Housing Minister Ariel Atias of Shas is a well-spoken and sophisticated person. He even deserves to receive an outstanding-politician award because he has done the impossible: He has created the image of a winner for himself while failing at everything he does.
When he took up his post, Atias promised that he would soon lower housing prices. The result was a huge increase in prices. Then he promised to reform the Israel Lands Administration, turning that last dinosaur into a dynamic ILA that would sell off land to the public, lowering prices. Nothing happened.
Then Atias said there was terrible bureaucracy at the building committees, which prolong the planning process and make it more expensive. So the process should be shortened, he said. Instead of two committees deliberating over every plan there would be only one. Impressive and efficient. But that was never implemented either.
And this week Atias finally found the reason for the increasing prices: a lack of subsidies. So he proposed to the Knesset that the state subsidize mortgages for young couples in the country's outskirts. It would grant them a subsidized loan of NIS 140,000, as well as NIS 800 a month to be used to repay a mortgage, and young couples would run to buy a home.
The following is Atias' iron logic. On the day the Bank of Israel governor declared an effective increase in mortgage rates to cool off the market, Atias came up with a diametrically opposed step that heated up the market, raising prices. Because it's clear that the moment subsidies are dished out, demand for housing will increase and prices will skyrocket. The people who will profit from this populist step are the contractors; most of the subsidy will go in their pockets. The people who will suffer are young couples - most of them - as a result of the increasing housing prices.
But a minority will receive the subsidy and benefit somewhat. Of course, this minority will be typified by a man with eight children and a low income. And I don't have to point out that he will also wear a black skullcap. Incidentally, of course.
What should Atias have done if he really intended to lower housing prices? First, he should have done away with the last dinosaur. In other words, he should have closed the ILA's gates and sold all its land to the public. He should have done this because the ILA is a monopoly that wants to maximize its revenues, so it offers too little land for sale. But the moment the ILA is closed and all state land is sold, the land will turn into a normal means of production, like capital and labor, and land prices will decline. As will housing prices.
Second, Atias should have privatized the process of approving construction plans. That has been done in the past with car inspections. Once you had to wait in line at the licensing bureau for a whole day for the chance to have your car inspected. Today the private garages (which are under supervision, of course ) make the process fast, efficient and cheap.
Third, Atias should have worked to improve the image of the construction trade through high-level professional training, mechanization and monetary incentive plans. Then young Israelis would want to be builders - as in Switzerland and the United States.
Fourth, he should have worked to bring about a revolutionary change in the attitude of the government and the mayors toward high-rise construction. Because the solution for increasing the housing supply is right under our noses: the construction of apartment buildings 20 to 30 stories high in the centers of the big cities, where the infrastructure is already in place, and where everyone wants to live. That's also the right move in terms of the environment because it will conserve expensive land.
But if Atias is reading this article, he's probably laughing hysterically. After all, he was only sent to the Knesset to benefit young ultra-Orthodox couples, and now he's being asked to show consideration for the entire public. After all, if he does so, he won't receive the outstanding-politician award.
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