The Shekel Drops / A Reform Goes Up in a Puff of Smokescreen

What is left of Netanyahu’s promise to reform the building permit process? Not much.

Just before Passover, Prime Minister Benjamin Netanyahu yanked his bill popularly known as the "balconies reform." It was an important proposal that he'd been working on for some time. Its aim was to simplify and shorten the process of obtaining building permits and construction so contractors could hurry up and build housing, thereby lowering housing prices.

Netanyahu vowed to use the Passover break to finish the job, but if anything's been finished, it's apparently his reform. That's because before Passover, Shas and Yisrael Beiteinu clashed. Shas hated the idea of means testing as a criterion for government subsidies for housing. Yisrael Beiteinu fought for the idea.

Families with a least one breadwinner and another member working a quarter-time job would have had an advantage over families with no breadwinner. Shas, being a Haredi party, opposed the concept because of the many Haredi families in which the husband does not work. Yisrael Beiteinu on the other hand cares about middle-class families who work and pay taxes but can't afford to buy a home.

Since Netanyahu didn't want to cross either of his allies, he simply gave up his precious reform before the Passover break, when he would have time to think of another solution. But none emerged.

The issue at stake, though, is hugely important. Affordable housing is the heart of the "social justice" protests.When it turns out that Haredi families are getting most of the 5,000 homes the government has decided to build, the protests are likely to flare up anew, which is bad for Netanyahu.

Meanwhile Shas has prevailed. The Israel Lands Administration accepted the recommendations of Housing Minister Ariel Atias, a key member of Shas. His criteria give a clear advantage to Haredim and "means testing" isn't even mentioned.

On Tuesday, Harel Locker, director-general of the Prime Minister's Office, achieved a compromise with Fania Kirshenbaum of Yisrael Beiteinu, but it's a smokescreen. Yisrael Beiteinu agreed (in writing ) to support the reform in exchange for Locker's agreement (in writing ) to have the cabinet discuss eligibility criteria for subsidized housing. Yisrael Beiteinu ostensibly got its wish: a cabinet debate and a vote on means testing too.

Yisrael Beiteinu head Avigdor Lieberman knows he can't win that vote because the Likud will vote with Shas. He also knows his public stance will bring him more votes from the middle class.

Shas accepted the cabinet debate and vote but told Netanyahu that if means testing is among the eligibility criteria, it would quit the government. Clearly, then, Netanyahu will vote with Shas.

And that, dear reader, is exactly why the whole thing is about to go up in a puff of smokescreen.

Netanyahu won't want to side with Shas against the middle class, which would hurt him personally and damage the Likud. Nor does he want to hand a victory to Lieberman, who will claim he wanted the means testing in the criteria but the treacherous Likud ministers allied with Shas and abandoned the middle class to its fate. The reform is dead and buried, which is bad for the economy and bad for housing prices.