Minister Litzman's new plan: Price to the outside resident, grants to the periphery inside

• Cost to the resident in plowing. Separate from Kahlon's plan

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  Ofer Petersburg

Produced by the Department of Special Additives

It has been the most fateful week in the construction industry in the last five years, with the development of the alternative plan of the Minister of Construction and Housing, which eliminates the cost to the resident. At the same time, a plan was introduced in the government to encourage urban renewal in Israel, reducing objections from 80% today to 66%, with more than half of the apartments and half of the common space. 38 also refers to Minister 38, as will be presented below.

Minister Yaakov Litzman is promoting a plan for affordable housing while dividing the land by land value. In the central region, we may be witnessing the reimbursement of land subsidies at the highest possible cost. In the periphery, the state will subsidize disadvantaged areas with increased subsidies on development costs, grants and loans at near zero interest, even to attract the ultra-Orthodox public.

In fact, Minister Litzman talks about changes in the marketing method, deepening the development subsidy in the periphery and assisting those in the periphery through mortgages and grants.

"The goal is to make it easier for young homeless couples to purchase an apartment, while minimizing land discounts provided in demand areas, increasing state revenue from marketing, and redirecting resources to Israel's geographical and social periphery," Litzman presented his plan to Finance Minister Israel Katz.

"Housing at hand"

Instead of a price per dwelling, similar tenders will be published in the format of "housing at hand", with changes mainly aimed at increasing competitiveness and maximizing land revenue in demand areas. The revenue increase will be used to accelerate peripheral marketing through deepening development subsidies. In other words, back to the days of administrative tenders where all the highest prices won in the demand areas, and prices took off to new highs.

At the center of the program are grants for the purchase of new apartments and second hand, in order to enable young couples to purchase cheap apartments on the periphery. The grant is 70 NIS 110,000. Contrary to the lottery price per lot, this is a direct help to the buyers, with the goal of helping young couples who want to live in peripheral communities.

"This means widening the gaps between the center and the periphery. The poor will be left with no choice for the periphery, while the middle class will subsidize them along with the housing enhancers and real estate investors," warns Ohad Danos, chairman of the former Real Estate Appraiser Bureau. The main problem is that housing tenders in the periphery are already failing.

As for the center of the country, it is a tax policy that encourages construction on the periphery and on the other hand restrains investor demand in the center of the country.

"A reduced tax return on home buyers for investment in the center of the country will be a significant barrier to restraining housing prices and will lead to a significant surge in demand, which will cause price rises in demand areas, a result that is undesirable," Litzman writes.

What about the revival?

In the proposal that Litzman is promoting at the same time, he is determined to reinvigorate the area of ​​urban renewal. This is done by providing positive incentives for entrepreneurs in the form of a reduced improvement levy of only 25% of the improvement, with an option for the authorities to fully exempt or charge a 50% levy, according to a municipal distribution of content in a timely manner.

"This is a matter of setting a minimum coefficient of coefficient with an improved improvement levy of 66%, in the case of an exception," explains Ohad Danos. "Establishing uniform appraisal rules for calculating the improvement levy will strengthen project economic certainty and allow the allocation tables to be skipped at the approval of the plans, provided that all rights holders are in full agreement."

Litzman proposes to reduce the absolute majority needed for evacuation-construction projects from 80% today to 66%, with the program promoters holding at least half of the apartments and half of the common space in each group of apartments in the plan.

Litzman's decision proposal is trying to promote changes in several procedural issues that have created delays in the implementation of programs, such as the expiration of the eviction-construction complex.

Litzman does not stop these changes, and also asks for tax exemption on two apartments belonging to the same owners in the plan, and if the apartments are state-owned, then all, without a numerical limit.

The place of the late TAMA 38 is also absent, and in its place the proposal seeks to allow a local or provincial committee to approve a demolition and rebuilding plan for a single building comprising up to 350% of the approved construction area.

It will also be possible to add commercial, employment and public zoning (up to 15% of the total building area approved in the plan). A decision on granting a building permit will be considered as a decision to approve a plan, subject to certain conditions to be determined by the Minister of the Interior in the regulations.

Later, Minister Litzman wants to allow him to sign framework agreements (roof agreements) with local authorities. The minister does not specify the amounts that the state will pledge in these agreements, but only in the scope of construction - at least 4,000 housing units at a rate not less than 800 per year.

In conclusion, Litzman recommends a monthly follow-up forum for large urban regeneration programs, where members of the municipal renewal authority will be members.

Produced by the Department of Special Additives