The treasury plan in the field of housing: fascinating, if it actually comes to fruition - voila! Real estate

The Ministry of Finance distributed today (Wednesday) for public comments the draft of the economic plan that will be approved together with the state budget for the years 2023 and 2024, in preparation for the approval of the budget and the economic plan in the government next week.

This is a comprehensive plan, which touches all parts of the economy and focuses on six main goals, the first of which is, of course, "acceleration of national infrastructure projects in the field of transportation and energy", or in other words, we will break the traffic jams, and also - "treatment of the housing market", which according to experience can Easily become another slogan, or false hopes of a new finance minister, and the former prime minister, Yair Lapid, can testify to that.

The additional goals that the Treasury has set for itself are: increasing competition and reducing centralization in the economy, strengthening human capital and technological leadership, reducing bureaucracy and regulation for the business sector and citizens, streamlining the public sector and fighting black capital.

The finance plan in the field of housing: fascinating, if it actually comes to fruition (Photo: ShutterStock)

The plan in the field of housing, according to the published Ministry of Finance draft, is intended to streamline and shorten the planning and licensing processes, maintain the pace of construction starts, maintain the long-term rental market and create positive incentives for the local government to prioritize housing projects.

Among other things, the plan includes the National Infrastructures Law, which is designed to remove bureaucratic and regulatory barriers that make it difficult to establish infrastructure projects and to shorten the timelines for establishing infrastructure projects in the fields of transportation, electricity, renewable energies, and more.

Shortening schedules and reducing road congestion (Photo: ShutterStock)

National Infrastructures Law - to shorten project schedules and reduce road congestion

According to the plan, the duration of time to establish infrastructure in Israel is long compared to the rest of the world and leads to significant economic damage and harm to the public.

The purpose of the National Infrastructures Law is to remove the bureaucratic and regulatory barriers that make it difficult to establish infrastructure projects, with the aim of shortening the timetables and thereby reducing road congestion, guaranteeing electricity supply, promoting renewable energy projects and many other infrastructure projects.

Furthermore, in the area of ​​transportation, the Ministry of Finance plans to establish metropolitan authorities that will operate public transportation, a model inspired by the OECD countries.

According to the model, the authority will lead strategic planning, operate public transportation and implement required infrastructure, will be connected to the needs of the residents, but will maintain a holistic view of transportation in the area.

The partnership of the government and the local government in solving the housing crisis

The finance plan states that the property tax structure is a major cause of the housing crisis and the rise in housing prices.

The gap between the residential property tax rate and the business property tax rate makes it difficult for the government and the local government to increase the supply of housing according to the needs of the economy and widens economic gaps between local authorities.

In order to significantly increase the housing supply, the Treasury proposes to establish a housing incentive fund headed by a representative of the local government.

This model was also inspired by the OECD countries.

According to the plan, the fund will allocate regular annual grants to the authorities for each building permit issued by the authorities in a way that will allow them to improve municipal services for residents.

The measure is intended to significantly increase the incentives of the local authorities to increase the supply of housing in their area, as well as to help reduce economic disparities between local authorities.

Reform of the district committees for planning and construction

Today, the plan states, a significant portion of the housing plans promoted by the district committees include a marginal amount of housing units.

Thus, according to the example given, in 2022 about 70% of the residential plans approved by the district committees included less than 30 units, resulting in only 2% of the units approved by the district committees.

In order to focus the activity of the district committees that will deal only with significant programs, the plan proposes to decentralize the planning authority to the local committees for programs with a limited scope of units without conditions, while strengthening supervision and control.

Reforming the rental market - and encouraging long-term rentals

The program offers a broad reform to improve the rental product and strengthen the rental market in Israel.

Accordingly, a number of steps will be promoted with the aim of strengthening the status of the rental as an alternative product of equal value to the product of the apartment for purchase, and primarily through the strengthening of long-term rentals, and the determination of a planning designation for rentals, so that the long-term rental product will be strengthened and the promotion of rent-oriented complexes that include the expansion of building rights, optimal density and utilization will be possible Efficient use of public spaces and shared spaces.

In addition, the program proposes, in partnership with the Ministry of Justice, the establishment of a team in the field of condominium management that will focus on reducing the costs of managing the condominium, ensuring the functioning of systems, examining the entities involved in the operation and management of condominiums, and more.

Smotrich: "I am a big believer in the Israeli economy" (Photo: Avi Rokah)

Furthermore, the economic plan talks about housing, about the promotion of urban renewal procedures and the correction of distortions in real estate taxation, while encouraging the continued decline of prices in the housing market.

, says that "the steps we are presenting will allow for the simplification of regulation, the removal of barriers and the weakening of monopolies, and all of these will translate into an easing of the burden of the cost of living for the citizens of Israel. I would like to thank each and every one of the professionals in the Ministry of Finance who worked around the clock to prepare the reforms God. I'm a big believer in the Israeli economy and today, with God's help, we're taking another step in the right direction."

: "The economic plan that we are publishing today and will be submitted for approval by the government next week is intended to advance the main policy goal of the Ministry of Finance - to raise the standard of living of the citizens of Israel. The plan includes a long series of structural measures that will contribute to the growth of the economy and help to strengthen the foundations of the Israeli economy"

• Real estate

Tags

• real estate