Coronavirus crisis affects housing project industry, gov't steps in

The coronavirus crisis has an overlooked effect on the building industry as well, which the Housing Ministry intends to solve.

Apartment for sale in Jerusalem (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
Apartment for sale in Jerusalem
The construction of  housing and apartment projects in Israel has been being delayed for an average of between 70 - 90 days, according to the Housing Ministry, something which during the coronavirus crisis has had detrimental financial repercussions.
The coronavirus crisis has a generally overlooked effect on the building industry, and the financial consequences which the Housing Ministry intends to solve. 
"Employers, including contractors have also been financially affected during this period," said Housing Minister Ya'acov Litzman.
"The coronavirus crisis has largely affected the public. Buyers of apartments are our top priority, and we have to take care of them," he added.
According to state law, for every day a housing project is past 60 days of its finishing project, a seller must pay the buyer 150% in rent, in relation to prices of apartments in the same or similar areas for the first eight months, and 125% until the actual apartment project is finished. 
This is a price that during the financial crisis caused by the pandemic, sellers are less able to pay, which led to the need for the Housing Ministry to develop a solution. 
 "Our solution is to take into account the balance between the need of the buyers on one hand, and the needs of the contractors on the other, for the benefit of all parties involved," Litzman added. 
The ministry's solution includes providing a 40-day extension period for building projects, notably apartment building projects, who's projected finishing date falls between the dates of March 18, 2020, and the end of the year - December, 31, 2020.
The solution was presented the to Housing Ministry by Erez Kiminitz, Deputy attorney-general of the Civil Law Department,  who deals with the financial effects of the coronavirus crisis on contracts every day, including the delays in delivering apartments. 
"In light of the coronavirus crisis and its effects on the real estate market, providing a fixed extension to the delivery of the apartment constitutes a fair and proper solution for the benefit of everyone involved," said director-general of the Housing Ministry Elazar Bamberger.