A week ago Sunday the housing cabinet approved a proposal by Finance Minister
Yair Lapid to establish a new government corporation to advance a project for
the construction of rental housing. The goal is to construct 150,000 housing
units over a period of 10 years.
Good news for young couples, and those
requiring subsidized public housing? I wouldn’t recommend anyone hold their
breath. The likelihood of this project getting off the ground is no better than
50:50 (to be on the optimistic side).
Though the project was approved by
the housing cabinet, it must still be approved by the government as a whole, and
will encounter bitter opposition, especially from the professional echelon in
the Finance Ministry (as opposed to Lapid’s personal staff),and the Construction
and Housing Ministry.
The reason? The Finance Ministry opposes the
project because it claims it is based on shaky economic foundations.
objection of the Housing Ministry is more political, and is based on the fact
that according to the proposal, the new corporation is to be controlled by the
Finance Ministry rather than the Housing Ministry, creating an alleged
redundancy with existing bodies currently responsible for rental housing (today,
exclusively subsidized housing for social cases).
The approach of the
Treasury professionals is not surprising. For several decades the Treasury has
insisted that all projects involving public financing must be based on economic
viability – which is OK from a professional economic point of view.
problem is that is a well-ordered state policy is determined by the government,
and the professionals are tasked with working out ways of realizing policy – not
approving it or vetoing it.
In fact, if the Treasury’s approach had
prevailed in the past, the whole Zionist endeavor since the beginning of the
20th century would have had to be shelved, and after the establishment of the
state many vital national projects, such as the National Water Carrier of the
early 1960s for conveying water from the Jordan River to the Negev, would never
have been realized.
At the first major Zionist meeting after the First
World War, held in London in July 1920, the prominent American Zionist and
justice of the US Supreme Court Louis Brandeis advocated that Zionist
institutions follow the principle of Americanstyle efficiency and economic
viability in their activities in Palestine, arguing that the goal should be to
create a situation in which private investment would do the job.
of the Zionist authorities, he added, was to create the conditions that would
make private investment safe and profitable, citing the example of eradicating
malaria as an example.
Even though in 1920 when Brandeis spoke the
socialist workers parties were not yet predominant in Zionist institutions (that
was to occur in 1935), Brandeis encountered strong opposition from the liberal
European Zionists who were in control, and the American Zionists were
neutralized for at least a decade (the 1929 disturbances in Palestine, and the
rise of Nazism in Germany, reversed that). What the Zionist leaders understood
was that whatever sort of national home one envisaged for the future, at that
juncture private investment would be marginal, and without public economic
planning and activity there could be no future.
Incidentally, at that
time even liberal supporters of laissez faire economics, like the father of
revisionist Zionism, Ze’ev Jabotinsky, believed that governments are
responsible, inter alia, for ensuring that the population has adequate
nutrition, housing, clothing, education and medicine.
The American Tea
Party Republicans of today would undoubtedly have labeled Jabotinsky a dangerous
As the years went by the balance between public economic
planning and activity and private economic activity changed. Clearly the current
economic reality offers many more opportunities for private initiative than ever
before. The problem is that the balance has gone much too far in favor of
private initiative, and the government has been divested of (or has voluntarily
given up) its ability to act effectively, especially in those areas that
Jabotinsky believed it should play a central role in – housing
There is no doubt that the housing situation in Israel is
The fact that housing – both for purchase and rental – is
so expensive, and beyond the reach of many working citizens, whose parents do
not have the means to assist them, and that the state is unable (even if the
will were there – and it is not always there) to provide housing solutions to
the weakest sections of the society, who even according to Israel’s draconian
laws are entitled to subsidized housing, is no less than
Perhaps if the free economy was really free, and not
distorted as it is in Israel, market forces could be relied on to do most of the
work. But Israel’s insane land policy, which means that over 90 percent of the
land in Israel is state-owned and managed in a very bureaucratic and
conservative manner, in addition to the fact that despite calls since the late
1980s for greater mechanization of the construction industry, for some
inexplicable reason there is strong industry resistance to the idea, are among
the reasons that free market forces are unable to supply the required demand at
Though Lapid’s proposed project might involve cost to
the state budget, I have no doubt that once the government starts to act in the
field of rental housing, private initiatives in this sphere will also emerge;
the government might not have to actually construct the full 150,000
However, one thing is certain: if the government does not act, no
But more generally, isn’t it time our government, as a
government, starts setting policy in various vital spheres, and then requiring
professionals to suggest ways and means of implementing it, rather than excuses
not to? It can be done if the will is there.
Nobody can tell me that
Jewish settlement activities in Judea and Samaria have an economic
It is sheer ideology, which one can accept or reject.
However, the government has found ways of financing these activities – sometimes
contorted and distorted ways, but nevertheless ways.
So why can’t this
work in other fields, in which there is much broader consensus, such as the
fields of nutrition, housing, clothing, education and medicine? Is there really
anyone in the current Israeli government who does not believe that there is need
for affordable housing, housing solutions for the needy, food products that are
not exorbitantly priced (up to 50 percent higher than in most European countries
and the US), education that offers everyone equal opportunities, etc.? Well,
perhaps we should count our blessings and stop complaining.
At least no
one in Israel is fighting national health insurance, and no matter how serious
our governability problem, the Opposition cannot simply cause the government to
shut down in an irresponsible act of blackmail.The writer is a retired
Stay on top of the news - get the Jerusalem Post headlines direct to your inbox!