Yesterday (Tuesday), on the eve of Remembrance Day, according to the publications, the three most influential ministers in the real estate industry in Israel met in a secret meeting: the Minister of Finance, Avigdor Lieberman, the Minister of Construction and Housing, Zeev Elkin and the Minister of the Interior, Ayelet Shaked. The meeting revolved around the current housing crisis.
The existence of the meeting is confirmed both by the spokeswoman for the Ministry of Construction and Housing and by Minister Elkin himself – but it is emphasized: these are leaks from people who were not present at all at the triple meeting, and therefore, it is claimed, most are incorrect.
The focus – especially on the next lotteries?
According to the publications, the new plan ostensibly includes increasing the number of localities that will participate in the various lotteries, and increasing the rate of apartments designated for those eligible for the various lotteries, a rate that currently stands at 60%. It should be noted in this context that in these projects many developers significantly increase the price of 40% of the apartments that can be sold on the free market, in order to compensate themselves for the loss in the sale of the apartments at a discount. And raising the rate of apartments for those eligible may put them in trouble.
The introduction of more expensive apartments than those currently included in the lotteries, and the increase in the proportion of locals, is also being considered according to the publications.
Another issue mentioned, and also included in Elkin’s law memorandum, is the tightening of treatment of contractors who will be late in handing over apartments: the memorandum published yesterday talks about refinement that will allow contractors to evade compensation only in specific cases. With the contractors who are late in these projects as well.
The three also discussed the idea of issuing bonds that would be linked to rising housing prices (at the national rate), as well as various incentives for municipalities – including an infrastructure development fund – to make the issue of housing more profitable and worthwhile for them. The housing plan formulated by the three in the near future.We will mention again that the sensitive political situation may well adversely affect the chances of the plan being approved in the foreseeable future.
A long list of ideas: from the first housing plan – to Elkin’s memorandum
Since the new government was formed, one way or another, several housing plans have been published to combat the housing crisis. The first was perhaps the most comprehensive of them all so far: the housing plan was officially released in October 2021, and included targets like 280,000 construction starts. Planning of 500,000 new housing units and more.
Shortly afterwards, Minister Elkin published the “Target Price Plan 2.1”, which later became a discounted apartment plan, with 30,000 housing units in the lotteries, the first of which was launched in the first lottery round towards the end of March.
Then came two lines from Lieberman: one – a housing plan that included, among other things, limiting land prices in state tenders, requiring developers to complete construction on the land they won in a tender within three years, and a fourth apartment tax. This plan has not yet become an official document, and over time it has gained various additions, mainly through publications in the various media. The second came in March 2022, when the Ministerial Committee on Legislative Affairs was presented with a reform of Minister Lieberman’s in real estate taxation, which included seven different steps.
A few days ago, as mentioned, Minister Elkin’s memorandum was published to amend the Sale (Dwellings) Law, which included three main sections: linking the price of a new apartment to the construction input index in terms of construction cost only, refining the definition of delay in delivery of a new apartment by contractors. The contractor’s attorney’s fee.