‘Target Price 2.1’ Affordable Housing Program Gives Priority to Locals

A construction site of residential buildings in Be’er Yaakov. (Flash90)

The Israel Land Council, which directs policy for the Israel Land Authority, last week approved the plan put forward by Construction and Housing Minister Ze’ev Elkin named “Target Price 2.1.” The main thrust of the plan is that land for housing at a reduced price will be sold only in cities where the average price per meter for housing is up to NIS 20,000 and in cities with a socio-economic profile of four or below according to the Central Bureau of Statistics’ measures.

The new method that the ministry proposes is to set a price per meter built that will be stated on the tender documents. On the basis of the price set, a discount of 20% of the price of the apartment will be given, up to NIS 300,000. Contractors participating in the tender will compete on the highest price for the land.

Unlike in past programs, there will be no annual quota for selling housing units. The number of housing units designated for those registered with the Ministry of Construction and Housing as entitled to subsidized housing (under the same definitions as in the Buyer price program) will be 60% of apartments constructed in high demand areas. In areas where the value of a dunam (quarter acre) of land is lower than NIS 100,000, in national priority areas, and in settlements occupied by minorities, the proportion of housing units designated for those entitled to state-subsidized housing will be up to 65%. In addition, one in every 30 units will be for a disabled person confined to his or her home.

The new method gives a priority allocation to “locals,” that is, anyone who has lived in the previous three years or in four out of the previous ten years within the jurisdiction of the local authority in which the project will be built: 25% nationally, 35% in national priority areas B, and 50% in national priority areas A. In minority settlements of up to 30,000 residents, 50% of housing units built will be allocated to locals. The Israel Land Authority will have the power to raise these percentages to as much as 75%. In the Haifa area and in the north the allocation to locals will be a fixed 75%. In settlements with populations of less than 10,000, it will be possible to obtain an allocation to locals of 100%.

In addition, those entitled to state-subsidized housing who buy homes in national priority areas (that is, areas that the government of Israel has declared as such and in which various incentives are available to attract residents and businesses) will receive a fixed grant of NIS 40,000.

“With unprecedented speed, we have submitted an affordable housing program for approval, after learning the lessons of past experience, and removing regulatory obstacles to land sales. The new Target Price plan focuses resources on people for whom the benefits will be of substantial significance in attaining a first home, with expansion of entitlements for the disabled and giving higher percentages to locals,” Elkin said.

The land for reduced-price housing will be marketed only for construction purposes in cities where the average price per square meter is NIS 20,000 and in localities where the socio-economic cross-section according to the CBS indices is 4 and below. The program will take place in dozens of localities, including Yerushalayim, Bnei Brak, Bat Yam, Elad, Elkana, Kfar Vradim, Beit Shemesh, Sderot, Netanya, Rosh HaAyin and Eilat.

It is noteworthy that while the plan may not be valid in Tel Aviv, Herzliya and Ramat Gan, but in cities like Nes Ziona, Rishon LeTzion, Bat Yam and Raanana it will be implemented – all of course on the assumption that the price per square meter will not exceed NIS 20,000.


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