home apartment light windows 521.
(photo credit: Gloria Deutsch)
The newly formed housing cabinet met Wednesday evening and set a 90-day deadline
to submit a plan for building 150,000 new apartment units within the next
Finance Minister Yair Lapid, who chairs the committee, said
lowering housing prices was one of the biggest tests of his budget.
are having a housing emergency that threatens an entire generation of young
people who are afraid they will never have an apartment,” he said. “Similar
projects around the world have proven their ability to change the reality of the
The housing cabinet said it would examine ways to rezone
existing land, ensure that entrepreneurs earn a fair return on their investment,
make the bureaucratic process shorter and examine rent control and environmental
It also budgeted NIS 5 million to fund a new professional
housing committee staff that will include representatives from the various
ministries active in the housing cabinet and which will be based at the Finance
Housing Minister Uri Ariel said he intends to create a national
headquarters to ease the burden on the ministries and help bring down barriers
in the way of housing starts.
Bank of Israel Deputy Governor Karnit Flug
on Thursday spoke about those barriers.
“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 obtaining permits.”
The biggest complaints from
construction businesses, Flug said, were in obtaining permits and approvals and
a lack of available land for construction despite relatively moderate credit
Interior Minister Gideon Sa’ar said it was important that
the project not neglect the periphery, adding that housing reforms under the
Kadima-led government had faltered over that point.
warnings, the government on Thursday canceled grants for home purchases in the
periphery, prompting Labor MK Itzik Shmuli to call for an emergency meeting. The
government, he said, had provided slogans on the issue but “is striking another
blow on the heads of young couples, distancing them from their dream to build
their homes in Israel.”
On Wednesday, Energy and Water Minister Silvan
Shalom urged action on the 12,000 “ghost apartments” in Tel Aviv and Jerusalem,
saying they should be sold or rented out. Ghost apartments refer to units that
remain vacant most of the time, often because their owners live abroad and use
them only sparingly.
Following three months of steady declines in housing
transactions, a Thursday report from the Finance Ministry found that in March
they remained steady. The good news was that level of investors fell to 21%, the
lowest in recent years, meaning that most of the housing transactions were for
actual renters or home owners.
Flug defended the Bank of Israel’s low
interest rates, which exacerbated the housing price increases of recent years in
part by incentivizing such investors. The central bank has other economic
priorities to take into account, she said.
“The low interest rate
supports activity in the market, particularly exports, public consumption and
investment in industries,” Flug said, adding that higher interest rates would
have strengthened upward pressure on the shekel in a time of low international
rates, harmed exports, prevented growth and yielded higher
Those factors would have led to a decline in the pace of
housing construction, she said.
“We must increase the supply of homes,”
Flug said. “For that purpose, the government must take steps to increase the
amount of available land for construction, shorten the time from the project’s
initiation to the actual start of building and synchronize building plans with