Kelly Odes
Argov Fellow in Leadership and Diplomacy

Catastrophic House Prices: the Answer is Transport

Believe it or not, there is a solution to the astonishingly expensive housing in Israel. The solution is not to introduce policies that will burst the real-estate bubble. The solution is to take the road less travelled and make use of the underdeveloped peripheral areas. But the only way to do that is to improve public transport.

It is a home-owners worst nightmare to wake up one morning and find out that half of their wealth has been lost as a result of a drop in housing prices. Israeli’s who worked sweat and blood to afford a home will be left feeling aggrieved. Israel’s economy will also take a hit as people begin to feel insecure that their store of wealth has been depleted and thus reign in their spending. Cutting the price of housing is cutting into people’s nest eggs, and that would be a calamity.

It is certainly no secret that land is a contentious issue in Israel. Not only politically, but socioeconomically too. Owning land in Israel in key metropolitan areas, has become a luxury for only the very wealthy or those who worked their whole lives to attain this goal. It is unattainable for most people to buy an apartment in the major cities of Tel Aviv or Jerusalem. Yet even so, the peripheral areas are not being leveraged. And here’s why: they’re simply out of reach.

If you have ever spent a significant period of time in Israel, one thing you cannot help but notice is the insanity of rush hour. Bumper to bumper traffic can turn your 20km distance from home to work into an hour long journey. Let’s not forget the price of fuel and car insurance too. Simply put – having a car is inefficient, and public transport is by no means a better alternative. The standard of public transport in Israel is below par. According to data published by Moovit, the average time spent on public transport a day is 70 minutes and 71% of those users spend more than 2 hours each day. Trains have only a limited number of stops, buses are often unreliable, and unexpected delays make people too weary to trust the current system to get to and from work. This all culminates in a burst of demand for apartments centrally located and within easy reach of work places.

Take Manhattan NYC, as a comparative example. Workers who commute everyday from other boroughs of New York (outside of Manhattan) nearly double Manhattan’s population, increasing it from 1.6 million to 3.1 million. The reason this works and is so common is because public transport to and from the city is more reliable, efficient and developed. The subway system and commuter rail lines, despite their flaws, allow for an incredible network of destinations to be reached within minutes. As does the London Underground as well. What is more remarkable is that these infrastructure projects were built over a century ago.

This model of a high speed train with a vast network of destinations should be applied in Israel. Of course, building such a train whether underground, over-ground or a mixture, would be a major undertaking and investment of time, money and resources. And indeed, it may cause plenty frustrations along the way. Nevertheless, the long term benefits of such a project would change the face of this country for the better. One of the greatest benefits being the impact it will have on the housing issue in Israel. If homes are built in the peripheral areas, they will still be more cost effective but will now be accessible. Allowing the freedom to buy a house at a decent rate while removing the obstacle of needing to live close to work.

There are a number of side advantages too. Firstly, taking cars off the road will reduce carbon emissions. Secondly, there will be an increase in productivity due to shorter transit times and thirdly – saved costs on expenses such as fuel and car maintenance can contribute to more savings that can be utilised towards other purposes, such as a mortgage or finance for a house.

The bottom line is that we need to think outside of the box and outside of the major cities when it comes to housing – and the most viable solution to make this possible is to improve transport infrastructure and leverage connectivity.

About the Author
Kelly Odes currently studies government, diplomacy and strategy at IDC Herzliya and is a part of the Honors Fellowship Program 'Argov' in leadership and diplomacy. She is a former intern at the Israeli Mission to the UN and seeks to work in Knesset affairs in the future.
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