Housing Ministry promised NIS 1b for public housing

Finance Minister Moshe Kahlon said that Israel's economy could withstand that kind of investment, as well as the negative repercussions associated with falling home prices.

October 27, 2015 21:01
1 minute read.
A laborer works on an apartment building under construction in Har Homa

A laborer works on an apartment building under construction in the Har Homa quarter in Jerusalem. (photo credit: REUTERS)


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Among the flurry of activities marking Housing Day on Tuesday, five Knesset committees met to discuss various solutions to the housing crisis, ranging from updating programs already in the works to introducing new initiatives on public accommodation.

Construction Minister Yoav Galant announced plans to spend NIS 1 billion on public housing in the coming year, and the Construction Ministry said the price of public housing will not rise this year, and that residents will be able to purchase their apartments earlier and at lower prices.

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“The minimal right is that every person in Israel will have at least a roof,” he said.

Finance Minister Moshe Kahlon said that the economy could withstand that kind of investment, as well as the negative repercussions associated with declining housing prices.

“The Israeli economy can handle a solution to the housing crisis, even if it costs a billion shekels a year. Young couples deserve it,” he said.

“One of the problems is that 90 percent of the people don’t want the price of apartments to go down, because they have apartments,” he added.

A precipitous drop in housing prices could have similar effects to when the US housing bubble burst, which set off the 2008 financial crisis.

The Bank of Israel has warned that the greatest risk to Israel’s financial system comes from the housing market.

MK Dov Henin (Hadash), co-chairman of the Housing Lobby in Knesset, said the crisis – which has seen prices double in the past eight years – resulted from poor government policy, and called for a greater state role in controlling rent and increasing public housing stock. Henin welcomed the Construction Ministry’s announcements.

Kahlon also took the opportunity to announce an update on his “resident’s price program,” which he said will have produced 25,000 units in Kiryat Motzkin, near Haifa, by the year’s end, and 70,000 by the end of 2016. The apartments, he added, sell at discount of NIS 300,000-NIS 400,000.

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