Daily Israel Report

Conflict Erupts Over Solutions to Housing Crisis

Where to invest - that is the question. Housing and Finance Ministries face off over the better solution to the housing problem.
By Tova Dvorin
First Publish: 5/13/2014, 9:56 AM

Housing
Housing
Israel news photo: Flash 90

Housing Minister Uri Ariel (Jewish Home/Bayit Yehudi) and Finance Minister Yair Lapid (Yesh Atid) are embroiled in another disagreement over the state budget - with each proposing his own solution to Israel's housing crisis. 

Both agree that Israel must invest in its housing market - now - to help the thousands of young couples in Israel who cannot afford to buy, or even rent, a place to live. 

But while Ariel believes in putting money into pre-existing projects to boost the safety of bad neighborhoods - and make cheaper real estate more desirable - Lapid is set on reviving Israel's chaos-ridden public housing program, Calcalist reports Tuesday. 

An investigation into the recent financial state of Amidar, Israel's biggest public housing firm, revealed that over 100 million shekels ($28,943,600) could be invested in the public housing system without hurting the company or the state, according to the daily. The money could either be issued as a dividend to the State budget or already listed as an expenditure while a feasible public housing rehabilitation plan gets off the ground. 

The Finance Ministry has reportedly embraced the idea - stating that a new project is in order, to upgrade public housing units in bad shape and build new units to accommodate the thousands of families still on waiting lists.

In February, MK Orly Levi-Abekasis (Yisrael Beytenu) confirmed that as of the end of 2013, at least 2,700 families were deemed eligible for public housing by the Ministry of Housing and Construction and another 30,000 by the Ministry of Immigrant Absorption. Eligible families often face a 5-8 year waiting period before being provided with new homes. 

The Ministry emphasized that the entire process will be carried out transparently - through regulations and state budgetary changes.

The issue of "transparency" is a common theme in feuds between Lapid and Ariel, as the former frequently accuses the Housing Ministry of pouring money into Judea and Samaria "under the table" - despite the fact that the exact usages of that money have been published, on at least one occasion, by Globes

The Housing Ministry fired back at the announcement Tuesday, claiming that the Finance Ministry has systematically wasted its public housing budget. For example, an 80 million shekel ($23,154,880) budgetary transfer for public housing approved in January only landed on the Finance Committee table in April - wasting valuable time for the project, the Ministry says.

Instead, Ariel has pushed to expand the "Garin Torani" project, whereby small groups of families - often religious - move into poor neighborhoods and invest their lives in rehabilitating a community. The project, which has been highly successful in places like Lod, has made several low-income neighborhoods more attractive to potential buyers, as well as reviving school systems and lowering crime.

"We proposed a 75 million shekel [$21,707,025] budget transfer to the project, which is for peripheral communities, and were answered with a veto," sources close to Ariel stated.