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Netanyahu's Housing Plan

At Tuesday morning's press conference, Prime Minister Netanyahu gave plans for immediate relief, blasting bureaucratic bottlenecks.
By Amiel Ungar
First Publish: 7/26/2011, 4:28 PM

At a news conference Tuesday morning at 11 AM Israel time, Prime Minister Binyamin Netanyahu, with finance Minister Yuval Steinitz at his side, acknowledged the seriousness of the housing crisis and announced practical plans for alleviating it. 

Netanyahu announced a plan that would primarily benefit young couples, students and discharged soldiers. This immediately  provoked opposition from leaders of the protest movement who claimed that the program was being selective in terms of its beneficiaries. The leaders have an obvious political agenda, so this was expected, but the housing shortage for purchase and rental, as well as spiraling prices for both, are real problems that did not start with Netanyahu, but have gotten worse during his term of office.

According to the Prime Minister, the major problem is the cumbersome bureaucracy, starting with the Israel Lands Authority that monopolizes Israeli real estate resources and ending with the tortuous path towards getting  housing permits. Israel ranks among the lowest rated countries in terms of the facility of the process, he said. 

Netanyahu started his term of office with a plan for changing the situation which became bogged down in bureaucratic and Knesset altercations, but the National Housing Commission Law, in preparation from before the protest, will circumvent most of the bureaucracy once it is passed.

The Prime Minister promised to streamline the process and called for a crash program for 50,000 new apartments within a year and a half under an emergency decree for that period.

The government would also encourage use of the current housing stock in the periphery by lowering the cost of public transportation to the center of the country where most of the jobs and universities are. 10,000 apartments would be allocated for rental housing at reasonable prices in order to drive down the price of apartment rentals.

Minister of Finance Yuval Steinitz (Likud), who found himself under attack, promised to zero in on the empty apartments many of which are used for offices or bought by overseas absentee owners. His ministry plans to cut down the exemption on real estate tax for empty apartments to 6 months in order to encourage their owners to rent them.

The Government Press Office issued the following outline of the plan:

Cheaper land for buying apartments – A 50% discount in the price of land will be given for the construction of apartments, in "price for tenant" tenders.  In these tenders, contractors compete for the lowest price to be offered to those purchasing the apartments.  Preference will be given to allocating apartments for young couples, discharged soldiers and national/civilian service graduates.
 
Reduced-cost rentals – The State will initiate the construction of apartments for long-term rental at reduced cost, with a 100% discount on the land.  The discount will be given to the contractor that offers that lowest price to renters.
 
Solutions for student housing – The state will provide free land for the construction of 10,000 new dormitory units for students.  Thus, rent for students who currently rent on the open market will be significantly reduced.
 
Reduction in public transportation costs for students – In order to open the housing market to students outside city centers, an immediate 50% rail and bus discount will be provided.