What are the chances of Kahlon being Kahlon?
Can the finance minister in Netanyahu's fourth term solve the housing crises, left over by Netanyahu's second and third administrations? Calcalist publisher Yoel Esteron speaks at the Calcalist Real Estate and Infrastructure 2015 conference
I would like to congratulate Moshe Kahlon for his achievements so far on his road to becoming minister of finance. Hopefully he is better prepared for the job than his predecessor, and I may assume that he is in light of his insistence on having a proper tool kit to deal with the housing crises. Good news indeed.
I would have said that there is a smell of optimism in the air, had I not remembered all too vividly the same feeling from two years ago, when we all hoped that the new administration then, with is spanking new minister of finance, would storm the housing crises and squash it into oblivion. We hoped supply would grow, demand would diminish and barriers would be removed.
Two years later, and we're still stuck in the same housing rut. So why should we believe that Netanyahu's current administration can accomplish what it failed to do in his previous terms?
Why should we believe that Kahlon will be, well, Kahlon?
Netanyahu might have been the first to home-in on the Iranian nuclear threat, but he was last to acknowledge the housing crunch. It doesn’t take a rocket scientist to realize that this crisis started brewing five or six years ago. One could say that the writing was on the walls that should have been – but weren't – built. It was splashed all over the headlines of the business papers.
Already at the Calcalist Real Estate 2010 we warned about the government's neglect and indifference, reducing young couples' dream to buy a house in central locations to a faraway fantasy. Already then, Calcalist published a series of eye-opening articles in which young couples painfully spoke about their lack of prospects for acquiring a house at a reasonable price.
In 2011, once again, we turned the spotlight on to the plight of Israel's middle class and issued an uncompromising demand to the government. This was during Netanyahu's second term, but who's counting? And once again, the government kept its eyes wide shut.
We pleaded, we cautioned, we demanded. So what? The government stuck to its guns and we made no change. Populist politicians sent young people to live in the peripheries, calling those who insisted on finding a house in high-demand areas "spoiled". How spoiled is wishing to live where one grew up, close to one's family and job opportunities?
One may assume that the government's indifference stems – at least partially – from political or ideological motives aiming to direct more Israelis toward the cheaper real estate in the territories. But alas, people did not relocate en-mass to Judea and Samaria and prices in high-demand areas soared even higher.
It appears we failed. And by "We" I mean not only Calcalist and the media as a whole, but also the great social protest that broke out in 2011, that failed to affect any real change and to get Netanyahu's second – and third – administration to so much as budge.
Since then, the streets and city squares have grown silent but the housing crises continues to balloon. Moreover, the increase in prices is steeper than the increase of supply. Yuval Steinitz is gone, Ariel Atias retired, Yair Lapid has been ousted and Uri Ariel is still waltzing through the hills of Judea and Samaria. As for us, we're still here, stuck in the same rut.
So along with congrats to the brand-new Finance Minister-cum-Head of the Planning Administration, and the pat on the shoulder from Netanyahu, come two footnotes: first, our claims from the past years are still valid. The housing crisis in high-demand areas must be solved – in those areas.
With all due respect to the peripheries, let us avoid decisions reminiscent of notorious ruling 3943 from 2008m, which called for the cessation of real estate development in the center of Israel and the shift thereof to the peripheries. The housing problem in the center of the country will not be resolved neither by rhetoric about the importance of the peripheries nor through underhanded funding of construction in Judea and Samaria.
The second footnote is rather a reminder that those who tried to squash demand – failed and those who attempt to address demand alone – will fail. Forgive me for stating the obvious – supply, supply and again – supply! We said it before and have no choice but to say it again.
Netanyahu's fourth government is narrow and uptight. Squeezed between the Bayit Yehudi party and the ultra-Orthodox, it isn't even committing to reach a peace accord with the Palestinians, and it's hard to believe that it would break us out of our international seclusion. It would be comforting to know that it would, at the very least, solve the housing crises. But, with all due respect to the laden minister of finance, at this juncture doubt outweighs hope.
What are the chances of Kahlon being Kahlon? Reading the small print in his big plane reveal huge inconsistencies: a mortgage payoff plane depends on significant price reductions by the Israel Land Authority which is no mean feat. Shattering the Authority's monopoly? That would take nothing short of a miracle, so good luck with that. Yair Lapid's rental housing-solution? So far it's experiencing more fits than starts.
And the greatest barrier yet: the complex legislation needed to tackle the housing issue. We all see how Netanyahu's sour-faced coalition is stumbling out of the gates, and it's evident that the contentious opposition will put its weight into stymieing each and every step this administration makes.
The sad conclusion is that thus far, evidence indicates that Netanyahu's fourth term achievements will be the same of terms two and three – Nada. A whole lot of nothing wrapped in vapid rhetoric and empty promises.
Yoel Esteron is the publisher of the Calcalist business daily.
