The war of the middle class / The real way to reduce housing prices
The housing problem is real. Apartment prices have increased by dozens of percentage points since 2008 to record highs. The rise is highest in Tel Aviv: 64%. But the young people on Rothschild are looking for answers in the wrong place.
Today, 10 days after the protest began, it's clear that the tents on Rothschild Boulevard will be with us for many more months, at least until the rains begin. This is because the demands are huge, the hope is enormous and the authorities can't meet them all.
But make no mistake: This isn't a social event or an Israeli Woodstock. It's something much more serious: the war of the middle class.
It started with the price of gasoline and went on to the excessive price of cottage cheese. It has now extended to wages, taxes and housing. It's the cry of the hard-working middle class, which pays high taxes, serves in the reserves but can't make ends meet.
The young people living in the tents on Rothschild Boulevard want more than inexpensive apartments and reasonable rents. They want an economic/social revolution that will redistribute wealth so that the wealthy will have less and they will have more. And if they also manage to drive Prime Minister Benjamin Netanyahu out of power, they won't shed a tear.
The housing problem is real. Apartment prices have increased by dozens of percentage points since 2008 to record highs. The rise is highest in Tel Aviv: 64 percent. Before the start of the price rise in 2007, a young couple needed to pay 87 monthly wages on average to buy an average apartment. Today the number is 143. In other words, they need to work 12 years without paying income tax and national insurance (which is impossible ), and to put all the money aside for an apartment. Obviously this is madness. Obviously this needs to be fixed.
The problem is that the young people on Rothschild are looking for answers in the wrong place. They want the state to build them affordable housing, but they don't seem to realize that the line for such housing will be a hundred times longer than the boulevard itself. Only a few will get an apartment, and most will feel left out. And if I may venture a guess, the people who receive an apartment will be ultra-Orthodox couples with large families and low income.
How do I know this? This is how it's happening in an affordable-housing program that is ostensibly for the general public but in practice is geared toward the Haredim. Have faith in Housing Minister Ariel Atias.
So this solution should be abandoned; it has already failed in Europe. Move on to the main reason for the price rise: the land shortage.
The main culprit is the Israel Lands Administration, which holds 93 percent of state land. The ILA has not released enough land for construction over the past decade, so we have a shortage. It has behaved like a seasoned trader on a product it has exclusivity on. It releases land slowly and makes a huge profit at our expense.
Adding to this is the bureaucracy - the local and district committees delaying building permits by a year or two. So it's clear why there are not enough apartments and why their prices have risen sky-high.
What we should demand is that the ILA fill the market with enough land to build 50,000 apartments every year, for the next decade. And it should reform the permit process. If these two changes are carried out, the number of apartments will rise and prices will fall.
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