The Bottom Line / The almost landlord
The time has come for land to be 100-percent privately held, just like any other asset. The time for ecclesiastical leasing has ended. It is time for a landlord.
Within the next few days, the people of Israel will be informed about an agrarian revolution. Six months ago, Industry and Trade Minister Ehud Olmert, who also chairs the Israle Lands Administration, appointed Yaakov Gadish to head a committee slated to "examine ways to decrease and reduce friction between the citizen and the ILA".
Ninety-three percent of land in Israel is managed by the ILA. Anyone who buys an apartment on ILA land has to pay an annual leasing fee to the ILA. If he wants to sell the plot or expand it, he has to go through the seven rings of ILA hell, get worn down by the wheels of bureaucracy and find players who know how to "convince" their royal highnesses, the clerks; and finally, of course, pay too much for the basic right to a home.
The ILA controls the land supply. It decides what land will be sold and how much farm land can be rezoned. It may send appraisers and hold tenders, but it basically decides the price of the land with the help of its control of supply. The ILA is an anachronistic entity that believes in central planning. Its control of land leads to low activity in the sector and raises apartment prices. It is also the central cause of the recession in the renovations market, due to the need for expensive permits.
In the last days of his life (Gadish died on Saturday), he continued to hold meetings and work on reforming the ILA. The committee's recommendations (yet to be published) say that owners of apartments in high-rise construction or homes on up to half a dunam of land can capitalize 99 percent of their leasing fees and receive the land for 196 years.
From that day forth, the citizen will be (almost) the owner the land. He will not need the ILA when he wants to expand his apartment or sell it to another citizen. But if he wants to sell the land to a foreigner, he will need an ILA permit.
Most members of the committee feared that "foreigners" (Saudis or Palestinians) would take over state land, so they didn't agree to a 100 percent sale, just 99 percent. But that fear is baseless. There are already 20 percent Arabs in our midst and they will be entitled to buy everything, with no limitations. Secondly, if rich Saudis want to buy land here, let them. Let them bring their billions here to help the economy. The state can always, using its plethora of laws, prevent improper use of the land and even nationalize it any time it wants. Israel already has 7 percent privately-owned land in the central region. Did you ever hear of a rich Saudi taking it over?
The time has come for land to be 100-percent privately held, just like any other asset. The time for ecclesiastical leasing has ended. It is time for a landlord. A modern economy works on private property and freedom of action, necessary conditions for development, growth and reducing unemployment.