Construction worker in West Bank 370.
(photo credit: REUTERS)
Israel’s reliance on Palestinian laborers make its housing sector vulnerable to
a deterioration in the security situation, Association of Contractors and
Builders in Israel president Nissim Bublil wrote in a letter to the government
“Given the deterioration in the security situation, there is a
higher chance of partial or full closure in Judea and Samaria for long or
intermittent periods,” he wrote. “Such a change in the daily routines of workers
in the construction branch will lead to a collapse of the construction branch,
where the pace of building could, with the brandishing of a sword, be extremely
A combination of quotas and restrictions on foreign workers
had led to a relative decline in their numbers, which Palestinian laborers
filled, Bublil wrote.
Currently, some 28,000 Palestinians work in Israel
construction, compared with 5,000 Chinese or European foreign workers.
uptick in violent incidents over recent weeks could lead to closures that cut
off the labor supply, he said, calling for a relaxation of quotas for foreign
Israel’s inability to match housing supply to growing demand has
been a central reason for booming housing prices, which rose over 80 percent
from 2007- 2013. Several government attempts to lower the prices have fallen
short, while the low-interest-rate environment has fueled investment in the
In May, former Bank of Israel deputy governor Karnit Flug, now
the governor, attributed the problems plaguing construction to bureaucracy,
especially difficulty in obtaining permits and approvals and a lack of available
land for construction.
“The planning process in Israel is very long,” she
said. “From the time a decision is made until the completion of construction,
the process takes almost 13 years. It seems that while the bottleneck at the end
of the last decade was at the planning stage, today, following the completion of
planning for 60,000 units in 2012, the bottleneck is now at the stage of