Rising housing prices have forced the state to offer even more exorbitant benefits under a plan “Discounted apartment“: Israel Lands Council Today (Tuesday) passed a series of decisions regarding the program, which change the conditions that were introduced in it in its first months. Bottom line: the maximum discount per apartment will be greater, and the rate of apartments to be allocated to those eligible in each lottery will be higher.
According to the decision, which offers an “updated outline for target price tenders” (most of the tenders will now be offered as part of the “discounted apartment” program of the Ministry of Construction and Housing), the discount ceiling in tenders will increase from NIS 300,000 to today, to NIS 500,000 from now on. It was also determined that 80% of the apartments in the tenders will be allocated to eligible homeless people, compared to 60% so far – and that the determining date for the value of a square meter per apartment will remain as it was on December 30, 2020. This decision has a significant impact on future winners.
The Israel Lands Council also decided in this context that in Priority Area B, the rate of housing units to be allocated to locals will increase to 40% of all dwellings; The council also approved the change of definition of local and local, in the northern and southern regions only, so that those will be defined as those who have lived there for at least 18 months before the date of publication of the tender (compared to three years in other regions).
Quint to the Treasury: “There is nothing and half a thing for fear of a deficit”
Another decision made by the council provokes a real dispute between the director of the Israel Land Authority, Yankee Quint, and the finance officials. This is a decision that should encourage authorities to implement housing plans, by increasing the development expenses that will be paid to them. According to the decision made by the council today, each authority will receive an additional NIS 30,000 for each housing unit that will advance in the program in its area, in addition to development expenses for the establishment of public institutions in the project. Half of the amount will be given when the land is marketed, and half when the building permits are issued. A local authority where the value of the land per housing unit exceeds NIS 2 million as of May 2022, will not be eligible for the supplement.
Yanki Quint, CEO of Rami / Photo: Yossi Zamir
The Ministry of Finance has already announced that it opposes the decision, which could slow down the move or at least delay it. The position document of the ministry that reached Globes states that “the cost of the proposal is about one and a half billion shekels a year, and it may even increase depending on the increase in marketing goals, a cost that would have led RMI, almost every year in recent years, to an annual deficit. To bring about a reliance on the state budget on the state budget.
“This is a disproportionate budget increase that constitutes an increase of between 150 percent and 600 percent compared to the budget given today, and indicates that this is a non-professional-based addition. The proposal adds budgeting to public institutions without any correspondence with needs, .
In a response letter to these remarks, the director of Rami wrote that “in all the last few years, Rami has presented a surplus of expenditure over expenditure of more than NIS 4 billion. Marketing so that the volume of revenue will not necessarily be harmed.
“Regarding your claim, according to the decision, a budget source and registration in the state budget is required – the development funds are managed as a closed financial economy, and since this is an expenditure contingent on income, naturally it can not actually lead to an annual deficit.” “In this form of operation, certainly in times of crisis, the activities of Rami and the Ministry of Construction and Housing may be paralyzed and will severely hamper the government’s efforts to deal with the housing crisis.”
Amendment 9 to the Sale Law will be implemented in practice in RMI tenders
Another important decision made at the council meeting today, which may also cause resentment – especially from developers – is the decision that “a payment made by a buyer of an apartment on state land will not be linked to any index and no interest will be added, except for linking the construction component to the construction input index. With the contractor for its purchase until the last payment date. ” The decision is a practical application in the state tenders of one of the sections in question in Amendment 9 of the Sale (Dwellings) Law, which is currently in legislative proceedings, after being approved in the first reading in the Knesset last week.
The Minister of Construction and Housing and Chairman of the Israel Land Council, Zeev Elkin: “Today we passed some dramatic decisions that could save apartment buyers hundreds of thousands of shekels. I would like to thank Finance Minister Avigdor Lieberman for the fruitful cooperation, Linki Quint, Director of the Israel Land Authority, and Finance Ministry Director General Aviad Friedman, who worked day and night to find the right and agreed solution for the benefit of home buyers in Israel. “
Aviad Friedman, Director General of the Ministry of Construction and Housing: “The decisions approved today by the council are significant and have a great impact on the public. All the steps together are significant steps in order to address the rising demand and market balance. I believe that we will soon see the beginning of a change. “