Only about three months ago, on the eve of the elections, Prime Minister Binyamin Netanyahu promised that he would immediately serve as chairman of the housing cabinet upon the formation of his new government.
what's happening today?
In order to solve the housing crisis, Netanyahu announced very recently that there are 300,000 apartments for 1.2 million residents, but this was stalled due to negotiations between the authorities and the budget department in the Treasury. According to him, when the government is formed, a housing cabinet will be established and he himself will head it, and the first decision that will be made According to him, there will be an order for the budget department to budget the infrastructure for the authorities in order to free those hundreds of thousands of stuck housing units. Sounds very simple. But there is one major problem: if you check the extent of the promises that Netanyahu made in previous terms in which he served as prime minister, starting with the infrastructure reform, the housing crisis And the suffocation of the bureaucracy - we will see that there is a huge gap between promises and reality.
Let's remind those with a short collective memory how at the height of the social protest in 2011, Netanyahu announced in front of the crowds of protesters: "We will lower housing prices."
In practice, since then housing prices have increased by over 100%.
More than that, from examining the OECD data, it appears that during Netanyahu's terms, prices jumped more than in all the Western countries combined.
The increase registered last year at a rate of 20% by the Lapid-Bennett government does not really contribute, except to the state treasury itself.
The biggest beneficiary of the price increase is the state, what is called "public money".
The Israel Land Authority (IRI) revenue threshold was broken for the second year in a row, with the volume of revenue in the last year recording a new record of 37 billion shekels, compared to 32 billion shekels in revenue from land marketing in 2021.
Just for the sake of comparison, in 2020 the scope of Rami's income from land valuation amounted to only NIS 12 billion. All this while the average wage in the economy rose for the first time only in December by only 0.1% and today stands at NIS 12,214 per month for a salaried position.
Why is real estate important
to the Israeli economy?
The severe crisis that has afflicted the construction industry in recent decades reveals the failures of the economy that are about to shock us all.
More than 1,200 contractors in the construction and infrastructure industry have reached economic collapse from the beginning of 2021 until today.
This is according to data presented by the CEO of BDI Corface, Eyal Yanai.
The housing crisis in Israel is one of the main influences on the Israeli economy and the economic, social and moral situation of the citizens of Israel.
Over 60,000 new households are added to Israel's population every year, an increase of 2.2% on average.
On the other hand, the construction of only about 50,000 new housing units is completed each year, so the shortage of apartments in the economy is now estimated at about 190,000 apartments.
Over the past 20 years, a long series of barriers have intensified, such as the slow marketing of state land for construction, a lack of professional personnel, bureaucracy, infrastructure and taxation barriers.
All of these cause the planning, licensing and implementation procedures to continue.
For example, the average wait of 30 months for a building permit.
The state fails to provide the scope of housing solutions required for its residents and the result of the governments conduct in recent years has resulted in a jump of over 250% in apartment prices since 2002.
All the attempts of the governments that served to solve the crisis, such as programs: target price, zero VAT, price per resident, discount apartment, imposing excess taxes on investors, changing the sales law and more - mainly focused on stopping demand, and therefore failed.
The contractors and construction companies are the producers of the apartments, public buildings and infrastructure for the Israeli economy and thus constitute the potential for solving the housing crisis.
In order to realize a solution to the ongoing crisis, an activity pattern must be adopted that nurtures the abilities of contractors and construction companies, in a way that will reduce the risks they take and improve their business environment, instead of attacking, criticizing and harming them.
Rami breaks a record -
buyers break savings
To straighten the generations, we have to admit that some good things were done after all.
For example, the Vatmal - that fast-track committee designed to give a boost to the construction plans;
the excellent housing cabinet headed by Avigdor Itzhaki;
The transformation of the Israel Land Administration into an authority and the transfer of tenants to apartment owners and more.
But everything is a little too much and too little.
