Contractors: Foreign Competition Not the Solution

YERUSHALAYIM -
Construction work on new homes outside Afula. Photo by Nati Shohat/Flash90
Construction work on new homes outside Afula. (Nati Shohat/Flash90)

Allowing foreign contractors to build projects in Israel is not the solution to the country’s housing crisis, according to Ronni Brik, director of the National Builders Organization. What’s missing, he said, are not contractors, but workers, and the addition of contractors from China and Portugal will only increase competition for the available workers who are interested in construction work.

On Wednesday, the Finance and Housing Ministries said that they had approved six foreign companies to build housing projects in Israel. The objective is to significantly increase construction activity and complete tens of thousands of housing units, thus flooding the market with apartments and lowering the prices on available homes.

The contractors will be allowed to work only on housing, and the contracts they receive will have specific finish-by dates they will be expected to observe to the letter. The program will run for a total of five years, with an option by the Ministries to extend it for another three years. Each company will be allowed to bring in 1,000 workers, whom they will be responsible to house and feed. It is expected that many of the contractors will use prefabricated methods to build their projects. Five of the companies chosen are Chinese, and one is from Portugal.

“We have an important responsibility to ensure a supply of housing for young couples and increase the supply of homes, and we are doing this in every way possible,” said Finance Minister Moshe Kachlon. “The way to do this is to fill out the supply chain, from increasing the supply of raw materials to authorizing foreign companies to speed up construction. Professional workers are a critical element for increasing the number of available homes and reducing demand.”

The new arrangements may help somewhat, said Brik, but they are not really sufficient. “At a meeting with the finance minister I presented the list of roadblocks I believe are preventing the construction of new homes,” he said. “At the top of that list is the need for tens of thousands of construction workers, and the immediate need for 10,000 such workers just to complete projects already under construction.” Bringing in 6,000 workers would help somewhat, but it is not nearly enough, he said, adding that the workers to be admitted will not be the skilled ones that Israel is sorely lacking.