This is the eighth essay in a multi-part series of blogs regarding what the Yesh Atid party has accomplished for Israel in its year and eight months in office
As a result of Yesh Atid’s laws and policies, for the first time in many years there is an actual plan in place to reduce the cost of housing in Israel.
The comptroller released a scathing report detailing the failures of the governments from 2008 to 2013 in dealing with the problem of the cost of housing in Israel. During that time, housing costs rose by 55% with no structured plan to address the problem. On page 251 of the report the comptroller states that this past government was the first to present a series of reforms which when implemented in a methodical manner, will substantially reduce the cost of housing. This is the result of Yair Lapid entering office as Finance Minister and forming a housing cabinet which, for the first time ever, collaborating with all the ministers involved in the realm of housing who were then led through a series of reforms to bring down the cost of housing.
The biggest problem, as indicated by the comptroller, had been the lack of construction. There was a need for the construction of 40,000 units per year but the country was only building 30,000 per year – resulting in a lack of 10,000 units per year which has escalated to 60,000 over the last few years. This lack of apartments in the face of great demand was the number one reason for the prices going up. The housing cabinet worked together to start the construction of over 100,000 new apartments in carefully planned neighborhoods. These units are already being built including 15,000 in Rishon Letzion, 7,500 in Kiryat Gat, 12,000 in Modiin, and 7,500 in Kiyat Bialik. In addition, we began the process of clearing out IDF bases that will move to the South, thereby clearing 8,900 “dunam” in the center of the country for the construction of 60,000 new units. In 2014 we exceeded a national record with more than 50,000 units being marketed.
The second part of the Yesh Atid housing plan is minimize the extraneous bureaucracy which led to significant delays in construction and also led to the rise in costs. The fact that Yair Lapid brought all the relevant ministries together enabled constructive collaboration and we were able to streamline the process. Neighborhoods are planned with all the necessary infrastructure in place including transportation, schools, etc. to make sure that there are no avoidable delays. The “Nativ Ladira” program allowed for the quick planning and construction of these 100,000 plus units and, even more importantly, freed 50,000 units to move forward which had already been marketed but were held up.
The third part of the plan is the construction of 150,000 low-cost long-term rentals in the areas of greatest demand throughout Israel. Aside from the fact that this would simply enable young couples to afford their initial rentals, the lower rental costs would impact the sales market as well. The “Dira L’haskir” government company was approved and the planning for these units has begun.
The fourth element of the plan is “targeted pricing.” Land will be released to contractors on condition that they sell 80% of the units at 20% below the current market price. Over the next five years, 66,000 would be marketed under this plan.
The fifth element of the plan to lower the cost of housing was the construction of units for university students. Working together with all the relevant organizations including student groups, Yair Lapid initiated the construction of 5,000 housing units for college students – 1,000 in the periphery and 4,000 in central Israel. The 160 million NIS designated for this project will be used in two parts. 100 million NIS was already invested in 3,000 units in the areas where there is the greatest demand for housing. The students will benefit from the low cost temporary apartments built for them, and when they move out of their current apartment units they will become available for middle class Israelis who are searching for places to live. In the second stage, 64 million NIS will go towards 2,000 units for community college students in the cities – in conjunction with the local municipalities.
The sixth element of the Yesh Atid housing plan was a one-time change which we put into effect immediately after coming into office. The previous housing minister, from the Shas party, established a criteria for government assistance in purchasing a home, called “experience in marriage.” This was a criteria set to benefit the ultra-Orthodox population which tends to get married at younger ages and, thus, qualified to receive this assistance at the expense of the broader population. As head of the housing cabinet, Yair Lapid switched this criteria for a new criteria – “qualified to enter the workforce.” The assistance is now provided to those who studied in universities, including the ultra-Orthodox, since the government assistance should be directed to those who will be paying taxes and contributing back to the government and the economy.
Finally, aside from all the steps described above, Yesh Atid believes in giving young couples who served in the IDF or did national service the opportunity to purchase their first home at a reduction of 240,000 NIS by not charging VAT on these homes. Aside from simply giving tens of thousands of young people the chance to purchase their own home, a long list of economic experts including Yaron Gindi and Tzvika Oren believe that this benefit will lead to a reduction in the second hand sales market as well.
Yesh Atid came into office and began implementing all of the elements in this plan. And, a remarkable thing happened. In October 2014, after housing prices rose by 80% over the last seven years, there was actually a reduction in overall house prices. It was just 1%. But we began heading in the right direction since, as the comptroller’s report indicated, there simply needs to be an all-encompassing strategy implemented and house prices will go down.
We, in Yesh Atid, are looking forward to returning to the Knesset with full force to be able to continue our plan which was cut short when the Prime Minister called for elections, and bring down the cost of housing in Israel.
Please make sure to read the previous part to this series: