Israel

Government Sets Target of 60,000 Housing Starts in 2016

Sunday, February 28, 2016 12:40 pm | 2 Minute Read

By Shimon B. Lifkin

Construction of new residential buildings in the northern Israeli city of Harish, for religious and secular occupants. (Lior Mizrahi/Flash90)

The Ministry of Finance is looking forward to 60,000 housing starts in 2016, 10,000 more than last year, Globes reported on Sunday.

The goal was stated in a ministerial work plan, among other goals for the beleaguered housing sector, including:

Increasing the supply of zoned land, removing bureaucratic obstacles, increasing the number of deals signed with the Israel Land Authority (ILA), publishing more buyer fixed price tenders, raising quotas for foreign workers in the construction industry, and reducing production costs.

At the same time, the Ministry of Construction and Housing is formulating an estimate of the supply of housing units slated for construction under the buyer fixed price plan using an index of “eligible parties who bought an apartment in buyer fixed price projects.”

The Ministry expects data will show the sale of 25,000 apartments at reduced prices in 2015 under the plan; in other words, developers will win tenders for 25,000 apartments and receive building permits for them. Planners anticipate increases in this figure to 30,000 apartments in 2017 and 35,000 in 2018, for a target of 90,000 housing units purchased in tenders with their construction begun by the end of 2018.

The Ministry of Construction and Housing hopes to significantly lower the number of eligible people who have been waiting for public housing for over a year. While the number of those eligible in 2015 was 1,708, it targets only 750 by the end of 2016 (a 56% reduction), 450 by the end of 2017, and only 150 by the end of 2018 – a planned reduction of 91% in those waiting for public housing in three years.

Urban renewal is also reportedly high on the agenda. The Ministry plan provides for signed urban renewal framework agreements with the local authorities (which will guarantee infrastructure financing for local authorities), increasing the supply of housing in the context of urban renewal.

In addition, the Ministry is keen on accelerating the pace of building in Israel. The statutory length of time from the beginning of planning until the plan goes into effect is slated to fall from 44 months in 2015 to 37 months at the end of 2016. The time from the publishing of land marketing tenders until a contract is signed with the land purchaser is also slated to fall from nine months in 2015 to seven months in 2016.