Yakov Litzman
Yakov Litzman Flash 90

Housing Minister Yaakov Litzman (UTJ) on Tuesday presented the Knesset's Finance Committee with a six-stage plan to accelerate the construction of additional homes, in the hopes that it will help Israel extricate itself from the economic crisis caused by coronavirus.

According to Israel Hayom, the plan includes offering grants to those purchasing second-hand apartments in areas distant from the country's center (termed 'periphery' in Israel) increasing the mortgage given to those eligible who are purchasing an apartment in the periphery, a five-year plan for infrastructure, transportation, and drainage, a plan for budgeting for classrooms as part of the implementation of general agreements, increasing the subsidies for development in towns in Israel's periphery, and increasing the workforce in construction industries by an additional 15,000 foreign workers and 15,000 Palestinian Authority Arabs.

The plan also includes differential marketing, which is expected to bring the State 3-4 billion shekels in profit, by dividing Israel into "luxury," "in demand," and "peripheral" areas and adjusting accordingly the way homes and lots are priced.

During the Committee meeting, Litzman emphasized that those able to purchase a 3 million shekel apartment "do not need a discount."

Israel Hayom quoted Zvi Wiener, CEO of the Megido group, who warned about increasing the mortgages: "We need to be careful when it comes to increasing the scope of the mortgages for those eligible, as a way of encouraging them to buy in the periphery."

"The situation in the job market right now is very unstable, and anyone who does not have the ability to repay may find himself in trouble and end up facing difficulties repaying [the mortgage], and will have to give up on the home. That's not a desirable situation, and certainly not one that the State wants to encourage."

For his part, Litzman said the plan is "great news for the periphery."

"I am sure it will succeed, with G-d's help. The maximum price for an apartment will be 700,000 NIS, tops. The discounts will be great, and they will be given in the Negev and Galilee, for first-time buyers only."

He also said that he intends to advance specific plans for the haredi and Arab communities, emphasizing that no sector will be left out.

Finance Committee Chairman MK Moshe Gafni (UTJ) said that "the issue of housing is critical for Israeli society in general, and it's not going to be easy."

"The issue of coronavirus is currently taking everyone's attention, and we pray it will be over soon, so your work is important in ensuring we are not left with empty hands afterwards, for the sake of all those many young couples who cannot purchase an apartment."

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