PM announces new housing plan

Prime Minister Benjamin Netanyahu held a press conference Tuesday and announced a series of measures meant to alleviate the affordable housing plight.

The affordable housing crisis, which mainly plagues central Israel, has prompted protesters to erect "tent cities" across Israel, including one right across from the Knesset in Jerusalem. The movement has called for a "rent revolution" and demanded both Netanyahu's resignation and that of Finance Minister Yuval Steinitz.

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Netanyahu's plan includes significant incentives for contractors who build smaller apartments, rent-earmarked housing and student housing, and aims to add 50,000 apartments to Israel's housing market over the next two years.

The plan will allow contractors and land developers to purchase land form the Israel Land Administration (ILA) at attractive prices – up to 50% cheaper – if they agree to build small apartments.

Contractors bidding on rent-earmarked housing projects would be obligated to rent out 50% of the apartments built for a period of no less than 10 years, at 30% of their current value; and will be allowed to sell the other 50% of apartments at a price they will set.

Contractors will be allowed to raise rent rates annually, in accordance with the Consumer Price Index.

The system aims to promote "housing integration" and prevent the formation of "rent-only zones," a source familiar with the details of the plan explained.

Contractors and land developers who will build student housing would be allotted the land for free, and will have to agree to government-supervised rent rates for 20 years.

'Israeli construction bureaucracy too complex'

Government sources said the plan does not require special legislation and can be implemented within a short period of time.

"I recognized this problem before I took office... and we have to deal with it. The best way to do that is to make sure there are more available, affordable housing," Netanyahu said.

"Housing prices in Israel are too expensive, and they're too expensive because there aren’t enough apartments. Building and marketing apartments in Israel in extremely complex – that's one of our major problems. It's a problem unique to us… Israeli construction bureaucracy isn’t just at the bottom of all other industrial states, it's on the bottom, period," he explained.

Netanyahu stressed that starting next week, the state will implement new measures – which he said were two years in the making – for marketing housing-earmarked land.

Instant solution? Netanyahu (Photo: Ofer Miron)

The plan calls for six newly-appointed national housing boards to authorize housing projects using a "bureaucracy-slim" process. The boards' mandate will be given for 18 months, after which it will be reviewed.

The prime minister also said the government will promote the construction of 10,000 housing units earmarked as student housing, nationwide. To further alleviate the students' specific housing problem, the government will also subsidize students' public transportation, allowing them to seek housing further away from universities. Netanyahu did not give a timeline for this part of the plan.

Netanyahu said the government will finish setting the plan in motion before the Knesset breaks for recess.

The prime minister hopes that the plan would put an end to the growing protest, which has thoroughly rattled his political position in general, and especially within the Likud.

Likud sources told Ynet that the growing social unrest has Netanyahu's party opponents  "smelling the blood," adding that for all intents and purposes the Likud's primaries race is underway.

The leaders of the affordable housing protest seemed unfazed by Netanyahu's plan, saying the outline offers only a partial solution: "We have to study the outline further, but from what we heard it's not a solution – it's an attempt to divide our camp. We won't back down."

'PM panicking'

Meanwhile, MKs Arieh Eldad National Union)and Zeev Elkin (Likud), who head the Knesset's Land of Israel Lobby, issued a statement urging Netanyahu "to add to his housing plan and life the political impediments preventing construction in Judea and Samaria, this enabling a solution for thousands of people, within the national consensus that includes Judea, Samaria and Jerusalem."

Opposition Chairwoman Tzipi Livni slammed Netanyahu's affordable housing plan, saying that he was "taking down tents, not building homes.

"He doesn't understand that the problem isn't technical, but fundamental. The middle class needs to be unburdened, and for that the national policy must be changed. Marginal solutions are not enough."

MK Yoel Hasson, chairman of the Kadima faction, added that "This is just another ad-hoc plan which will have little effect on the housing market. It only demonstrates that the prime minister is panicking over the growing protest. Once again, Netanyahu's financial polices have failed."

Kadima MK Yohanan Plesner panned the plan as "a hollow reform," while MK Nachman Shai said Netanyahu was "trying to pull rabbits out of his hat, but the public knows he has none."

The Labor Party also dismissed the plan as ineffective: The proposed plan "falls short of offering any real sustainable solutions to a core problem which has been festering for years," the party said in a statement.

Attila Somfalvi contributed to this report  

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