Housing plan will double size of Rosh Ha'ayin

Gov't to spend NIS 2.2 billion on investments, at a loss

By
February 4, 2014 20:33
2 minute read.
Petah Tikva school

Petah Tikva school 370. (photo credit: Courtesy )

 
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The Housing and Finance ministries on Tuesday unveiled an umbrella agreement to build or fast-track 15,700 housing units in Rosh Ha’ayin, located east of Petah Tikva.

The umbrella agreement provides up-front financing for years of infrastructure spending that must accompany new building, such as roads, schools and sewage.

Usually, concerns over how to fund such infrastructure delay or deter new building. However, instead of taking a share of revenue from building, the government will provide the funding at a loss. The total level of investment will reach NIS 2.2 billion.

“I want to emphasize – not for the first time – that we are willing to lose money,” Finance Minister Yair Lapid said. “The days in which the government saw in housing an opportunity to turn a profit, at the hands of its citizens, are over. What concerns me is that an entire generation will have a place to live.”

In May, Bank of Israel Gov.

Karnit Flug, who was then deputy governor, told a housing conference many of the holdups in the building process were at the level of local authorities.

“The bottleneck is now at the stage of obtaining permits, meaning the local committees, due among other things to limitations in the construction of the infrastructure to support neighborhoods,” she said.

The new units, which will be developed and brought to market through 2017, will more than double the size of Rosh Ha’ayin. Within a decade, it is expected to expand its population from the current 42,000 people to 120,000.


Construction and Housing Minister Uri Ariel said: “We’re talking about an event in the area that is almost a new city in the high-demand area under the agreement, allowing a solution that benefits the city and residents and ensures efficient, accelerated marketing.”

The government will also fund renovations to the town’s main street and connect it to Route 5.

Tuesday’s announcement is the third such umbrella agreement the government has unveiled in recent months and brings the grand total of planned units to 34,700 units.

Earlier agreements were for 7,500 units in Kiryat Gat and 11,500 in Modi’in. Plans for Kiryat Bialik, Rishon Lezion, Herzliya, Yavne and Beersheba are in the works.

Israel Lands Authority director Benzi Lieberman said due to the deal “we see more cooperation today between local authorities, government offices and the Israel Lands Authority, which generates thousands of apartments for Israelis.”

While the plan to fast-track housing should help alleviate Israel’s constrained supply, it may not get to the systemic problems at the heart of the problem.

In her May testimony, Flug noted that the planning process in Israel was disgracefully long, saying that it took nearly 13 years from the time a decision to build was made until construction was completed.

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