We must solve the housing crisis

The end of the housing crisis is in sight. With the support of Israeli voters, Kulanu will make it happen.

By MICHAEL OREN
Construction (illustrative). (photo credit: REUTERS)
Construction (illustrative).
(photo credit: REUTERS)
I was watching the news the other day with my eldest son, and hearing about the catastrophic housing situation in the country. Since 2008, apartment prices rose 77 percent, we learned – 17% in the last year alone. Israel is short 120,000 housing units and that gap is growing at a rate of 45,000 per year. Seven years ago, it took an average of 103 months’ salary to buy even a modest apartment.
Now it takes 141 months.
Sitting next to me on the sofa, my son audibly sighed. A fluent Mandarin speaker with a BA in Chinese from Columbia and an MBA from China’s leading business school, he had just returned from four years of senior corporate work in Shanghai. He was not short of attractive job offers in Israel. And his wife also held two degrees and would certainly find respectable employment.
Yet, even with their two professional salaries, the possibility of purchasing an apartment for them and their recently born child was almost nil.
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“Abba [Dad], I’ll never be able to own a home in this country,” my son lamented.
If that was his reaction, imagine the despair of the countless Israelis with fewer earning possibilities and larger families. For them, even renting an apartment has become almost prohibitive.
Rentals have increased by 64% across the country and by 85% in Tel Aviv in the past seven years. There is virtually no recognition of tenants’ rights and little to prevent landlords from doubling rents overnight.
Of course, one could purchase a cheaper apartment in a peripheral part of the country, but those areas are notoriously short on job opportunities, to say nothing of infrastructure.
You might be in a position to buy a piece of land, but 13 years will pass before your house is built. This is because 93% of the country’s land is controlled by the Israel Lands Authority, which works to maximize earnings for the state while bogging projects down in endless bureaucracy.
More than the Iranian nuclear program, more than the threat of Hezbollah and Hamas terror, Israelis rate economic and social gaps as the greatest threat jeopardizing our country’s future.
And the core danger is housing.
For new immigrants, in particular, housing is a critical component in their success in setting down roots and remaining in the country. As many as 70% of new immigrants from the United States and Canada return to North America because of financial reasons, prominent among them their inability to ever buy a home.
Clearly, Israel needs answers now and the Kulanu party – alone among the contenders in next week’s election – has them. Unlike the Yesh Atid party, whose 0%-VAT program would increase demand without addressing the root causes of the problem, Kulanu will focus on vastly increasing supply. We pledge to break up the monopoly of the Israel Lands Authority and to change its mandate from making money to providing affordable housing. Land will be released to contractors and local authorities that will commit to constructing apartments at reasonable cost within three years.
Those failing to meet that deadline will be penalized. Young couples will for the first time be able to pay for mortgages from their tax-free Keren Hishtalmut state savings plan.
Kulanu is determined to expedite the completion of 250,000 housing units currently stalled in bureaucracy. This will be accomplished through an emergency program similar to that adopted during the mass aliya from the former Soviet Union of the 1990s, including the temporary employment of skilled workers from abroad. Instead of the five government bodies that now regulat e housing projects, one overarching ministry will supervise them all. The time necessary to attain a building permit will be reduced from three years to three months. In peripheral areas, housing projects will be accompanied by government guaranteed construction of infrastructure, transportation, and employment centers.
Kulanu will also provide affordable long-term rentals for young couples and defend their rights as tenants. Standards for rental apartments will be established and limits placed on the tenants’ responsibility for upkeep.
Israel’s housing crisis cannot be solved overnight, but Kulanu will begin relieving the pressure and furnish long-term solutions.
Party head Moshe Kahlon succeeded where no one else had in breaking up the cellphone monopolies that once cost Israelis an estimated NIS 5 billion annually. He will do the same with dissolving the housing monopolies and cutting through bureaucracy.
When my son next sighs, “Abba, I’ll never be able to afford a house in this country,” I will be able to give him hope. The end of the housing crisis is in sight, I’ll tell him. With the support of Israeli voters, Kulanu will make it happen.
The writer is No. 4 on Kulanu’s candidates list and former ambassador to the US.