Netanyahu´s cabinet accepts reforms for Israel housing crisis (HA´ARETZ NEWS) By Ranit Nahum-Halevy and Moti Bassok 03/19/12)
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Prime Minister Benjamin Netanyahu´s cabinet accepted Sunday the
central recommendations proposed by the Trajtenberg committee, in
order to ease the country’s housing crunch.
Netanyahu spoke during his weekly cabinet meeting and said that
accepting the recommendations will “lower the cost of living” and
will allow the government to “deal with housing prices.” Netanyahu
further said that the effort to combat rising prices would be backed
up by “a series of steps, some of which would have far-reaching
consequences, to increase the supply of housing.”
Some of the recommendations proposed by the Trajtenberg committee
include sanctions against developers that delay construction, higher
municipal taxes on unoccupied homes and measures to increase the
housing supply in minority communities.
Netanyahu further emphasized that this is the fourth time that the
government has accepted a part of the Trajtenberg committee’s report,
which he claimed has led to “tax exemptions of thousands of shekels
for working parents” and the “precedent-setting decision” to provide
free education for children as young as three-years-old.
“This is a government that acts. It is a government that does a lot…
We are setting a worldwide agenda that deals with issues of Israel’s
security. We are properly taking care of our economy and
The Trajtenberg committee, led by Prof. Manuel Trajtenberg, was
charged with finding ways to reduce Israel´s high cost of living,
especially for the middle class. The panel´s recommendations
regarding housing, a focus of last summer´s social protests, were to
have been submitted to the cabinet months ago but were delayed by
disputes between government ministries and coalition members.
They include punishing real estate developers that delay approved
residential projects. The measure, which was proposed by Prime
Minister Benjamin Netanyahu and Finance Minister Yuval Steinitz,
would fine foot-dragging developers by up to 10% of the home´s
eventual selling price.
In explaining the need for this clause, the draft states that
developers hold a significant amount of land in desirable areas, but
are not necessarily building due to considerations that include
maximizing profit. The sanction would encourage them to build and
increase the supply of homes, it states.
A handful of companies hold land worth billions of shekels. These are
primarily companies that used to be owned by the state or the
Histadrut labor federation and include Africa Israel, Azorim and
Shikun & Binui as well as private firms such as Ashdar and Y.H.
Damari that for decades have been sitting on land for tens of
thousands of homes.
Another provision would greatly increase municipal property taxes
(arnona ) on unoccupied homes. There are a reported 46,850 homes
without occupants around the country, mainly in Tel Aviv (4,746),
Haifa (3,445) and Jerusalem (3,429). The problem is usually
associated with apartments purchased as vacation homes, and in
addition to raising rents by effectively reducing the available
housing supply it also turns some neighborhoods into ghost towns,
according to the draft law. The hope is that jacking up municipal tax
rates on empty homes will encourage their owners to rent them out.
The proposal also calls for encouraging construction, particularly of
high-density apartment buildings, in the Arab, Druze and Circassian
communities that are home to 1.5 million Israelis, about 20% of the
country´s population. The government would allocate funds to
facilitate planning and infrastructure for these communities.
These communities need 12,000 to 13,000 new homes a year, and to the
extent that demand is met, it is through individual construction of
single-family homes, at a pace of about 6,000 to 7,000 a year, the
The draft also calls for speeding up home development and sales, and
increasing government housing assistance. This would include an extra
NIS 160 million a year in rental assistance between 2012 and 2016;
another NIS 160 million a year for building old-age homes; money to
help new immigrants and the disabled buy or rent homes; and money to
assist single parents.
Part of the dispute between coalition partners had related to setting
criteria for government housing assistance.
Yisrael Beiteinu had demanded the reform use the original criteria
recommended by the Trajtenberg committee, that couples need to work
125% - meaning, both partners would need to work at least part time -
in order to be eligible. But the criterion sets 100% employment as
the criteria, in keeping with pressure from Shas.
However, Yisrael Beiteinu is expected to support the reform because
it now calls for allocating NIS 1 billion to assist new immigrants
and the elderly. (© Copyright 2012 Ha´aretz 03/19/12)
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