PM presents building reform aimed at lowering prices

Special police unit assigned to fight corruption.

construction AJ 311 (photo credit: Ariel Jerozolimski)
construction AJ 311
(photo credit: Ariel Jerozolimski)
Prime Minister Binyamin Netanyahu on Sunday presented the government's planning and building reform which promises to speed up the approval process for construction permits and fight corruption.
"The monstrous bureaucracy and obstacles found in Israel when it comes to the approval of planning and construction permits do not exist in any other developed country. We are not number 10 or number 20 in the world in the category of building and construction in the World Bank's Doing Business Index but number 120," said Netanyahu at a press conference in Jerusalem on Sunday.
"The Israeli economy's strong growth in recent years was achieved without the contribution of the construction sector. The reform we are presenting today seeks to remove bureaucratic obstacles, to simplify and shorten approval processes, and to increase transparency, in an effort to boost economic growth."
Netanyahu added that the new Planning and Building Law, which was last changed in 1965, will be presented to the cabinet for a first reading as early as Tuesday this week. The new law aims to reduce waiting and procedure times for getting planning approvals and construction permits by 50 percent.
Also speaking at the conference, Finance Minister Yuval Steinitz said that the combination of planning and building reforms together with reforms in the Israel Land Administration and changes in infrastructure plans for the Galilee and the Negev, will have a major impact on the economy and attract investments.
"In Athens investors can get permits and build a hotel within a short period of two to three years, while in Jerusalem the same endeavor can take between 10 to 13 years," said Steinitz.
"Once we get to the situation that investors can build a hotel in Israel within a similar period of time that it would take them in Rome or Athens, the impact on the economy will be significant. We expect to start to see the impact on growth already from next year and more strongly in 2012 and 2013."
The government expects to complete the implementation of the reforms within the next four years.
Annual investment in construction and development amounts to an average of NIS 34.5 billion. However, construction planning and permit procedures are tedious, time consuming and costly, which has led many investors to build outside of the country. As a result, the supply of housing is lagging behind demand, while construction costs are rising, causing property prices to reach record levels.
"Young couples today are either trapped into having to pay astronomical apartment prices to live in the center of the country, or are stuck living with their parents as they can't afford the prices," said Netanyahu.
"In order to change this situation and bring prices down we will implement the land reform to increase the supply of land, we have plans to create the infrastructure for a transportation system to link the center with the Galilee and the Negev which will be presented in two weeks time, and finally we will introduce the planning and building reform."
As part of the reform presented on Sunday, building and planning commissions will no longer be operated behind closed doors. The procedure for getting housing approvals will be digitalized, so that it can be followed via a Web site at any stage. In addition, for the first time, local authority planning committees will also include two representatives from the public who will be paid for sitting on the committee rather than participate on a voluntary basis.
"There will be one plan approved by one committee," said Netanyahu.
As a result of the reform more authority and power will be transferred from the regional planning councils to the local ones.
Meanwhile, environmental organizations on Sunday voiced opposition to the streamlining process planned by the reform. They said it would annul the coastline protection committee which ensures guards against environmental damage and unrestricted development in a 300-meter strip from the waterline. As part of the reform, environmental protection committees will be merged into the National Council for Planning and Building.
Furthermore, the reform will introduce fixed schedules for processing plans, divided into three tracks and run by a "one-stop shop" system centralizing all relevant professional bodies in different fields, which have to provide approvals.
Under the first track, or the exemption track, minor construction and building plans - for example, building a two-meter fence or installing industrial air conditioners and solar panels - will be exempted from the current requirement of a permit and will receive immediate approval.
Under the second track, or the fast track, permits for building plans that require minor engineering work - for example, converting a balcony to a room, building  a pergola, or performing construction of up to 25 square meters - will be given approval within 45 days.
Under the third track, or the full track, large construction plans involving intensive engineering work - for example, construction of a new building or bridges - will be given approval within 90 days.