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Dependence on Palestinian labor means security restrictions could 'collapse' construction
By NIV ELIS
12/01/2014
Closures of West Bank could cut off Palestinian labor supply to construction projects in Israel.
 
Israel’s reliance on Palestinian laborers make its housing sector vulnerable to a deterioration in the security situation, Association of Contractors and Builders in Israel president Nissim Bublil wrote in a letter to the government on Sunday.

“Given the deterioration in the security situation, there is a higher chance of partial or full closure in Judea and Samaria for long or intermittent periods,” he wrote. “Such a change in the daily routines of workers in the construction branch will lead to a collapse of the construction branch, where the pace of building could, with the brandishing of a sword, be extremely stretched.”

A combination of quotas and restrictions on foreign workers had led to a relative decline in their numbers, which Palestinian laborers filled, Bublil wrote.

Currently, some 28,000 Palestinians work in Israel construction, compared with 5,000 Chinese or European foreign workers.

An uptick in violent incidents over recent weeks could lead to closures that cut off the labor supply, he said, calling for a relaxation of quotas for foreign workers.

Israel’s inability to match housing supply to growing demand has been a central reason for booming housing prices, which rose over 80 percent from 2007- 2013. Several government attempts to lower the prices have fallen short, while the low-interest-rate environment has fueled investment in the sector.

In May, former Bank of Israel deputy governor Karnit Flug, now the governor, attributed the problems plaguing construction to bureaucracy, especially difficulty in obtaining permits and approvals and a lack of available land for construction.

“The planning process in Israel is very long,” she 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.”
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