Ariel, Lapid agree on fund to reduce housing costs

Housing cabinet approves agency to promote rental.

Lapid and Bennett at Knesset swear in 370 (photo credit: Marc Israel Sellem/The Jerusalem Post)
Lapid and Bennett at Knesset swear in 370
(photo credit: Marc Israel Sellem/The Jerusalem Post)
Construction and Housing Minister Uri Ariel and Finance Minister Yair Lapid agreed on Sunday to form a multi-billion-shekel fund to reduce barriers to developing real estate.
Construction remains stalled on some planned housing programs because the existing infrastructure – in areas such as urban planning, road interchanges and water treatment facilities – is not up to snuff. The fund will take aim at making progress on those fronts, in order to let stalled construction proceed.
“The marketing must be effective, and [must] enable contractors to build tens of thousands of additional housing units throughout the land, and increase the supply of [housing] starts,” Ariel said. “This is the most significant tool at the government’s disposal for reducing the price of housing.”
In addition to agreement on the “barriers fund,” the housing cabinet on Sunday approved the creation of a government agency to advance rental housing.
In an interview with The Jerusalem Post to be published during October’s Diplomatic Conference, Lapid said that his aim was to “change the rules of the game” in housing, pushing more young couples toward rentals.
The company’s main objectives will be developing potential land for development, implementing property agreements and land redemption, advancing statutory planning and managing development and contracts. The company will have an operating budget of NIS 8 million and an additional NIS 20m. for advancing projects for each of the next two years.
“The government company that will be established will advance projects in the area of rental housing, and will centralize under it the handling of all stages of building, from locating areas, to construction and oversight of contract winners,” Lapid said on Sunday.
Due largely to a lack of new supply to keep up with spiking demand, the average home price shot up 54 percent between 2008 and 2012, while average household income in the country rose by only 20 percent.
Lapid set a goal of adding 150,000 units over the next decade to combat the housing crisis.