The cabinet's housing committee Monday approved a package of reforms, including setting targets for planning approvals of 80,000 new homes annually and land sales for at least 25,000 units.
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The ministers also backed a plan to give national housing committees - which were formed in 2011 to speed up residential planning approvals - additional powers.
They also approved a plan to make additional reforms in the Israel Lands Authority, development of a unified national plan for state-owned lands, and devise tools for encouraging construction of long-term rental housing.
"This major government program approved by the cabinet is important, but the real key to solving the housing problem is the national housing plan, which aims to create 150,000 units for long-term rental over the next decade," Finance Minister Yair Lapid said. "The housing market has to change."
The plan calls for a fifth of the 150,000 units to go to designated segments of the population and 5% to public housing.
The plan represented most of the proposals that had been made by the finance, housing and interior ministries. However, at the start of yesterday's meeting, Lapid said he would not bring up for vote elements of the proposal that elicited opposition.
Thus, Housing and Construction Minister Uri Ariel blocked plans for reducing certain regulations that snag new construction. Silvan Shalom, the minister for development of the Negev and Galilee, blocked another proposal to advance a government program strengthening building against earthquakes.
Another proposal that would have weakened certain regulations in a bid to speed up building, failed to be voted on because Environmental Protection Minister Amir Peretz opposed it.
Shalom also voiced objections to a major element of the proposals, which grants incentive for home construction in the center of the country, saying it spelled neglect for the Negev and Galilee.
"What do you care if we add the Galilee and Negev to the areas of [high] demand?" he asked, to which Ariel responded: "I really don't care."
Bentzi Lieberman, the head of the ILA, explained that "there's no problem in the planning and sale of land in the periphery, [but] in the center there's a shortage and we have to end it."
In the end, Lapid agreed that the two regions would be added to the plan for approval.
Lapid also declined to bring up for a vote a proposal to impose a special tax on building contractors who hold onto land acquired from the ILA without building on it. He cited strong opposition from the Contractors Association.
Lapid also told the housing cabinet that he had abandoned plans, leaked last week to TheMarker, to revoke a 15-year-old law that has enabled tenants in public housing to buy their apartments at deep discounts.
Treasury officials have long backed rescinding the so-called Public Housing Law, but political opposition has frustrated their efforts, as it did again this year.