Meretz public housing protest 370.
(photo credit: Marc Israel Sellem/The Jerusalem Post)
The newly-formed housing cabinet met Wednesday evening and set a 90-day deadline
to submit a plan for building 150,000 new apartment units within the next
Finance Minister Yair Lapid, who chairs the committee, said
lowering housing prices was one of the biggest tests of his budget. "We having a
housing emergency that threatens an entire generation of young people who are
afraid they will never have an apartment," he said.
"Similar projects around the
world have proven their ability to change the reality of the housing market."
The Housing Cabinet said that in shaping the plan, it would examine ways to open
up new supply, rezoning existing land, ensuring that entrepreneurs keep a fair
return on their investment, making the bureaucratic process shorter, examining
rent control and environmental protection.
It also budgeted NIS 5m. to
fund a new professional housing staff committee, to be housed at the Ministry of
Finance and include representatives from the various ministries active in the
Housing Minister Uri Ariel declared his intention to
create a national headquarters to ease the burden on ministries and help bring
down barriers in the way of housing starts.
Speaking on Thursday, Bank of
Israel Deputy Governor Karnit Flug laid out the extent of those
“The planning process in Israel is very long,” Flug said. “From
the time a decision is made until the completion of construction, the process
takes almost 13 years. It seems that while the bottleneck at the end of the last
decade was at the planning stage, today, following the completion of planning
for 60,000 units in 2012, the bottleneck is now at the stage of obtaining
permits, meaning the Local Committees, due among other things to limitations in
the construction of the infrastructure to support residential
The biggest complaints from construction businesses, she
added, were in obtaining permits and approvals and a lack of available land for
construction despite relatively moderate credit limitations.
Minister Gideon Sa'ar emphasized the importance of the project not skipping over
the periphery, saying that housing reforms under the Kadima-led government
faltered over that point.
Despite such warnings, the government on
Thursday canceled grants for home purchases in the periphery, prompting Labor Mk
Itzik Shmuly to call for an emergency meeting. The government, he said, had
provided slogans on the issue, but "is striking another blow on the heads of
young couples, distancing them from their dream to build their homes in Israel."
On Wednesday, Energy Minister Silvan Shalom urged action on the 12,000 "ghost
apartments" in Tel Aviv and Jerusalem, saying that they should be sold or rented
out. “Ghost apartments” refers to units that remain vacant most of the time,
often because their owners live abroad and use them only
Following three months of steady declines in housing
transactions, a Thursday report from the finance ministry found that in March,
they remained steady. The good news was that level of investors fell to 21%, the
lowest in recent years, meaning that most of the housing transactions were for
actual renters or home-owners.
Flug defended the Bank of Israel’s low
interest rates, which exacerbated the housing price increases of recent years in
part by incentivizing such investors. The Bank, Flug noted, has other economic
priorities to take into account.
“The low interest rate supports activity
in the market, particularly exports, public consumption and investment in
industries,” she said, noting that higher interest rate, would have strengthened
upward pressure on the shekel in a time of low international rates, harming
exports, prevented growth, and yielded higher unemployment. Those factors, she
argues, would have led to a decline in the pace of housing
“We must increase the supply of homes. For that purpose,
the government must take steps to increase the amount of available land for
construction, shorten the time from the project’s initiation to the actual start
of building, and synchronize building plans with infrastructure development,”