[:he]Instead of addressing the root of the problem and acting aggressively to increase the supply of apartments, the state continues to take specific steps in an attempt to reduce demand, and along the way harms young housing seekers and the investing public. How do you solve the housing crisis? It’s time for a national emergency plan. Yair Levy lays out the main points of a national emergency plan that will save the housing market in Israel Housing prices in Israel continue to soar year after year, and as we learned in an introductory economics class, the explanation for this is quite simple – when demand is higher than supply, the price goes up . Instead of thoroughly dealing with the supply of apartments, Israeli governments in the last decade insist on focusing on plans to reduce demand: tightening the conditions for obtaining mortgages, a tax on a third apartment, and more. This is a big mistake! When the demand is real, it must be met with supply, reality shows that any other solution will only work in the short term. Only a comprehensive solution in the form of a national emergency plan to drastically increase the supply of apartments will solve the crisis we have found ourselves in. Natural and legitimate demand that should be encouraged The demand for residential apartments in Israel stems from three main sources: natural population growth, low interest rates, and the nature of the State of Israel as a haven for all the Jews of the world. Happily, Israel is a country that enjoys a high percentage of natural growth and a young and multiplying population, and if we add to this welcome trends such as positive immigration and waves of immigration, then naturally the demand for housing in Israel is growing as a “basic consumer product” and not a treat or a luxury. The fact that Israel is a place of safety for the Jews of the world creates additional demands from foreign residents who are looking for emotional and financial security in the country, and to all of these must be added demands that arise from financial considerations– in a world where interest is zero the only way to maintain the value of money over time is to invest in yielding properties and residential real estate the main one. Investing in a residential apartment today is likened to investing in a provident fund 20 years ago, and a legitimate way to maintain financial security. It is appropriate for a country to actually encourage its citizens in this direction. A country that surrenders to its own bureaucracy and prevents an increase in the housing supply Let’s go back to the economics lesson for a moment: the main way to deal with excess demand is to increase the supply. The supply of apartments in Israel is not sufficient – there is a great shortage of plots available for immediate construction, obtaining approvals for construction plans takes years, and anyone who wishes to do so can file an objection and delay construction plans without any problem. The result is that the stock of new apartments does not keep up with the growth of the population. At first it was about the center of the country, but today it is clear that even the young people who “return home” to settlements in the north and south have difficulty finding suitable housing. Only a drastic reduction in bureaucratic procedures and encouragement of new construction on a large scale will bring the housing market back to a state of balance. So what do we do? Announcement of a national emergency plan Under the conditions created in the economy, only a national emergency plan that will increase the supply of apartments in Israel will lead to the revival of the housing market and ensure the ability of the younger generation to build a home in Israel. At the heart of the plan, the announcement of emergency regulations for all planning and construction processes for a period of at least 5 years. 1. Shortening the processes of thawing the land and flooding the economy with land available for immediate construction. 2. Shortening the licensing processes and recruiting the private sector wherever possible. For example: to abolish the monopoly of the local authorities on approval of the construction of buildings, and to introduce additional players such as private, experienced and veteran offices into the game, which will shorten the bureaucratic procedure. 3. Implementing all the possible simplifications in advance in existing city building plans, and removing the authority of local committees to discuss requests from developers for additional changes, since any request for an exception only delays the start of construction and opens an opening for corruption 4. Establishing a special court for real estate matters with extensive powers that will discuss and approve District or local programs in a quick procedure, and will coordinate all handling of real estate issues in the State of Israel. 5. Charging a financial guarantee to anyone who submits an objection to construction plans in order to avoid situations in which individuals or groups delay a plan to build thousands of housing units, due to individual and illogical problems such as problems of light and shadow. And even objections stemming from green lung conservation — can we really afford it now? On this side, a transformation must be made in the mortgage market, to make the conditions for obtaining a mortgage possible while minimizing the risk of the financial entities:
- Separate the purchase of the land from the purchase of the building
- Introduce institutional entities into the game, for example: that the state sell the land to the insurance companies and they will undertake to sell the land to those entitled, spread over 30 years.
So instead of going round and round, blaming the investors, punishing the citizens and dealing with a situation where more and more families in Israel are having difficulty financing housing for themselves, The state should stop submitting to the bureaucracy it itself created and concentrate its efforts on a real solution. It is possible.[:]