The numbers now thrown into the air are also quite impressive, or as the chairman of the housing headquarters, attorney Shlomi Heizler, who was recently appointed director general of the Ministry of Finance, said, "loading the cartridge".
The Israel Land Authority reports a record year in residential land marketing, the second year in a row, when it published a record number of about 107,000 units for marketing in 2022, about 6% more than in 2021. About 46,000 of the residential land marketings were published For affordable housing, target price plans and discounted apartments for young people and the homeless, as well as long-term rental housing.
The planning director also reports an all-time record in planning, when in 2022 158,000 units were approved, about 50% more than in 2021, when 104,000 units were approved.
Of these housing units, over 77,000 housing units were approved as part of urban renewal - this figure is also a record figure.
But we have already discovered that actions are separate and realizations are separate.
What seemed rosy, finally stopped at the bottleneck of the bureaucracy.
As long as the issue is not addressed from the root, most of the marketing, and the blown records, will be abandoned on paper.
"The mother of all reforms"
how did it all start?
After all, we could have solved the bottleneck in the bureaucracy about a decade ago.
It all started in July 2009 with a "bombshell" thrown by Prime Minister Netanyahu who promised to carry out the "mother of all reforms" - a revolution in the real estate market that was nicknamed the "balcony reforms", the whole purpose of which was to shorten the amount of time required to obtain approvals for construction and development plans, starting with balconies and roads committee.
"There is no reason not to get approval for the planning of a building or a road within three to four months," said Prime Minister Netanyahu when we met a few years ago at the inauguration of Route 6 in the north.
Netanyahu added that "in the State of Israel, the process of buying an apartment is very complicated and difficult. It is difficult to build, it is difficult to buy, it is difficult to plan and even to renovate.
Go close the balcony here.
The first and simplest reform is to simplify the construction process and bring down apartment prices, cut the bureaucracy and free the citizens."
Netanyahu promised at the Caesarea forum: "Go close a balcony here. The most trivial but also the most difficult financial effort that every family in Israel makes is to buy an apartment. In the State of Israel this action is very, very difficult."
What came out of these readings?
About two months later, a committee of ministers met and approved Netanyahu's proposal.
At the same time, the government committed to submit within 3 months a bill for reform in the field of planning and construction, which will, among other things, reduce the number of planning courts from three to two and transfer many powers from the district planning and construction committees to the local committees.
One of the main sections of the reform concerned the rate of marketing land for construction, which was supposed to lower prices due to an increase in the supply of land.
And what actually happens?
Since then the time has shortened a bit and it took about two years to issue a building permit, even after an approved TBA!! The reform, to remind, spoke of only about two months to obtain a building permit. Today, by the way, the situation has worsened and the time period for issuing a building permit has been extended to three years.
And what happened since then?
In July 2010, a year after Prime Minister Netanyahu promised to make things easier for the citizens, Interior Minister Eli Yishai, who was supposed to lead the reform, sent a letter to Netanyahu and the director general of his office, Eyal Gabbay, in which he expressed disbelief in the reform's ability to realize the goals of speeding up the planning and construction procedures, And even warned that she might obstruct the proceedings.
The "sacred cow" of the state
January 1996: A few months after the polls predicted for Binyamin Netanyahu a defeat against Shimon Peres, Netanyahu stated that the Israel Land Administration is a monopolistic body that manages the state's land inefficiently, which contributes to raising housing prices and harming the weak and middle classes, according to him.
In the same breath, Netanyahu called for deep privatization in the administration.
In practice: from then until today, no one dared touch the administration and the state was content with reform alone.
17 years later, we continued to hear similar calls.
In March 2013, already in the first days after the establishment of the government of those days, Prime Minister Netanyahu promised to privatize Rami.
On the eve of the elections, he also promised to appoint Moshe Kahlon as chairman of Rami. This did not happen, nor was Kahlon appointed. Kahlon received the supervision and management of Rami two years later, under a different cover and a different party.
