A report by Israel’s Accountant General reveals the numbers behind the Price Resident apartment construction and sales plan – and analysts said that the numbers will not help get the program renewed. In the four years the program has been ongoing, the state has subsidized construction at a cost of about NIS 7 billion – but so far, only 3,500 Price Resident apartments have been delivered to buyers. Another 25,000 have received building permits, mostly for homes in outlying areas – and it is not clear at which stage of construction those apartments are. 65,000 people have signed up for the program.
Under the Price Resident program, the state provides discounts on land for contractors who commit to building a portion of the apartments in a project specifically for the program, and they are marketed at a discounted price to young couples and others who do not own homes. To qualify to purchase an apartment under the program, candidates apply and are chosen by lottery.
The program was established in 2015 as a way to lower the cost of new homes, which are out of reach for many young couples. The program originally called for construction of some 95,000 apartments in all areas of the country.
A report in Yisrael Hayom quoted analysts as saying that the current level of costs could not be sustained. According to the report, costs of the program are expected to rise this year and next, as more lotteries are held and more projects come online. Meanwhile, the Israel Lands Administration, which administers the program, has transferred only very small sums to the Treasury; in 2018, it transferred NIS 361 million in funds realized from the auction of parcels, just one million shekels more than in 2017.
In addition, the analysts said, there were many peripheral costs to the program, including its impact on the housing market, which has not been very dramatic. If Binyamin Netanyahu is elected to another term and Moshe Kahlon remains on as finance minister, it’s likely the program will continue, but by 2023 it will be impossible for the government to finance it within the realm of the state budget, the analysts said.