It’s ironic that the Israeli government spends so much time and energy on the “peace process,” while ignoring a much more pressing problem: the inability of the country’s young to buy homes.
While the government can’t deliver peace — that depends on having a willing partner — it can deliver affordable housing. But despite social protests that brought hundreds of thousands to the streets two summers ago, and despite campaign promises last year to make housing affordable, the crisis has only grown worse.
In the past year, already-inflated housing prices jumped 8 percent. Of course, the salaries did not rise at the same pace. Indeed, if in 2008 it took 90 monthly salaries to buy an apartment, in 2013 it took 148 months (12-and-a-half years!) of work.
Things are so bad that Housing Ministry Director General Shlomo Ben Eliyahu told a recent conference of builders that Israel is approaching the moment when people won’t be able to buy apartments. This statement is a stunning admission of failure on the part of the government to provide its citizens with a basic necessity like housing.
Ben Eliyahu’s remarks come as no surprise to parents, who in keeping to the broadly accepted practice in Israel of buying apartments for newly married couples, must come up with huge sums to help their children buy even small apartments on the periphery. It comes as no surprise to young couples who are forced to pay exorbitant rents for storage rooms that have been turned into studio “apartments.”
Over the decades, Israel has succeeded in building massively for one wave of immigrants after another. At a time when the state faced a much more precarious economic and security situation than today’s, the resources were found to build homes, schools, shuls, mikvaos and other infrastructure for communities all around the country.
Immigrants from poor countries, young couples, the elderly, were given an array of government grants and subsidized mortgages to enable them to purchase homes. As recently as 10 years ago, a young couple could purchase an apartment in Ramat Beit Shemesh, half an hour out of Yerushalayim, for $120,000 — of which $80,000 was available in mortgages and grants.
The problem is not a lack of resources, but a lack of resolve. As Nissim Bobleil, the head of a builders’ organization, noted at the conference addressed by Ben Eliyahu, taxes make up a third of the price of a new apartment, and that doesn’t include the various fees that are demanded by the local municipalities.
The high price that builders have to pay for land, which is controlled by the Israel Lands Administration, must be passed on to the buyer. And the bureaucratic hurdles that builders must overcome — years of appearances before the various local and district planning committees — add considerably to the cost of construction.
All these things are within the control of the government.
The good news is that there is a new initiative that aims to increase the supply of apartments and to cut down on the bureaucracy. The government recently signed “blanket” agreements to build some 35,000 apartments in Kiryat Gat, Modiin and Rosh HaAyin.
Under the agreements, signed by the Treasury, the Housing Ministry, the Israel Lands Administration, and the local municipalities, the government provides guarantees for the building of infrastructure and public facilities, so that they will be built at the same time as the planning and construction of the apartments.
These agreements also guarantee developers building permits within 90 days, shortening the time it takes to build new neighborhoods.
According to economists, the chareidi market suffers the worst housing shortages. Projects like Har Yona, for instance, in Upper Nazareth, or Beit Shemesh, where thousands of units are going up exclusively for the religious community, are no longer being approved.
“We looked into the apartment plans in Modiin and found that they fit us perfectly,” a chareidi source told Hamodia. “For example, alongside the main street are five-story buildings, 30 percent are 2-room, 30 percent are 3-room and the rest are 4- to- 5-room units; these are small apartments that are ideal for young couples. There are dozens of other locations coming up in future tenders. We have to organize purchasing groups.”
Purchasing groups could bring together a group of families to buy an entire building or bloc of buildings, bringing down the price and ensuring a certain level of homogeneity.
According to the housing minister, additional blanket agreements will be signed, resulting in 100,000 housing units in the coming years. He predicts that the supply of so many apartments will cause prices to start to fall in 2015.
But for this to happen, the government will have to be stable and live up to its promises. Israeli governments are notorious for being brought down prematurely in no-confidence motions and for failing to live up to their commitments (“we never promised to keep our promise”).
The government has an obligation to provide its citizens with the basics: housing, education, employment, security. It must give housing at least as much attention and resources as the peace process.