Land reform? Tread carefully

The government needs to convince us that its plan for reform doesn't make a bad situation worse.

Tel Aviv at night 88 248 (photo credit: Courtesy)
Tel Aviv at night 88 248
(photo credit: Courtesy)
Almost all of the land in Israel - 93 percent - is either the property of the state, the Jewish National Fund, or the 1950s-era Development Authority for abandoned Arab property. Whatever the case, the Israel Land Administration (ILA) is the government agency responsible for managing all land in the public domain. Ownership of real estate in Israel typically means leasing rights from the ILA for 49 or 98 years. One of Prime Minister Binyamin Netanyahu's campaign promises was to reform the ILA in order to bring down exorbitant real-estate prices and reduce housing costs. Besides making homes more affordable, reform seeks to spur a building boom, creating jobs and generating economic growth. The premier has long advocated "slaying the ILA dragon," simplifying procedures and attracting overseas investors. The idea is to break up the ILA monopoly, transfer leased lands to private ownership, decentralize and give more say to local planning commissions. This intended outcome would mean more efficient land management and a citizenry better served. True to his word, Netanyahu won cabinet approval for the reform, with detailed clauses to be ratified by the Knesset via the omnibus "arrangements bill" that accompanies the budget proposal. ALL THIS is good, and long overdue. However, enthusiasm for reform is not universal. Environmental organizations, social activists and farmers (among others) are apprehensive. They warn that, regardless of its good intentions, the upshot of reform would be to stimulate a real-estate development free-for-all, making some wealthy developers even wealthier, other developers instantly rich, and possibly inviting corruption. Land reform could also cause incalculable and irreparable damage to the environment and to the public good by allowing private entrepreneurs a free hand to do as they please in areas where no master plans have yet been finalized. Though the ILA recently committed itself to making the preservation of open spaces an integral element of every land grant, this does not assuage our concerns. Streamlining procedures is a good thing, but it's not clear how privatization can be implemented in an equitable manner. Moreover, if privatization leads to soaring land values, few farmers will be able to till the soil in ever-more expensive and highly taxed zones. It will become easier and more attractive to transfer agricultural land to other uses - but what would that mean for Israeli agriculture? More immediately, the reform will not privatize leased farmsteads, only urban holdings. In so tiny a country, land is a national resource. In the short run, critics say that reform is certain to encourage get-rich-fast schemers and broaden careless suburban sprawl with its attendant wasteful infrastructure and environmental damage. In the long run, whatever open spaces yet exist around us will be destroyed. SO IS reform a good thing or not? In some way, proponents and opponents are both right. In other respects neither camp is. It's true that current land prices contribute to high housing costs, but ILA reform will do little to neutralize the underlying catalyst - market forces. Locations in central Israel that are much sought-after would continue to be prohibitively expensive, precisely where demand outstrips supply. Reform could make a difference largely in peripheral regions. The ILA has lately been offering plots in more outlying locales, at rock-bottom prices. There have been few takers. Cheap land has never been unavailable. However, there will always be greater demand in metro-Tel Aviv than in greater Beersheba. The question is how to bring Tel Aviv's opportunities closer to Beersheba, thereby making living in the periphery more viable and attractive. The answer is not necessarily revolutionary land reform, but ordinary infrastructure and transportation upgrades that would belatedly pull Israel's rail system out of the late 19th century and into the 21st. We need, for instance, fast trains that will shrink distances and demolish psychological barriers by encouraging people to live outside the country's economic and cultural hubs. No one disputes that the current land management system is broken. But the government needs to convince us that its plan for reform doesn't make a bad situation worse.