thousands of Israelis took to the streets of Tel Aviv and other cities, setting up similar tent cities and holding rallies to protest the high cost of living and decrying social injustice. It was the biggest mass protest Israel has ever seen.

The new container villages in Sderot and Lod are, in part, aimed at addressing those grievances. To secure a spot in either village, residents must commit to volunteering in the local community.

“The concept is very educational. It allows us to contribute to the community, and in return we get a nice and cheap place to live,” said Banchi Avraham, a student at the Interdisciplinary Center Herzliya, about a 30-minute train ride from Lod.

And how does she feel about living in a metal box?

“I don’t see it like that,” she said. “It looks great inside, and I am very excited to be part of a new project. I like being the first one to try something.”

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