Kill the last dinosaur
The Israel Lands Administration is a convoluted, bureaucratic agency that is causing a bottleneck in construction, development and infrastructure growth.
Even after the torrents of criticism directed at Benjamin Netanyahu recently, one must admit that the prime minister has not lost his magic touch on all matters concerning public relations and the media. At this year's Caesarea Economic Forum, which met last week in Eilat, he did not speak about boring topics such as taxes, budgets and deficits. He focused on the matter dearest to the hearts of average Israelis: their apartments.
The speech was nicknamed "the balcony speech" because Netanyahu described the difficulties and bureaucratic hassles encountered by any young couple that simply wants to enclose a balcony. They must obtain innumerable permits from everyone and their uncle, from the Israel Lands Administration to various zoning committees, and from the municipality. It all costs a great deal and is highly time-consuming.
Netanyahu provided an intriguing example, but in reality he was referring to the bigger picture: the entire building sector. It is common knowledge that obtaining a construction permit is a years-long process that entails great expense and sometimes even bribery. Good contractors leave the country and build abroad because here they are ground down by the wheels of bureaucracy.
The Israel Lands Administration is the last dinosaur. It is a convoluted, bureaucratic agency that is causing a bottleneck in construction, development and infrastructure growth. Every factory and business, each highway and park needs an allocation of ILA-controlled land, and oh how the ILA enjoys dishing out the abuse. It does so because its power is infinite. Israel is the only country in the world in which a single government authority owns 92 percent of the land. Even China offers more rapid privatization and selling of land. In the former East Germany citizens own 65 percent of all land. Only in Israel is everything concentrated in the hands of the ILA, and controlled from the top down.
The ILA controls the supply and the pricing of the land. It decides how much land will be put up for sale, and where. Since it tries to maximize its profits, citizens face inflated property prices, and the economy suffers due to the sluggishness of this key economic sector.
In Israel today there are 800,000 people with apartments that they own but whose land belongs to the ILA. Netanyahu's proposed reform will transfer full ownership of the land to the leaseholder. That will eliminate the need to obtain ILA approval for the enclosure of every balcony.
This would end the ILA's role as the exclusive planner of land use. The organization would be obligated to sell undeveloped property to contractors, and local governments would be responsible for planning and development. That would force the ILA to put more land on the market, which would in turn result in a drop in prices. And that would benefit all Israelis.
But here too, as if acting on a sign from on high, the environmentalists and those who mistakenly refer to themselves as "socially conscientious" rallied to oppose the reform. They are unwilling to let go of state ownership of land and government-administered property. On the one hand they criticize the government as always erring, yet on the other they want the government to continue to control the land.
Do they not understand that the very ownership of such a large resource constitutes a source of corruption? Every major corruption scandal involving the ILA began with permits being issued to cronies and political hacks enabling them to convert farmland into residential or commercial properties.
What is wrong with enabling individuals to buy land throughout the country, such as in the still largely desolate Negev? After the appropriate master plans are put in place we will suddenly be witness to a major wave of development in that region. One person will buy a few dunams of land for "green" industry using solar energy. Another will take advantage of the special landscape of the desert for a tourism enterprise. Yet another will build a resort for retirees who will come from around the world for the winter sun. Everything is possible when private initiative is encouraged, rather than discouraged.
What was the American West, and not-so-West, before it was developed? It was wasteland. But once Americans were entitled to buy land the entrepreneurs arrived, laid down railway tracks, and founded states such as Arizona, Texas and Nevada. Are there no parks in these places? Do people not live there?
The environmentalists and the "socially aware" were joined by predictable allies: settlers and those on the right who wish to see the state continue to control property so that it can allocate to them more "state lands" in the territories and prevent Arabs from settling within the Green Line.
The Netanyahu plan could actually be criticized from the opposite side of the spectrum. It is too small, too piecemeal. Instead of only offering ownership and the gimmick of turning the ILA into a "lands authority," we ought to think big and transfer control of all the lands to their real owners: the people. We must turn the land into a for free, normal, instrument of production, exactly like labor and capital. The ILA must be shut down and the entire stock of land must be sold - to all comers.
That is the necessary revolution. Modern economies function well only when there is private ownership, personal initiative and freedom of action. That is the only way to achieve development, growth and a drop in unemployment. The time has come to rid ourselves of the Israel Lands Administration. We must kill the last dinosaur.