PM to announce dramatic reforms to resolve housing crisis

Sources say “revolutionary” reforms will significantly improve housing situation of young couples, students, demobilized soldiers; Netanyahu cancels Poland visit, says "Israelis can make better living than in Europe."

By GIL STERN STERN HOFFMAN, HERB KEINON
Binyamin Netanyahu 521 (photo credit: REUTERS)
Binyamin Netanyahu 521
(photo credit: REUTERS)
Prime Minister Binyamin Netanyahu is expected to present a series of reforms aimed at solving the housing crisis in a press conference at the Prime Minister’s Office in Jerusalem on Tuesday with Finance Minister Yuval Steinitz and Construction and Housing Minister Ariel Attias.
Sources close to Netanyahu called the reforms “revolutionary,” and said they would significantly improve the housing situation of young couples, students and demobilized soldiers.
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“We will lower the prices of apartments in order to unify the people socioeconomically,” Netanyahu said in a speech at the Hebrew University on Monday.
The reforms are expected to include incentives for contractors to build low-cost housing in the center of the country via tenders that will be won by whoever agrees to sell and rent apartments at the cheapest prices. Land will be allocated across the country for such projects. There will also be incentives for changing office buildings into residences.
Israeli citizens can make a better living today than European citizens or Israelis in the past, Israel Radio reported Netanyahu as saying on Monday night. At the end of the month, Israelis lack a disposable income because prices in Israel are high, the prime minister added.
Speaking from a National Security College alumni ceremony at Mount Scopus in Jerusalem, Netanyahu said "prices are high because of a lack of competition [in the market] and the effects of cartels," including "state monopolies" like the Israel Lands Administration, one such cartel in need of change.
Netanyahu said Israel faces threats on a scale not seen in the country's history. he said that the security apparatus needed to protect the nation has steep costs, and therefore demands a strong and powerful economy.
Steinitz told Channel 2 that thousands of dormitories would be built for students, which he said would free up rental apartments. He said discounts on public transportation for students would also be part of the plan revealed on Tuesday.
“I haven’t forgotten about the people,” Steinitz said, responding to allegations that he was insensitive to the needs of poor sectors of the population.
Protests over lack of affordable housing stretched into the 11th day on Monday morning, as approximately 100 young people protested outside the Knesset as its committees were discussing housing reforms. The protesters also blocked roads in Jerusalem and Haifa. Eleven demonstrators were arrested in Jerusalem.
Netanyahu’s pet project, a bill intended to expedite the construction planning process, was finalized Monday at a joint meeting of the Knesset Economics and Interior Committee. A clause requiring land to be allocated for accessible housing was added to the bill, which is expected to pass its final readings in the Knesset on Wednesday.
Reforms in the Lands Administration are also expected to pass before the Knesset recess begins next week.
Domestic economic issues trumped diplomacy on Monday, when Netanyahu – in a rare move – announced he was postponing a trip to Poland Wednesday to deal with the housing crisis.
A statement issued by the Prime Minister’s Office said Netanyahu pushed off his trip to Warsaw to “remain in the country and focus on passing legislation having to do with housing reform, and other steps for students, demobilized soldiers and young couples.”
Netanyahu had originally planned to go to Poland and Hungary, but canceled the Hungary leg of the trip last week because of “logistical problems.” One of the purposes of the planned trip was to continue lobbying EU countries against supporting a Palestinian bid for statehood at the UN in September.
Government officials said his decision to postpone the trip at this time showed the degree to which Netanyahu is taking seriously the economic issues now at the top of the country’s agenda.
The prime minister defended Steinitz at a meeting of the Likud faction, rejecting reports that he had considered replacing him with socioeconomically-minded Welfare and Social Services Minister Moshe Kahlon.
“I especially want to thank Yuval Steinitz, who always carries the weight of the economy,” Netanyahu said. “The results prove it: economic growth, possibly the lowest unemployment in the nation’s history. Yuval, you have an important part in the economy doing so well. All objective people can see you’re doing well. Finance minister is a difficult, thankless job, but when you do it well, you see the results.”
In the Channel 2 interview, Steinitz blamed the reports regarding his possible replacement on his political rivals and tycoons who have been harmed by his economic policies. Kahlon also complained about anonymous ministers harming him by reporting that he was the top candidate to replace Steinitz.
“I’ve been a minister for only two years in the Communications Ministry, and just four months as welfare and social services minister,” he said.
“The finance minister is doing a terrific job and finance ministers need four years to do their job. I didn’t ask for the [Finance Ministry], I wasn’t offered it, and didn’t leak anything.”
An anonymous minister accused Netanyahu of displaying a lack of leadership on Monday. The only minister who openly criticized Netanyahu was MK Michael Eitan (Likud), who warned the prime minister against “falling into a pit.”
Finance Minister director-general Haim Shani warned against capping rent prices.
Speaking to Army Radio on Monday morning, Shani said he hopes there won’t be any regulations introduced to cap rent prices, adding that he doesn’t see how such a measure could be enforced.
“An attempt to artificially manage the market is likely to create a black market,” Shani said. “Government intervention will harm the market in the long term.
We’re all in the same boat, we are aware of and understand everyone’s distress, and are planning solutions that will be sustainable in the long term.
“There are no magical solutions to bring new apartments into the market. We’re already witnessing a significant slowdown in the market,” Shani said. “The number of deals is falling, and there’s a chance we’ll see prices fall too.”
Nadav Shemer and JPost.com staff contributed to this report.