This is a repeating pattern.
No one wants to touch the country's "sacred cash cow".
After all, Rami boasts (and rightly so) of income from land marketing of approximately NIS 27 billion on average over the past three years.
If so, why would the state give up this money "pump"?
Free land for soldiers? No longer!
In January 2010, Netanyahu announced a reform to distribute free land to combat and reserve soldiers in active service, for private construction in the Negev and Galilee.
As part of the plan he presented, combat soldiers who served full service in combat units will be granted free land in an area of about a quarter of a dunam.
The value of the land at the time was estimated at about NIS 150,000.
In those days, a detailed list of settlements in the Negev and the Galilee that meet the criteria was presented.
The program was led by MK Gila Gamliel (Likud), Deputy Minister in the Prime Minister's Office.
In this case too, apart from headlines in the press, no discharged soldier, even non-combatant, has yet received free land.
The initiative was signed in a dispute concerning the scope of the lands that will participate in the program.
Maybe now we will see a change?
The "spreader of promises" on duty today is Defense Minister Yoav Galant who is promoting the plan to subsidize 90% of the cost of purchasing land in the Negev and the Galilee for discharged soldiers.
It is no longer about free land.
Until now, there was a similar benefit only for Druze veterans and Gallant is interested in extending it to all soldiers.
In 3 months it will be formulated and brought to the government for discussion.
And what happened since then?
In July 2010, a year after Prime Minister Netanyahu promised to make things easier for the citizens, Interior Minister Eli Yishai, who was supposed to lead the reform, sent a letter to Netanyahu and the director general of his office, Eyal Gabbay, in which he expressed disbelief in the reform's ability to realize the goals of speeding up the planning and construction procedures, And even warned that she might obstruct the proceedings.
The "sacred cow" of the state
January 1996: A few months after the polls predicted a defeat for Benjamin Netanyahu against Shimon Peres, Netanyahu stated that the Israel Land Administration is a monopolistic body that manages the state's land inefficiently, which contributes to raising housing prices and harming the weak and middle classes, according to him.
In the same breath, Netanyahu called for deep privatization in the administration.
In practice: from then until today, no one dared touch the administration and the state was content with reform alone.
17 years later, we continued to hear similar calls.
In March 2013, already in the first days after the establishment of the government of those days, Prime Minister Netanyahu promised to privatize Rami.
On the eve of the elections, he also promised to appoint Moshe Kahlon as RMI chairman. This did not happen, and neither did Kahlon's appointment.
He received the supervision and management of Rami as a window two years later, under a different cover and a different party. This is a repeat pattern.
No one wants to touch the country's "sacred cash cow".
After all, Rami boasts (and rightly so) in income from land marketing of about NIS 27 billion on average over the past three years. So, why would the state give up this money "pump"? Free land
for soldiers? Not anymore!
In January 2010, Netanyahu announced a reform to distribute free land to combat and reserve soldiers in active service, for private construction in the Negev and Galilee.
As part of the plan he presented, combat soldiers who served full service in combat units will be granted free land in an area of about a quarter of a dunam.
The value of the land at the time was estimated at about NIS 150,000.
In those days, a detailed list of settlements in the Negev and the Galilee that meet the criteria was presented.
The program was led by MK Gila Gamliel (Likud), Deputy Minister in the Prime Minister's Office.
In this case too, apart from headlines in the press, no discharged soldier, even non-combatant, has yet received free land.
The initiative was signed in a dispute concerning the scope of the lands that will participate in the program.
Maybe now we will see a change?
The "spreader of promises" on duty today is Defense Minister Yoav Galant who is promoting the plan to subsidize 90% of the cost of purchasing land in the Negev and the Galilee for discharged soldiers.
It is no longer about free land.
Until now, there was a similar benefit only for Druze veterans and Gallant is interested in extending it to all soldiers.
In 3 months it will be formulated and brought to the government for discussion.
were we wrong
We will fix it!
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