Trajtenberg panel: Public paid NIS 330b due to housing failures
The committee, tasked with drafting a plan to lower the cost of living, calculated this based on average home prices in 1987, before the major wave of immigration from the Soviet Union began.
The government's shortcomings in handling land for construction and the country's real estate market cost citizens a total of NIS 330 billion over the past 20 years, the Trajtenberg committee stated in its report.
The committee, tasked with drafting a plan to lower the cost of living, calculated this based on average home prices in 1987, before the major wave of immigration from the Soviet Union began. Prices were in equilibrium at this point, the committee determined.
"If the state wanted to preserve the balance between rents paid to landowners, the cost of construction and builders' profits, then the price of homes - which is the sum of these three factors - needed to keep pace with the building input index," the report states. Yet between 1987 and 2010, the index increased 430%, while home prices increased 730%.
The committee extrapolated based on the number of new households created every year between 1990 and 2010, multiplied by the extent to which home prices increased more than the building input index, and reached the figure NIS 330 billion - the sum the public paid for the government's shortcomings, it said.
While not every new household necessarily bought a home, others bore the costs of increased housing prices in other ways, making this figure an accurate estimate, it stated.