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High Housing Prices in Jerusalem: Who's to Blame?

A Jerusalem City Councilwoman is fighting to whittle local housing prices back down to a reasonable level by attacking the source of the problem.
By Hana Levi Julian
First Publish: 1/14/2010, 12:11 PM / Last Update: 1/14/2010, 1:42 PM

Arutz Sheva

Housing in the nation's capital is among the most expensive in the country, and Jerusalem City Council Member Yael Antebi has joined the battle to whittle the prices back down to reasonable levels.

Approximately two weeks ago, a tender was issued by the Israel Lands Authority for apartment in the northern neighborhood of Pisgat Ze’ev -- but Antebi claims that not everyone can enter the bidding. She says the Lands Authority tender is open only to contractors and to registered entrepreneurs, and not to acquisition groups - contrary to acceptable practice throughout the rest of the country.

Antebi pointed out that “blocking acquisition groups and only allowing contractors [to bid] in this manner results in these apartments being lost [to consumers], since acquisition of the units through purchasing groups lowers the price of the apartment by [a significant] percentage.”

The Jerusalem councilwoman told Arutz Sheva's Hebrew news service that the bottleneck is counterproductive: “It’s doesn't make sense that the Israel Lands Authority would not permit free competition, [especially] at this time when we are trying to increase the attractiveness of Jerusalem. We need to make it possible to maximize lower housing prices so that families can obtain homes in the city, and not just people that buy apartments for investment purposes, or foreigners who buy but rarely stay in them.”

Attorney Tzvi Shamir sent a preliminary petition to the Israel Lands Authority and the Ministry of Housing, pointing out that the ban on purchasing groups contradicts the ministry’s stated policy of making lower-priced housing available to consumers. He also said that the Lands Authority itself will end up receiving less money for the land than would have been paid by individual purchasers or acquisition groups on their behalf, while the latter will have to pay more due to payments of VAT and other taxes.