Analysis: A curse on all your (overpriced) houses

Consistent political instability, an inability to create and follow long-term plans, and bureaucratic disarray stand in way of addressing housing crisis.

By
February 26, 2015 01:32
2 minute read.
Construction (illustrative).

Construction (illustrative).. (photo credit: REUTERS)

Former finance minister Yair Lapid dodged a political bullet Wednesday with the release of the State Comptroller’s Report on housing, which conveniently left out the bulk of his tenure in office, including his much-maligned Zero Value- Added Tax plan.

But if State Comptroller Joseph Shapira managed to show anything with his analysis of five years of half-hearted half-measures aimed at tackling the housing crisis, it was that there is a larger problem in Israel’s political system, which prevents it from tackling even the most important issues.

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The consistent political instability, the inability to create and follow long-term plans and the bureaucratic disarray that stops multiple ministries from communicating and coordinating is as much to blame as the slew of politicians listed in the report.

Despite its hype as a political bombshell, the report is irrelevant to the upcoming election in many ways; it would have been more useful before the last election. The people do not need Shapira’s report to know that home prices keep rising, not only because the Central Bureau of Statistics continues to publish the data proving it, but because they feel it in their wallets.

Moreover, just as many of the current candidates were excluded from the report’s purview, many of the culprits it named re out of the game.

Ehud Olmert, blamed with missing the crisis in the first place, is on his way to prison. His party, Kadima, once the largest in the Knesset, is heading to extinction. The people who have since been charged with trying to fix the problem, whether Lapid or Construction Minister Uri Ariel, will not feel the wrath of Shapira until his next report, well after the election.

The one constant, of course, has been Prime Minister Benjamin Netanyahu.

It has been nearly five years since his government (belatedly) realized that there was a problem in the housing market. Throughout the social protests, the Trajtenberg commission and then Netanyahu’s reelection, home prices have continued to rise.

At a December event on rent control laws, Tel Aviv Mayor Ron Huldai told a story about advice he got during his first year on the job. To fix a problem, he was counseled, leave it alone until it develops into a crisis, and then everyone will be forced to act.

Overall, the comptroller has painted a picture of a government unwilling to focus its efforts on one of its most pressing problems, even years after it has reached crisis levels.

There may be a bright spot: Both Labor’s Manuel Trajtenberg and Koolanu’s Moshe Kahlon are calling for revamping the bureaucracy to put all the relevant areas of housing under one authority. Kahlon, in particular, discusses the country’s myriad problems in structural terms.

Will either of them have the tenacity to actually tame the bureaucratic beast and focus the next government on making the changes everyone knows need to be made: Increasing housing supply, planning more land, reducing the length of time it takes to work through bureaucracy and find affordable housing solutions for those who cannot buy? We will likely not find out the comptroller’s perspective until two elections later.


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