The politics of housing

If government’s many detractors think they can do better job, they should offer real alternatives instead of resorting to empty populist slogans.

Housing protest in Jerusalem 311 (photo credit: Marc Israel Sellem)
Housing protest in Jerusalem 311
(photo credit: Marc Israel Sellem)
During a press conference Tuesday, Prime Minister Binyamin Netanyahu, Finance Minister Yuval Steinitz and Construction and Housing Minister Ariel Attias presented an ambitious list of long-needed reforms that have been in the making for at least two years and are aimed at addressing the chronic market failures afflicting our housing sector.
Cutting red tape that creates interminable delays in the construction process, freeing up more land for housing construction, streamlining the regional planning councils and revamping the Israel Lands Authority – an anachronistic body that controls 90 percent of the land in the country – are all elements of what has been billed as the “affordable housing program.”
Yet, demonstrators populating tent cities across the nation reacted with blind hostility to the reforms, failing to articulate pertinent criticism or practical alternatives.
Students argued disingenuously that the plan, which also included fast-track building of 10,000 dormitory rooms for those enrolled in university, were an attempt by the prime minister to “divide and conquer” the demonstrators by giving preferential treatment to students.
“Our struggle is not just about housing for students,” declared Hadar Stern, a student at Ben-Gurion University in Beersheba. “It’s about everyone.”
Stern and other young demonstrators conveniently ignored the fact that most of the reforms targeted the entire housing market. Even the plan to build more dormitory rooms would help push down housing prices for everyone. If thousands of students are provided with cheap housing, the high levels of demand currently outstripping supply will ease, helping to bring down rental prices across the country.
Politicians in the opposition also broadsided the government, while offering neither ideas on how to improve upon Netanyahu’s reforms nor a plan of their own. The housing program “falls short of offering any real sustainable solutions to a core problem that has been festering for years,” the Labor party said in a statement.
Opposition leader Tzipi Livni claimed Netanyahu was more concerned with “taking down tents, not building homes.” Livni argued that “national policy must change,” but did not specify how.
Activists from The National Left, who aspire to establish a new left-wing party, claimed in a press release that Netanyahu was “deaf to the middle class” and that his political demise would be the same as [Egyptian president Hosni] Mubarak’s.
In contrast, Bank of Israel Gov. Stanley Fischer, who cannot be accused of being motivated by narrow political interests or the desire to appeal to cheap populism, praised the government’s reforms, saying that they were “proportional” and would help lower housing prices.
Notwithstanding Fischer’s praise, the “affordable housing program,” like any practical program designed to address a tremendously complex and decades-old problem, is not perfect. The devil is in the details and massive housing reforms include a multitude of such details.
For instance, using land zoned for public institutions to build 10,000 dormitory units might sound easy. But how many towns will agree to give up precious land that could have been used to build a community center or a school to build dormitories housing a bunch of rowdy college students? An estimated 80,000 housing units stand vacant. But it is highly doubtful whether raising municipal real estate taxes (called arnona in Hebrew) by a few hundred shekels will convince rich Israelis or foreigners who own many of these apartments to sell.
Also, how will the government ensure that the planned slashing of land costs will be passed on to the buyer or tenant, and not be pocketed by the building contractor? Will the push to cut bureaucracy, which includes measures that allow for public oversight of the building process, result in laxity with regard to environmental issues? How will the government determine who is eligible to enjoy cheaper housing, and who is not? Solving the housing crisis is an intricate matter with many obstacles to clear along the way. The easy way out, chosen by many previous governments, has been to ignore the conundrum altogether.
This government, buoyed by popular demand for change, has taken significant steps to tackle the crisis. If the government’s many detractors think they can do a better job, they should offer real alternatives instead of resorting to empty populist slogans articulating nothing more than inchoate discontent.