The best idea for solving Israel’s housing crisis, believes United Torah Judaism faction chairman MK Rabbi Menachem Eliezer Mozes, is to create a program that will encourage construction of apartment buildings with rental units. Similar to programs that have been instituted in the past in major cities around the world, the government could enact a program of incentives and tax breaks for contractors who build rental units, he wrote in a letter to Housing Minister Yoav Gallant.
The letter comes on the background of disappointing results in a tender for the Price Resident program in Beit Shemesh and Ramat Beit Shemesh – in which not one contractor took up the offer of the government for free and low-cost land in exchange for setting aside a portion of the apartments to be built to be sold at a discount to young couples. Those were not the only tenders to fail, said MK Rabbi Mozes in his letter. “Price Resident is the government’s flagship program for the institution of affordable housing. Unfortunately it is not succeeding as hoped, as the failure to market homes in Beit Shemesh shows. The only solution is to encourage construction of homes for long-term rental.”
Israel’s rental market consists of privately-owned apartments that are unoccupied, many of them owned by individual investors who bought them specifically to rent out. Leases generally need to be renewed annually, and the price of rent is set by the market, as there are no rent control laws in Israel. As a result, many families that rent find themselves being forced to move every few years, as the personal circumstances of apartment owners change and they move newly-married children, parents, and others into the apartments, thus forcing tenants to move. The concept of an apartment building owned by a contractor or real estate firm that rents out units is unknown. It is that kind of housing that MK Rabbi Mozes advocated in his letter.
Even if there were sufficient housing for purchase, the high price of real estate would ensure that homes remained out of reach for young couples. “In recent days the Bank of Jerusalem has said that from now on it will require a 50 percent down payment in order to qualify for a mortgage. This may be the final straw in terms of keeping homes affordable, and will no doubt be imitated by others. This development only enhances the need for massive construction of rental units,” the letter added.