The Finance Committee, chaired by MK Alex Kushnir (Yisrael Beytenu), convened on Wednesday for a follow-up discussion on the spike in housing prices in Israel. The meeting was held with the participation of Israel Land Authority (ILA) Director General Yaakov Kvint.
Committee Chair MK Kushnir opened the meeting by saying: “I welcome the representatives from the ILA and the director general, who will present the ILA’s activity. It is no secret that we are experiencing a growing crisis in the housing market; the rise in prices has reached a new peak. This has many reasons and causes. The committee will summon relevant parties related to the issue, who can influence the supply and also the demand. The goal is to prepare the committee members and the public for the Arrangements Law that will reach us by the end of the month, so that we can examine the measures that the government intends to take in order to address the housing issue, along with the knowledge we will gain, and with data from professionals in the field.”
ILA Director General Kvint: “The supply side, of which we are a considerable part, is affected by many factors — the state budget, the ability to carry out extensive and accelerated development, financing of public institutions and interchanges, placing transportation infrastructure underground, cooperation with local authorities, and of course, planning.
“There are almost no housing units that are waiting to be put on the market and have not yet been marketed. On the demand side, there are many factors that have an effect, such as the interest rate, as when the interest is low and money is cheap, there is an option to invest in housing. In May alone, 2,600 units were purchased for investment,” Kvint said, adding that 21,000 housing units were purchased for investment in the past 10 months (from August 2020 to May 2021).
Kvint noted that the Jewish National Fund (KKL-JNF) owned 12% of the state lands, and 11% were in the possession of the Development Authority, but a large share of them were held by various lessees and the state had almost no control over them. He said that from the 22 million dunams of the country’s area, only about 7% were suitable for planning by the ILA — 1.59 million dunams. This is after excluding firing zones, national parks, nature reserves, JNF forests, agricultural land and more.
Kvint said that [from the beginning of the year] until June 2021, 11,150 housing units had been planned, and 27,983 units had been put on the market. “Only a small balance of units are left to be put on the market; from the [units under] planning you have to separate the units that are on state land, because only those can be marketed.”
During the discussion, MK Rabbi Yinon Azoulay (Shas) commented on the high concentration [of power] in the hands of the ILA: “Your unlimited options are causing our housing costs to rise and rise; you hold everything as a monopoly. We haven’t seen any good news in the housing market, only [price] increases.”
Kvint said that so far in 2021, 3,084 housing units for rental had been put on the market. Regarding the National Planning and Building Committee for Priority Housing Areas (VATMAL), the ILA director general said that between the years 2016–2021, the average time for approval of a plan (from initial receipt to validation) in this framework was 12 months, versus 31 months in the usual format. “Competition is good, it also shortens the [work] time of the District Committees. Without the VATMAL, we would have a very severe housing crisis.” He stated that between 2015 to 2021, 139,000 housing units were planned in the VATMAL, versus 47,000 in the District Committees.
According to the data presented, 249,490 housing units were not put on the market. Kvint presented the various barriers to the process.
On the matter of the umbrella agreements with local authorities, Kvint said that the ILA’s total budgetary commitments within these agreements were in excess of NIS 44 billion. The total number of units in the umbrella agreements is 278,780 and the average payment for each unit is NIS 160,000.
In summary, Kvint said: “It is a broad market, and there are many players that affect the market and the prices. We have to do whatever is possible to put as many [units] on the market as possible. We’re making a great effort, and working day and night to perform the tasks. It’s irregular even relative to previous years, and the work is being done. It can’t affect the situation on its own. All the actions being taken are tactics for the short and medium term, but strategically, in the long term, we have to think about additional measures: strategic actions — new cities, stretching the boundaries of the central region, accessible transportation, strategic evictions, moshavim whose location in central Israel has to be reconsidered.”
MK Kushnir: “We all understand that there is a gap between supply and demand, and that the scope of housing units in Israel has to be doubled within 20 years. The question is whether there is strategic planning of this, based on the understanding that if we don’t do it, people will end up living on the street.”
Committee Chair MK Kushnir summed up the discussion: “The purpose of these discussions is to receive as much information as possible ahead of the Arrangements Law and for oversight in general. The things we heard are in the right direction, particularly in terms of supply, and that is very important. I can’t say that we came out with all the information; for every answer, more and more questions arise. We have launched cooperation, and I’m sure we will continue with this. Every action is taken by all the parties involved, so it has to be done together. The government is leading this.”