Housing cabinet okays plan to lower home prices

"Comprehensive plan" to bring down cost of housing by increasing supply, developing rental market seeks efficient use of land.

By
June 3, 2013 23:31
2 minute read.
Housing protest candle vigil

housing protest 311. (photo credit: Ben Hartman)

The housing cabinet on Monday approved a “comprehensive plan” to bring down the cost of housing by increasing the supply of apartments, developing the rental market and reducing barriers to real estate development and urban renewal.

The comprehensive plan seeks to use IDF land in high-demand areas to establish residential neighborhoods, provide builders with tax breaks, make more efficient use of land, agree with local authorities to make rentals more readily available and put 6,000 new long-term rentals on the market by the end of 2014.

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In terms of urban renewal, the cabinet’s plan seeks to strengthen incentives for “vacate and build” policies and establish a fund for projects falling under “Plan 38,” a 2005 program for bringing existing buildings up to snuff with new regulations. The urban renewal policies closely followed prior recommendations of a committee appointed by the Prime Minister’s Office.

Finance Minister Yair Lapid, who chairs the housing cabinet, praised the passage, but said a national plan still in the works was ultimately more important.

“The government program that the cabinet approved today is important, but the real key to solving the housing problems in Israel is the national housing plan, which will lead to building 150,000 units for long-term rental in the next decade,” Lapid said.

In the framework of the national plan, 20 percent of the apartments will be allotted to designated populations and 5% to public housing.

One thousand units in each major city will be set aside for students.

Earlier in the day, Bank of Israel Gov. Stanley Fischer repeated his mantra that housing prices could only come down if Israel “takes care of the supply side.”

The approved plan takes a multi-pronged approach, with some portions requiring changes to law, some requiring updating ministerial regulations, and others simply requiring coordination with local authorities.

Interior Minister Gideon Sa’ar promised to expedite the plan’s implementation by introducing legislative amendments to existing laws on issues such as reduced timelines for issuing building permits and approving construction plans.

Lapid expressed opposition to selling subsidized public housing to long-term tenants, a practice that has aroused controversy in recent weeks.

Opposition leader Shelly Yacimovich dismissed the plan approved on Monday.

“You don’t build a house from a cabinet,” she said, criticizing Lapid for “more words, more committees, more empty promises. Lapid broke a record on establishing committees.”

The cabinet will meet again next week at the request of Energy and Water Minister Silvan Shalom over how to gear the plan toward the periphery of the country.


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