Steinitz promises thousands of cheap housing units
Goal is to create meaningful supply of housing for long-term rentals, similar to what exists in US, Europe, says finance minister.
View of Jerusalem construction project. Photo: Courtesy
The government’s plan for rental housing will enable the annual construction of
thousands of apartments so that renters won’t have to move every other year,
Finance Minister Yuval Steinitz said Monday.
Presenting the program at a
Treasury conference in Tel Aviv, he said the aim was to create a meaningful
supply of housing for long-term rentals, similar to what exists in the United
States and Europe.
Israelis would soon have the option of renting for
periods of 10 years or more, “if that is what they want,” Steinitz
The program, which is based on recommendations made by the
Trajtenberg Report last year, has already passed its first reading in the
Knesset. It promises to grant tax exemptions to pension and provident
funds that invest in long-term rental housing and to assist those with less
means by placing under price supervision at least one-quarter of the apartments
in these projects.
Steinitz acknowledged there was a growing credit
crunch in the realestate market, but he said it would be eased by enabling
pension funds and other financial institutions to provide credit.
Hapoalim and Bank Leumi currently account for 70 percent of credit in the
real-estate market, or about NIS 200 billion, according to data presented at the
conference by a representative of the Treasury’s budgets
“There is no reason that institutions that invest around the
world will not invest in Israeli rental housing,” Steinitz said. “When
institutional bodies start funding rental housing projects, eventually they will
also start providing credit for regular construction.”
Housing Minister Ariel Attias (Shas) said it was difficult to convince financial
institutions to invest in housing rentals instead of “more profitable”
commercial rentals. But he said the government could influence them by
providing tax incentives and by taking measures to reduce the price of land,
which he said would increase yields from the current 3%-4% to a range of
Yoni Tal, deputy CEO of Menora Mivtachim Insurance, agreed with
Attias’s assertion that financial institutions have the money to invest in such
projects. But he said he and his colleagues remain skeptical about the program
despite government assurances.
“There is no lack of institutional funds,
but there is a lack of good projects,” Tal said. “If the program is feasible and
the yields sufficient – 7 percent after expenses – I believe institutions will
be prepared to invest the funds.”