The state will dip into its coffers to help lower housing costs, Construction and Housing Minister Uri Ariel said on Wednesday.
“We don’t have the option to wait four years until the housing market stabilizes,” he said in a speech to a conference of religious Zionists at the Dead Sea.
Though he and the Finance Ministry were still hammering out details, Ariel presented a number of options that were under discussion. Among them: reducing taxes, participation in land development, providing grants, giving direct subsidies and setting price controls.
Ariel blamed former prime minister Ehud Olmert for the high prices, saying his lack of planning resulted in a lack of construction.
Israel has a shortage of 120,000 housing units, he said, although he predicted that with government intervention the market would stabilize in 2014 and begin to come down in 2015.
The cost of housing has been a major political issue and was the main rallying cry of the social protests that swept the nation in the summer of 2011.
In 2013, home prices rose 6.7 percent faster than other prices in the economy.
Ariel also addressed an ongoing coalition crisis between his Bayit Yehudi party and Prime Minister Binyamin Netanyahu over the peace process.
“We have significant policy limitations,” he said. “Certainly, we would want it to be different, within the constraints. We will try to do our best.”